What To Expect From The SHIPS For America Act

By William C. Baldwin and James A. Kearns III 

For more than a year, a bipartisan team of Sen. Mark Kelly (D-Ariz.), Sen. Marco Rubio (R-Fla.), Rep. Mike Waltz (R-Fla.) and Rep. John Garamendi (D-Calif.) worked with stakeholders from all sectors of the U.S. maritime industry to develop a comprehensive plan to revitalize the United States as a maritime nation. An interim result of that effort was a document titled “Congressional Guidance for a National Maritime Strategy,” which the team released in April 2024. It offered several high-level strategic objectives and made several recommendations in general terms for achieving those directives.

Soon after, there began circulating the draft of a comprehensive bill to convert those high-level objectives and general recommendations into many specific legislative proposals. This culminated in the introduction on December 19 of the Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act in the Senate and House of Representatives. Kelly, Sen. Todd Young (R-Ind.), Garamendi and Rep. Trent Kelly (R-Miss) sponsored the bill.

Much of the discussion in the media about this proposed legislation has focused on its national security and international commerce policy objectives, such as expanding the domestic shipbuilding capacity needed to construct ships for the U.S. Navy, enabling U.S.-flagged vessels to better compete in international commerce and expanding the domestic mariner and shipyard workforce. While such issues might be matters of concern to those in the inland river industry as citizens of the nation, such needs might seem removed from the kinds of challenges that are faced by operating vessels on the inland waterways, which are already required by law to be constructed in the United

States, documented under the U.S. flag and crewed by U.S. citizens.

However, the proposed legislation does offer benefits to the inland waterways. First, the adage that “a rising tide lifts all boats” is literally true in this case. Like many other industries, the river industry is challenged in recruiting the next generation into its ranks. One of the threshold difficulties in this regard is that the opportunities of working on a river are largely invisible to those who would likely benefit from such entry-level jobs. How many captains in the wheelhouse started out as boots on the deck, and how many other industries offer that much upward mobility? Revitalizing the sense of the country as a maritime nation would help make the prospect of working in the maritime industry more visible to the general population, which in turn could benefit workforce recruitment efforts for vessels on the inland waterways.

The civilian agency primarily responsible for the country’s waterborne transportation system is the Maritime Administration (MarAd) within the U.S. Department of Transportation (DOT). However, MarAd is just one of the many transportation-related agencies within the DOT that deal with aviation, railroads, highways, motor carrier safety, mass transit and even pipelines. As such, MarAd must necessarily compete with these other agencies in the department for the attention of the secretary of transportation and other department-level managers.

The act would establish the position of Maritime Security Advisor within the White House, with that person leading an interagency Maritime Security Board tasked with making whole-of-government strategic decisions for how to implement a national maritime strategy. This offers the prospect of raising the profile of MarAd within not only the DOT but also throughout the federal government. The act would give MarAd direct hiring authority for any personnel that the Maritime Administrator determines are necessary for implementation of the act and associated work.

The SHIPS for America Act would also establish a Maritime Security Trust Fund modeled on the dedicated trust funds that support other modes of transportation, such as the Highway Trust Fund and the Aviation Trust Fund, to allow for sustained federal support of national transportation priorities independent of the annual appropriations process. The existing trust funds associated with maritime transportation—the Inland Waterways Trust Fund and the Harbor Maintenance Trust Fund—are limited to specific ways of supporting U.S. maritime transportation. The Inland Waterways Trust Fund is limited to making construction and rehabilitation expenditures for navigation on the inland and coastal waterways, and the Harbor Maintenance Trust Fund is dedicated primarily to the dredging of navigation channels and harbors along the coasts and Great Lakes and to a lesser extent at inland ports.

The Maritime Security Trust Fund proposed by the act would protect a broad range of programs that support the U.S. maritime industry from the need to rely on annual appropriations for carrying out their missions. These include several MarAd programs that have been of significant benefit to vessel operators and to ports and other facilities on the inland waterways, such as the Port Infrastructure Development Program, the Small Shipyard Grant Program, the Title XI Loan Guarantee Program, and MarAd workforce development initiatives.

The act would make several changes to MarAd’s Capital Construction Fund (CCF) program, in which there has been increasing participation by vessel owners and operators on the inland waterways. One of the proposed changes would provide more flexibility for determining how much a fund holder can deposit into its CCF account for a taxable year than the formula-based approach under current law. Under the act’s proposed amendments to the program, this maximum amount would be specified in the CCF agreement between the fund holder and MarAd, to the extent that it is “related to a commitment to invest the revenue from the Capital Construction Fund for the vessel into the funding of new vessels.” The act also incorporates an earlier initiative to expand the CCF program to marine terminals for the acquisition of low-emission cargo-handling equipment.

There is much more to the SHIPS for America Act, which runs 343 pages in its official printed format, and it will undoubtedly receive much more commentary as it is reviewed and analyzed by stakeholders in the maritime industry. Although the act is not expected to become law before the current Congress adjourns for the year, its prospects are favorable in the next Congress. Not only does its bipartisan sponsorship include Kelly, who gained national prominence as a possible candidate for vice president, but one of its original architects, Waltz, would have been a Republican cosponsor until he was selected by President-elect Donald Trump to be national security advisor. According to its sponsors, the bill has also received endorsements from nearly 80 labor unions, port authorities and industry groups.

Jim Kearns is special counsel in Jones Walker’s Maritime Practice Group, where he focuses on maritime transactions. In his more than 30 years of practice, Kearns has represented owners, operators, financial institutions (as both lessors and lenders) and end users in the purchase, construction and financing of vessels engaged in both the foreign and coastwise trades of the United States, including compliance with the requirements of the Jones Act for the ownership, chartering and transfer of vessels.

Will C. Baldwin is co-leader of the Jones Walker’s Maritime Industry Group and leader of the firm’s maritime transactional team, where he focuses on maritime transactions and marine finance. Baldwin also serves as co-chair of the firm’s offshore wind initiative.