(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 section 50301(a) of title 46 that is attributable to the sale of obsolete vessels in the National Defense Reserve Fleet that are scrapped or sold under section 57102, 57103, or 57104 of title 46 shall be available until expended as follows:

(A) Fifty 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) Twenty five 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) Applicability.—Paragraph (1) does not apply to amounts credited to the Vessel Operations Revolving Fund before July 1, 1994.

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(b) Use of Amounts for Program.—

(1) Allocation.—

(A) In general.—Except as provided in subparagraph (B) and paragraph (2), of the amounts available each fiscal year for the Program under subsection (a)(1)(C)—

(i) 50 percent shall be used for grants under section 308703(b); and

(ii) 50 percent shall be used for grants under section 308703(c).

(B) Set aside.—

(i) In general.—Not less than 25 percent of the amounts available each fiscal year for the Program under subsection (a)(1)(C) shall be used for the preservation and presentation to the public of the maritime heritage property of the Maritime Administration.

(ii) Direct transfers.—The Secretary may provide amounts used for the preservation and presentation to the public of the maritime heritage property of the Maritime Administration through direct transfers to the Maritime Administration.

(iii) Waiver.—The Maritime Administrator may waive the application of clause (i) for any fiscal year.

(2) 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) one half shall be allocated to the National Trust for expenses incurred in administering grants under section 308703(b) of this title; and

(ii) one half shall be allocated as appropriate by the Secretary to the Service and participating State Historic Preservation Officers.

(c) Disposal of Vessels.—

(1) Requirement.—The Secretary of Transportation shall dispose (by sale or by purchase of disposal services) of all vessels described in paragraph (2)—

(A) in accordance with a priority system for disposing of vessels, as determined by the Secretary, that 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 available for disposal; 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 Federal Government, except in any case in which obtaining the best value would require towing a vessel and the 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 57102 to 57104 of title 46.

(2) Description of vessels.—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 the National Defense Reserve Fleet; and

(B) are not specifically authorized or required by statute to be used for a particular purpose.

(d) Treatment of Available Amounts.—Amounts available under this section shall not be considered in any determination of the amounts available to the Department of the Interior.