REVITALIZATION OF UNITED STATES SHIPBUILDING INDUSTRY.

SEC. 1031. REVITALIZATION OF UNITED STATES SHIPBUILDING INDUSTRY. (a) In General.—The Secretary of Defense shall require that all sealift ships built under the fast sealift program established in section 1424 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101–510; 104 Stat. 1683) shall be constructed and designed to commercial specifications. (b) Interagency Working Group To Formulate a Program To Preserve Shipyard Industrial Base.—(1) Not later than March 1, 1993, the President shall establish an interagency working group for the sole purpose of developing and implementing a comprehensive plan to enable and ensure that domestic shipyards can compete effectively in the international shipbuilding market. (2) The working group shall include representatives from all appropriate agencies, including the Department of Defense, the Department of State, the Department of Commerce, the Department of Transportation, the Department of Labor, the Office of the United States Trade Representative, and the Maritime Administration. (3) The President shall submit to Congress the comprehensive plan developed by the working group not later than October 1, 1993. (c) Report on Ship Dumping Practices.—The Secretary of Transportation shall prepare a report on the countries that provide subsidies for the construction or repair of vessels in foreign shipyards or that engage in ship dumping practices. (d) Report on Defense Contracts.—The Secretary of Defense shall prepare a report on— (1) the amount of Department of Defense contracts that were awarded to companies physically located or headquartered in the countries identified in the Secretary of Transportation’s report under subsection (d) for the most recent year for which data is available; and (2) the effect on defense programs of a prohibition of awarding contracts to companies physically located or headquartered in the countries identified in the Secretary of Transportation’s report under subsection (d). (e) Report on Adequacy of United States Shipbuilding Industry.—The Secretary of Defense shall prepare a report on— (1) the adequacy of United States shipbuilding industry to meet military requirements, including sealift, during the period of 1994 through 1999; and (2) the causes of any inadequacy identified and actions that could be taken to correct such inadequacies. (f) Submission of Reports.—The reports under subsections (c), (d), and (e) shall be submitted to Congress with the President’s budget for fiscal year 1994. (g) Penalty for Failure to Comply.—(1) Except as provided in paragraph (2), if the President fails to submit to Congress a comprehensive plan as required by subsection (b) by October 1, 1993, no funds appropriated to the Department of Defense for 106 STAT. 2490fiscal year 1994 may be used to enter into a contract for the construction, repair, or purchase of any product or service with any company that has headquarters in any country that continues to provide a subsidy to a foreign shipyard for the construction or repair of vessels or that engages in ship dumping practices. (2) Paragraph (1) shall not apply if the President— (A) notifies Congress that he is unable to submit the plan by the time required under subsection (c); and (B) includes with the notice a brief explanation of the reasons for the delay and a statement that the plan will be submitted by April 15, 1994. (h) Definitions.—For purposes of subsection (c): (1) The term “foreign shipyard” includes a ship construction or repair facility located in a foreign country that is directly or indirectly owned, controlled, managed, or financed by a foreign shipyard that receives or benefits from a subsidy. (2) The term “subsidy” includes any of the following: (A) Officially supported export credits and development assistance. (B) Direct official operating support to the commercial shipbuilding and repair industry, or to a related entity that favors the operation of shipbuilding and repair, including— (i) grants; (ii) loans and loan guarantees other than those available on the commercial market; (iii) forgiveness of debt; (iv) equity infusions on terms inconsistent with commercially reasonable investment practices; (v) preferential provision of goods and services; and (vi) public sector ownership of commercial shipyards on terms inconsistent with commercially reasonable investment practices. (C) Direct official support for investment in the commercial shipbuilding and repair industry, or to a related entity that favors the operation of shipbuilding and repair, including the kinds of support listed in clauses (i) through (v) of subparagraph (B), and any restructuring support, except public support for social purposes directly and effectively linked to shipyard closures. (D) Assistance in the form of grants, preferential loans, preferential tax treatment, or otherwise, that benefits or is directly related to shipbuilding and repair for purposes of research and development that is not equally open to domestic and foreign enterprises. (E) Tax policies and practices that favor the shipbuilding and repair industry, directly or indirectly, such as tax credits, deductions, exemptions and preferences, including accelerated depreciation, if the benefits are not generally available to persons or firms not engaged in shipbuilding or repair. (F) Any official regulation or practice that authorizes or encourages persons or firms engaged in shipbuilding or repair to enter into anticompetitive arrangements. (G) Any indirect support directly related, in law or in fact, to shipbuilding and repair at national yards, includ-106 STAT. 2491ing any public assistance favoring shipowners with an indirect effect on shipbuilding or repair activities, and any assistance provided to suppliers of significant inputs to shipbuilding, which results in benefits to domestic shipbuilders. (H) Any export subsidy identified in the Illustrative List of Export Subsidies in the Annex to the Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the General Agreement on Tariffs and Trade or any other export subsidy that may be prohibited as a result of the Uruguay Round of trade negotiations. (3) The term “vessel” means any self-propelled, sea-going vessel— (A) of not less than 100 gross tons, as measured under the International Convention of Tonnage Measurement of Ships, 1969; and (B) not exempt from entry under section 441 of the Tariff Act of 1930 (19 U.S.C. 1431).