Maritime Legislative Update
The end of 2020 has seen significant developments in legislation with implications for the maritime industry as we move from the Trump administration to the new Biden administration. This article provides an update on the status of several key maritime-related bills in the 116th Congress as of December 7, 2020.
The incoming Biden administration has not developed specific bills yet, but we anticipate infrastructure being at the top of the list. This will provide a number of opportunities for the maritime industry—from expanding title XI loan guarantees to funding for port infrastructure projects, new vessels for new offshore wind projects, and an expansion of cargo preference to support the Jones Act. Of import, Biden’s campaign voiced his support for the Jones Act.
Key Maritime Bills Expected to Be Enacted in the 116th Congress
National Defense Authorization Act (“NDAA”)
The NDAA is roundly considered to be an annual “must-pass” bill, having passed every year since the Kennedy administration. In recent years, many maritime provisions have been included in the NDAA. The reason for this is that, as an essential bill that is enacted every year, the NDAA creates opportunity for the advancement of policy priorities in the maritime industry if they are included. The House and Senate have agreed to a conference report for the NDAA and the final bill will include significant maritime provisions, including U.S. Maritime Administration (“MARAD”) reauthorization, U.S. Coast Guard (“USCG”) reauthorization, extension of the Jones Act and other federal laws to offshore renewable energy, and funding for ports to address COVID-related emergencies. A few of these bills are summarized below and more details will be addressed in a follow-up maritime advisory.
H.R. 3409 – Coast Guard Authorization Act of 2019 (“CGAA 2019”)
CGAA 2019 has been pending for quite some time due to inaction in the Senate regarding particular provisions of the bill. The CGAA was initially introduced in 2019, and House passage in the summer of 2020 raised hopes that Congress could pass a USCG bill in 2020.
As far as substance, in addition to reauthorizing USCG programs and activities, the CGAA 2019 makes key policy reforms for the maritime industry and addresses numerous policies, including promotion authority for USCG personnel, the USCG’s use of unmanned maritime and aircraft systems, Great Lakes icebreaking, and the use of engine cut-off switches on recreational vessels. Additionally, notable amendments to existing maritime statutes—either in the bill or under discussion—would address requirements relating to “non-operating individuals” embarked on U.S.-flag commercial vessels; requests for the determination of available Jones Act coastwise-qualified installation vessels; reports on polar security cutter acquisitions; the feasibility of using liquefied natural gas to fuel USCG vessels; and waivers of navigation and vessel inspection laws.
The CGAA 2019 has been included in the final NDAA. As of this writing, Congress is expected to vote on the NDAA during the week of December 7, 2020. We expect a bill that has passed 59 times will be passed a 60th time, despite a veto threat from the White House over renaming bases named for confederate officers as well as no action on curbing media sites if they discriminate against politically conservative postings.
MARAD Title of the NDAA
As is the norm, the conferees included authorizations for existing and new MARAD programs in the final NDAA conference report. The key provisions include:
- The establishment of a new, privately owned product tanker security fleet program, to be funded at six million dollars a year per vessel for each vessel in the program;
- New priority for grants to be awarded to small coastal ports and terminals;
- Additional funding in the amount of $388 million for the National Security Multi-Mission Vessel;
- $30 million for the title XI loan guarantee program;
- A new strategic program focused on merchant mariner recruitment, training, and retention;
- The Maritime Transportation System Emergency Relief Act, described further below; and
- A “sense of Congress” resolution to support the U.S. coastwise laws.
H.R. 4447 – Expanding Access to Sustainable Energy Act of 2019: “Garamendi Amendment 33”
The Expanding Access to Sustainable Energy Act of 2019 included a provision (referred to as the “Garamendi Amendment 33”) to amend the Outer Continental Shelf Lands Act, which would confirm that all federal laws, including the Jones Act, would be extended to all offshore energy development on the Outer Continental Shelf, including wind energy.
The Garamendi Amendment 33 would extend federal law to “all installations and other devices permanently or temporarily attached to the seabed [for the purposes of] … producing or supporting the production of energy from sources other than oil and gas.” U.S. Customs and Border Protection would have to conclude, if this language is enacted, that the Jones Act applies to renewable energy projects, such as offshore wind, in the same way it applies to oil and gas. This legislation would be a positive development for vessel operators and renewable energy developers because it will bring clarity and ensure a level playing field for all stakeholders. A version of this amendment has now been included in the NDAA for this year. For further details on this bill, please see the Mainbrace article, New Legislation to Apply the Jones Act to Offshore Renewables (Dec. 2020).
H.R. 7515 – Maritime Transportation System Emergency Relief Act (“MTSERA”)
The chairman of the Transportation and Infrastructure committee, Rep. Peter DeFazio (D-OR-4), introduced this bill in the summer of 2020 as a response to the COVID-19 pandemic. Provisions in this bill have been subsequently added to the FY2021 NDAA that has already passed the House of Representatives. The new relief program for ports and terminal operators affected by COVID-19 has now been included in the final NDAA.
MTSERA is designed to provide relief to those in the maritime industry during a national emergency, increase training opportunities for merchant mariners, authorize a new competitive grant program for projects at smaller ports and terminals, and establish a National Shipper Advisory Committee to give U.S. importers and exporters a formal process to interact with the Federal Maritime Commission.
Specifically, the bill allows MARAD to provide grants for operating costs involved with an emergency response operation, including costs for cleaning, sanitizing, janitorial services, staffing, paid leave, and procuring personal protective equipment; and the costs of capital projects to protect, repair, reconstruct, or replace equipment and facilities of the U.S. maritime transportation system that are in danger of suffering serious damage, or have suffered serious damage, as a result of an emergency.
Negotiations regarding funding the government in FY2021 are currently underway. The Senate Appropriations Committee recently released their appropriations bills. The House Appropriations Committee marked up their appropriations bills over the summer. On a macro level, to avoid a government shutdown, Congress must enact another spending measure before the current continuing resolution (“CR”) expires on December 11, 2020. As of this writing, Congress intends to extend the CR for one week to give more time for final negotiations on a FY2021 appropriations bill. Speaker Nancy Pelosi is also working to conclude negotiations with the Senate on a $900-billion stimulus package, which she wants to attach to the omnibus funding bill. Stay tuned for more news on these important packages.
To align with the maritime authorization bills, described above, we anticipate that actual funding for these programs will occur in any end-of-year omnibus appropriations bill. This will include funding for port infrastructure development grants, small shipyard grants, title XI funding and administrative expenses, and the new MTSERA program.
H.R. 5845/S. 3263 – Break Free from Plastic Pollution Act of 2020 and the PLASTICS Act
Plastics legislation is on the menu this year. In addition to the Break Free from Plastic Pollution Act, Congressman Michael McCaul (Ranking Member) and Eliot Engel (outgoing Chairman) of the House Foreign Affairs Committee have introduced H.R. 4636, the PLASTICS Act. This act would leverage U.S. assistance to support reduction of plastics in developing countries and is supported by the American Chemistry Council. H.R. 4636 recently passed the House on the Suspension Calendar. The Break Free from Plastic Pollution Act was introduced by Rep. Alan Lowenthal (D-CA-47) in the House of Representatives and Sen. Tom Udall (D-NM) in the Senate. Neither bill has progressed, and neither is expected to pass.
As far as substance, the Break Free from Plastic Pollution Act would make certain producers of products (e.g., packaging, paper, single-use products, beverage containers, or food service products) fiscally responsible for collecting, managing, and recycling or composting the products after consumer use. In addition, the bill establishes 1) minimum percentages of products that must be reused, recycled, or composted; and 2) an increasing percentage of recycled content that must be contained in beverage containers.
Additionally, beginning January 1, 2022, the bill would phase out a variety of single-use products, such as plastic utensils. The bill also sets forth provisions to encourage the reduction of single-use products, including by establishing programs to refund consumers for returning beverage containers and by establishing a tax on carryout bags. The bill would create a temporary moratorium on new or expanded permits for facilities that manufacture plastics as well, to remain in place until regulations are updated to address pollution from the facilities. Lastly, the bill would establish limitations on the export of plastic waste to other countries.
For a specific bill affecting marine plastic debris, please see the Mainbrace article, Marine Plastic Pollution (Dec. 2020).
H.R. 8632 – Ocean-Based Climate Solutions Act
Rep. Raul Grijalva (D-AZ-3) introduced the Ocean-Based Climate Solutions Act in October 2020. The bill has not progressed and is not expected to become law this Congress. The bill and a number of other ocean bills were the subject of a recent hearing in the House Natural Resources Committee, which Congressman Grijalva chairs and is expected to chair again in the 117th Congress.
This bill would aim to end the federal offshore oil-leasing program and pursue other ocean-related solutions to the climate change crisis in an effort to restore coastal ecosystems, strengthen marine mammal conservation, reduce carbon emissions from shipping vessels, improve international ocean governance, and protect 30 percent of ocean habitats by 2030. The bill would also create new policies around what it calls the “blue carbon” ecosystems that help sequester our greenhouse gas emissions. That includes protecting salt marshes, sea grasses, and mangroves that pull carbon dioxide out of the atmosphere, as well as protecting ocean habitats for the recovery of whales, which store tons of carbon. Lastly, the bill would provide three billion dollars for coastal restoration projects, with priority given to projects that provide jobs for those affected by COVID-19 and assistance to low-income communities of color affected by environmental racism.
We expect this bill to be a marker for the 117th Congress as well as new bills to address climate change, a subject that is important to the incoming Biden administration.
Conclusions and Recommendations
The 116th Congress faced innumerable challenges during the last year, from a presidential impeachment to fashioning a response to the novel coronavirus pandemic that took away valuable time from enacting substantive legislation. But, as the 116th Congress draws to a close, we see that substantive maritime legislation will be included in the end-of-year defense and funding bills. We believe these bills will withstand a threatened veto by President Trump.
The 117th Congress will have its own set of challenges, including the potential for a divided government. But, we anticipate that it will more likely address climate change and the impact of infrastructure and maritime programs on climate change, including reductions of carbon dioxide emissions from shipping. We will report further when the new Congress starts in January 2021.
This article is one in a series of articles written for Blank Rome's MAINBRACE: December 2020 edition.