To prescribe the conditions under which contractors receiving operating-differential subsidy or their affiliates may engage in coastwise or intercostal trade.

Amends the Merchant Marine Act, 1936 to prohibit the Secretary of Transportation, with respect to bulk vessels, from granting permission to a foreign trade subsidy contractor to engage in coastwise or intercoastal trade if it will result in unfair competition. (Current law: (1) makes no reference to bulk vessels; and (2) includes a proviso applicable to water common carriers in operation in 1935.)

Requires an application for such permission to disclose the nature and scope of operations proposed. Requires any permission to contain any necessary conditions to prevent: (1) unfair competition; and (2) the applicant's service in the coastwise or intercoastal trade being supported, directly or indirectly, by any money paid by the United States under operating-differential subsidy (ODS) provisions to subsidize operations in the U.S. foreign commerce. Conditions granting permission on the Secretary finding that there would not be unfair competition or transfer of subsidies and that the proposed service would not be provided with any vessels over 25 years old that were built with construction-differential subsidy. Provides for revocation of permission.

Directs the Secretary to initiate a hearing to determine, with respect to carriers in interstate or foreign commerce who are receiving ODS, whether mixed or affiliated service is in accordance with provisions of the Act as amended by this Act.