MAINTENANCE AND REPAIR REIMBURSEMENT PILOT PROGRAM.

SEC. 3517. MAINTENANCE AND REPAIR REIMBURSEMENT PILOT PROGRAM.(a) Authority to Enter Agreements.—(1) In general.—The Secretary of Transportation may carry out a pilot program under which the Secretary may enter into an agreement with a contractor under chapter 531 of title 46, United States Code, as amended by this Act, regarding maintenance and repair of a vessel that is subject to an operating agreement under that chapter.(2) Limitation.—The Secretary may not require a person to enter into an agreement under this section, including as a condition of awarding an operating agreement to the person under chapter 531 of title 46, United States Code, as amended by this Act.(b) Terms of Agreement.—An agreement under this section—(1) shall require that except as provided in subsection (c), all qualified maintenance or repair on the vessel shall be performed in the United States;(2) shall require that the Secretary shall reimburse the contractor in accordance with subsection (d) for the costs of qualified maintenance or repair performed in the United States; and117 STAT. 1797(3) shall apply to maintenance and repair performed during the 5-year period beginning on the date the vessel begins operating under the operating agreement under chapter 531 of title 46, United States Code.(c) Exception to Requirement to Perform Work in the United States.—A contractor shall not be required to have qualified maintenance or repair work performed in the United States under this section, if the Secretary determines that—(1) there is no facility in the United States available to perform the work; or(2) there is not available to the Secretary sufficient funds to pay reimbursement under subsection (d) with respect to the work.(d) Reimbursement.—(1) In general.—The Secretary shall, subject to the availability of appropriations, reimburse a contractor for costs incurred by the contractor for qualified maintenance or repair performed in the United States under this section.(2) Amount.—The amount of reimbursement shall be equal to 80 percent of the difference between—(A) the fair and reasonable cost of obtaining the qualified maintenance or repair in the United States; and(B) the fair and reasonable cost of obtaining the qualified maintenance or repair outside the United States, in the geographic region in which the vessel generally operates.(3) Determination of fair and reasonable costs.—The Secretary shall determine fair and reasonable costs for purposes of paragraph (2).(e) Notification Requirements.—(1) Notification by contractor.—The Secretary is not required to pay reimbursement to a contractor under this section for qualified maintenance or repair, unless the contractor—(A) notifies the Secretary of the intent of the contractor to obtain the qualified maintenance or repair, by not later than 180 days before the date of the performance of the qualified maintenance or repair; and(B) includes in such notification—(i) a description of all qualified maintenance or repair that the contractor should reasonably expect may be performed;(ii) an estimate of the cost of obtaining such qualified maintenance or repair in the United States; and(iii) an estimate of the cost of obtaining such qualified maintenance or repair outside the United States, in the geographic region in which the vessel generally operates.(2) Certification by secretary.—Not later than 60 days after the date of receipt of notification under paragraph (1), the Secretary shall certify to the contractor—(A) whether there is a facility in the United States available to perform the qualified maintenance or repair described in the notification by the contractor under paragraph (1); and(B) whether there is available to the Secretary sufficient funds to pay reimbursement under subsection (d) with respect to such work.117 STAT. 1798(f) Qualified Maintenance or Repair Defined.—In this section the term “qualified maintenance or repair”—(1) except as provided in paragraph (2), means—(A) any inspection of a vessel that is—(i) required under chapter 33 of title 46, United States Code; and(ii) performed in the period in which the vessel is subject to an agreement under this section; and(B) any maintenance or repair of a vessel that is determined, in the course of an inspection referred to in subparagraph (A), to be necessary to comply with the laws of the United States; and(2) does not include—(A) routine maintenance or repair; or(B) any emergency work that is necessary to enable a vessel to return to a port in the United States.(g) Analysis.—(1) In general.—Not later than October 1, 2004, the Secretary of Transportation shall submit to the Committee on Armed Services of the House of Representatives and the Committee on Armed Services and the Committee on Commerce, Science, and Transportation of the Senate, an analysis of the need for agreements authorized by this section.(2) Conduct and considerations.—In conducting the analysis, the Secretary shall consider the overall costs and benefits of the pilot program, including the following:(A) The impact on operations of vessels in the program.(B) The availability of repair shipyards and drydocks in the various regions of the United States (as that term is defined in such chapter) that are capable of handling such vessels that are ocean-going vessels.(C) The experience of such shipyards in repairing the types of such vessels.(D) A comparison of drydock and repair costs between available United States and foreign shipyards located within the geographic range of the trading area of such vessels.(E) A comparison of the time period required for the drydocking and repair of such vessels between available United States shipyards and foreign shipyards.(F) The impact of the voyage deviation of such vessels to United States shipyards.(G) The benefits to the Department of Defense of having a vessel repair base in the United States to accelerate the activation of the Ready Reserve Fleet.(H) The benefits of extending the program to all vessels that are subject to operating agreements under chapter 531 of title 46, United States Code, as amended by this Act.(3) Recommendations.—The Secretary shall include in the analysis recommendations of any additional incentives that are necessary to encourage participation in the program.(h) Authorization of Appropriations.—In addition to the other amounts authorized by this subtitle, for reimbursement of costs of qualified maintenance or repair under this section there is authorized to be appropriated to the Secretary of Transportation $19,500,000 for each of fiscal years 2006 through 2011.117 STAT. 1799