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Posted: March 27, 2018

Consolidated Appropriations Act funds key maritime programs for current fiscal year

On March 23, the Consolidated Appropriations Act, 2018 was signed into law after being approved by Congress ahead of the deadline to avert a partial shutdown of the federal government. The appropriations act provides, and in some cases exceeds, statutory funding for key maritime programs for the current fiscal year.

The 2018 appropriations act fully funds the Maritime Security Program and its fleet of 60 U.S.-flagged ships at $300 million, providing a $5 million stipend per ship. This is the statutory funding level for the MSP mandated by the National Defense Authorization Act of 2017.

The MSP supports a fleet of militarily-useful U.S.-flagged ships, which are crewed by U.S. merchant mariners and operate in international commercial trades. The ships and their corresponding privately-owned intermodal cargo systems and networks are available to the Department of Defense for military sealift operations and in national security emergencies. The cost of the MSP amounts to a small fraction of the projected $65 billion it would cost the government to replicate this sealift capacity and the intermodal infrastructure provided to the DOD by private-sector MSP participants.

The appropriations act also provides funding for U.S. food-aid programs for fiscal year 2018. Food for Peace Title II - the primary source of food-aid cargoes for U.S.-flagged vessels - is now funded at $1.6 billion for the current fiscal year, an increase from the base level funding of $1.466 billion provided for this program in fiscal year 2017.

Under U.S. cargo preference requirements, at least 50 percent of U.S. government impelled food-aid shipments must be carried by U.S.-flagged vessels. These cargoes help keep U.S.-flagged commercial vessels in service and U.S. merchant mariners, who are needed to man surge and reserve military sealift vessels in times of war or crisis, employed and current on their skills and certifications.

American Maritime Officers and American Maritime Officers Service maintain leading roles on Capitol Hill in advocating full funding for the Maritime Security Program fleet and Food for Peace Title II, as well as other key maritime programs.

The appropriations act provides approximately $289.3 million for the National Defense Reserve Fleet, including expenses related to the Maritime Administration's Ready Reserve Force. In fiscal year 2017, the appropriation was approximately $274.5 million.

The appropriations act provides the National Security Multi-Mission Vessel Program with $300 million for the construction, planning, administration and design of maritime academy training ships, which could also be used in defense sealift and humanitarian crisis missions domestically and abroad.

In an article posted on the State University of New York Maritime College's website, details of the construction of the first multi-mission vessel were provided. The ship will replace the college's training vessel Empire State VI, which was built in 1962.

"After many years of work, our dreams of having a new, purpose-built ship to educate and train the nation's future mariners has come to pass. This news would not have been possible without the consistent staunch support of our elected officials, especially Representative Joe Crowley, Senators Chuck Schumer and Kirsten Gillibrand, and the rest of the New York delegation, as well as the dedication of Transportation Secretary Elaine Chao and SUNY Chancellor Kristina Johnson," the college stated.

"The college anticipates the nation's first National Security Multi-Mission Vessel will be delivered in time for the 2022 summer sea term," the college stated.

The appropriations act provides $30 million for the Maritime Administration's Title XI shipbuilding loan guarantee program. Of the total, $27 million is designated for new loan guarantees and $3 million is designated for administrative expenses and managing the administration's existing portfolio of loan guarantees. Title XI eases access to commercial credit for U.S. companies by selectively providing loan guarantees to support private-sector financing of, among other things, the construction of commercial ships at U.S. shipyards.

The appropriations act provides added funding for harbor maintenance and dredging. According to an article published by the Great Lakes/Seaway Review, an additional $341.4 million is included in the U.S. Army Corps of Engineers budget above what the agency requested. The funds are designated for harbor dredging and other operation and maintenance activities. The Corps will develop a work plan to nationally distribute these funds. Great Lakes ports will receive a share of the funding, with specific amounts to be announced in six to eight weeks.