[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


             REVIEW OF FISCAL YEAR 2024 BUDGET REQUEST 
              FOR FEDERAL MARITIME TRANSPORTATION PROGRAMS, 
                     AND IMPLEMENTATION OF THE                      
                  OCEAN SHIPPING REFORM ACT OF 2022

=======================================================================

                                (118-7)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 23, 2023

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure
             
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]             


     Available online at: https://www.govinfo.gov/committee/house-
     transportation?path=/browsecommittee/chamber/house/committee/
                             transportation                             
                                __________

                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
53-162 PDF                  WASHINGTON : 2023                    
          
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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

  Sam Graves, Missouri, Chairman
Rick Larsen, Washington,             Eric A. ``Rick'' Crawford, 
  Ranking Member                     Arkansas
Eleanor Holmes Norton,               Daniel Webster, Florida
  District of Columbia               Thomas Massie, Kentucky
Grace F. Napolitano, California      Scott Perry, Pennsylvania
Steve Cohen, Tennessee               Brian Babin, Texas
John Garamendi, California           Garret Graves, Louisiana
Henry C. ``Hank'' Johnson, Jr.,      Georgiavid Rouzer, North Carolina
Andre Carson, Indiana                Mike Bost, Illinois
Dina Titus, Nevada                   Doug LaMalfa, California
Jared Huffman, California            Bruce Westerman, Arkansas
Julia Brownley, California           Brian J. Mast, Florida
Frederica S. Wilson, Florida         Jenniffer Gonzalez-Colon,
Donald M. Payne, Jr., New Jersey       Puerto Rico
Mark DeSaulnier, California          Pete Stauber, Minnesota
Salud O. Carbajal, California        Tim Burchett, Tennessee
Greg Stanton, Arizona,               Dusty Johnson, South Dakota
  Vice Ranking Member                Jefferson Van Drew, New Jersey,
Colin Z. Allred, Texas                 Vice Chairman
Sharice Davids, Kansas               Troy E. Nehls, Texas
Jesus G. ``Chuy'' Garcia, Illinois   Lance Gooden, Texas
Chris Pappas, New Hampshire          Tracey Mann, Kansas
Seth Moulton, Massachusetts          Burgess Owens, Utah
Jake Auchincloss, Massachusetts      Rudy Yakym III, Indiana
Marilyn Strickland, Washington       Lori Chavez-DeRemer, Oregon
Troy A. Carter, Louisiana            Chuck Edwards, North Carolina
Patrick Ryan, New York               Thomas H. Kean, Jr., New Jersey
Mary Sattler Peltola, Alaska         Anthony D'Esposito, New York
Robert Menendez, New Jersey          Eric Burlison, Missouri
Val T. Hoyle, Oregon                 John James, Michigan
Emilia Strong Sykes, Ohio            Derrick Van Orden, Wisconsin
Hillary J. Scholten, Michigan        Brandon Williams, New York
Valerie P. Foushee, North Carolina   Marcus J. Molinaro, New York
                                     Mike Collins, Georgia
                                     Mike Ezell, Mississippi
                                     John S. Duarte, California
                                     Aaron Bean, Florida
                                ------                                7

        Subcommittee on Coast Guard and Maritime Transportation

                   Daniel Webster, Florida, Chairman
Brian Babin, Texas                   Salud O. Carbajal, California,
Brian J. Mast, Florida                 Ranking Member
Jenniffer Gonzalez-Colon,            John Garamendi, California
  Puerto Rico                        Chris Pappas, New Hampshire
Jefferson Van Drew, New Jersey       Jake Auchincloss, Massachusetts
Mike Ezell, Mississippi, Vice        Mary Sattler Peltola, Alaska
    Chairman                         Hillary J. Scholten, Michigan,
Aaron Bean, Florida                    Vice Ranking Member
Sam Graves, Missouri (Ex Officio)    Rick Larsen, Washington (Ex 
                                         Officio)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................     v

                 STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Daniel Webster, a Representative in Congress from the State 
  of Florida, and Chairman, Subcommittee on Coast Guard and 
  Maritime Transportation, opening statement.....................     1
    Prepared statement...........................................     3
Hon. Rick Larsen, a Representative in Congress from the State of 
  Washington, and Ranking Member, Committee on Transportation and 
  Infrastructure, opening statement..............................     4
    Prepared statement...........................................     5
Hon. Salud O. Carbajal, a Representative in Congress from the 
  State of California, and Ranking Member, Subcommittee on Coast 
  Guard and Maritime Transportation, opening statement...........     7
    Prepared statement...........................................     9

                               WITNESSES

Ann C. Phillips, Rear Admiral, U.S. Navy (Ret.), and 
  Administrator, Maritime Administration, oral statement.........    10
    Prepared statement...........................................    12
Hon. Daniel B. Maffei, Chairman, Federal Maritime Commission, 
  oral statement.................................................    16
    Prepared statement...........................................    18

           WRITTEN TESTIMONY SUBMITTED IN LIEU OF APPEARANCE

Nancy Wallace, Director of the Marine Debris Program, Office of 
  Response and Restoration, National Ocean Service, National 
  Oceanic and Atmospheric Administration.........................    22

                       SUBMISSIONS FOR THE RECORD

Statement of Richard W. Murray, President, National Association 
  of Waterfront Employers, Submitted for the Record by Hon. 
  Jenniffer Gonzalez-Colon.......................................    34

                                APPENDIX

Questions to Ann C. Phillips, Rear Admiral, U.S. Navy (Ret.), and 
  Administrator, Maritime Administration, from:
    Hon. Daniel Webster..........................................    51
    Hon. Mike Ezell..............................................    51
    Hon. Aaron Bean..............................................    52
    Hon. Chris Pappas............................................    53
Questions from Hon. Mike Ezell to Richard W. Spinrad, Ph.D., 
  Under Secretary of Commerce for Oceans and Atmosphere, and 
  Administrator, National Oceanic and Atmospheric Administration.    54

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                             March 20, 2023

    SUMMARY OF SUBJECT MATTER

    TO:      LMembers, Subcommittee on Coast Guard and Maritime 
Transportation
    FROM:  LStaff, Subcommittee on Coast Guard and Maritime 
Transportation
    RE:      LCoast Guard and Maritime Transportation 
Subcommittee Hearing on ``Review of Fiscal Year 2024 Budget 
Request for Federal Maritime Transportation Programs, and 
Implementation of the Ocean Shipping Reform Act of 2022''
_______________________________________________________________________


                               I. PURPOSE

    The Subcommittee on Coast Guard and Maritime Transportation 
will hold a hearing on Thursday, March 23, 2023, at 2:00 p.m. 
ET in Room 2253 of the Rayburn House Office Building to receive 
testimony on the ``Review of Fiscal Year 2024 Budget Request 
for Federal Maritime Transportation Programs, and 
Implementation of the Ocean Shipping Reform Act of 2022.'' The 
Subcommittee will examine the President's fiscal year (FY) 2024 
budget request for Federal maritime transportation programs and 
progress on the implementation of the Ocean Shipping Reform Act 
of 2022 in preparation for consideration of annual authorizing 
legislation for the Maritime Administration (MARAD) and other 
maritime matters, including amendments to the Ocean Shipping 
Reform Act of 2022 (P.L. 117-146). The Subcommittee will hear 
testimony from MARAD and the Federal Maritime Commission 
(Commission or FMC) and receive written testimony from the 
National Oceanic and Atmospheric Administration (NOAA).

                             II. BACKGROUND

MARAD

    MARAD was established in 1950 and is responsible for 
promoting and developing the maritime industry of the United 
States to meet the Nation's economic and security needs.\1\ 
MARAD administers financial assistance programs to build, 
promote, and operate the United States flag fleet; manages the 
disposal of Federal Government-owned vessels; regulates the 
transfer of United States documented vessels to foreign 
registries; maintains a reserve fleet of Federal Government-
owned vessels essential for national defense; operates the 
United States Merchant Marine Academy; and administers a grant-
in-aid program for state operated maritime academies and other 
financial assistance programs to support the United States 
maritime and shipbuilding industries.\2\ Rear Admiral Ann C. 
Phillips, United States Navy (Ret.), has served as the 
Administrator of MARAD since being sworn in on May 16, 2022.\3\
---------------------------------------------------------------------------
    \1\ U.S. Dept. of Transp. (DOT), A Short History of the Maritime 
Administration, available at https://www.maritime.dot.gov/outreach/
history/short-history-maritime-administration (last updated Oct. 26, 
2018).
    \2\ DOT, Budget Estimates Fiscal Year 2024: Maritime Administration 
(2023), available at https://www.transportation.gov/sites/dot.gov/
files/2023-03/MARAD_FY_2024_President_
Budget_508.pdf [hereinafter MARAD 2024 Budget Estimates].
    \3\ DOT, Rear Admiral, Ann C. Phillips, US Navy (Ret.), available 
at https://www.maritime.dot.gov/office-administrator/key-personnel/
rear-admiral-ann-c-phillips-us-navy-ret (last updated May 16, 2022).
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FMC

    FMC was established in 1961 as an independent agency that 
regulates ocean-borne transportation in the foreign commerce of 
the United States.\4\ FMC protects shippers and carriers from 
restrictive or unfair practices of ocean carriers, including 
foreign-flagged carrier alliances.\5\ FMC also enforces laws 
related to cruise vessel financial responsibility to ensure 
cruise vessel operators have sufficient resources to pay 
judgements to passengers for personal injury or death or for 
nonperformance of a voyage.\6\
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    \4\ 46 U.S.C. Sec.  46101.
    \5\ FMC, About the FMC, available at https://www.fmc.gov/about-the-
fmc/.
    \6\ FMC, Federal Maritime Commission FY 2024 Budget Justification 
(2023), available at https://www.fmc.gov/wp-content/uploads/2023/03/
FMCFY2024CongressionalBudget
Justification.pdf [hereinafter FMC FY24 Budget Justification].
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    FMC is composed of five commissioners appointed for five-
year terms by the President with the advice and consent of the 
Senate. The Honorable Daniel B. Maffei was designated Chairman 
of the Commission by President Biden in March 2021.\7\
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    \7\ FMC, Daniel B. Maffei, available at https://www.fmc.gov/
commissioners/daniel-b-maffei/.
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NOAA

    NOAA was established in 1970 as an agency within the 
Department of Commerce.\8\ NOAA's mission is to understand and 
predict changes in climate, weather, oceans, and coasts, to 
share that knowledge and information with others, and to 
conserve and manage coastal and marine ecosystems and 
resources.\9\ This mission includes responsibility for 
scientific coordination and support coordination to oil spill 
response and marine debris prevention, removal, research, 
response coordination, monitoring, and detection. Dr. Richard 
W. Spinrad was sworn in as the Under Secretary of Commerce for 
Oceans and Atmosphere and the Administrator of NOAA on June 22, 
2021.\10\
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    \8\ NOAA, Our History, available at https://www.noaa.gov/heritage/
our-history (last updated Jan. 6, 2023).
    \9\ NOAA, About our agency, available at https://www.noaa.gov/
about-our-agency (last updated Mar. 2, 2023).
    \10\ NOAA, Richard W. Spinrad, Ph.D., available at https://
www.noaa.gov/our-people/leadership/richard-w-spinrad-phd (Sept. 9, 
2022).
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                           III. MARAD BUDGET

    The President's FY 2024 budget request for MARAD \11\ as 
compared to the FY 2023 enacted funding level \12\ is shown 
here:
---------------------------------------------------------------------------
    \11\ MARAD 2024 Budget Estimates, supra note 2.
    \12\ Consolidated Appropriations Act, 2023, Pub. L. No. 117-328, 
available at https://www.congress.gov/117/bills/hr2617/BILLS-
117hr2617enr.pdf [hereinafter 2023 CAA].

                     MARAD FY 2023 Enacted to FY 2024 President's Budget Request Comparison
                                             (Dollars in Thousands)
----------------------------------------------------------------------------------------------------------------
                                                                    President's FY   FY 2023 to FY   FY 2023 to
                      Account                           FY 2023      2024 Budget      2024 Change      FY 2024
                                                        Enacted        Request            ($)        Change (%)
----------------------------------------------------------------------------------------------------------------
Operations and Training............................  $ 213,181.00     $ 289,773.00     $ 76,592.00           36%
  Maritime Environmental and Technical Assistance      $ 6,000.00       $ 8,500.00      $ 2,500.00           42%
   Program.........................................
  United States Marine Highway Program.............   $ 10,000.00      $ 11,000.00      $ 1,000.00           10%
Assistance to Small Shipyards......................   $ 20,000.00      $ 20,000.00            $ --            0%
Ship Disposal Program..............................    $ 6,000.00       $ 6,021.00         $ 21.00            0%
Maritime Security Program..........................  $ 318,000.00     $ 318,000.00            $ --            0%
Title XI--Administrative Expenses..................    $ 3,000.00       $ 3,020.00         $ 20.00            1%
Title XI--Loan Guarantees..........................          $ --              $--            $ --            0%
State Maritime Academy Operations..................  $ 120,700.00      $ 53,400.00   $ (67,300.00)          -56%
Cable Security Fleet Program.......................   $ 10,000.00             $ --   $ (10,000.00)         -100%
Tanker Security Program............................   $ 60,000.00      $ 60,000.00            $ --            0%
Port Infrastructure Development Program............  $ 212,203.51     $ 230,000.00     $ 17,796.49            8%
                                                    ------------------------------------------------------------
  Total............................................  $ 963,084.51     $ 980,214.00     $ 17,129.49            2%
----------------------------------------------------------------------------------------------------------------
 Funding levels for the Operations and Training Account and the Port Infrastructure Development Program do not
  include supplemental appropriations provided by the Infrastructure Investment and Jobs Act (P.L. 117-58).


    The President requests $980.2 million in FY 2024 for the 
activities of MARAD.\13\ This is a $17.1 million increase (2 
percent) from the FY 2023 enacted level.\14\
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    \13\ MARAD 2024 Budget Estimates, supra note 2.
    \14\ 2023 CAA, supra note 12.
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    MARAD's FY 2024 budget request does not include funding for 
the:
     LMaritime Transportation System Emergency Relief 
Authority;
     LCable Security Fleet Program; or
     LTitle XI Loan Guarantees.

OPERATIONS AND TRAINING

    The President's FY 2024 budget requests $289.8 million for 
Operations and Training, an increase of $76.6 million (36 
percent) beyond the FY 2023 enacted level.\15\ Included in this 
request is $195.5 million for academic operating expenses and 
the Capital Asset Management Program of the United States 
Merchant Marine Academy (USMMA); $8.5 million for the Maritime 
Environmental and Technical Assistance (META) program, which 
promotes the research, development, and demonstration of 
emerging technologies, practices, and processes that improve 
maritime industrial environmental sustainability; and $11 
million for the United States Marine Highway Program to support 
the development, expansion, and modernization of America's 
navigable waterways to reduce landside congestion and increase 
movement of freight by water.\16\ The authorization levels for 
these programs in the FY 2023 National Defense Authorization 
Act (NDAA) include $112.8 million for USMMA operations; $15 
million for the META program; and $15 million for the United 
States Marine Highway Program.\17\ Much of the $76.6 million 
funding increase in the President's request can be attributed 
to the Capital Asset Management Program of USMMA. The FY 2024 
funding request included for the United States Marine Highway 
Program is in addition to the $25 million provided in the 
Infrastructure Investment and Jobs Act (P.L.117-58) that will 
remain available through the end of FY 2032.\18\ The Notice of 
Funding Opportunity for the FY 2023 round of the United States 
Marine Highway Program is currently available, and applications 
will be accepted through April 28, 2023.\19\
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    \15\ See MARAD 2024 Budget Estimates, supra note 2.
    \16\ Id.
    \17\ National Defense Authorization Act for Fiscal Year 2023, Pub. 
L. No. 117-263, available at https://www.congress.gov/117/bills/hr7776/
BILLS-117hr7776enr.pdf [hereinafter NDAA FY23].
    \18\ Infrastructure Investment and Jobs Act, Pub. L. No. 117-58, 
135 Stat. 429, available at https://www.congress.gov/117/plaws/publ58/
PLAW-117publ58.pdf [hereinafter IIJA].
    \19\ MARAD, 2023 Notice of Funding Opportunity for the U.S. Marine 
Highway Program, available at https://cms.marad.dot.gov/grants/marine-
highways/notice-funding-opportunity-america%E2%80%99s-marine-highway-
projects.
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ASSISTANCE TO SMALL SHIPYARDS

    The Assistance to Small Shipyards grant program provides 
capital assistance to privately-owned shipyards to expand and 
modernize shipbuilding capacity, efficiency, and 
competitiveness.\20\ The program received $20 million in FY 
2023, and the President's FY 2024 budget request includes $20 
million.\21\ The program's authorized funding level was $30 
million in the FY 2023 NDAA.\22\ The application window for the 
FY 2023 round of the Small Shipyard Grant Program closed on 
February 27, 2023.\23\
---------------------------------------------------------------------------
    \20\ See MARAD 2024 Budget Estimates, supra note 2.
    \21\ Id.
    \22\ NDAA FY23, supra note 17.
    \23\ MARAD, Small Shipyard Grant, available at https://
www.maritime.dot.gov/grants-finances/small-shipyard-grants.
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SHIP DISPOSAL

    The President's budget requests $6.02 million for the Ship 
Disposal Program, which is $20,000 above the FY 2023 enacted 
level.\24\ The program's authorized funding level was $6 
million in the FY 2023 NDAA.\25\ This program provides for the 
proper disposal of outdated government-owned merchant ships 
maintained by MARAD in the National Defense Reserve Fleet. This 
request includes $3 million to maintain the Nuclear Ship 
SAVANNAH in protective storage according to Nuclear Regulatory 
Commission license requirements, while decommissioning of the 
vessel's defueled nuclear reactor, components, and equipment is 
in progress.\26\ This funding also includes $3 million for Ship 
Disposal Program support, including salaries and overhead.\27\ 
The National Defense Reserve Fleet is under the jurisdiction of 
the House Committee on Armed Services.
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    \24\ See MARAD 2024 Budget Estimates, supra note 2.
    \25\ NDAA FY23, supra note 17.
    \26\ See MARAD 2024 Budget Estimates, supra note 2.
    \27\ Id.
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MARITIME SECURITY PROGRAM

    The President requests $318 million for the Maritime 
Security Program (MSP), which is equal to the FY 2023 enacted 
level, to maintain a viable commercial fleet that can support a 
United States presence in foreign commerce.\28\ The program's 
authorized funding level was $318 million in the FY 2023 
NDAA.\29\ Under this program, $318 million in direct payments 
are allocated among up to 60 United States flagged vessel 
operators engaged in foreign trade. MSP vessel operators must 
keep their vessels in active commercial service and provide 
intermodal sealift support to the Department of Defense in 
times of war or national emergency. This budget request enables 
vessel operators to remain active and available for service, 
and results in $5.3 million per stipend payment for each of the 
60 ships in the program.\30\ Allocating less than $318 million 
annually for the program allows United States vessels to exit 
without penalty, and would likely also lead to vessels exiting 
the United States flag registry. MSP is under the jurisdiction 
of the House Committee on Armed Services.
---------------------------------------------------------------------------
    \28\ Id.
    \29\ NDAA FY23, supra note 17.
    \30\ See MARAD 2024 Budget Estimates, supra note 2.
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TITLE XI_ADMINISTRATIVE EXPENSES

    The President requests $3.02 million for administrative 
expenses to carry out the guaranteed loan program, which is 
$20,000 above the FY 2023 enacted level.\31\ $3 million was 
authorized for Title XI administrative expenses in the FY 2023 
NDAA.\32\ The Title XI Loan Guarantee Program helps to promote 
the growth and modernization of the United States shipyard 
industry by providing additional opportunities for vessel 
construction and modernization, including repowering that may 
otherwise be unavailable to ship owners.\33\ The program is 
under the jurisdiction of the House Committee on Armed 
Services.
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    \31\ Id.
    \32\ NDAA FY23, supra note 17.
    \33\ See MARAD 2024 Budget Estimates, supra note 2.
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STATE MARITIME ACADEMIES

    The President requests $53.4 million for the six State 
Maritime Academies (SMA), which is a decrease of $67.3 million 
(56 percent) compared to the FY 2023 enacted level.\34\ This 
request includes $19.2 million for vessel management, 
logistics, and maintenance oversight to support integration of 
National Security Multi-Mission Vessels (NSMV) into the fleet 
of SMA training vessels; $22 million to maintain the six legacy 
SMA training vessels; $6 million in direct payments to the 
schools; $2.4 million for the Student Incentive Payment 
Program; and $3.8 million for training ship fuel 
assistance.\35\ SMA programs were authorized funding levels of 
$53.8 million while the NSMV program was authorized $75 million 
in the FY 2023 NDAA.\36\ Much of the $67.3 million funding 
decrease can be attributed to decreases in funding needed for 
the NSMV program. SMA Operations provide Federal assistance to 
the six SMAs, to help educate and train mariners and future 
leaders to support the United States marine transportation 
system. These graduates promote commerce in the United States 
and aid in the national defense by serving in the merchant 
marine. SMAs are under the jurisdiction of the House Committee 
on Armed Services.
---------------------------------------------------------------------------
    \34\ Id.
    \35\ Id.
    \36\ NDAA FY23, supra note 17.
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TANKER SECURITY PROGRAM

    The FY 2024 request for the Tanker Security Program (TSP) 
is $60 million, an amount equal to the FY 2023 enacted 
level.\37\ TSP provides direct payments to United States 
flagged product tankers capable of supporting national economic 
and Department of Defense contingency requirements. The program 
was authorized $60 million per year through FY 2035 in the FY 
2021 NDAA.\38\ The purpose of this program is to provide 
retainer payments to carriers to support a fleet of militarily 
useful, commercially viable product tankers sailing in 
international trade, as well as assure access to a global 
network of intermodal facilities.\39\ The program will also 
sustain a base of United States Merchant Mariners to support 
national security requirements during times of urgent need. TSP 
is under the jurisdiction of the House Committee on Armed 
Services.
---------------------------------------------------------------------------
    \37\ See MARAD 2024 Budget Estimates, supra note 2.
    \38\ NDAA FY23, supra note 17.
    \39\ See MARAD 2024 Budget Estimates, supra note 2.
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PORT INFRASTRUCTURE DEVELOPMENT PROGRAM

    The President requests $230 million for the Port 
Infrastructure Development Program (PIDP), which is $17.7 
million above the FY 2023 enacted level.\40\ This request is in 
addition to the $450 million investment in advanced 
appropriations provided in FY 2024 under the Infrastructure 
Investment and Jobs Act (P.L. 117-58).\41\ PIDP was authorized 
at a funding level of $750 million in the FY 2023 NDAA.\42\ 
PIDP provides grants for coastal seaports, inland river ports, 
and Great Lakes ports infrastructure to improve the safety, 
efficiency, or reliability of the movement of goods, and to 
reduce environmental impacts in and around ports.\43\ The NOFO 
for the FY23 round of PIDP is currently available, and 
applications will be accepted through April 28, 2023.\44\
---------------------------------------------------------------------------
    \40\ Id.
    \41\ IIJA, supra note 18.
    \42\ NDAA FY23, supra note 17.
    \43\ 46 U.S.C. Sec.  54301.
    \44\ MARAD, 2023 Port Infrastructure Development Program (PIDP)--
Notice of Funding Opportunity, available at https://
www.maritime.dot.gov/office-port-infrastructure-development/port-and-
terminal-infrastructure-development/2019-port-1 (last updated Feb. 9, 
2023).
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                           IV. BUDGET FOR FMC

    The President's FY 2024 budget request for FMC \45\ as 
compared to the FY 2023 enacted funding level \46\ is shown in 
the following table:
---------------------------------------------------------------------------
    \45\ See FMC FY24 Budget Justification, supra note 6.
    \46\ CAA 2023, supra note 12.

                      FMC FY 2023 Enacted to FY 2024 President's Budget Request Comparison
                                             (Dollars in Thousands)
----------------------------------------------------------------------------------------------------------------
                                                                  President's FY   FY 2023 to FY   FY 2023 to FY
                     Account                          FY 2023      2024 Budget      2024 Change     2024 Change
                                                      Enacted        Request            ($)             (%)
----------------------------------------------------------------------------------------------------------------
Operations and Administrative Program............   $ 38,260.00      $ 43,720.00      $ 5,460.00             14%
----------------------------------------------------------------------------------------------------------------


    The President requests $43.7 million in FY 2024 for the 
activities of the FMC, a $5.5 million (14 percent) increase 
from the FY 2023 enacted level, and equal to the FY 2024 
authorized level.\47\ The request would permit the funding of 
salaries and benefits for 163 full-time equivalents, a 5.29 
percent projected pay raise for personnel, rent and building 
security needs, and information technology system 
improvements.\48\
---------------------------------------------------------------------------
    \47\ Ocean Shipping Reform Act of 2022, Pub. L. No. 117-146, 136 
Stat. 1272 available at https://www.congress.gov/117/plaws/publ146/
PLAW-117publ146.pdf [hereinafter OSRA 2022].
    \48\ See FMC FY24 Budget Justification, supra note 6.
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IMPLEMENTATION OF THE OCEAN SHIPPING REFORM ACT OF 2022

    The Ocean Shipping Reform Act of 2022 (P.L. 117-146) 
strengthened FMC authorities to promote the growth and 
development of United States exports through an ocean 
transportation system that is competitive, efficient, and 
economical.\49\ This legislation authorizes appropriations for 
FMC through FY 2025; sets standards for detention and demurrage 
charges and sets penalties for charges deemed inaccurate; 
allows FMC to set minimum contract standards for ocean shipping 
service contracts to protect United States shippers from 
actions which leave export cargoes stranded at United States 
ports; and increases protections for domestic shippers from 
retaliation by foreign ocean carriers.\50\
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    \49\ OSRA 2022, supra note 47.
    \50\ Id.
---------------------------------------------------------------------------
    The Commission is currently taking actions to enact the 
requirements of this law. Since the Act's enactment on June 16, 
2022, FMC has:
     LProvided industry guidance on filing charge 
complaints with respect to charges assessed by a common carrier 
that the complainant believes may not comply with statute.\51\
---------------------------------------------------------------------------
    \51\ FMC, Industry Advisory--Interim Procedures for Submitting 
``Charge Complaints'' Under 46 U.S.C. 41310, (July 14, 2022), available 
at https://www.fmc.gov/industry-advisory-interim-procedures-for-
submitting-charge-complaints/.
---------------------------------------------------------------------------
     LProvided industry guidance on the applicability 
of self-executing provisions of the law to common carriers, 
including compliance with demurrage and detention billing 
practices.\52\
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    \52\ FMC, Industry Advisory--Applicability of Provision Contained 
in PL 117-146, (June 24, 2022), available at https://www.fmc.gov/
industry-advisory-applicability-of-provisions-contained-in-pl-117-146/.
---------------------------------------------------------------------------
     LSolicited public comments on a new data 
collection system for containerized vessel imports and exports 
to and from the United States.\53\
---------------------------------------------------------------------------
    \53\ Agency Information Collection Activities: 30-Day Public 
Comment Request, 87 Fed. Reg. 75629, (Jan. 9, 2023), available at 
https://www.govinfo.gov/content/pkg/FR-2022-12-09/pdf/2022-26804.pdf.
---------------------------------------------------------------------------
     LSolicited public comments on a proposed rule 
requiring inclusion of specific information on demurrage and 
detention invoices.\54\
---------------------------------------------------------------------------
    \54\ FMC, Proposing New Demurrage & Detention Billing Requirements, 
(Oct. 7, 2022), available at https://www.fmc.gov/fmc-proposing-new-
demurrage-detention-billing-requirements/.
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     LSolicited public comments on a proposed rule that 
would define unreasonable refusal to deal or negotiate with 
respect to vessel space accommodation provided by an ocean 
common carrier.\55\
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    \55\ FMC, FMC Seeking Public Comment on Unreasonable Refusal to 
Deal Proposed Rule (Sept. 13, 2022), available at https://www.fmc.gov/
fmc-seeking-public-comment-on-unreasonable-refusal-to-deal-proposed-
rule/.
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     LEstablished the Bureau of Enforcement, 
Investigations, and Compliance for improved effectiveness of 
the Commission's enforcement and compliance activities.\56\
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    \56\ FMC, New FMC Enforcement Structure, (July 29, 2022), available 
at https://www.fmc.gov/new-fmc-enforcement-structure/.
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     LEntered into an agreement with the National 
Academies of Sciences, Engineering, and Medicine to carry out a 
study and develop best practices for the efficient supply of 
chassis for transporting intermodal containers.\57\
---------------------------------------------------------------------------
    \57\ National Academies of Sciences, Engineering, and Medicine. 
Best Practices for the Efficient Supply of Chassis for Transporting 
Intermodal Containers, available at https://www.nationalacademies.org/
our-work/best-practices-for-the-efficient-supply-of-chassis-for-
transporting-intermodal-containers#sectionContact.
---------------------------------------------------------------------------
     LPublished on their website the ``Fact Finding 
Investigation 29 Final Report on the Effects of the COVID-19 
Pandemic on the U.S. International Ocean Supply Chain: 
Stakeholder Engagement and Possible Violations of 46 U.S.C. 
41102(c)''.\58\
---------------------------------------------------------------------------
    \58\ FMC, Fact Finding Investigation 29 Final Report, available at 
https://www2.fmc.gov/readingroom/docs/FFno29/
Fact%20Finding%2029%20Final%20Report.pdf/.
---------------------------------------------------------------------------

               V. BUDGET FOR NOAA'S MARINE DEBRIS PROGRAM

    NOAA's marine debris and oil spill response operations are 
funded out of the Agency's Coastal Science, Assessment, 
Response, and Restoration Account. NOAA's FY 2024 Congressional 
Budget Justification documents and FY 2023 spending plans are 
pending release and unavailable at this time. More broadly, the 
President's FY 2024 budget request includes $6.8 billion for 
NOAA, an increase of $450.5 million above the FY 2023 enacted 
level.\59\
---------------------------------------------------------------------------
    \59\ NOAA, NOAA's FY 2024 budget: Building a climate-ready nation, 
available at https://www.noaa.gov/news-release/noaa-fy-2024-budget-
building-climate-ready-nation.
---------------------------------------------------------------------------

                             VI. WITNESSES

     LRear Admiral Ann C. Phillips (Ret.), 
Administrator, Maritime Administration
     LThe Honorable Daniel B. Maffei, Chairman, Federal 
Maritime Commission
     LWritten testimony provided by: Dr. Richard W. 
Spinrad, Under Secretary of Commerce for Oceans and Atmosphere, 
and Administrator, National Oceanic and Atmospheric 
Administration

 
    REVIEW OF FISCAL YEAR 2024 BUDGET REQUEST FOR FEDERAL MARITIME 
   TRANSPORTATION PROGRAMS, AND IMPLEMENTATION OF THE OCEAN SHIPPING 
                           REFORM ACT OF 2022

                              ----------                              


                        THURSDAY, MARCH 23, 2023

                  House of Representatives,
                    Subcommittee on Coast Guard and
                           Maritime Transportation,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:27 p.m. in 
room 2253 Rayburn House Office Building, Hon. Daniel Webster 
(Chairman of the subcommittee) presiding.
    Mr. Webster of Florida. The Subcommittee on Coast Guard and 
Maritime Transportation will come to order.
    I ask unanimous consent that the chairman be authorized to 
declare a recess at any time during today's hearing.
    Without objection, so ordered.
    As a reminder, if Members submit a document, they need to 
email it to us at [email protected].
    I now recognize myself for the purpose of an opening 
statement for 5 minutes.

OPENING STATEMENT OF HON. DANIEL WEBSTER OF FLORIDA, CHAIRMAN, 
    SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

    Mr. Webster of Florida. Today, we convene to review the 
fiscal year 2024 budget request for Federal maritime 
transportation programs administered by the Maritime 
Administration, the Federal Maritime Commission, and NOAA.
    I would like to welcome our guests, Rear Admiral Ann 
Phillips, Administrator of the Maritime Administration, and the 
Honorable Dan Maffei, Chairman of the Federal Maritime 
Commission.
    MARAD serves as the agency within the Department of 
Transportation responsible for promoting the U.S. merchant 
marine and the domestic maritime industry. In this pursuit, 
they are responsible for the administration of programs that 
serve to strengthen national security and ensure a more 
efficient maritime transportation system.
    This subcommittee shares jurisdiction of MARAD with the 
House Armed Services Committee, with us overseeing the 
nonnational security aspects of the merchant marine. This 
includes the Port Infrastructure Development Program known as 
PIDP that provides grants for coastal seaports, inland river 
ports, and Great Lakes ports infrastructure to improve the 
safety, efficiency, and reliability of the movement of goods.
    The President's budget request for fiscal year 2024 
includes $230 million for this program, which is in addition to 
the $450 million in advanced appropriations the program 
received through the Infrastructure Investment and Jobs Act.
    Though this program is intended to help optimize and 
improve port operations, I am concerned with the program's 
ability to fully realize this goal, due to language Congress 
has routinely included in the program's authorization that 
prohibits the use of funds for automated cargo handling 
equipment. I am also concerned that MARAD has included this 
policy in the notice of funding opportunity for the United 
States Marine Highway Grant program, which has no legislative 
requirement specifying this prohibition.
    It is unfortunate that we have drastically limited the 
impact these programs can have due to this policy, and I look 
forward to hearing from MARAD on the role automation plays in 
improving port operations for our Nation's supply chains.
    Additionally, MARAD oversees the permitting process for 
deepwater ports, its sole permitting program. Current 
applicants have experienced very long delays in the processing 
of their applications, and in fact, all five pending 
applications are stalled due to MARAD's convoluted process. I 
hope we can work with MARAD to ensure that these applications 
are processed in a timely fashion as is directed under law.
    We also have FMC with us today to discuss the work being 
done to implement provisions of the Ocean Shipping Reform Act 
of 2022, known as OSRA. FMC is an independent agency 
responsible for the regulation of oceanborne transportation in 
the foreign commerce of the United States.
    The supply chain crisis that emerged following the onset of 
the COVID-19 pandemic led to massive increases in ocean 
shipping costs, long cargo wait times at ports, and an 
imbalance in maritime trade flows leading to the frequent 
export of empty containers from the U.S. rather than moving 
inland to be filled with domestically produced goods. Congress, 
in response, passed the Ocean Shipping Reform Act of 2022 to 
help address many of these challenges facing U.S. exporters.
    I applaud FMC for working expeditiously to implement the 
many provisions included in this law, unlike the United States 
Coast Guard that often fails to carry out the legislative 
directives of this subcommittee. I look forward to hearing from 
Chairman Maffei today on FMC's progress in implementing OSRA.
    Lastly, I would like to note that although they are not 
here in person, we also received written testimony from NOAA 
regarding their Marine Debris Programs. NOAA is responsible for 
providing support to oilspill response and marine debris 
prevention, removal, research, response coordination, 
monitoring, and detection.
    I thank NOAA for providing us with their written testimony, 
and I thank our witnesses for being here today. I look forward 
to hearing their testimony.
    [Mr. Webster of Florida's prepared statement follows:]

                                 
    Prepared Statement of Hon. Daniel Webster of Florida, Chairman, 
        Subcommittee on Coast Guard and Maritime Transportation
    Today, we convene to review the fiscal year 2024 budget requests 
for federal maritime transportation programs administered by the 
Maritime Administration, the Federal Maritime Commission, and the 
National Oceanic and Atmospheric Administration. I'd like to welcome 
our witnesses--Rear Admiral Ann Phillips, Administrator of the Maritime 
Administration, and the Honorable Dan Maffei, Chairman of the Federal 
Maritime Commission.
    MARAD serves as the agency within the Department of Transportation 
responsible for promoting the U.S. Merchant Marine and the domestic 
maritime industry. In this pursuit, they are responsible for the 
administration of programs that serve to strengthen national security 
and ensure a more efficient maritime transportation system.
    This subcommittee shares jurisdiction of MARAD with the House Armed 
Services Committee, with us overseeing the non-national security 
aspects of the merchant marine. This includes the Port Infrastructure 
Development Program, also known as PIDP, that provides grants for 
coastal seaports, inland river ports, and Great Lakes ports 
infrastructure to improve the safety, efficiency, and reliability of 
the movement of goods.
    The President's budget request for FY24 includes $230 million for 
this program, which is in addition to the $450 million in advanced 
appropriations the program received through the Infrastructure 
Investment and Jobs Act.
    Though this program is intended to help optimize and improve port 
operations, I am concerned with the program's ability to fully realize 
this goal due to language Congress has routinely included in the 
program's authorization that prohibits the use of funds for automated 
cargo handling equipment. I am also concerned that MARAD has included 
this policy in the notice of funding opportunity for the United States 
Marine Highway Grant Program, which has no legislative requirement 
specifying this prohibition.
    It is unfortunate that we have drastically limited the impact these 
programs can have due to this policy, and I look forward to hearing 
from MARAD on the role automation plays in improving port operations 
and our Nation's supply chains.
    Additionally, MARAD oversees the permitting process for deep water 
ports, its sole permitting program. Current applicants have experienced 
very long delays in the processing of their applications and in fact, 
all five pending applications are stalled due to MARAD's convoluted 
process. I hope that we can work with MARAD to ensure that these 
applications are processed in a timely fashion as is directed under 
law.
    We also have FMC here with us today to discuss the work being done 
to implement provisions from the Ocean Shipping Reform Act of 2022, 
also known as OSRA. FMC is an independent agency responsible for the 
regulation of ocean-borne transportation in the foreign commerce of the 
U.S.
    The supply chain crisis that emerged following the onset of the 
COVID-19 pandemic led to massive increases in ocean shipping costs, 
long cargo wait times at ports, and an imbalance in maritime trade 
flows leading to the frequent export of empty containers from the U.S. 
rather than moving inland to be filled with domestically produced 
goods. Congress in response passed the Ocean Shipping Reform Act of 
2022 to help address many of these challenges facing U.S. exporters.
    I applaud FMC for working expeditiously to implement the many 
provisions included in this law, unlike the United States Coast Guard 
that often fails to carry out the legislative directives of this 
Subcommittee. I look forward to hearing from Chairman Maffei today on 
FMC's progress in implementing OSRA.
    Lastly, I would like to note that though they are not here in 
person to testify, we also received written testimony from the National 
Oceanic and Atmospheric Administration regarding their marine debris 
programs. NOAA is responsible for providing support to oil spill 
response and marine debris prevention, removal, research, response 
coordination, monitoring, and detection.
    I thank NOAA for providing us their written testimony and I thank 
our witnesses for being here today. I look forward to hearing their 
testimony.

    Mr. Webster of Florida. I ask unanimous consent that 
Members not on the subcommittee be allowed to participate in 
the hearing.
    Without objection, that is adopted.
    I now recognize Ranking Member Carbajal for 5 minutes for 
an opening statement.
    Mr. Carbajal. Thank you, Mr. Chair. I am going to yield to 
Ranking Member Larsen. He has somewhere to go, and he is the 
ranking member, if that is OK.
    Mr. Webster of Florida. OK. That recognition is accepted. 
And Mr. Larsen, you are recognized.

 OPENING STATEMENT OF HON. RICK LARSEN OF WASHINGTON, RANKING 
     MEMBER, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

    Mr. Larsen of Washington. Thanks. Thanks, Mr. Chair, and I 
want to thank the ranking member for indulging me. I want to 
thank you for scheduling this hearing for the fiscal year 2024 
budget requests of MARAD and the FMC, the first in a series 
that this committee will hold to inform us on maritime issues.
    MARAD's purpose is to promote the U.S. maritime industry, 
while the FMC protects consumers and monitors shipping company 
practices. Ocean shipping is dominated by foreign shipping 
companies, with U.S.-flagged operations comprising less than 2 
percent of imports and exports. Supply chain crises and ongoing 
international conflicts demonstrate the need for a robust U.S. 
maritime presence.
    The President's fiscal year 2024 budget request for MARAD 
includes a 2-percent increase and a 14-percent increase for 
FMC, both welcomed increases. Under MARAD, this year's budget 
request includes an increase for the United States Merchant 
Marine Academy to address long-term infrastructure needs and 
culture changes around sexual assault and sexual harassment.
    Investment in the U.S. maritime industry is long overdue, 
and for years, we faced a mariner shortage as the incumbent 
workforce ages out and industry struggles to appeal to younger 
Americans. Admiral Phillips, I do expect to hear how MARAD is 
promoting the industry and getting ahead of this particular 
growing issue.
    I would be remiss if I did not bring up the work Admiral 
Phillips and Deputy Administrator Lessley have done to address 
sexual assault and harassment, both at the U.S. Merchant Marine 
Academy and across the commercial industry. Sexual assault and 
harassment have no place in our society, and every mariner 
deserves respect and deserves to feel safe at sea. The industry 
will not grow if workers do not feel safe and welcome.
    The President's budget includes increases for MARAD's 
Marine Highway Program and the Port Infrastructure Development 
Program as well. Infrastructure investments in U.S. seaports 
and their intermodal connections, both on the land and in the 
water, provide opportunities to bolster our economy, create and 
sustain jobs, and enhance our international competitiveness. A 
strong and sustainable Federal investment in seaport-related 
infrastructure is critical to the economic and environmental 
health of the United States.
    Small shipyards are vital to maintaining an industrial 
shipbuilding base and a U.S. maritime presence while providing 
rewarding jobs to local communities. As technology evolves and 
industry invests in the development of alternative fuels, 
programs like the Small Shipyard Grant program will be 
essential in ensuring our shipyards can bring these new fuels 
and technology online. And despite an increase in authorized 
amounts, I am very disappointed the President's budget includes 
only $20 million for this program, which is the same as last 
year's budget request.
    Last Congress, we passed the Bipartisan Infrastructure Law, 
which included $2.25 billion over 5 years for the Port 
Infrastructure Development Program, the largest investment 
since the launch of that important initiative. These grants 
will bring U.S. ports into the 21st century and provide needed 
funds to reduce emissions and strengthen the supply chain. 
Since 2019, over $6 billion has been requested by applicants 
for these grants, demonstrating the demand for them.
    Between 2010 and 2019, China invested billions in domestic 
and foreign ports to broaden its global maritime influence. 
Economic and national security relies on maritime power. The 
Government of China understands this, and it is time that we 
do, too.
    Small ports are part of the lifelines to our local 
communities and are a critical part of the supply chain that 
can ease congestion at our large ports. That is why it is so 
important that we get robust funding in the PIDP.
    I want to commend Admiral Phillips and MARAD for their work 
on the BIL funding and look forward to seeing what projects are 
selected this fall.
    Last Congress, this committee passed the Ocean Shipping 
Reform Act of 2022, and under Chairman Maffei's leadership, the 
FMC has been quick to implement new requirements for ocean 
carriers and investigate unfair shipping practices. The FMC 
will require more funding and personnel to fully address the 
new investigative and prosecutorial authorities that we 
provided it under law. I am heartened to see the President 
understands this and included in the budget request a 14-
percent increase for FMC.
    Since the passage of OSRA in 2022, container prices have 
fallen, ships lingering offshore have dropped 30 percent, and 
FMC has improved the reporting process, leading to an increase 
in charge complaints from American businesses, one of which 
resulted in a $2 million settlement over findings that the 
shipping company knowingly and willfully violated the Shipping 
Act. These actions are important.
    Finally, I will just say the committee has jurisdiction 
over the Marine Debris Program at NOAA. Through this program, 
NOAA determines the sources of, reduces, prevents, and removes 
marine debris from our oceans to mitigate its impact on the 
marine environment and navigation safety. This is a critical 
program for the Pacific Northwest, for the Puget Sound, and the 
Salish Sea. I look forward to reauthorizing that, as well.
    [Mr. Larsen of Washington's prepared statement follows:]

                                 
 Prepared Statement of Hon. Rick Larsen of Washington, Ranking Member, 
             Committee on Transportation and Infrastructure
    Mr. Chairman, thank you for scheduling this afternoon's hearing to 
review the Fiscal Year 2024 budget requests of the Maritime 
Administration and the Federal Maritime Commission--the first in a 
series of hearings to inform the Committee ahead of this year's Coast 
Guard Authorization Act.
    The Maritime Administration's purpose is to promote the United 
States maritime industry while the Federal Maritime Commission protects 
consumers and monitors shipping company practices.
    Ocean shipping is dominated by foreign shipping companies with 
U.S.-flagged operations comprising less than 2 percent of imports and 
exports. The supply chain crisis and ongoing international conflicts 
demonstrate the need for a robust U.S. maritime presence.
    The President's fiscal year 2024 budget request for the Maritime 
Administration includes a 2 percent increase and a 14 percent increase 
for the Federal Maritime Commission--both welcomed increases.
    Under MARAD, this year's budget request includes an increase for 
the United States Merchant Marine Academy to address long-term 
infrastructure needs and culture changes around sexual assault and 
sexual harassment.
    Investment in the U.S. maritime industry is long overdue. For 
years, we have faced a mariner shortage as the incumbent workforce ages 
out and the industry struggles to appeal to younger Americans.
    Admiral Phillips, I expect to hear how MARAD is promoting the 
industry and getting ahead of this growing issue.
    I would be remiss if I did not bring up the work Admiral Phillips 
and Deputy Administrator Lessley have done to address sexual assault 
and sexual harassment both at the United States Merchant Marine Academy 
and across the commercial industry. Sexual assault and harassment have 
no place in our society. Every mariner deserves to be respected and 
feel safe out at sea. The industry will not grow if its workers do not 
feel safe and welcome.
    The President's budget includes increases for MARAD's Marine 
Highway Program and the Port Infrastructure Development Program.
    Infrastructure investments in U.S. seaports and their intermodal 
connections--both on the land and in the water--provide opportunities 
to bolster our economy, create and sustain jobs and enhance our 
international competitiveness.
    Strong and sustainable federal investment in seaport-related 
infrastructure is critical to the economic and environmental health of 
the nation.
    Small shipyards are vital to maintaining an industrial shipbuilding 
base and U.S. maritime presence while providing rewarding jobs to local 
communities.
    As technology evolves and the industry invests in the development 
of alternative fuels, programs like the Small Shipyard Grant Program 
will be essential in ensuring our shipyards can bring these new fuels 
and technology online. Despite an increase in authorized amounts, I'm 
disappointed the President's budget includes only $20 million for this 
program, which is the same as last year's budget request.
    Last Congress, we passed the Bipartisan Infrastructure Law which 
included $2.25 billion over 5 years for the Port Infrastructure 
Development Program--the largest investment since the launch of that 
important initiative. These grants will bring U.S. ports into the 21st 
century, providing needed funds to reduce emissions and strengthen the 
supply chain.
    Since 2019, over $6 billion has been requested by applicants for 
Port Infrastructure Development grants, demonstrating the demand for 
port infrastructure investments and the importance of the funding in 
the Bipartisan Infrastructure Law.
    Between 2010 and 2019, China invested billions in domestic and 
foreign ports to broaden their global maritime influence. Economic and 
national security relies on maritime power. China understands this and 
it is time we do too.
    Small ports are lifelines to local communities and are a critical 
part of the supply chain that can ease congestion at larger ports. That 
is why it is so important robust funding is allocated for small ports 
in the Port Infrastructure Development Program.
    In my district, the Swinomish Port Authority--a small port and one 
of the few Tribal-run port authorities--received $11 million to fund a 
master plan for the port and begin the design and engineering of a new 
commercial pier. The local impact of this project is immeasurable.
    I commend Admiral Phillips and the Maritime Administration for 
their work in awarding the Bipartisan Infrastructure Law funding, and I 
look forward to seeing what projects are selected this fall.
    Last Congress, this committee passed the Ocean Shipping Reform Act 
of 2022. Under Chairman Maffei's leadership, the Federal Maritime 
Commission has been quick to implement new requirements for ocean 
carriers and to investigate unfair shipping practices.
    The Federal Maritime Commission will require more funding and 
personnel to fully address the new investigative and prosecutorial 
authorities provided under the law. I am heartened to see that the 
President understands this and included in his budget request a 14 
percent increase for the Federal Maritime Commission.
    Since passage of the Ocean Shipping Reform Act of 2022, container 
prices have fallen, ships lingering offshore have dropped 30 percent 
and the FMC has improved the reporting process leading to an increase 
in charge complaints from American businesses. One of which resulted in 
a $2 million settlement over findings that the shipping company 
knowingly and willfully violated the Shipping Act. This means lower 
costs for consumers thanks to quick action by Congress and the 
President.
    The Committee also has jurisdiction over the Marine Debris Program 
at the National Oceanic and Atmospheric Administration (NOAA). Through 
this program, NOAA determines the sources of, reduces, prevents and 
removes marine debris from our oceans to mitigate its impact on the 
marine environment and navigation safety. I'm interested in bolstering 
the work of the Marine Debris Program as part of the Coast Guard 
Authorization.
    I look forward to engaging our witnesses on the administration's 
ongoing work to strengthen our supply chain and grow the United States 
commercial maritime fleet.

    Mr. Larsen of Washington. And with that, I thank the chair 
and the ranking member for the indulgence. I will be back for 
questions. I don't yield any time back, because I have none to 
yield back. Thank you.
    Mr. Webster of Florida. OK. Well, Mr. Carbajal, do you want 
to go ahead with your statement?
    Mr. Carbajal. I am glad to go, but I want to yield to your 
Republican that is on your side as the next Member. I don't 
want to take advantage. So, since you let my ranking member go, 
I am OK with the next Republican.
    Voice. We only do an opening statement for the chairman.
    Mr. Carbajal. So, I can go next? OK, great. Thank you. I 
just want to do what is right.

  OPENING STATEMENT OF HON. SALUD O. CARBAJAL OF CALIFORNIA, 
   RANKING MEMBER, SUBCOMMITTEE ON COAST GUARD AND MARITIME 
                         TRANSPORTATION

    Mr. Carbajal. Thank you, Mr. Chairman, for scheduling 
today's hearing, ``Review of Fiscal Year 2024 Budget Request 
for Federal Maritime Transportation Programs, and 
Implementation of the Ocean Shipping Reform Act of 2022.'' 
Well, that was a mouthful.
    And I want to congratulate you, Mr. Chairman, on being 
appointed chairman of this subcommittee. I look forward to 
working with you and finding as much common ground on a 
bipartisan basis as possible.
    I look forward to hearing from Chair Maffei of the Federal 
Maritime Commission, or FMC, and Administrator Phillips of the 
Maritime Administration, or MARAD, as we call it, on the 
President's budget request and their agencies' priorities for 
the upcoming year.
    I am particularly eager to hear from the FMC about its 
implementation of the Ocean Shipping Reform Act, which passed 
out of this subcommittee last Congress before becoming law, and 
how its new authorities will help maintain a resilient and 
efficient supply chain. I want to remind us it passed in a 
bipartisan fashion.
    As the Federal agency tasked with ensuring fairness in 
international shipping, the FMC has key authorities which allow 
it to safeguard transparent and equitable maritime commerce. As 
the recent supply chain issues have demonstrated, stability in 
international shipping is integral to a strong economy.
    During the COVID-19 pandemic, weaknesses in our supply 
chain system were amplified as landside port congestion and 
unfair shipping practices by foreign ocean carriers led to 
backlogs and price increases, which certainly contributed to 
inflation.
    The reforms in our bill strengthened the FMC's authority to 
investigate unfair ocean shipping carrier fees and facilitate 
the efficient movement of cargo through U.S. ports. I am proud 
to say that since the passage of the Ocean Shipping Reform Act, 
vessel congestion at ports has decreased dramatically, and the 
FMC has refunded over $700,000 in undue charges by carriers--
or, should I say, unfair charges.
    Further, the FMC is currently undertaking a rulemaking 
aimed at ensuring that exporters are giving fair access to 
cargo space. It is important that the FMC is sufficiently 
funded so that it can properly carry out these reforms, which 
will greatly benefit American businesses and the American 
consumer.
    I look also forward to learning about MARAD's plans to 
revitalize the American maritime industry, from ports and 
infrastructure, to our shrinking U.S.-flagged fleet, to the 
dwindling of available American merchant mariners.
    Administrator Phillips and her team have done an excellent 
job continuing to pursue systemic change to the toxic culture 
that has resulted in sexual violence at the U.S. Merchant 
Marine Academy and in the commercial maritime industry. Some of 
that congratulations is also extended to Lucinda Lessley for 
her work before the Administrator came on. This issue is of the 
utmost importance, and while our work is not done, I commend 
both of your leaderships on efforts to make the maritime 
industry a safe and desirable workplace for all.
    MARAD oversees vital grant programs that fund projects to 
modernize our infrastructure, including the Maritime 
Environmental and Technical Assistance program, META, and the 
Port Infrastructure Development Program. The President's budget 
request includes $8.5 million for META, which is a $2.5 million 
increase over last year's budget. This supports the research, 
development, installation, and use of low- or zero-carbon 
technologies. These technologies are crucial for reducing 
harmful emissions that protect the environment, especially for 
port communities where air pollution is statistically worse.
    Included in this request for META is $1.5 million for the 
research and reduction of underwater noise from vessels. 
Underwater noise disproportionately affects marine mammals such 
as whales. Last Congress, I worked with my colleagues across 
the aisle to include an increased authorization for META and 
language to address vessel sound. While this request is small, 
I am happy to see that MARAD is prioritizing protecting whales 
from the impacts of vessels.
    The Port Infrastructure Development Program also supports 
decarbonization projects, which help reduce our carbon 
footprint and build a more resilient, reliable Marine 
Transportation System. When we invest in renewable energy like 
electrification at ports, it creates jobs and adds resilience 
to disruptions that can occur with traditional fossil fuels, 
not to mention protecting the public's health.
    I am particularly interested in how the Port Infrastructure 
Development Program could support the Morro Bay offshore wind 
project in my district. Building out potential port 
infrastructure to receive and transmit this energy, as well as 
creating laydown space for shoreside wind turbine staging and 
operations is of critical importance and will require a 
significant investment.
    Thank you to our witnesses and attendees for their 
participation today. I look forward to a robust discussion 
about how the 2024 budget request can support investments in a 
stronger maritime industry.
    [Mr. Carbajal's prepared statement follows:]

                                 
  Prepared Statement of Hon. Salud O. Carbajal of California, Ranking 
    Member, Subcommittee on Coast Guard and Maritime Transportation
    Thank you, Chair Webster, for scheduling today's hearing on the 
``Review of Fiscal Year 2024 Administration Budget Request for Federal 
Maritime Transportation Programs and Implementation of the Ocean 
Shipping Reform Act of 2022''.
    I look forward to hearing from Chair Maffei of the Federal Maritime 
Commission, or FMC, and Administrator Phillips of the Maritime 
Administration, or MARAD, on the President's budget request and their 
agency priorities for the upcoming year.
    I am particularly eager to hear from the FMC about its 
implementation of the Ocean Shipping Reform Act, which passed out of 
this subcommittee last Congress before becoming law, and how its new 
authorities will help maintain a resilient and efficient supply chain.
    As the federal agency tasked with ensuring fairness in 
international shipping, the FMC has key authorities which allow it to 
safeguard transparent and equitable maritime commerce. As the recent 
supply chain issues have demonstrated, stability in international 
shipping is integral to a strong economy.
    During the COVID-19 pandemic, weaknesses in our supply chain system 
were amplified as landside port congestion and unfair shipping 
practices by foreign ocean carriers led to backlogs and price 
increases, which have contributed to inflation.
    The reforms in our bill strengthened the FMC's authority to 
investigate unfair ocean shipping carrier fees and facilitate the 
efficient movement of cargo through U.S. ports. I am proud to say that 
since the passage of the Ocean Shipping Reform Act, vessel congestion 
at ports has decreased and the FMC has refunded over $700,000 in undue 
charges by carriers.
    Further, the FMC is currently undertaking a rulemaking aimed at 
ensuring that exporters are given fair access to cargo space. It is 
important that the FMC is sufficiently funded so that it can properly 
carry out these reforms, which will greatly benefit American businesses 
and the American consumer.
    I look also forward to learning about MARAD's plans to revitalize 
the American maritime industry, from ports and infrastructure to our 
shrinking U.S. flagged fleet and the dwindling availability of American 
merchant mariners.
    Administrator Phillips has done an excellent job continuing to 
pursue systemic change to the toxic culture that has resulted in sexual 
violence at the U.S. Merchant Marine Academy and in the commercial 
maritime industry. This issue is of the utmost importance and, while 
our work is not done, I commend her leadership on efforts to make the 
maritime industry a safe and desirable workplace for all.
    MARAD oversees vital grant programs that fund projects to modernize 
our infrastructure, including the Maritime Environmental and Technical 
Assistance program, or META, and the Port Infrastructure Development 
Program.
    The President's budget request includes $8.5 million for META, 
which is a $2.5 million increase over last year's budget. This supports 
the research, development, installation and use of low or zero-carbon 
technologies. These technologies are crucial for reducing harmful 
emissions and protecting the environment, especially for port 
communities, where air pollution is statistically worse.
    Included in this request for META is $1.5 million for the research 
and reduction of underwater noise from vessels. Underwater noise 
disproportionately affects marine mammals, such as whales. Last 
Congress I worked with my colleagues across the aisle to include an 
increased authorization for META and language to address vessel sound. 
While this request is small, I am happy to see MARAD prioritize 
protecting our whales from the impacts of vessels.
    The Port Infrastructure Development Program also supports 
decarbonization projects, which help reduce our carbon footprint and 
build a more resilient, reliable marine transportation system. When we 
invest in renewable energy, like electrification at ports, it creates 
jobs and adds resilience to disruptions that can occur with traditional 
fossil fuels.
    I'm particularly interested in how the Port Infrastructure 
Development Program could support the Morro Bay offshore wind project 
in my district. Building out the port infrastructure to receive and 
transmit this energy, as well as creating laydown space for shoreside 
wind turbine staging, is of critical importance and requires a 
significant investment.
    Thank you to our witnesses and attendees for their participation 
today. I look forward to a robust discussion about how the 2024 budget 
request can support investments in a stronger maritime industry.

    Mr. Carbajal. Mr. Chair, I yield back.
    Mr. Webster of Florida. I would like to welcome our 
witnesses and thank them for being here today. I appreciate 
your attendance.
    I ask unanimous consent that the witnesses' full statements 
be included in the record.
    Without objection, so ordered.
    As your written testimony has been made part of the record, 
the committee also asks you to limit your oral remarks to 5 
minutes.
    With that, Admiral Phillips, you are recognized for 5 
minutes for your testimony.

 TESTIMONY OF ANN C. PHILLIPS, REAR ADMIRAL, U.S. NAVY (RET.), 
AND ADMINISTRATOR, MARITIME ADMINISTRATION; AND HON. DANIEL B. 
         MAFFEI, CHAIRMAN, FEDERAL MARITIME COMMISSION

 TESTIMONY OF ANN C. PHILLIPS, REAR ADMIRAL, U.S. NAVY (RET.), 
           AND ADMINISTRATOR, MARITIME ADMINISTRATION

    Admiral Phillips. Thank you, Chairman Webster.
    Good afternoon, everyone. Good afternoon, Mr. Chairman, 
Ranking Member Carbajal, members of the subcommittee. Thank you 
for your tremendous support for the Maritime Administration, 
the U.S. Merchant Marine Academy, and the U.S. maritime 
industry. And thank you for the opportunity to testify before 
you today.
    As a retired U.S. Navy rear admiral with more than 30 years 
of military service, I knew before becoming the Maritime 
Administrator how critical our merchant marine and our entire 
maritime industry are to our national defense, as well as our 
economy.
    Now, having led the great MARAD team for just under a year, 
I can tell you this agency is meeting many historic moments as 
we work to promote the merchant marine and strengthen all 
facets of the maritime industry. We are administering once-in-
a-generation investments in ports and waterways made possible 
by the President's Bipartisan Infrastructure Law. We are also 
working to advance culture change throughout the merchant 
marine to help ensure every mariner is treated with respect and 
has the opportunity to advance on the basis of their skills and 
professionalism. We are advancing long overdue recapitalization 
of our aging Ready Reserve Force.
    The President's fiscal year 2024 budget request of $980.2 
million for MARAD is critical to enabling MARAD to carry out 
this vital work on every front. For example, the request would 
expand our historic investments in ports. In fiscal year 2024, 
the third tranche of funding, $450 million, provided by the 
Bipartisan Infrastructure Law to support the Port 
Infrastructure Development Program, will be invested in new 
grants. The President's budget requests an additional $230 
million to support PIDP, which would bring the total amount of 
funding available in 2024 to $680 million.
    Last year, MARAD awarded more than $703 million in PIDP 
grants to 41 projects in 22 States and 1 Territory. More than 
60 percent of these awards benefit ports in historically 
disadvantaged communities, and more than $150 million in 
awarded funding focuses on port electrification to improve air 
quality.
    In addition, the President's fiscal year 2024 request will 
enable MARAD to continue to address the urgent and longstanding 
challenges at the Merchant Marine Academy, including 
implementing the many new authorities and responsibilities 
provided in the fiscal year 2023 NDAA.
    Specifically, funding will support approximately 975 
midshipmen and 292 faculty and staff. It will enable us to 
continue our work implementing the Every Mariner Builds a 
Respectful Culture program, EMBARC, and help meet the Academy's 
extensive facility, maintenance, and repair needs.
    As you know, MARAD established the EMBARC program in 
December of 2021 to help prevent sexual assault and harassment 
during the Sea Year program to support survivors, strengthen a 
culture of accountability, and improve safety for all mariners. 
Now, thanks to the fiscal year 2023 NDAA, commercially operated 
vessels must, by law, comply with sexual assault and harassment 
prevention and response standards set by MARAD before they can 
train Merchant Marine Academy cadets.
    Further, the fiscal year 2023 NDAA gave MARAD the authority 
to withhold payments from companies that receive Federal 
subsidies if they do not comply with MARAD's policies and 
requirements. MARAD is working as quickly as possible to 
develop a proposed EMBARC rule pursuant to the authority 
provided by the NDAA. I note that today there are 16 commercial 
operators enrolled in EMBARC, and together they operate more 
than 140 vessels.
    The 2024 budget request also includes $92 million for 
capital and maintenance funding improvements for the Academy to 
help us advance capital projects and address the maintenance 
backlog.
    We have also implemented numerous measures to improve our 
ability to manage capital projects at the Academy, including 
creating a new position staffed by a senior executive to 
oversee all projects. Late last year, we provided the Academy's 
Fiscal Year 2022 Capital Improvement Plan, which details 
project needs to support safety, health, and well-being of 
midshipmen. In December 2022, we awarded a campuswide 
maintenance contract at USMMA, which has a $42 million ceiling 
over the next 5 years, and additional maintenance work, 
including the replacement of boilers, will continue outside 
that contract.
    Looking at our sealift programs, the fiscal year 2024 
budget requests the full authorization of $318 million for the 
Maritime Security Program, and the budget requests $60 million 
for the Tanker Security Program. I am pleased to report that at 
the end of last year, MARAD issued an interim final rule to 
implement the Tanker Security Program. The TSP application 
period closed February 17th, and we anticipate announcing the 
first 10 ships selected for enrollment in the near term.
    Thank you for the opportunity to present and discuss the 
President's budget for MARAD, and I look forward to any 
questions you and the members of the subcommittee may have.
    [Admiral Phillips' prepared statement follows:]

                                 
Prepared Statement of Ann C. Phillips, Rear Admiral, U.S. Navy (Ret.), 
               and Administrator, Maritime Administration
    Good afternoon, Chairman Webster, Ranking Member Carbajal, and 
Members of the Subcommittee. Thank you for your tremendous support for 
the Maritime Administration (MARAD), the U.S. Merchant Marine Academy 
(USMMA), and the U.S. maritime industry. We greatly appreciate the 
opportunity to testify today on the President's Fiscal Year (FY) 2024 
budget, and how this request will enable MARAD to continue to advance 
key priorities in support of our economic and national security.
                         FY 2024 Budget Request
    MARAD's mission is to foster, promote, and develop the maritime 
industry of the United States to meet the nation's economic and 
security needs. The President's FY 2024 Budget request of $980.2 
million for MARAD will enable the agency to continue to strengthen our 
sealift enterprise by advancing recapitalization of the Ready Reserve 
Force (RRF) and the vital commercial sealift programs that support 
U.S.-flagged vessels operating in the foreign trade.
    The President's request will also support investments in our ports 
and waterways to improve supply chain resiliency and expand our efforts 
to address climate change. In FY 2024, the third tranche of funding--
$450 million--provided by the Bipartisan Infrastructure Law (BIL) to 
support the Port Infrastructure Development Program (PIDP) will be 
invested in new grants. The President's budget requests an additional 
$230 million to support PIDP, which would bring the total amount of 
funding available in FY 2024 to $680 million and enable us to continue 
modernizing our ports to help reduce the costs of moving goods from 
ships to shelves and from American farmers and factories to 
destinations overseas.
    In addition, the President's request will enable MARAD to continue 
critical investments to address the urgent and long-standing challenges 
at the USMMA. Further, it will enable us to implement the many new 
authorities and responsibilities provided in the James M. Inhofe 
National Defense Authorization Act for Fiscal Year (FY 2023 NDAA).
            Economic and Climate Sustainability Investments
    The President's FY 2024 budget requests $230 million for the PIDP 
to provide grants to improve port infrastructure and facilities and to 
stimulate economic growth in and around ports while also improving 
safety, addressing climate change and equity, and strengthening our 
supply chains. In addition to the funding requested in the budget, the 
BIL provides $450 million in advance appropriations for this program in 
FY 2024. Together, this funding would provide a $680 million investment 
for port infrastructure projects.
    Last year, MARAD awarded more than $703 million in PIDP grants. 
This total included the first tranche of $450 million in funding 
provided by the BIL, approximately $234 million in FY 2022 
appropriations, and unexpended funding from a prior PIDP round. The 
2022 PIDP awards will fund 41 projects in 22 states and one territory. 
More than 60 percent of the PIDP awards made in 2022 benefit ports in 
historically disadvantaged communities. More than $150 million in the 
funding awarded last year focuses on port electrification to improve 
air quality, while nearly $100 million of the awarded funding supports 
projects that will advance offshore wind farm developments.
    This year, thanks again to the BIL and the funding provided in the 
FY 2023 appropriations measure, more than $662 million in funding is 
available for PIDP grants. The Notice of Funding Opportunity (NOFO) for 
this program is open and applications are due on April 28, 2023.
    The FY 2024 Budget also requests $11 million for the United States 
Marine Highway Program. Marine highways support our maritime supply 
chains and enable more cost-effective transportation options for U.S. 
shippers and manufacturers.
    The FY 2023 NDAA made significant changes to this program, 
including renaming it from the ``America's Marine Highway Program'' to 
the new ``United States Marine Highway Program'' and expanding the 
types of cargo that projects receiving funding under the program can 
support. The changes made by the FY 2023 NDAA are incorporated into 
this year's NOFO for the United States Marine Highway Program, which is 
now open. There is $12.4 million in funding available and applications 
are due on April 28, 2023. Importantly, thanks to another change made 
in the FY 2023 NDAA, any eligible project along any of the 29 
designated Marine Highway Routes--which encompass 41 states--is 
eligible to apply for funding.
    In 2022, MARAD awarded nearly $39 million in marine highway 
projects. This unprecedented level of funding was made possible by the 
BIL, which provided a one-time infusion of $25 million to support the 
expansion of marine highways. The funding awarded last year will 
support 12 projects across the nation--and nearly all the funding is 
supporting projects in Historically Disadvantaged Communities or 
Federally designated community development zones.
    The FY 2024 Budget also requests $20 million for MARAD's Small 
Shipyards grants to support infrastructure improvements at qualified 
small U.S. shipyards to help improve their efficiency and ability to 
compete for domestic and international commercial ship construction and 
maintenance opportunities. Investing in shipbuilding supports job 
creation in a vital domestic industrial base. These grants can also be 
used to support the acquisition of equipment that reduces climate 
impacts and adapts technologies that reduce shipyard power consumption.
    Within MARAD's FY 2024 Budget request, $8.5 million will support 
the Maritime Environmental and Technical Assistance (META) program. The 
META program fulfills a niche in the Federal government by being 
specifically designed to assist stakeholders with innovation that 
supports a safe and efficient U.S. maritime transportation sector. 
Approximately 75 percent of the FY 2024 funding will be focused on 
efforts related to decarbonization of the maritime transportation 
sector.
    The FY 2024 Budget request for MARAD includes $3 million for the 
Maritime Guaranteed Loan Program (Title XI) to provide the salaries and 
overhead support to manage the loan portfolio, currently at $1.5 
billion in outstanding loan guarantees. This program is designed to 
manage loans that help to promote the U.S. shipyard industry by 
providing additional opportunities for vessel construction and 
modernization, including repowering, that may otherwise be unavailable 
to ship owners.
    In June 2022, MARAD designated vessels constructed or reconstructed 
for use to support offshore wind facilities as Vessels of National 
Interest. This is the first time that this authority has been used 
since it was added to Title XI statute in 2019. With this designation, 
applications for projects qualifying as Vessels of National Interest 
have priority for review and funding. Since this designation, there has 
been a significant increase in interest in the Title XI Program to 
support offshore wind vessels. The program has applications for seven 
projects under credit trustworthiness review, including five projects 
for Jones Act-qualified windfarm vessels.
    The President's FY 2024 Budget requests $6 million for MARAD's Ship 
Disposal Program for support staff and overhead costs to continue to 
put primary emphasis on the disposal of the worst conditioned, non-
retention vessels to mitigate environmental risks.
              U.S. Merchant Marine Education and Training
    MARAD supports mariner training programs to produce highly skilled 
U.S. Coast Guard (USCG) credentialed officers for the U.S. merchant 
marine. Specifically, MARAD supports mariner education and training at 
USMMA, and it facilitates mariner education through the extensive 
support we provide to the six state maritime academies (SMA).
    Graduates of USMMA are required to maintain their licenses for 6 
years and to sail on commercial vessels or serve in other capacities--
such as on active duty in U.S. uniformed services--for 5 years. USMMA 
is also the principal source of new officers for the U.S. Navy's 
Strategic Sealift Officer (SSO) Program, which maintains a cadre of 
approximately 2,000 U.S. Naval Reserve Officers with the training and 
credentials to operate strategic sealift resources at times of national 
need.
    Funding will support academic operating expenses for approximately 
975 midshipmen and 292 faculty and support staff, including expanded 
support for the extensive facility maintenance and repair needs of the 
Academy's aging physical plant and for our work implementing the Every 
Mariner Builds A Respectful Culture (EMBARC) program.
    MARAD established the EMBARC program in December 2021 to help 
prevent sexual assault and sexual harassment during the Sea Year 
program, to support survivors, strengthen a culture of accountability, 
and improve safety for all mariners. Vessel operators enroll in the 
EMBARC program before USMMA cadets can train on an operator's vessels.
    Now, thanks to the FY 2023 NDAA, commercially operated vessels must 
comply with standards set by MARAD regarding the prevention of, and 
response to, sexual assault and harassment before they can train USMMA 
cadets. In addition, the FY 2023 NDAA authorized the Secretary of 
Transportation to establish a Sexual Assault Advisory Council to review 
existing policies and make recommendations for improvements to build on 
our efforts to strengthen prevention of sexual assault and sexual 
harassment on campus and during Sea Year and ensure appropriate 
responses when such incidents occur.
    Further, the FY 2023 NDAA gave MARAD the authority to withhold 
payments from companies participating in the Maritime Security Program 
(MSP), Cable Ship Security Program (CSP), and Tanker Security Program 
(TSP) if they do not comply with the policies and requirements 
established by MARAD for the protection of cadets from sexual assault 
and sexual harassment. MARAD is working as quickly as possible to 
develop a proposed EMBARC rule pursuant to the authority provided by 
the FY 2023 NDAA.
    In addition, the FY 2023 NDAA requires that ocean-going vessels 
include sexual assault and sexual harassment response policies in their 
Safety Management Systems (SMS)--which has been a central tenet of 
EMBARC. In short, the FY 2023 NDAA reinforces a long overdue change in 
shipboard culture that will promote fair and equitable treatment of all 
mariners and contribute to a safer working environment.
    Today, there are 16 commercial operators enrolled in EMBARC; 
together, they operate more than 140 vessels. All vessel operators that 
are required to carry USMMA cadets under section 46 U.S.C. Sec.  
51307(b)--i.e., operators with vessels enrolled in the MSP and the 
CSP--have enrolled in EMBARC. Companies that enroll vessels in the new 
Tanker Security Fleet will be required to have completed enrollment in 
EMBARC as a condition of enrolling in the TSP.
    Thanks to the incredible support provided by the Military Sealift 
Command, the Navy, and the USCG, the Midshipmen in the USMMA Class of 
2023 have accrued the sea time needed to qualify to take their 
licensing exams on time and to graduate on time.
    Of the funding requested in the FY 2024 Budget for USMMA, $92 
million would support emergency and recurring maintenance and repair 
activities on campus as well as major investments in aging facilities 
and infrastructure at USMMA.
    The Biden-Harris Administration has long recognized the urgent need 
to rehabilitate and replace existing infrastructure and to 
significantly strengthen the ability of MARAD and USMMA to plan and 
manage capital investments and major maintenance efforts. Working 
closely with leaders and experts from the Department of Transportation 
(DOT), MARAD has implemented numerous measures to improve our ability 
to manage capital projects. Consistent with a recommendation from the 
National Academy of Public Administration, MARAD/USMMA created a new 
director position that is staffed with a Senior Executive to oversee 
all capital and maintenance projects at USMMA. MARAD and the DOT have 
also created new oversight bodies to ensure that investments of 
taxpayer funds are properly managed and yield completed projects that 
address the Academy's most urgent needs.
    Late last year, MARAD provided to the Committees on Appropriations 
and made public USMMA's Fiscal Year 2022 Capital Improvement Plan 
(CIP). The Fiscal Year 2022 CIP explains significant changes made to 
active and out-year projects since USMMA's last CIP report, which was 
provided in FY 2019. These changes are based on demonstrated need as 
well as the principles that guide our prioritization of capital and 
maintenance projects. Specifically, our highest priorities for capital 
and maintenance investments are supporting the safety, health, and 
well-being of Midshipmen and supporting the Academy's academic mission.
    In December 2022, the USMMA awarded a campuswide maintenance 
contract, which fulfills another key recommendation from the National 
Academy of Public Administration. The contract has a $42 million 
ceiling over the next 5 years and will help address the significant 
maintenance backlog. Part of the funding requested for FY 2024 will 
enable us to implement task orders under the campuswide maintenance 
contract to address routine maintenance on a scheduled basis and help 
reduce the incidence of emergency repairs.
    Capital improvement funds requested in FY 2024 would enable us to 
replace USMMA's existing storm water management systems, which date 
back to the 1940s and are broken beyond repair. Funding would also 
enable us to replace the seawall, which can no longer meet projected 
storm surges and anticipated rises in sea level.
    The FY 2024 Budget request also includes $53.4 million to provide 
support to the six SMAs. This request includes funding for vessel 
management, logistics, and maintenance oversight to prepare the schools 
to receive and operate the National Security Multi-Mission Vessels 
(NSMV).
    Funding would also be available to address unanticipated increases 
in steel costs for the NSMVs, and support pier improvements at SMAs 
necessary to enable heavy weather mooring of the NSMVs. MARAD has 
concluded a cooperative agreement with the State University of New York 
Maritime College under which MARAD will cover 80 percent of the costs 
of their eligible pier upgrades up to just over $18 million.
    Funding would also meet maintenance and repair costs to maintain 
the legacy school ships and continue our direct support to the SMAs.
    There are now four NSMVs under construction. The first ship--the 
EMPIRE STATE--is already launched and we anticipate taking delivery of 
the ship in June of this year.
                           National Security
    Providing sealift to meet the nation's needs is a critical part of 
MARAD's mission, and we have proudly met the challenges of managing the 
National Defense Reserve Fleet (NDRF) for 77 years. America's strategic 
sealift provides the Nation with the capability to rapidly project 
power globally by deploying Department of Defense (DOD) forces and 
moving cargoes worldwide during peacetime and wartime--including 
through contested environments--whenever activated by the U.S. 
Transportation Command (USTRANSCOM).
    Our Government-owned sealift fleet is supported and leveraged by a 
fleet of privately owned, commercially operated U.S.-flag vessels in 
the MSP, CSP, and the new TSP.
    The FY 2024 Budget requests the full authorization level of $318 
million for the MSP, which is the heart of sustainment sealift. In 
return for a stipend, MSP operators provide the DOD with assured access 
to their ships and their global networks of critical capabilities, 
including intermodal facilities used to unload and transport military 
cargoes to final destinations.
    There are 60 commercially viable, militarily useful vessels 
enrolled in MSP. These vessels are active in international trade and 
are on-call to meet the nation's need for sustained military sealift 
capacity. The MSP supports and sustains the merchant mariner base by 
providing employment for 2,400 highly trained, skilled U.S. merchant 
mariners who may also crew the U.S. Government-owned surge sealift 
fleet when activated. The MSP also supports more than 5,000 additional 
shore-side maritime industry jobs.
    In addition, the President's budget requests $60 million for the 
TSP. A study required by the FY 2020 NDAA found a substantial risk to 
the nation associated with heavy reliance on foreign-flagged tankers, 
particularly in a contested environment. The TSP will be comprised of 
active, commercially viable, militarily useful, privately owned product 
tank vessels. I am pleased to report that at the end of last year, 
MARAD issued the updated Voluntary Tanker Agreement and an Interim 
Final Rule. The application period closed on February 17, 2023, and we 
anticipate announcing the first 10 ships selected for enrollment in the 
near term.
    As you know, last year, I testified before this Subcommittee 
regarding our cargo preference programs. As I said then, put simply, 
without cargoes, ships will leave the U.S. flag, our modest fleet will 
continue to dwindle to the point that the number of American vessels is 
simply too small to meet government shipper agency requirements whether 
military or civilian. We are working with the Biden-Harris 
Administration's Made In America Office to help agencies understand 
cargo preference requirements. In addition, consistent with my 
testimony, I have written to all Federal departments and agencies 
explaining how MARAD can help them ensure they meet their obligations 
under cargo preference laws and regulations.
    MARAD is working diligently on revisions to the cargo preference 
regulations as required by the Fiscal Year 2023 NDAA.
    One of the current challenges with meeting cargo preference 
requirements is ensuring we have both enough vessels and the wide mix 
of vessel types to carry the many types of cargoes that the government 
impels. To help attract additional vessels to our flag, the Biden-
Harris Administration proposed that Congress eliminate the 3-year 
period that vessels entering the U.S. flag must currently wait before 
they are eligible to carry civilian agency preference cargoes. This 
would ensure that vessels that choose to sail under the U.S.-flag can 
carry preference cargoes as soon as they enter the flag, as well as 
provide the opportunity to diversify the types of vessels available to 
civilian agencies to carry cargoes. In return, once under the U.S. 
flag, the vessels would be restricted from flagging out for 3 years. 
This proposal, however, was not adopted by the prior Congress.
    The President's FY 2024 Budget requests $809.6 million from DOD 
budgetary authority for MARAD to acquire, upgrade, and maintain vessels 
in the NDRF and RRF. Funds will ensure MARAD's ability to maintain the 
fleet in a ready, reliable, and responsive condition to meet strategic 
sealift for the U.S. Armed Forces, and humanitarian support when called 
upon during national emergencies, as well as maintain MARAD's NDRF 
fleet mooring sites.
    MARAD's RRF consists of sealift ships providing a mix of 
capabilities. RRF ships, along with a smaller number of Military 
Sealift Command vessels, provide sealift surge capability to deliver 
DOD equipment and supplies where needed during the initial stages of a 
response to a major contingency. Today, the RRF is a fleet of 45 
vessels, with an average age of more than 45 years, maintained in a 
reduced operating status to be ready to sail within five days of 
activation. The fleet will grow to 51 vessels after the transfer of 
additional surge sealift and prepositioning vessels from the Military 
Sealift Command is complete by the end of FY 2025.
    The COVID-19 pandemic has exacerbated difficulties in maintaining 
ship and even mariner readiness. As part of the Navy's overall plan for 
sealift recapitalization, MARAD is responsible for maintaining the 
existing RRF ships through the recapitalization period, including 
dozens of ships that are nearly 50 years old or even older. Continued 
focus on safety, material condition, and regulatory compliance have 
been difficult to sustain, and challenges have been compounded by 
equipment and parts delays, and the increased scope of the repairs we 
have had to undertake, including steelwork.
    MARAD is working to advance the urgent recapitalization of the RRF. 
In March 2022--and for the first time in nearly 30 years--we announced 
the purchase of two vessels. These two ships, the former HONOR and 
FREEDOM, joined the RRF as the CAPE ARUNDEL and CAPE CORTES, adding 
more than 432,000 square feet of total sealift capacity and 316,000 
square feet of military cargo capacity. Both of these vessels 
participated in the MSP, and while differences in marine safety 
regimens have slowed progress towards certification, the ships will be 
upgraded in U.S. shipyards to add additional capabilities in summer 
2023 as planned.
    On January 27, 2023, the DOD transmitted the next proposed ship 
purchase decision to Congress for the required 30-day notification 
period. Without any noted concerns, the three ships will be purchased 
and placed under U.S. government ownership starting in April 2023 and 
continuing into summer 2023.
    In the FY 2023 NDAA, MARAD was directed to develop a Roll-On/Roll-
Off ship design for the construction of 10 new vessels for the NDRF to 
begin construction in 2024. In response to this directive, the RRF 
program is documenting the necessary actions to rapidly implement a 
limited shipbuilding program. Modeled after the NSMV program, this 
shipbuilding effort would leverage commercial practices and utilize a 
Vessel Construction Manager to speed deliveries. At this time, MARAD 
activity is limited to developing the implementation plan and the 
requirements for a concept design for new construction.
                               Conclusion
    These programs represent MARAD's priorities that are supported by 
the President's Budget. We will continue to keep you apprised of the 
progress of our program activities and initiatives in these areas in 
the coming year.
    Thank you for the opportunity to present and discuss the 
President's Budget for MARAD. I appreciate the Subcommittee's 
continuing support for maritime programs, and I look forward to any 
questions you and the members of the Subcommittee may have.

    Mr. Webster of Florida. Thank you so much.
    Now, Chairman Maffei, you are recognized.

TESTIMONY OF HON. DANIEL B. MAFFEI, CHAIRMAN, FEDERAL MARITIME 
                           COMMISSION

    Mr. Maffei. Thank you very much, Chairman Webster, Ranking 
Member Carbajal, and members of this committee. I appreciate 
the opportunity to testify today.
    The last time I appeared before this subcommittee, the 
international ocean freight transportation system in this 
country was in crisis. Chairman Webster already pointed out to 
you the sky-high rates and the fact that ag exporters were 
being crowded out. And many of you were rightfully looking to 
the Federal Maritime Commission to take a leading role in 
untying the knots and mitigating the unfairness that seemed to 
be plaguing the supply chain.
    I am pleased to report to you today that the situation has 
dramatically improved. The ship queues and congestion that 
overwhelmed the supply chain for approximately 2 years are now 
gone. Cargo is flowing more fluidly, shippers are having an 
easier time securing vital equipment, and exports are better 
able to make their connections to outgoing ships. The cost of 
ocean shipping has fallen substantially, and for transpacific 
service is now near pre-pandemic levels. And this rate drop 
occurred far more rapidly than forecasted. If anything, ocean 
shipping is now exerting downward pressure on price inflation.
    Now, no doubt, much of this is a natural result of market 
forces occurring as the world emerged from COVID. But the 
Federal Maritime Commission has also played a vital role in 
promoting fairness to America's importers and exporters, and 
restoring confidence to our ocean supply chains. The intense 
engagement of the FMC has helped U.S. companies by providing 
fair arbitration or adjudication of their disputes with ocean 
containership companies and terminal operators.
    Word gets around fast in the freight transportation 
industry. When America's importers and exporters realized that 
the FMC could help, there was a huge jump in cases. Our 
consumer affairs office now handles an average of more than 100 
requests for help every month. The FMC is now handling vastly 
more formal complaints than in past years. The annual number of 
dockets filed with our Secretary has tripled since 2019. We 
currently have more than two dozen active cases, and there has 
been such a vast increase in cases filed with the Commission's 
administrative law judges that we now must hire a third judge 
when just one ALJ was sufficient in early 2020.
    Now, the FMC's increased potency in assisting American 
cargo shippers is largely due to the enactment by this 
subcommittee and then consequently by the whole Congress of the 
Ocean Shipping Reform Act of 2022. This was the first 
substantial overhaul of America's international ocean shipping 
laws in 24 years, and in my view is a counterexample to the 
cynical view that Congress cannot address problems in a broadly 
bipartisan way, and do so expediently.
    And I have to note that the two House sponsors of the bill, 
Mr. Garamendi and Mr. Johnson of South Dakota, are here today.
    As you and Congress did your job, we at the FMC must now do 
our jobs by implementing the new law to the best of our ability 
and in the spirit intended by Congress. We have, in fact, made 
substantial progress in meeting our obligations under the law 
since the President signed it. The FMC has already two landmark 
OSRA rulemakings underway. We have created a new fast-track 
process for importer and exporter charge complaints, and we 
have implemented seven other OSRA provisions.
    Now, the Commission is cognizant that it is implementing 
these important changes at a time when international trade 
itself is changing. At an ocean freight conference a few weeks 
ago, General David Petraeus warned that we are in an era of 
``slowbalization,'' where geopolitics very much define what is 
possible in terms of economics, trade, and investment. Managing 
risk is becoming much more challenging for American importers 
and exporters when any event or economic issue taking place 
anywhere in the world has the potential to disrupt America's 
supply chains.
    America's international ocean freight transportation system 
moves more than $1.3 trillion in goods annually and is 
indirectly responsible for trillions more in economic activity. 
But make no mistake, this system remains vulnerable. The FMC 
has learned much from the last several years and is working 
diligently within our statutory authority to apply these 
lessons, both in our implementation of OSRA and in our other 
activities. The budget that the President has submitted permits 
us to do this in large part by hiring the professional staff 
needed to enhance enforcement, sharpen antitrust monitoring, 
assist more U.S. importers and exporters, and work with public- 
and private-sector stakeholders to find solutions to America's 
supply chain challenges.
    This has been and continues to be the most intense period 
of activity in our agency's over 50-year history. We are proud 
of what we have accomplished, and at the same time, we 
understand that there is still so much to be done. Thank you.
    And I, too, am happy to take questions from the committee.
    [Mr. Maffei's prepared statement follows:]

                                 
Prepared Statement of Hon. Daniel B. Maffei, Chairman, Federal Maritime 
                               Commission
    Chairman Webster, Ranking Member Carbajal, Members of the 
Subcommittee, thank you for this opportunity to appear before you today 
to discuss the Federal Maritime Commission's Fiscal Year 2024 budget 
request of $43,720,000 to fund its operations in the coming fiscal 
year.
    The last time I appeared before this subcommittee, the supply 
chains that service this country were still very much in crisis. The 
media was still showing long lines of ships held up outside our major 
ports, ports were clogged with containers, ship schedules were woefully 
unreliable making it extremely challenging for exporters, and freight 
rates and fees were sky-high adding to the inflationary pressures on 
imported goods and inputs.
    The Nation's freight transportation systems were largely 
overwhelmed by the unprecedented high demand that resulted from COVID-
related consumer spending patterns. However, there were also widespread 
reports from importers and exporters that the large multinational ocean 
container ship operators were taking advantage of a situation already 
economically favorable to them. The most cited example was additional 
freight charges called detention and demurrage being improperly 
assessed for laden containers that were not picked up on schedule or 
empty containers and other equipment that was not returned on time. The 
assertion was that many of these charges--amounting to millions and 
millions of dollars for even a medium-sized shipper--did not comply 
with FMC rules such as the May 2020 interpretive rule on detention and 
demurrage authored by Commissioner Rebecca Dye and approved unanimously 
by the Commission.
    Sorting all of this out and promulgating solutions to stakeholders 
to help us unravel the knots in the Nation's supply chains was largely 
the job of the Federal Maritime Commission. It has been and continues 
to be the most intense period of activity in our agency's over 50-year 
history.
    I am pleased to report to you that now the ocean freight 
transportation system is much improved in virtually every way. The ship 
queues and congestion that overwhelmed the supply chain for 
approximately two years have drastically dissipated. Cargo is flowing 
more fluidly, shippers are having an easier time securing intermodal 
equipment, and exports are making their connections to the outgoing 
ships. The cost of ocean shipping has dropped dramatically to levels 
more typical of pre-pandemic prices--and this rate drop occurred far 
more rapidly than forecast. If anything, ocean shipping is now exerting 
downward pressure on price inflation.
    Of course, much of this is a natural result of market-forces. 
Nonetheless, the FMC played a vital role in promoting fairness to 
America's importers and exporters and restoring confidence to America's 
ocean supply chains. Many stakeholders and their representatives in 
Congress turned to the Federal Maritime Commission to do more during 
the crisis. In rapid response, the FMC substantially stepped up its 
activity, and made a difference.
    As shippers realized the FMC was eager to help them where 
appropriate and provide fair arbitration or adjudication of their 
disputes, there was a huge jump in cases.
    We are handling exponentially more complaints now than before the 
Ocean Shipping Reform Act of 2022 (OSRA) was enacted. Our Office of the 
Secretary reports that the number of dockets it manages increased by 
88% in Fiscal Year 2022 from Fiscal Year 2021, and there are three 
times as many docket filings when compared to Fiscal Year 2019. This is 
a useful barometer of Commission activity as docketed proceedings 
include formal complaints, informal complaints, petitions, fact 
findings, special permission applications, and rulemakings.
    A second indicator of the new demand for Commission services is the 
marked increase of both small claims and formal cases that have been 
filed with the Commission's Office of the Administrative Law Judges 
(ALJ) beginning in 2020. The ALJ's caseload tripled in Fiscal Year 2022 
when compared to a pre-pandemic year. Comparing statistics within the 
pandemic period, the OALJ's output in FY 2022 doubled from FY 2021. 
Many of the cases heard by our ALJs are complicated and involve 
substantive matters of the law that do not lend themselves to immediate 
rulings. The Commission hired a second Administrative Law Judge to help 
manage this caseload and are we are in the process of recruiting for a 
third now. These hirings ensure that legal proceedings do not become 
delayed because of caseloads and the judicial process at the Federal 
Maritime Commission continues to function effectively.
    The demand for Commission services from all our bureaus and offices 
remains high and we believe this workload will remain at elevated 
levels. This increase is largely a positive development because it 
means that importers, exporters, and other industry stakeholders have 
seen others benefit from using the FMC. We are closely tracking 
requests for service to determine if present volumes are indicative of 
the tail end of a trend or a new baseline for how often the public 
turns to the FMC for assistance.
                        OSRA 2022 Implementation
    Of course, the capacity of the FMC to assist American importers and 
exporters and promote fairness and efficiency in America's cargo 
transportation systems was significantly aided by the enactment of the 
bipartisan Ocean Shipping Reform Act of 2022 (OSRA). Whether you 
ultimately supported the legislation, thought it went too far, or 
thought it did not go far enough, I want to thank each and every member 
of this subcommittee for your constructive contribution to America's 
ocean freight transportation system.
    I maintain that the additional resources and authority in OSRA and 
the Congress' willingness to act so expeditiously were crucial to 
putting the system back on course.
    That is why I am committed to implementing OSRA in the spirit 
intended by Congress. We have made substantial progress in meeting our 
obligations under the law since its enactment by President Biden on 
June 16, 2022. To date, we have already:
      Updated our civil penalties regulations to include 
refunds of a charge (Section 8);
      Established a process for accepting, investigating, and 
adjudicating charge complaints (Section 10);
      Posted to the Commission's website the Fact Finding 29 
Final Report (Section 11);
      Updated the Annual Report to include any concerning 
practices by ocean common carriers (Section 14);
      Continued to maintain an Office of Consumer Assistance 
and Dispute Resolution Services (CADRS) (Section 17(b));
      Hired no fewer than seven positions to support 
investigations and oversight functions (Section 17(c));
      Determined if congestion of carriage of goods has created 
an emergency situation such that the Commission needs to order 
information sharing (Section 18);
      Entered into an agreement with the Transportation 
Research Board to conduct a study and develop best practices for on-
terminal and near-terminal chassis pools (Section 19); and,
      Been in contact with relevant agencies responsible for 
sections of OSRA dealing with Review of Potential Discrimination 
Against Transportation of Qualified Hazardous Materials (Section 22), 
Use of Inland Ports for Storage and Transfer of Containers (Section 
24), Report on Adoption of Technology at United States Ports (Section 
25).

    Significant work has been completed on other requirements of OSRA 
and we have made substantial progress in:
      Issuing a proposed final rule on detention and demurrage 
invoicing and billing (Section 7); and,
      Issuing a Supplemental Notice of Proposed Rulemaking on 
Unreasonable Refusal to Deal or Negotiate with Respect to Vessel Space 
(Section 7).

    Notwithstanding my commitment to timely implementation, it is even 
more important we get these rules right. I want to assure you that 
Commission staff is working diligently on both these matters, giving 
all comments received the careful consideration they warrant. The 
Commission is committed to ultimately issuing rules that address and 
reconcile the important issues raised by the comments. I anticipate we 
will be taking next steps on both the Unreasonable Refusal to Deal and 
the Detention and Demurrage Billing Requirements proposed rules soon.
    Implementation of OSRA involves the efforts of all staff at the 
Commission working in policy and program offices. All sections of OSRA 
are being worked on simultaneously. We have had to make decisions 
regarding prioritization. As staff achieves progress on first 
implementation priorities, they turn their efforts to other sections of 
the legislation. No section of OSRA is being left unaddressed and work 
has begun on all sections of the legislation the Commission is 
responsible for implementing. We will be announcing further 
implementation steps and achievements as the year goes on.
    While OSRA implementation has provided the Commission with a ``to 
do'' list, these are responsibilities that are in addition to the 
ongoing work of the organization.
    Charge complaints, created by OSRA, is generating a considerable 
amount of work for our investigators and enforcement attorneys. The 
public has responded favorably to the option of submitting billing 
complaints under a streamlined process allowing for more rapid review 
of claims than the other pre-existing options that were available at 
the Commission. Between June 16, 2022, and March 14, 2023, 260 charge 
complaints have been filed, 97 of which were perfected and assigned for 
investigation. Except for one case where the Commission's Bureau of 
Enforcement, Investigations, and Compliance issued a ``Show Cause'' 
order (that is still pending) all other cases have been voluntarily 
settled by the ocean carriers once the disputed charge has been brought 
to their attention. Approximately $800,000 in charges have been waived 
or refunded. Processing charge complaints requires the work of staff 
from our Office of the Secretary, the Bureau of Investigations, and the 
Bureau of Enforcement. We are assessing the requirements for accepting, 
investigating, and adjudicating charge complaints to make certain we 
have sufficient resources devoted to this effort.
    The charge complaint statistics referenced above do not reflect 
charge mitigation that is taking place directly between carriers and 
shippers. We are collecting information from the top nine ocean 
carriers calling the United States on demurrage and detention billing 
through our Vessel-Operating Common Carrier (VOCC) Audit Program. 
Beginning in Quarter One Calendar Year 2022, the indices for collected 
and billed detention and demurrage began declining and in Quarter Two 
2022, the rate of waived charges was rising. We believe that data will 
continue to show reductions in billed and collected charges. 
Nonetheless, continued progress must be made in changing what I believe 
has become a practice of using demurrage and detention as a revenue 
center as opposed to strictly an incentive to pick-up cargo and return 
equipment. We will be carefully monitoring information we gather on 
fees as one way to measure compliance with our rule on demurrage and 
detention.
        Enforcement, Compliance, Oversight & Consumer Assistance
    In April 2022, I directed the VOCC Audit Program to determine how 
ocean carriers are serving U.S. exporters and what proposals these 
companies had for doing more to help American shippers reach overseas 
markets. Last December, the VOCC Audit Program began assessing how 
ocean carriers will comply with anti-retaliation provisions of OSRA 
with particular attention paid to instituted training programs and if 
they result in bottom-to-top awareness of the new prohibitions. We have 
found the VOCC Audit Program to be a productive tool for raising and 
resolving issues with ocean carriers.
    The FMC protects competition in U.S. ocean transportation, ensuring 
that there is both efficiency and reliability in the supply chain for 
U.S. exporters and importers. The FMC's competition program consists of 
careful analysis of agreements. Oversight of agreements and the 
marketplace continues through the important work done by our Bureau of 
Trade Analysis (BTA). As I have testified before, ocean carrier 
alliance agreements are subject to the most frequent and close 
monitoring of any class of filed agreement. BTA's monitoring program 
provides the Commission with unequalled insight into the behavior and 
business decisions of ocean carriers participating in agreements. 
Unlike reviews of mergers and acquisitions, alliance agreement 
monitoring is continuous, and we receive detailed information on 
operational data, minutes from meetings among agreement principals, and 
minutes from regularly scheduled alliance meetings. In effect, we have 
insight into the alliances' commercial and operational decisions that 
goes straight to the companies' top leadership. We also have the 
ability to change alliance agreement reporting requirements as 
warranted. We did so twice during the past two years, most 
significantly in 2022 by requiring enhanced pricing and capacity 
information be filed as part of the monitoring process. I should add 
that it is not just ocean carriers who are subject to monitoring 
requirements. Monitoring requirements for marine terminal operator 
agreements on file at the Commission that have rate discussion 
authority (something that the carrier alliance agreements do not have) 
were changed over the past year to give BTA more insight into how these 
companies operate when they utilize an agreement.
    We continue with efforts initiated last year to reorganize our 
investigative, enforcement, and compliance activities into a more 
capable and holistic enforcement function. Following Congressional 
approval, we established the Bureau of Enforcement, Investigations, and 
Compliance, bringing all those activities under one organization that 
will be led by a new director. Area Representatives were reclassified 
as Investigators and their public outreach responsibilities were 
reassigned to other parts of the Commission. This change removed any 
question as to the role of these field personnel and conveys the 
emphasis on enforcement I have brought during my tenure as Chairman. 
Further toward that effort, we are increasing the number of 
Investigators we have in total while simultaneously strategically 
expanding the size of BEIC by adding needed attorneys, investigative 
analysts, compliance analysts, and supervisors across all three 
programs.
    Our reorganization efforts are showing results that include:
      As of March 1, 2023, there were 39 active cases on 
actions and practices of VOCCs and non-vessel-operating common carriers 
(NVOCCs);
      Preliminary actions have been taken against three large 
VOCCs and one NVOCC;
      One of the Commission's Administrative Law Judges 
recently issued a decision to accept a proposed $950,000 settlement 
agreement reached between container company Wan Hai and BEIC; and,
      Compromise discussions are on-going with a NVOCC for 
providing service to unlicensed Ocean Transportation Intermediaries 
(OTI).

    Though separate from BEIC, our Bureau of Certification and 
Licensing provides an important compliance function. Their continued 
administration of thousands of license applications, renewals, and 
revocations/suspensions of OTIs each year protects individuals who want 
to ship goods. When BCL learns of an OTI operating without a license, 
they work to bring that party into compliance, but if a company 
continues to refuse to meet their obligations under the law and 
regulations, then the case is turned over to BEIC for enforcement. 
Beyond OTI licensing, BCL is also responsible for the Passenger Vessel 
program which importantly provides protections to passengers embarking 
a cruise at a U.S. port.
    Inquiries continue to come into CADRS at more than 1,500 
communications annually. Requests for CADRS' aid cover almost any 
imaginable circumstance involved in international commerce and 
cruising. As part of our efforts to bolster the effectiveness of CADRS, 
we have added staff to this office including an export expert whose 
primary responsibility is aiding shippers who want to reach overseas 
markets. The volume of contacts CADRS fields has remained fairly 
consistent year-to-year and we have every reason to believe that these 
statistics will remain steady if not grow.
    The Commission cannot conduct its work without the important 
support it receives from many other parts of the agency. We are working 
to identify which parts of our information technology infrastructure 
are in need of upgrading and working on a plan to prioritize the order 
of work that must be completed. Many of the Commission's systems are 
built on legacy technology and need to be improved or replaced. We have 
retained an outside technology consulting company to assist us with 
this effort and to help guide us to making the most beneficial 
acquisitions. This will be a longer-term effort likely taking several 
years to complete.
                            Looking Forward
    We continue to invest in the capabilities necessary to have a 
workforce that is fully telework ready. The Commission was fortunate to 
have adopted this goal in the pre-pandemic era and when COVID forced 
staff to stop coming to the office, we were well prepared to work 
successfully from locations other than our offices. We are looking to 
identify any lessons learned from the past two years and incorporate 
them into future contingency plans.
    Beyond investing in improving our existing IT infrastructure, we 
will acquire capabilities that will serve us into the future and 
benefit the public. We have invested in an updated rulemaking docketing 
system and are in the process of purchasing a court docket system to 
allow us to better manage not just cases our ALJs are working on, but 
also all other docketed proceedings of the Commission. We will build a 
data lake that will streamline data submission from regulated entities 
as well as data review, processing, and analysis by FMC staff. We have 
initiated a series of construction projects to meet that goal. We are 
also undertaking a refresh of our Hearing Room to make it more 
accessible to the public, of more utility to the Commission, and to 
undertake technology upgrades that will better serve the public who 
watch our proceedings via webcasts.
    The Federal Maritime Commission is changing. Not only in response 
to congestion, legislation, and the priorities I set when I became 
Chairman, but also because international trade is changing. General 
David H. Petraeus warned recently at a large gathering of ocean 
shipping stakeholders that the era of ``benign globalization'' is over, 
and that geopolitical risk will have an even greater impact of trade 
flows than it has in the past. Clearly, we have entered an era where 
international trade patterns are less stable and more fraught with 
risk. Any event or economic issue taking place anywhere in the world 
has the potential to dramatically alter everyone's supply chains. The 
U.S. freight delivery system will face another disruption, the only 
question is when. My goal as Chairman is that the Commission will be 
nimble and capable enough to respond when the inevitable occurs.
    The budget we are submitting makes important Investments in our 
monitoring, enforcement, and consumer assistance functions. It permits 
us to hire the staff needed to do more enforcement, assist more 
exporters, and provide consumer assistance. This is an important 
juncture. Shippers and other parties turned to the Federal Maritime 
Commission in record numbers throughout the pandemic. Now is the time 
to invest in building the capabilities of the Commission so that it is 
prepared to continue to provide competition oversight and address 
violations of the law.

  WRITTEN TESTIMONY SUBMITTED IN LIEU OF APPEARANCE OF NANCY 
   WALLACE, DIRECTOR OF THE MARINE DEBRIS PROGRAM, OFFICE OF 
  RESPONSE AND RESTORATION, NATIONAL OCEAN SERVICE, NATIONAL 
             OCEANIC AND ATMOSPHERIC ADMINISTRATION

                              Introduction
    Good morning, Chairman Webster, Ranking Member Carbajal, and 
members of the Subcommittee, thank you for this opportunity to provide 
a Statement for the Record about marine debris and oil spill 
preparedness, response, and restoration. My name is Nancy Wallace, and 
I am the Director of the Marine Debris Program, within the National 
Ocean Service Office of Response and Restoration, at the National 
Oceanic and Atmospheric Administration (NOAA) within the Department of 
Commerce.
    Marine Debris, as defined by the Marine Debris Act, is ``any 
persistent solid material that is manufactured or processed and 
directly or indirectly, intentionally, or unintentionally, disposed of 
or abandoned into the marine environment or the Great Lakes (33 U.S.C. 
Sec.  1956(3)).'' Marine debris ranges from lost or abandoned fishing 
gear and vessels, to plastics, glass, metal, and rubber of any size, 
and is an on-going international problem that impacts our natural 
resources. The NOAA Marine Debris Program (MDP) leads national efforts 
to research, prevent, and reduce the impacts of marine debris. 
Authorized by the Marine Debris Act, as amended (33 U.S.C. Sec.  1951 
et seq., ``Marine Debris Act''), the program supports marine debris 
projects in partnership with state and local agencies, tribes, non-
governmental organizations, academia, and industry. NOAA spearheads 
national research efforts, engages with the Department of State and 
international organizations on global marine debris efforts, and works 
to change behavior through outreach and education initiatives.
    NOAA recognizes that marine debris is a global problem and that 
there is no `one size fits all' solution to addressing this issue on 
national and international scales. A recent study estimated that in 
2016, as much as 23 million metric tons of plastic waste entered 
aquatic ecosystems from land around the world (Borelle et al., 2020). 
This number may seem huge, but it does not include marine debris items 
not made of plastic, or ocean-based marine debris, such as lost fishing 
gear and vessels. That number has also likely increased with time. If 
current practices continue, the amount of plastic discharged into the 
ocean could reach up to 53 million metric tons per year by 2030 
(Borrelle et al. 2020, Jambeck and Johnsen 2015, Pauly and Zeller 
2016). The United States alone, despite a well-developed formal waste 
management system, contributed approximately 1 million to 2 million 
metric tons of plastic waste to the environment at home and abroad in 
2016 (Law et al. 2020). It is clear that there is still much work to be 
done to find solutions to marine debris on both the national and 
international levels.
    Today, I will focus my testimony on the Marine Debris Act, the 
impacts of marine debris in the ocean and Great Lakes, the program 
pillars of NOAA's MDP, implementation of the Save Our Seas 2.0 Act, and 
H.R. 886, Save Our Seas 2.0 Amendments Act and NOAA's oil spill 
preparedness, response, and damage assessment.
                         Marine Debris Impacts
    Marine debris causes significant threats not only to ocean and 
coastal environments and wildlife, but also to human health, safety, 
and navigation. Each year, countless marine animals, sea turtles, and 
seabirds are injured or die because of entanglement in or ingestion of 
marine debris. Additionally, debris can scour, break, smother, or 
otherwise damage important marine habitat, such as coral reefs and 
tidal wetlands, that serve as the basis of marine ecosystems and are 
critical to the survival of many important species. Derelict fishing 
gear, such as nets and crab pots, can continue to capture fish--
something we refer to as ``ghost fishing''--for years after they are 
lost. Not only does this affect the species that end up as bycatch in 
the lost gear by reducing the abundance and reproductive capacity of 
the population, but it also causes fishermen economic losses. Marine 
debris can facilitate the introduction and range expansion of invasive 
species.
    Marine debris also creates navigation hazards. Ropes, plastics, 
derelict fishing gear, and other objects can become entangled in vessel 
propellers or clog water intakes, causing operational problems. Larger 
items, such as lost shipping containers, can become collision dangers. 
Such interactions with marine debris involve costly engine repairs and 
disablement. Abandoned vessels are another navigational threat in our 
coastal waterways that have become a serious marine debris problem in 
many states. The dangerous and costly impacts of these different types 
of marine debris affect both the recreational boating and commercial 
shipping communities.
                           Marine Debris Act
    The MDP is authorized by Congress as the federal lead to work on 
marine debris through the Marine Debris Act. The Act authorizes the 
NOAA Administrator, through the MDP, to ``identify, determine sources 
of, assess, prevent, reduce, and remove marine debris and address the 
adverse impacts of marine debris on the economy of the United States, 
marine environment, and navigation safety.'' (33 U.S.C. Sec.  1952). 
The Act further directs the Administrator, through the MDP, to 
``provide national and regional coordination to assist States, Indian 
tribes, and regional organizations,'' ``undertake efforts to reduce the 
adverse impacts of lost and discarded fishing gear on living marine 
resources and navigation safety,'' ``undertake outreach and education 
activities for the public and other stakeholders'' on marine debris 
issues, develop ``interagency plans for the timely response to 
events,'' and ``enter into cooperative agreements and contracts and 
provide financial assistance in the form of grants for projects to 
accomplish the purpose'' of the Act. 33 U.S.C. Sec.  1952(b)-(d). The 
2012 amendments (P.L. 112-213) directed NOAA to address and determine 
severe marine debris events. The Save Our Seas Act of 2018 (P.L. 115-
265), which reauthorized and amended the Marine Debris Act, directed 
NOAA to ``promote international action, as appropriate, to reduce the 
incidence of marine debris'' and, in the case of a severe marine debris 
event, to ``assist in the cleanup and response required by the severe 
marine debris event'' or conduct such other activity as NOAA deems 
appropriate.
                     The NOAA Marine Debris Program
    The MDP, guided by the Marine Debris Act, is focused around six 
program pillars: prevention, removal, research, monitoring and 
detection, response, and coordination.
Prevention
    One of the most effective ways to reduce marine debris is through 
prevention, which requires that boaters, fishermen, industry, and the 
general public have the knowledge and training to change the behaviors 
that create marine debris. NOAA's robust outreach and education 
activities focus on improving awareness and changing behavior through 
developing and disseminating public information, and by partnering with 
and providing funding support to external groups including academic 
partners and nonprofit groups.
Removal
    While prevention is essential to stemming the input of new debris 
into the ocean, removal is necessary to diminish the impacts of debris 
already introduced into the ocean and Great Lakes. The MDP provides 
funding through its removal grants competitive funding opportunity. The 
program also provides support to the annual International Coastal 
Cleanup.
Research
    A key tenet of the MDP is research. Congress recognized the need 
for research that determines the sources and helps us understand the 
adverse impacts of debris on the marine environment and navigation 
safety (33 U.S.C. Sec.  1952(b)(1)). Since its establishment, the MDP 
has funded research projects that help expand our understanding of 
debris by investigating where debris comes from, how it moves through 
the environment, and how it impacts wildlife and our ocean, waterways, 
and Great Lakes.
Monitoring and Detection
    The MDP supports projects that generate monitoring and detection 
data, involve the public, incorporate innovative technologies, and 
provide guidance to the marine debris community. Monitoring and 
detection efforts improve our understanding of the scope, scale, and 
distribution of marine debris in the environment, as well as provides 
critical data on the types and amount of debris, which can inform 
management practices and prevention. In particular, the MDP maintains 
the NOAA Marine Debris Monitoring and Assessment Project, an initiative 
that helps answer fundamental questions about the types of marine 
debris found on shorelines.
Response
    Coastal storms and natural disasters are another source of marine 
debris that create hazards in our inland and coastal waters. NOAA has 
responded to emergency events including Hurricanes Florence, Michael, 
Harvey, Irma, and Maria, and Typhoon Yutu. The MDP also works before 
disasters strike to help communities prepare to respond to marine 
debris. As part of this work, the MDP partners with coastal states and 
U.S. territories to develop state/territory-specific marine debris 
emergency response guides. These guides outline the processes and roles 
of each partner for responding to and recovering from a severe marine 
debris event, such as a hurricane.
Regional Coordination
    The MDP works with local communities to address region-specific 
marine debris issues. The MDP has 11 Regional Coordinators working in 
Alaska, the Pacific Northwest, California, the Pacific Islands, the 
Gulf of Mexico, Florida, the Caribbean, the Southeast, the Mid-
Atlantic, the Northeast, and the Great Lakes to support projects and 
partnerships with state and local agencies, tribes, nongovernmental 
organizations, academia, and industry that addresses marine debris 
locally.
    The MDP Regional Coordinators also work with partners to develop 
and implement regional marine debris action plans. These action plans 
focus on long-term solutions to the causes and impacts of marine debris 
in the regions, as well as outline operational best practices and data 
collection protocols. The purpose of these action plans is to aid 
states in preventing and reducing debris and mitigating coastal 
impacts.
National Coordination
    As authorized in the Marine Debris Act, 33 U.S.C. Sec.  1954, NOAA 
is the chair of the Interagency Marine Debris Coordinating Committee 
(IMDCC), a multi-agency body that is responsible for streamlining the 
federal government's efforts to address marine debris. Representative 
agencies coordinate a comprehensive program of marine debris activities 
and report to Congress every two years on research priorities, 
monitoring techniques, educational programs, and regulatory action. 
Members include: the Departments of Energy, Interior, Justice, and 
State; the U.S. Environmental Protection Agency; the U.S. Coast Guard; 
the U.S. Navy; the Marine Mammal Commission; the National Aeronautics 
and Space Administration; the National Science Foundation; and the U.S. 
Agency for International Development.
    In addition to the IMDCC, the program also partners with other 
agencies on funded projects. For example, the MDP provides support for 
missions to remove marine debris from Papahanaumokuakea Marine National 
Monument. Project partners for these missions have included the 
National Fish and Wildlife Foundation, Papahanaumokuakea Marine Debris 
Project, U.S. Fish and Wildlife Service, State of Hawaii, and other 
NOAA programs. In Fiscal Year 2021, the mission removed 118,400 pounds 
of derelict fishing nets and nearly 5,300 pounds of plastic and other 
debris.
International Engagement
    There are many ongoing international, multilateral, and bilateral 
initiatives to understand and combat the issue of marine debris across 
the world. The MDP works closely with the Department of State and other 
U.S. national agencies to provide input and leadership on the issue, 
and also collaborates with other countries to research, prevent, and 
remove marine debris.
              Implementation of the Save Our Seas 2.0 Act
    The Save Our Seas (``SOS'') 2.0 Act (P.L. 116-224) was signed into 
law on December 18, 2020. The Act contains three titles that address: 
(1) the United States' domestic programs to combat marine debris, (2) 
international engagement to combat marine debris, and (3) domestic 
infrastructure to prevent marine debris. The lead agencies with 
responsibilities under the Titles of the Act are NOAA, the Department 
of State, and the Environmental Protection Agency, respectively.
    Significant components of the SOS 2.0 Act within NOAA's 
jurisdiction include:
      Clarifying the scope of the Marine Debris Act to include 
waters in the jurisdiction of the United States, the high seas, and 
waters in the jurisdiction of other countries (Sec. 101);
      Establishing a Marine Debris Foundation (Subtitle B);
      Establishing a Genius Prize for Save Our Seas Innovation 
(Subtitle C); and
      Requiring several new reports and studies on different 
aspects of marine debris (Subtitle D), including the sources and 
impacts of derelict fishing gear, innovative uses of plastic waste, 
microfiber pollution, vessel recycling, and the United States' 
contribution to global plastic pollution, as well as a pilot program 
for providing incentives to fishermen to collect and dispose of plastic 
found at sea.
Marine Debris Foundation
    The SOS 2.0 Act (33 U.S.C. Sec.  4211 et. seq.) also established 
the Marine Debris Foundation as a charitable and nonprofit organization 
(33 U.S.C. Sec.  4211). The Marine Debris Foundation is charged with 
augmenting the efforts of NOAA to assess, prevent, reduce, and remove 
marine debris, and with taking actions to support other Federal 
agencies, and other entities, to address marine debris (33 U.S.C. Sec.  
4211(b)). The SOS 2.0 Act specifies that the Under Secretary of 
Commerce for Oceans and Atmosphere (NOAA Administrator) is responsible 
for appointing, and serves on, the Board of Directors of the Marine 
Debris Foundation (33 U.S.C. Sec.  4212(a)).
    On April 6, 2022, NOAA announced the inaugural Board of Directors 
for the new Marine Debris Foundation. The appointment of the inaugural 
Board of Directors was approved by the Secretary of Commerce, 
consistent with the Presidential signing statement for the Save Our 
Seas 2.0 Act. The 12 new Board members bring a diverse range of 
expertise, experience, and perspectives. The Foundation will be an 
important partner to NOAA and other entities in the United States who 
are tackling the immense challenges that marine debris poses to nature, 
human health, and the U.S. economy.
Studies and Reports
    The SOS 2.0 Act requires the MDP to undertake several studies and 
reports as described below. The MDP has completed or is in the process 
of completing the studies and reports using several avenues, including 
existing grant-funded projects, new grant awards, new contracts, and 
collaboration with other federal agencies.
    Section 131 requires the IMDCC to submit a report to Congress on 
innovative uses of plastic waste in consumer products. As vice-chair of 
the IMDCC, the Environmental Protection Agency (EPA) has taken the lead 
on implementation of this report.
    Section 132 requires the IMDCC to submit a report to Congress on 
microfiber pollution. The MDP is working closely with the EPA on this 
report. The draft report, and the five-year federal action plan 
contained within it, went out for a 30-day public comment period on 
September 15, 2022. The report is undergoing interagency review.
    Section 133 requires NOAA to fund the National Academies of 
Sciences, Engineering and Medicine to conduct a study on the 
contributions of the United States to global ocean plastic waste. This 
study was released in December 2021, and the MDP is working under our 
current authorities on implementation of actions and activities that 
address the report recommendations.
    Section 135 requires NOAA to submit a report to Congress on the 
sources and impacts of derelict fishing gear. This report is under 
development.
    Section 136 requires NOAA to conduct a study to determine the 
feasibility of a nationwide vessel recycling program, using a pilot 
project in Rhode Island as a model. On February 8, 2023, the MDP 
published a report, Recycling Opportunities for Abandoned, Derelict, 
and End-of-Life Recreational Vessels, that summarizes the completed 
study. The report, created by the Rhode Island Marine Trades 
Association Foundation in partnership with the MDP and National Marine 
Sanctuary Foundation, identifies challenges associated with recycling 
fiberglass vessels and outlines the steps necessary to build a viable 
nationwide recycling program.
    Section 137 requires NOAA to establish a pilot program to assess 
the feasibility and advisability of providing incentives to fishermen 
to collect and dispose of plastic found at sea. Through the MDP's FY22 
competitive grant funding opportunity, we awarded funding to 
Mississippi Commercial Fisheries United, Inc. to develop and implement 
a pilot program. The project will conclude in August 2025, and we will 
work with the grantee to document lessons learned on the project's 
feasibility and advisability.
    Section 307 requires the EPA and the IMDCC to conduct a study on 
minimizing the creation of new plastic waste. The EPA has taken the 
lead on implementation of this report.
Genius Prize
    The SOS 2.0 Act also establishes a Genius Prize for Save Our Seas 
Innovation and authorizes the Secretary of Commerce to offer to enter 
into an agreement with the Marine Debris Foundation to administer the 
prize competition. The FY 24 Budget includes funding to support a 
Genius Prize for marine debris.
               H.R. 886, Save Our Seas 2.0 Amendments Act
    If enacted, H.R. 886, Save Our Seas 2.0 Amendments Act, would amend 
the SOS 2.0 Act by:
      Providing technical and administrative corrections to the 
operation of the Marine Debris Foundation. For example, it would change 
the title of the ``first officer or employee appointed by the Board'' 
from ``chief operating officer'' to ``chief executive officer'' to 
align with common terminology used in the non-profit sector.
      Adding the U.S. Agency for International Development as a 
named agency for consultation before removal of a Director, and would 
clarify that the Board shall submit recommendations on new Directors to 
the Under Secretary.
      Adding clarification on the location of the Marine Debris 
Foundation's principal office and a new directive on development and 
implementation of ``best practices for conducting outreach to Indian 
Tribes.''
      Aligning the Marine Debris Foundation's operation into 
alignment with other Congressionally chartered non-profits and remove 
restrictions that inhibited the Marine Debris Foundation from 
effectively beginning operations.
      Authorizing up to twelve percent of federal funds 
appropriated to the Department of Commerce to carry out SOS 2.0 to be 
used to offset administrative expenses of the Marine Debris Foundation.
      Specifying that the 24-month window for use of federal 
funds for salaries of the Marine Debris Foundation begins at the 
enactment of the Amendments Act; and would expand the list of non-
federal entities whose contributions to the Marine Debris Foundation 
may be matched using federal funds.

    H.R. 886 would also amend the Marine Debris Act by:
      Providing more flexibility to enter into different types 
of agreements and to work with non-profits and individuals;
      Enabling third parties to provide funding to NOAA for 
projects without having to reimburse actual costs; and
      Implementing a technical fix to allow discretionary cost-
share waiver for grants to address severe marine debris events.

    We appreciate the close coordination with the Committees and 
sponsor offices and the opportunity to provide important clarifications 
to help guide NOAA's work with the Marine Debris Foundation and other 
partners.
    H.R. 886 also contains language in the new section on receipt and 
expenditure of funds that would make available funds--``only to the 
extent provided in advance in appropriations acts''.
        Oil Spill Preparedness, Response, and Damage Assessment
    NOAA's Office of Response and Restoration (OR&R) is a center of 
expertise in preparing for, evaluating, and responding to threats to 
coastal environments, including oil and chemical spills, releases from 
hazardous waste sites, natural disasters, and marine debris. OR&R staff 
are located around the country to work with local and regional partners 
to address the impacts of environmental threats to our coastal 
communities.
    Under laws such as the Oil Pollution Act of 1990 (OPA); Clean Water 
Act; Comprehensive Environmental Response, Compensation, and Liability 
Act (known as CERCLA or Superfund); and National Marine Sanctuaries 
Act, NOAA is a trustee for the public's natural resources, charged with 
protecting and restoring them when impacted by oil and chemical spills, 
hazardous waste sites, and vessel groundings. In addition to these 
authorizations, OR&R also has a role supporting the Federal Emergency 
Management Agency and other federal agencies under Presidential Policy 
Directives 8 and 44 for natural disasters and other incidents. OR&R 
strives to fulfill our mission of protecting and restoring NOAA trust 
resources by providing scientific and technical support to prevent and 
prepare for, respond to, and recover from marine pollution.
Preparedness
    Following the devastating 2017 hurricane season, and to address the 
realities of increased natural and human-caused coastal threats, NOAA 
created the Disaster Preparedness Program within OR&R. This program is 
focused on strengthening existing operational capabilities to ensure 
that NOAA's National Ocean Service and its partners have the tools 
necessary to help plan for and respond to disasters so commerce, 
communities, and natural resources can recover as quickly as possible. 
OR&R supports disaster preparedness for NOAA and our partners through 
planning, training, exercises, disaster coordination, continuous 
improvement, and long-term recovery for an optimal preparedness 
posture.
Response
    Thousands of incidents occur each year in which oil or chemicals 
are released into the environment as a result of accidents or natural 
disasters. Spills into our coastal waters and inland waterways, whether 
accidental or intentional, can harm people and the environment and 
cause substantial disruption of marine transportation with potential 
widespread economic impacts.
    Every year, OR&R responds to approximately 150 oil and chemical 
spills in U.S. waters. Under the National Response Framework and the 
National Contingency Plan, NOAA has responsibility for providing 
scientific support to the federal on-scene coordinator and other 
federal partners for oil and hazardous material spills. To support this 
work, we provide response to incidents 24 hours a day, seven days a 
week. When an incident occurs, OR&R's scientific support coordinators 
compile scientific inputs and deliver this critical information to the 
federal on-scene coordinator and other federal partners. Through the 
use of our customized tools, models, and products, information is 
available to provide responders with the science they depend on to 
protect our coastal communities.
Damage Assessment
    OPA authorized NOAA and other natural resource trustees to recover 
damages from parties responsible for oil pollution to cover the costs 
of damage assessment and restoration planning and restoration 
implementation. Based on this authority and comparable damage 
assessment authority for hazardous substances under CERCLA, NOAA 
established a program for such assessment and restoration. Under this 
program, OR&R is responsible for evaluating and restoring coastal and 
estuarine habitats impacted by hazardous waste releases, oil spills, 
and vessel groundings. Our team assesses ecological risk and 
environmental and economic injury from contamination and ship 
groundings.
    To fully accomplish this mission, OR&R works with NOAA's General 
Counsel for Natural Resources and the NOAA Office of Habitat 
Conservation to administer the Damage Assessment, Remediation, and 
Restoration Program (DARRP). This program holds polluters accountable 
for restoration of natural resources and human uses lost or injured by 
oil or hazardous substances, saving the taxpayer the direct cost of 
restoration. On average, even after setting aside Exxon Valdez and 
Deepwater Horizon settlements, the program has delivered four dollars 
of restoration for every one dollar invested in DARRP support. To date, 
the partnership has recovered over $10.6 billion dollars to restore a 
wide variety of critical habitats and resources nationwide.
Recent Accomplishments
    In fiscal year 2022, OR&R:
      helped to recover $114 million from pollution settlements 
for restoration in five states: New Jersey, Texas, Louisiana, Hawaii, 
and Pennsylvania;
      partnered with NOAA's National Sea Grant office to 
establish a new funding opportunity to improve disaster preparedness 
within coastal communities;
      supported response efforts to 151 oil spills, chemical 
releases, and other incident responses;
      worked with the U.S. Coast Guard to conduct important 
research on characterizing oil on water in ice environments at three 
locations in the Arctic;
      and trained over 2,500 responders in disaster 
preparedness, oil and chemical spill response, and planning.

    These accomplishments demonstrate our dedication to science-based 
solutions for protecting and restoring natural resources from coastal 
hazards thus benefiting the environment, public, and economy.
                               Conclusion
    The efforts of NOAA's Office of Response and Restoration span the 
emergency management cycle from preparedness to response and 
restoration with particular emphasis on applying NOAA scientific and 
operational capabilities to coastal disasters including pollution from 
oil, chemical, and marine debris. We will continue this critical work 
to protect and restore the nation's oceans, coasts, and communities 
from increasing environmental threats. With our allocated resources, 
OR&R will remain agile as these needs evolve during a time of changing 
climate.
    While the problem of marine debris has existed for decades and has 
received considerable attention from NOAA and other partners, there is 
still much to learn as we work to address the impacts of marine debris 
on the environment, marine species, and human health and safety. NOAA 
is committed to investigating and preventing the adverse impacts of 
marine debris and looks forward to working with the Committee.
    Thank you very much for the opportunity to provide a Statement for 
the Record. I would be happy to answer any questions you may have.
References

Borrelle, S. B., J. Ringma, K. L. Law, C. C. Monnahan, L. Lebreton, A. 
    McGivern, E. Murphy, J. Jambeck, G. H. Leonard, M. A. Hilleary, M. 
    Eriksen, H. P. Possingham, H. De Frond, L. R. Gerber, B. Polidoro, 
    A. Tahir, M. Bernard, N. Mallos, M. Barnes, and C. M. Rochman 
    (2020). Predicted growth in plastic waste exceeds efforts to 
    mitigate plastic pollution. Science. 369(6510).

Jambeck, J. and K.J. Johnsen (2015). Citizen-Based Litter and Marine 
    Debris Data Collection and Mapping. Computing in Science and 
    Engineering. 17(4).

Law, K. L., Starr, N., Siegler, T. R., Jambeck, J. R., Mallos, N. J., 
    Leonard, G. H. (2020). The United States' contribution of plastic 
    waste to land and ocean. Science Advances. 6(44).

Pauly, D., and D. Zeller (2016). Catch reconstructions reveal that 
    global marine fisheries catches are higher than reported and 
    declining. Nature Communications. 7(10244).
    Mr. Webster of Florida. Thank you so much. I appreciate it. 
Well, we will start with our questioning. I will be first.
    And Admiral Phillips, planned deepwater ports in the Gulf 
of Mexico are experiencing very long delays in their 
application process to receive construction permits from MARAD. 
I am not really sure why that is happening, it's just not 
going.
    The permitting process outlined in the Deepwater Port Act 
of 1974 specifies that the process from application to issuance 
of a decision by the Secretary of Transportation should take no 
longer than 1 year, 365 days. However, several current pending 
applications were initially submitted several years ago and 
have been delayed by excessive requests from MARAD for 
supplemental technical and environmental information, 
suspending the statutory process timeline. Applicants also 
report a lack of communication and transparency from MARAD on 
where the process stands and what they can do to provide the 
needed information.
    First of all, why is MARAD failing to process these 
applications in a timely manner as outlined by law?
    And when is the decision expected for the Texas GulfLink 
permit, which has now been languishing for nearly 1,200 days?
    And anyway, maybe I will continue on, and then you can come 
back and answer those two questions. OK?
    I would like to shift now to discuss the Port 
Infrastructure Development Program. Current law provides funds 
from this program to be used for fully automated cargo handling 
equipment. As greater amounts of cargo enter the ports, many 
port and terminal operators are working to optimize and improve 
operations, including technology and automated systems that 
have the potential to improve container throughput. At the same 
time, longshore unions have resisted a transition to these new 
technologies.
    What role does automation play in improving and optimizing 
the capacity to move cargo through the ports?
    Additionally, why did MARAD include the prohibition on 
using funds to procure fully automated cargo handling equipment 
in the notice of funding opportunity for the United States 
Marine Highway Grant program, when it was not directed by 
legislation?
    And then lastly, I would like to address a topic that has 
been the subject of recent news reports. A recent Washington 
Post article highlighted the potential cybersecurity threat 
that Chinese-manufactured cranes pose to our national security, 
serving as intelligence-gathering devices capable of tracking 
the movement of goods at the ports. Section 3529 of the most 
recent NDAA directed MARAD to lead a report on this topic.
    Are there any early findings from the study or general 
highlights on the topic that you would like to share? If you 
could talk about those, that would be great.
    Admiral Phillips. Thank you, Mr. Chairman. I will start 
with the cranes first.
    First of all, as you point out, we are tasked within the 
2023 NDAA to do a report, an unclassified report on the topic 
of cyber threat, potential cyber threat related to cranes, 
particularly those that are manufactured in China. We are to do 
that report in concert with a number of interagency partners: 
CISA, Coast Guard, DHS, and others, and we are doing so. We 
have just begun meeting with all of them.
    And I would comment that much of the existing reporting and 
information on this particular problem is classified, and so, 
those reports and those meetings are taking place in a 
classified environment. So, we will continue to produce and 
work towards producing this report as directed by the NDAA.
    I think at present our findings are that much more work 
needs to be done. And consistent with that, certainly, you are 
aware of the broader challenges with anything that is connected 
to the internet and that is cyber.
    Sir, if I may move to U.S. Marine Highways and automation, 
we are under law by the 2023 NDAA required under the PIDP 
program to report to Congress any aspect of a PIDP application 
grant that results in a net loss of jobs. And we added that 
notification, which is included in the PIDP NOFO to the U.S. 
Marine Highways NOFO, as well, to make them consistent with 
what we believe to be Congress' intent there.
    If I may continue, sir, on deepwater ports--I realize I 
have used up my time--we anticipate we will be able to move 
forward with a Record of Decision on the GulfLink project later 
this year.
    On the topic of the length of time it takes to implement 
and execute a deepwater port process to get to a legally 
defensible Record of Decision, we find that these are extremely 
complicated circumstances, and as under the law we have the 
authority to put a stop clock on the process if we find that 
there is missing information from either the applicant or a 
special request by agencies--and we work with more than 20 
Federal agencies in completing this process--we do that, we put 
a stop clock in place to allow applicants to respond.
    I would take issue with the inference that we do not 
communicate with applicants. We communicate routinely with 
applicants, and I would reference in particular the completion 
of the SPOT Record of Decision last November. Prior to 
completing that Record of Decision for that particular 
application, we were meeting weekly with that applicant. So, we 
do interact with applicants on a continued basis.
    I would also point out that the longest pending application 
is on hold more than 1,000 days, at the request of the 
applicant. So, in my opinion, it is to the applicant's benefit 
that we have this opportunity to stop the clock to allow them 
to refine their application so that we can move forward, 
scrupulously following the law and with the obligation and 
intent of a legally defensible Record of Decision, so that we 
can move forward.
    Mr. Webster of Florida. OK. Well, my time has expired. So, 
I will go to Mr. Carbajal.
    You have questions? You are recognized.
    Mr. Carbajal. Mr. Chairman, your time is never expired.
    [Laughter.]
    Mr. Carbajal. Yes. Thank you, Mr. Chairman.
    Admiral Phillips, I am proud to have played a role in the 
passage of the sweeping legislation included in the NDAA last 
year addressing sexual assault and sexual harassment in the 
commercial maritime industry, as well as the Merchant Marine 
Academy.
    But I recognize that your work, and likely our work, is not 
done. I have heard repeated concerns about trouble recruiting 
and retaining commercial mariners. While we examine other ways 
to attract more individuals to the industry, how important is 
it that the industry becomes safer and more inclusive? And are 
you facing difficulty recruiting students to the Academy?
    Admiral Phillips. Thank you for that question, Ranking 
Member Carbajal.
    I would say, in the context of recruiting, we are finding 
the same challenges that many other institutions are finding. 
Applications dipped last year, they are some better this year, 
and we are finding that we are indeed able to recruit students, 
and yet still are facing challenges, as are other academic 
institutions. I wouldn't draw any particular conclusions there.
    However, moving forward to the issue of safety and security 
within the maritime industry, it is absolutely paramount that, 
as you point out, we continue this journey. We are at the 
beginning of a journey, not the end. And we thank the committee 
for its support by putting EMBARC into law, and have continued 
to take and have taken significant steps at the Academy to 
strengthen both their sexual assault prevention and response 
programs to ensure that midshipmen understand what their rights 
and requirements are at sea. We have issued them satellite cell 
phones, as you know. They are voice activated. They can contact 
anyone at any time if they feel they must for any reason. We 
have ensured that there is an amnesty policy, so, people may 
come forward without fear of any other application being held 
against them in particular.
    And I can also say that we have taken the time to explain 
the legislation with the Coast Guard and others at the Academy 
in a session we held January 23rd with midshipmen, and later 
that afternoon with the entire EMBARC-certified community.
    So, as you suggest, this is the beginning of a journey, it 
is not the end. There is much more to be done, and we continue 
to move forward, and we will continue to move forward, and 
thank the committee.
    Mr. Carbajal. Are companies complying with the new program? 
Are they still signing up? Is there still momentum there?
    Admiral Phillips. As I stated in my opening testimony, 
sir--thank you again for that question--the 16 operators and 
companies who are required by law to be in the EMBARC program 
are in the EMBARC program.
    Mr. Carbajal. Thank you.
    Admiral Phillips. That includes more than 140 vessels.
    Mr. Carbajal. Thank you very much. Admiral Phillips, we 
know the impact that the Port Infrastructure Development 
Program will have in reducing emissions in and around the 
ports, as well as providing low- and no-emission fuels to 
vessels.
    There needs to be new development and infrastructure of 
landside facilities like the Morro Bay project in my district 
if we are to meet President Biden's 2030 decarbonization goals. 
What is the potential impact of PIDP-funded projects on 
offshore wind deployment?
    Admiral Phillips. Thank you for that question, Ranking 
Member Carbajal.
    Sir, as you may be aware, in last year's PIDP grant awards, 
there were at least four projects that were related to offshore 
wind deployment, totaling almost $100 million in grant 
responses. We expect more applicants this year will be tied to 
offshore wind development, and we look forward to reviewing 
those applications and helping to move them forward.
    There is certainly considerable potential within PIDP to 
facilitate additional capacity in supporting offshore wind.
    Mr. Carbajal. Thank you.
    Chairman Maffei, among other things, the Ocean Shipping 
Reform Act tasked you with several difficult rulemakings. Can 
you report on the progress of those rulemakings, including the 
``unreasonable refusal to deal or negotiate'' rulemaking?
    Are you confident that they are going to result in a more 
equitable and transparent maritime supply chain?
    In response to heightened Federal attention, as well as the 
passage of OSRA, have carriers taken action to ensure a level 
playing ground for U.S. exporters?
    Mr. Maffei. Yes. So, just in general, we have done a number 
of rulemakings in line with OSRA, but the two major ones that I 
call landmark rulemakings are the one to refine our detention 
and demurrage billing rules, to take the precedent already set 
by the Commissioner Rebecca Dye-authored interpretive rule, and 
apply that in a--basically put more leaves on that tree. We are 
working now on the final rule for that.
    Where it has gone a little slower than I wanted was in this 
refusal to deal rulemaking. The reason for that, though, is not 
a bad reason. It is because we have gotten so many comments 
from 27 entities, lots of whom had very, very good points. The 
issue here is we are trying to maximize the benefits for U.S. 
exporters, while minimizing any unintended consequences that 
then might harm them.
    So, I would say that that is about the trickiest rulemaking 
we have ever done, but I think we are making very good 
progress. I will say that it is not going to be as narrow as 
just looking at the so-called refusal to deal provision, 
because I believe the intent of Congress was to look at also 
the provision that does not allow carriers to unreasonably 
refuse to take exports, which is in a slightly different part 
of the bill, but I view just as important. So----
    Mr. Carbajal [interrupting]. Thank you, Mr. Chairman. I am 
out of time. I yield back.
    Mr. Maffei. I think I answered. So, thank you.
    Mr. Webster of Florida. Thank you very much.
    Representative Gonzalez-Colon, you are recognized for 5 
minutes.
    Mrs. Gonzalez-Colon [microphone was off at the beginning of 
remarks]. . . . back in the ports in Puerto Rico [inaudible]. 
So, I just wanted to take the opportunity to make a point that 
MARAD and the U.S.-flagged fleet have been important partners 
for Puerto Rico. And in support of Puerto Rico for the regular 
service of our Jones Act carriers, provide stability and 
reliability to Puerto Rico's supply chain, both for consumers 
and for industry. And the U.S. domestic shipping fleet is a 
vital asset for our Nation, but is our main source of goods on 
the island. So, I am proud that I say that I support this 
industry, and I will continue to do so.
    I've got a question for Admiral Phillips, and it is an 
issue we saw during the last weeks in Puerto Rico. And I want 
to bring up the issue of security within our maritime 
transportation system.
    Last week, U.S. Customs and the Coast Guard at the Port of 
San Juan detained 18 illegal migrants who had stowed away 
aboard a container barge arriving from Jacksonville, Florida. 
As the vessel approached San Juan, 16 of those people jumped 
and attempted to swim ashore, and they were rescued by the 
Coast Guard at the time. Then, when customs agents searched the 
barge, they found the remaining two migrants, 25 pounds of 
cocaine, and a firearm.
    Customs officials told the press that they suspect the 
migrants scrambled aboard as the vessel passed waters of the 
Dominican Republic on its way to Puerto Rico. While the 
investigation is ongoing to determine exactly what happened, it 
raised questions about vulnerabilities and security risks if 18 
people were able to jump on board a barge traveling between 2 
U.S. ports supposedly undetected.
    So, my question would be how the U.S. Maritime 
Administration works to coordinate with law enforcement 
partners and private-sector stakeholders to address or mediate 
security issues within our maritime transportation system and 
how this fiscal year budget request may help support those 
efforts.
    Admiral Phillips. So, thank you, Congresswoman Gonzalez-
Colon. It is very nice to meet you, ma'am.
    I am not aware of the situation you are describing, and I 
find it alarming. What MARAD would do in such a circumstance, 
knowing that the Coast Guard has been involved and Customs has 
already been involved, is ascertain the details and more than 
likely put out--which we do routinely--a notice to our fleet, 
to our U.S.-flag fleet, through our very modest security 
department, to ensure that our carriers are aware of the 
circumstance and the events surrounding it as a warning to them 
that they should be prepared for such things, and going through 
with them how they could report it, and the kinds of things 
they should do to prepare to prevent such an action.
    Mrs. Gonzalez-Colon. What happened in San Juan is not the 
first time that happened in Puerto Rico. I don't know if we do 
have more cases like those in the rest of the Nation, whether 
you are aware. Do we have more cases like that?
    Admiral Phillips. Well, I am certainly aware that we have 
had cases long term, based on my Navy experience, with such 
activities. But I would take that question for the record, 
ma'am, if I may, and certainly we will investigate and do what 
is within our authorities to make our U.S.-flag fleet aware, 
and make sure they are very vigilant in response.
    Mrs. Gonzalez-Colon. Thank you, Admiral, and thank you, 
Chairman.
    Mr. Chairman, I just want to introduce for the record a 
statement from the president of the National Association of 
Waterfront Employers for this fiscal year budget request, just 
to be on the record, if you would allow that.
    Mr. Webster of Florida. Without objection.
    [The information follows:]

                                 
  Statement of Richard W. Murray, President, National Association of 
   Waterfront Employers, Submitted for the Record by Hon. Jenniffer 
                             Gonzalez-Colon
    Chairman Webster, Ranking Member Carbajal, and the Members of the 
Subcommittee on Coast Guard and Maritime Transportation, the National 
Association of Waterfront Employers (``NAWE'') appreciates the 
opportunity to submit its views on the requested Fiscal Year (``FY'') 
2024 budgets for maritime transportation programs as well as the 
implementation of the Ocean Shipping Reform Act of 2022 (``OSRA''). As 
the voice for U.S. stevedores and marine terminal operators (``MTOs'') 
in Washington, DC, NAWE is uniquely aware of the tremendous impact that 
federal funding allocated through maritime programs can have upon U.S. 
marine terminal operations. Moreover, NAWE has been consistently 
engaged with the Federal Maritime Commission (``FMC'') on OSRA's 
implementation and is grateful for this Subcommittee's oversight, 
ensuring that OSRA is implemented consistent with the intent of 
Congress.
                 Marine Terminal Infrastructure Funding
    The proposed FY 2024 budget includes $230 million for the Port 
Infrastructure Development Program (``PIDP'') administered by the U.S. 
Department of Transportation, Maritime Administration (``MARAD''). 
Notably, if adopted in its proposed form, MARAD would be directed to 
``prioritize projects that also lower emissions'' in an effort to 
reduce the environmental impact of America's ports. This funding 
prioritization is consistent with the requirement to meet 
decarbonization goals under the Inflation Reduction Act's Clean Ports 
program, enacted during the prior Congress.
    The key to achieving these environmental goals is the purchase of 
zero- or near-zero emissions port equipment to replace existing cargo 
handling equipment. Support from this Subcommittee for funding 
opportunities for private MTOs, including through the PIDP, will be 
crucial to support these costly next-generation equipment upgrades. For 
example, a single diesel tractor used at a marine terminal today can 
cost around $150,000, while an electric tractor and its charging 
infrastructure could cost close to $600,000. Moreover, the utility 
infrastructure at ports will need to be adapted to allow MTOs to charge 
their cargo handling equipment and draw more electricity from the grid. 
In aggregate, the purchase of zero- or near-zero emissions port 
equipment and the related infrastructure throughout American ports will 
cost private MTOs tens or even hundreds of billions of dollars. 
Accordingly, significant support from this Subcommittee through 
maritime programs such as PIDP, will be necessary to achieve the 
Government's port decarbonization goals.
    In addition to the overwhelming costs, there are significant 
challenges in sourcing American-made zero- or near-zero emissions port 
equipment. Domestic manufacturers are currently partnering with battery 
suppliers to build specialized electric port equipment, however, there 
are still many types of cargo handling equipment that are not available 
in the United States. Accordingly, NAWE encourages this Subcommittee to 
adopt a measure of flexibility to allow the use of PIDP funding to 
purchase domestically unavailable next generation cargo handling 
equipment.
                          OSRA Implementation
    This Subcommittee should commend the FMC for its efforts to 
implement OSRA in a timely manner and, more importantly, consistent 
with the public engagement principles of the Administrative Procedure 
Act. As result of these efforts, it may prove impossible for the FMC to 
meet Congressionally-mandated timelines, however, it is critical that 
the Commission take the necessary time to engage with maritime 
stakeholders to ensure that OSRA is implemented in a considered fashion 
and consistent with the intent of Congress. Moreover, it is critical 
for this Subcommittee to allow the regulatory process to fully develop. 
Taking additional legislative action to further amend or build upon 
OSRA's directives before the full regulatory process is complete--and 
the resulting impacts evaluated--will add uncertainty to the maritime 
supply chain, potentially causing delays and adding unnecessary 
transportation costs. Accordingly, we urge this Subcommittee's members 
to oppose further amendments to OSRA at the present time and, instead, 
to provide appropriate oversight to ensure that the FMC is successfully 
implementing the current law consistent with the intent of Congress.
    Substantively, NAWE's members are concerned about the manner in 
which the FMC is proposing to implement OSRA as well as the manner in 
which it is currently applying the ``Incentive Principle'' under the 
Shipping Act. Specifically, NAWE is concerned that (a) the Commission's 
Notice of Proposed Rulemaking (``NPRM'') regarding demurrage and 
detention billing requirements is deviating from the clear 
Congressional intent, and (b) that the FMC is applying the Incentive 
Principle in a manner that may actually disincentivize the flow of 
cargo.
(1) The Proposed Rule is Inconsistent with Supply Chain Relationships
    The FMC's October 2022 NPRM unfortunately chose to ignore the 
express Congressional intent by broadly sweeping MTOs into OSRA's 
substantive demurrage billing requirements. By doing so, the FMC is 
setting up its regulations for failure. Of primary concern is the fact 
that the NPRM requires MTOs to have a contractual relationship with 
cargo owners, which is at odds with the longstanding contractual 
relationships in the maritime supply chain. This part of the NPRM is, 
quite simply, incorrect and would force unnatural business 
relationships within the supply chain. Under longstanding industry 
practices, MTOs lack any sort of direct contractual relationship with 
shippers or beneficial cargo owners. The MTOs' only customers are the 
ocean carriers. Accordingly, because there is no direct relationship 
between the MTOs and shippers, MTOs lack direct information as to why a 
shipper's container remains on terminal property past free time. All 
that is known to the MTO is that the container has stayed at the 
terminal past its designated free time, taking up valuable terminal 
space that cannot be occupied by other import or export containers. 
Congress recognized these challenges in choosing to exclude MTOs from 
OSRA's demurrage billing requirements, and the FMC must follow this 
intent in its regulatory implementation.
    In addition, implementing the FMC's proposed regulations would 
require MTOs to abandon existing, efficient practices in which terminal 
demurrage is charged and paid via electronic appointment booking 
systems, simultaneously when a container retrieval appointment is made 
by the shipper's agent. This system has been effective in incentivizing 
the flow of cargo, and the payment of properly-imposed demurrage 
charges, to ensure that containers are moved off of marine terminals in 
a timely fashion. Accordingly, not only would the Commission's proposed 
regulations be impossible because MTOs lack the contractual 
relationships necessary to obtain the relevant information, they would 
also slow the flow of cargo, undermining the recent successful efforts 
to mitigate supply chain congestion. NAWE therefore asks that this 
Subcommittee direct the FMC to take these concerns into consideration 
when issuing its detention and demurrage billing practices final rule.
(2) Demurrage and the Incentive Principle
    In addition to the detention and demurrage NPRM, NAWE's members are 
concerned about the FMC's recent interpretation of the ``Incentive 
Principle'', which the Commission uses to determine whether a detention 
or demurrage charge is ``reasonable'' under the Shipping Act. Notably, 
in a recent decision, the FMC determined that the imposition of 
equipment detention (essentially a fee charged by ocean carriers for 
use of their equipment beyond ``free time'') on a holiday weekend was 
at odds with the ``Incentive Principle'' and therefore unreasonable 
under the Shipping Act. Notably, the shippers in the case had advanced 
notice that the marine terminal would be closed on the holiday weekend, 
but nonetheless chose to continue to hold the ocean carrier's 
equipment. Despite this clear notice, and the fact that the shipper's 
agent had every opportunity to return the equipment before the holiday 
weekend, the Commission deemed the detention charges unreasonable.
    If this logic is extended to terminal demurrage, the result would 
actually ``disincentivize'' the timely removal of containers from 
marine terminals and would impede cargo fluidity at U.S. ports. The 
fundamental issue that appears to be misunderstood by many shippers is 
that a marine terminal is not a warehouse. MTOs pay for the use of some 
of the most expensive waterfront real estate in the country and, 
therefore, must be compensated when a shipper fails to remove its 
container in a timely fashion and improperly uses the marine terminal 
as a warehouse. Moreover, it is clear that the imposition of weekend 
and holiday terminal demurrage promotes cargo fluidity, consistent with 
the Incentive Principle. Such charges incentivize shippers to remove 
their containers before the weekend or holiday, if free time has 
expired, to avoid paying for such additional storage costs. In 
addition, if the shipper is given free storage on the weekend (at the 
MTO's cost and to the detriment of other containers that may enter the 
terminal from ships over the weekend) it will actually disincentivize 
the flow of cargo, as shippers will want to take advantage of this 
government-imposed free service. The aggregate result therefore would 
be an increase in supply chain congestion at U.S. ports. Accordingly, 
we urge this Subcommittee to ensure that the Commission does not extend 
its recent policy decision to terminal demurrage.

                                 * * *

    NAWE appreciates this Subcommittee's leadership in supporting 
funding opportunities for U.S. marine terminal operators, in a manner 
that considers the realistic costs and availability of zero- or near-
zero emissions cargo handling equipment. We are also thankful for this 
Subcommittee's oversight in ensuring that OSRA is implemented 
consistent with the intent of Congress. We look forward to continuing 
to work with this Subcommittee on these issues and ensuring the 
continued resiliency of the U.S. maritime supply chain.

    Mrs. Gonzalez-Colon. Thank you. I don't have any further 
questions. Thank you, and I yield back.
    Mr. Webster of Florida. Mr. Garamendi.
    Mr. Garamendi. Thank you, Mr. Chairman and Ranking Member 
Salud. I want to thank you and the committee for the success we 
had last year in this committee with the passage of the Ocean 
Shipping Reform Act. I noticed you waived on my colleague in 
that process, Mr. Dusty Johnson, and I thank you for doing so.
    Chairman Maffei, you gave credit for the significant 
decline to many things. Dusty and I think it is only due to the 
Ocean Shipping Reform Act.
    [Laughter.]
    Mr. Garamendi. So, you all understand that.
    But like every piece of legislation, there is always more 
to be done. The actual legislation that passed this House was 
modified in the Senate, leaving out some very important 
elements that Mr. Johnson and I intend to try to add into the 
legislative process this year.
    And so, one of those, Chairman Maffei, has to do with your 
authority to actually carry out the orders that your 
administrative law judges are working on. Your agency seems to 
be the only independent agency in the entire Federal Government 
that does not have the authority to implement its decisions 
about unfair practices. Certainly, we can go down through the 
Federal Trade Commission, the Securities and Exchange 
Commission, on and on. Every one of these independent 
Commissions has the authority to do so.
    However, when your team decides that somebody is acting 
unlawfully or contrary to the law, you have got to go to court 
to get an order, rather than the other way around, giving an 
order and then, if the party doesn't like it, they can go to 
court and try to overturn your order. We have received a letter 
from two of your Commissioners, Max Vekich and Carl Bentzel, 
asking Congress to right this wrong, and to modify the Ocean 
Shipping Reform Act so that you actually have the authority to 
implement the decisions that you have.
    So, my question to you is, do you support your other two 
Commissioners and this effort to try to modify, improve last 
year's law?
    Mr. Maffei. Yes, Congressman Garamendi, I do support it. 
And I would say that even if the two Commissioners in question 
weren't sitting imposingly behind me.
    [Laughter.]
    Mr. Garamendi. Well, they are big men, but whatever the 
motivation, we appreciate your answer.
    Also, I note that this bill is supported. Mr. Johnson and I 
will carry this bill through, hopefully, success and to the 
President.
    And I also note that Mr. Johnson has some additional 
reforms that follow along on, I would say, some errors that the 
Senate made that he hopes to correct. And I look forward to the 
opportunity to work with him on that.
    I wanted also to go to the issue of the sexual assault. 
Admiral, that has been covered extensively by my colleagues.
    And I want to, therefore, just bring to your attention the 
ongoing issue that MARAD has to keep its ancient ships 
floating. If you would like to comment on that and spend the 
next minute and 30 seconds commenting on how you intend to keep 
those ships and/or replace them, I would appreciate that.
    Admiral Phillips. Yes, sir, Congressman Garamendi, thank 
you for that question. And I am happy to talk about EMBARC, and 
I am certainly happy to talk about ships.
    As you are aware, we are working a Ready Reserve Force 
Recapitalization Program, which involves purchasing new vessels 
or used vessels--in particular, used vessels. We have purchased 
two, and are in the process of concluding a purchase, which we 
have notified Congress of, to bring in three more. These 
vessels will be coming on board later this year, and we will be 
working on flagging them in.
    As you are aware, during the 2023 NDAA, we were authorized 
a new build program. However, that program was not 
appropriated. I would offer that, in the context of 
recapitalizing the Ready Reserve Force, it is an all-hands-on-
deck evolution. The ships are aging, as you point out. 
Maintaining them is more costly, and buying used is very 
expensive, as well. So, every opportunity that is possible I 
think we should take.
    Mr. Garamendi. Thank you. In my remaining 25 seconds, we 
will be bringing to this committee what we call the national 
Maritime Security Program, which is a program that is built 
upon some of the policies we already have in place, so that the 
Jones Act fleet--some of those ships could be militarily useful 
if they were modified or built in the future to be militarily 
useful. In that way, we might be able to provide the necessary 
logistical support that the Navy or the military would need, 
should anything occur in the Pacific. So, we will get more of 
that to the committee in the days ahead.
    Thank you very much.
    Mr. Johnson, what a pleasure to see you.
    Mr. Webster of Florida. Thank you.
    Mr. Van Drew, you are recognized.
    Dr. Van Drew. Well, welcome to the House Subcommittee on 
Coast Guard and Maritime Transportation. Today, my remarks and 
questions will focus on this administration's--what I believe 
is a dangerous rush to industrialize our oceans with offshore 
wind.
    To paint the picture for my colleagues, the proposed 
offshore wind projects are over 2 million acres in size and 
include over 3,000 wind turbines, each over 1,000 feet in 
height.
    We--oh, I am sorry [adjusting microphone]. There we go. Do 
I have it now? Thank you.
    To paint a picture for my colleagues, the proposed offshore 
wind project leases are over 2 million acres in size, and 
include over 3,000 wind turbines, each over 1,000 feet tall. 
The straight words are: We have never seen anything like this 
before.
    Of concern to this subcommittee should be the effect of the 
maritime supply chain. The Bureau of Ocean Energy Management 
has determined that the impacts of wind turbines on navigation 
and vessel traffic will be ``major,'' and could result ``in 
personal injury or loss of life.'' It is obvious why these 
projects are dangerous.
    First, offshore wind leases will obstruct major maritime 
traffic lanes. Thousands of vessels would be forced into tight 
bottlenecks.
    Second, offshore wind structures interfere with 
navigational radar. This interference affects both commercial 
and military vessels, as well as search and rescue helicopters.
    The fact is that maritime transit and offshore wind 
complexes will be difficult, and it will be dangerous, and our 
supply chain will become even more fragile. Congress must shine 
a light on the true costs of offshore wind industrialization, 
and hold this Government accountable.
    I direct my questions to Rear Admiral Ann Phillips, 
Administrator for the United States Maritime Administration, 
and I thank you for your service to the United States Navy.
    Since 1958, the Maritime Administration has regularly 
published the official instruction manual on collision 
avoidance radar, most recently in 2005. This matter is under 
your purview. Has the Maritime Administration conducted any 
assessments of the effect of offshore wind structures on 
collision avoidance radar? And if not, would you commit to 
investigating this phenomenon?
    Admiral Phillips. Thank you, Congressman Van Drew. To my 
knowledge, we have not conducted a specific investigation into 
the impacts on collision avoidance radar. I would certainly 
think that, if there were issues related to this, that the 
maritime industry would have contacted me.
    However, I appreciate your interest in such a strong safety 
measure, and we will work with our fellow interagency to see 
what----
    Dr. Van Drew [interrupting]. And I will just remind you 
that it is a little tough sometimes on the maritime industry, 
and they have mentioned it numerous times.
    You have been a vocal advocate of the offshore wind 
industry in your official capacity as Maritime Administrator. 
Before this job--and I don't mean to be tough, just questions--
you worked for Burdeshaw Associates, a consulting firm with 
connections to the wind industry going back a decade. Is that 
correct?
    Admiral Phillips. I did work for Burdeshaw probably more 
than a decade ago. Yes, sir.
    Dr. Van Drew. OK. You then served as a member of the 
Advisory Board for the Center for Climate and Security, which 
has received substantial funding from left-leaning political 
action groups and undisclosed donors. Is that correct?
    Admiral Phillips. It is correct that I served on the board 
of the Center for Climate and Security.
    Dr. Van Drew. OK. In your time as a civilian, did you 
receive compensation to consult or advise on any matters 
related to wind energy?
    Admiral Phillips. I did not.
    Dr. Van Drew. Development onshore or offshore?
    Admiral Phillips. I did not.
    Dr. Van Drew. OK. So, let me just say to the people that 
are here--and I know I don't have a lot of time left, either--I 
live on the east coast, obviously. I live--it is what is called 
the Jersey Shore. We now have along the east coast 25 dead 
whales. We have dozens of dead dolphins. We have never seen 
anything like it.
    We have thousands upon tens of thousands of people now 
who--on the coast, whether it be Florida, whether it be New 
Jersey, whether it be New York--do not want these wind 
turbines. There has been much proof that they are actually 
going to cost a great deal of money, that people's utility 
rates are going to go up, it is going to cost them more, that 
it is dangerous to the environment, it is dangerous to the Cold 
Pool, which is a very environmentally sensitive area, it is 
dangerous to all this wildlife. The fishermen are against it. 
It is dangerous to the fishermen. And I would maintain that it 
is also dangerous for the maritime industry.
    We are fully involved with this. We just had a hearing 
actually in-district--I guess it was about 10 days ago now, I 
would have to check, but it was recently. We had so many people 
there, so many folks concerned, we couldn't even get them all 
in the convention center.
    So, I would tell you that, quite frankly, you are going to 
hear more from me, and you are going to hear more from people 
like Andy Biggs, and a whole bunch of other folks who are real 
concerned about this issue. Many other Congressmen have 
concern, and I wouldn't want this committee, which I sit on, to 
be in a vacuum and not realize the serious, serious concerns 
that there are out there. And this must be investigated. Thank 
you.
    [Pause.]
    Dr. Van Drew. I kind of knew that would make everybody 
quiet.
    Mr. Webster of Florida. Thank you for that question.
    Ranking Member Larsen, you are recognized for your 
questions.
    Mr. Larsen of Washington. Thank you.
    Just to start, Admiral, is it the Biden policy position to 
develop offshore wind, generally?
    Admiral Phillips. Yes, sir, it is.
    Mr. Larsen of Washington. Yes. Should we expect someone who 
is an appointed person in the Biden administration to do 
anything but support the Biden administration policy? And if 
you didn't, you would leave? Isn't that usually how it works?
    Admiral Phillips. That is an interesting question, sir, but 
I----
    Mr. Larsen of Washington. All my questions are.
    Admiral Phillips. Yes, sir. Thank you very much.
    [Laughter.]
    Mr. Larsen of Washington. Yes, yes.
    Admiral Phillips. I look forward to them. Thank you, sir.
    Mr. Larsen of Washington. All right, great, sure. And I 
think everyone should expect to hear a lot of support for 
offshore wind, as well. And so, I look forward to doing that.
    However, this is about your budget, and about FMC's budget, 
and the debris program. And I do have a complaint about the 
administration's $20 million request for the Small Shipyard 
Grant program. If the administration put the fully authorized 
amount in the budget, based on your past experience and MARAD's 
past experience, would there be $30 million worth, at least $30 
million worth of awards in the Small Shipyard Grant program?
    In other words, is it oversubscribed?
    Admiral Phillips. Congressman Larsen, all of our grants are 
oversubscribed.
    Mr. Larsen of Washington. I care about the Small Shipyard 
Grant program.
    Admiral Phillips. It is oversubscribed.
    Mr. Larsen of Washington. It is oversubscribed?
    Admiral Phillips. Yes.
    Mr. Larsen of Washington. Yes. So, the fact that they have 
put in $20 million in the budget, and we authorized $30 
million, is telling me that we have an opportunity here in 
Congress to fix the mistake that the Biden administration made 
with the budget, in my view. I want to make that point clear to 
the folks listening in TV-land, because this is a program that 
helps a lot of small shipyards in my district and my State, and 
throughout the country. So, I look forward to moving forward on 
that.
    But I want to turn to Chair Maffei about your agency's 
budget--about the Commission's budget, that is. We are getting 
a lot of new opportunities and responsibilities with OSRA 2022. 
How much of that budget is going to be put into implementation 
of that, versus your basic budget that maybe--you had a backlog 
in technology investments, or you had a backlog in X, Y, or Z. 
How is that split up, generally?
    Mr. Maffei. That is a good question, and I will want to 
submit a written----
    Mr. Larsen of Washington [interposing]. Yes, that would be 
great.
    Mr. Maffei [continuing]. Answer to you.
    But I will say, just generally speaking, almost all of it 
goes to professional personnel. And all of our professional 
personnel are involved in implementing OSRA. There are so many 
different provisions. You know, we are learning how to walk and 
chew gum at the same time. We are not putting off anything 
while we figure out one thing. Everything is being done 
simultaneously.
    There are a couple of things that we do need to address in 
order to implement OSRA, but also to do other things. For 
instance, a lot of our IT equipment--and software, frankly--is 
outdated. We need to freshen our website. We need to freshen a 
number of those technological intersections and also make sure 
that we are not vulnerable to any sort of cyber attacks, et 
cetera. So, there are some.
    But by far, most of the budget goes into personnel, mostly 
economists and lawyers, who know a lot more about the maritime 
industry than I want to know, but do a great job, and will help 
us to implement OSRA and also to do our other activities.
    Mr. Larsen of Washington. That is great. I just will put a 
note in for the Marine Debris Program since that is on the 
agenda. But we have the written statement and, again, I will 
just underscore how important that is, how important a program 
that is to the Pacific Northwest, to the Puget Sound, to the 
Salish Sea, and having a funded Marine Debris Program is 
important for us there.
    And so, I know that other folks have gone over time, and 
so, I will yield back a full minute in making up my 
contribution to this committee. Thank you.
    Mr. Webster of Florida. Representative Babin, you are 
recognized.
    Dr. Babin. Thank you, Mr. Chairman. I want to say thank you 
to our witnesses. It was good to talk to you, Admiral, on our 
call yesterday, as well. Thank you both for being here.
    The U.S. maritime industry keeps our Nation's economy 
running, without question. If you doubt that for a minute, just 
come down to southeast Texas, the Greater Houston region, look 
in my district alone. We have some great ports there, including 
the number-one port, by tonnage, in the country, the Port of 
Houston. The Houston Ship Channel is busy day and night, a 
conduit for shippers to send and receive goods and services all 
around the world. Despite that importance, many folks--in fact, 
I think most of our country--did not understand just how big an 
impact this movement of goods was.
    However, COVID brought new attention to this space, putting 
shipping issues and supply chain challenges right smack in the 
limelight. And even as we have heard so much about supply chain 
issues and the need to improve the status quo, I have heard 
horror stories about dealing with redtape in the maritime 
industry. This hurts Texas more than any other State, 
especially when it deals with energy export projects that are 
being held up.
    So, Rear Admiral Phillips, this question is for you. 
Piggybacking off what Chairman Webster had alluded earlier, the 
Deepwater Port Act provides a statutory timeline of about a 
year for MARAD to process and approve or deny a deepwater port 
application. I understand that these projects can be complex, 
but MARAD is taking much longer, more than 3 years to process 
many of these applications. And since 2015, MARAD has issued 
only 1 Record of Decision and zero licenses for deepwater 
ports, despite the filing of 8 deepwater port applications 
since that time.
    I find that extremely disturbing, given the project 
proponents are spending millions of their dollars to develop 
these projects, only to have them stalled in your agency. For 
example, as Chairman Webster brought up, Texas GulfLink is in 
year 4 of supposedly our 1-year application process, because 
every time MARAD is supposed to give them an answer, they start 
asking duplicative questions and pushing the timelines. Even 
worse, this is costing Texas GulfLink big time. They are paying 
millions for MARAD to just do their job.
    Your response to this issue is just that MARAD is 
scrupulously following the law. Well, asking the same types of 
question over and over again because it resets the clock isn't 
MARAD's statutory responsibility. MARAD needs to be 
transparent, honest, and straightforward with private-sector 
partners.
    Who at MARAD is ultimately responsible for these 
applications moving along in a timely fashion, and what steps 
are they taking to ensure applications are being processed in a 
transparent, efficient, timely manner, and that applicants are 
being kept informed of what is going on with their projects? I 
would like to hear that.
    Admiral Phillips. Thank you, Congressman Babin, for that 
question.
    I sign the Records of Decision. That is delegated to me by 
the Secretary. So, I am the person at MARAD who is responsible 
for moving these programs along, and I accept that 
responsibility.
    I would point out that the Record of Decision for the 
Delfin project was approved in 2017.
    The project did not move to a license because the company 
was not ready to do so. We have signed the SPOT ROD, as you 
know, last fall, and we anticipate moving forward with a 
license for that later this year.
    The GulfLink project is moving forward, as well, and we 
anticipate we can move to a Record of Decision with them later 
this year.
    As discussed, these are extremely complicated projects. We 
work very hard, and I will state again: We are transparent, and 
we do work with the companies on what the requirements are that 
we need from them to move forward, and that the stop clock 
actually helps them provide what they need so that this process 
can continue, and we can reach a legally defensible Record of 
Decision.
    Dr. Babin. Well, I am not sure they are very appreciative 
of the stop clock.
    And why would you have duplicative questions, asking the 
same questions over and over again, and then the clock starts 
all over?
    Admiral Phillips. I would----
    Dr. Babin [interrupting]. I don't have examples of the 
duplicative questioning, but this is something that I have 
heard from several of these companies.
    Admiral Phillips. Yes, sir. I would take that for the 
record. I don't know of duplicative questions, and we rely on 
the applicant to respond to us once questions have been asked 
for them and a specific issue has been provided to them.
    Dr. Babin. OK. How much time do I have left?
    Voice. Five seconds.
    Dr. Babin. Five seconds? Well. Sorry, Mr. Maffei, I am not 
going to be able to get that in in 5 seconds.
    [Laughter.]
    Dr. Babin. I yield back.
    Mr. Maffei. I appreciate the Congressman not asking the 
question, and then having the time expire.
    Mr. Webster of Florida. Representative Peltola.
    Mrs. Peltola. Thank you, Mr. Chairman. Oh, good afternoon.
    So, I am very pleased to be on this subcommittee. Coast 
Guard is critical in Alaska, and so are the maritime trades and 
maritime transportation. We mostly fly in and out, but most of 
our cargo comes in by barge. So, thank you for the work that 
you do.
    As the Arctic warms, and as our Bering Sea, Chukchi Sea, 
Beaufort Sea are ice free, so often we have seen a real 
dramatic increase in vessels traveling in the Arctic. And this 
is going to provide a lot of opportunity, but it is also 
providing challenges to communities and stressors that we 
haven't seen before. And I was just wondering if the Commission 
and the Administration could speak to some of the things that 
you are looking at in this regard. Thank you.
    Mr. Maffei. Yes, as far as the Commission is, we monitor 
anything like the trade lanes, if trade lanes are opening up 
through the Arctic. But we don't have any jurisdiction over 
that particular area.
    Admiral Phillips. Yes, ma'am, Congresswoman, thank you for 
your question.
    We work with the Committee on the Maritime Transportation 
System, who does look at Arctic issues. We are a member of 
that. We host them, actually, at MARAD. They have done work in 
the Arctic, and continue to do work on the matters surrounding 
Arctic matters, as well as the Coast Guard, who is definitely, 
as you point out, a critical player in Alaska, and very much 
involved in safety with regard to maritime operations in the 
Arctic.
    [Pause.]
    Mrs. Peltola. Maybe I could yield my time to the gentleman 
from Texas to ask his question.
    [Audio malfunction.]
    Dr. Babin. Could you hear me?
    Mr. Maffei. Yes.
    Dr. Babin. From last year at the same time, and certainly 
since the height of the COVID-19 pandemic, do you foresee 
supply chain congestion returning to U.S. ports in 2023, or in 
the next 5 to 10 years?
    I know you don't have a crystal ball, but----
    Mr. Maffei [interrupting]. Yes.
    Dr. Babin [continuing]. Without further amendments to the 
Shipping Act?
    Mr. Maffei. I think that the cargo flows are 
extraordinarily difficult to predict. I wish I could give you a 
better answer to this question.
    But what I will say is that what we have learned, both with 
COVID--initially, by the way, a lot of people in the industry 
thought COVID would mean exactly that, very little shipping, 
right? And then it was this boom of everybody staying at home, 
and having nothing to do but shopping and whatever that created 
this extreme opposite situation. Now we have a situation where 
things have fallen far faster than anybody in the industry 
predicted.
    So, whether it could return in 2023, I am not sure. I would 
say that the odds are against it, because of the economy and 
other things like that. But I would not underestimate the 
possibility that American consumers could yet decide that all 
this stuff in warehouses, the extra stuff that you have read 
has gotten stuck in warehouses, and that sort of thing, they 
won't want that, they want the latest thing. And so, I think we 
need to be ready for another boom.
    Now, will it be the kind of boom in demand that we saw 
under COVID? No, I doubt it would be that high. But we need to 
be ready.
    So, for instance, the reason why we need to get the export 
rule in place, the reason why we need to get the detention and 
demurrage rules in place are not necessarily for this moment, 
but they are for the next crisis. We are in the calm after the 
storm, but also the calm before the storm, in my view.
    Dr. Babin. Thank you. And I appreciate the gentlewoman's 
yielding.
    Am I completely out of time? How much time do I have left? 
A minute and 30 seconds? I've got one more, then, OK.
    [Laughter.]
    Dr. Babin. As FMC Commissioner, you are no doubt familiar 
with the incentive principle, which essentially states that 
demurrage and detention practices are reasonable under the 
Shipping Act only if they incentivize cargo flow. In applying 
the incentive principle, do you agree that the FMC must avoid 
actions that would disincentivize the flow of cargo and, for 
example, by allowing shippers to further delay container 
retrieval past free time?
    Mr. Maffei. Yes, the incentive principle--Rebecca Dye came 
up with after a lot of consultations within the industry, and 
she was in the middle of a fact finding. And it is difficult, 
because the particulars do matter here. But yes, the idea is to 
make sure that detention and demurrage does exist, right?
    We were asked, well, why don't you just suspend it, et 
cetera, when there is so much unfairness going on? And the 
truth is, if we suspended it, it would all be worse. There 
would be even more.
    Legitimate detention and demurrage is very, very important 
to keep cargo flowing. But it must follow that incentive 
principle, meaning that if a shipper can't pick up their cargo, 
an importer or exporter can't pick up their cargo because the 
terminal is closed, there is a blizzard, or maybe even they are 
just closed on the weekend, and they can't pick it up that day, 
they shouldn't be charged for that particular day. And if they 
can, then they should be.
    So, there is a lot packed in that, and I would like to 
maybe have a further conversation with you. But yes, I do 
believe in the incentive principle. It is absolutely essential. 
And it is what OSRA is all about, is adding the leaves on that 
tree.
    Dr. Babin. Good. Thank you. And I see that my time is out, 
so, I yield back.
    Mr. Webster of Florida. OK. So, where were we? Yes, Mr. 
Ezell.
    Mr. Ezell. Ezell.
    It looks like we are all having a little trouble with this 
button today. Thank you, Mr. Chairman, and it is Ezell, one 
word.
    [Laughter.]
    Mr. Webster of Florida. I will never miss it again.
    Mr. Ezell. I have been working on that. So, thank you all 
for this afternoon, and being a part of this committee.
    Mr. Maffei, when I am talking to the ports in my district, 
I hear how port property used for marine terminal operations is 
pretty limited across the country. And I think this, of course, 
contributes to port congestion.
    Can you expand on the importance of picking up shipping 
containers in a timely manner?
    Mr. Maffei. Yes, it is absolutely essential to keep cargo 
moving.
    The presumption of your question is absolutely correct. 
Most of the ports in this country are near or in urban areas, 
of course. Right? That is where the business is. And because of 
that, it is very difficult to get new property, as we saw 
particularly in the L.A.-Long Beach area during COVID. So, it 
is very, very important that people pick up their containers on 
time, that they drop them off.
    One of the things that was upsetting is these reports of 
large, huge customers like the big box stores or whatever, 
getting 3 or 4 weeks of free time. There is some evidence of 
that. Mostly that is not the case. But if you have excessive 
free time, it does create those bottlenecks. So, all of that is 
very important.
    It is also important to make sure that empties can be 
picked up. And one of the things that we are being careful 
about in terms of our ``refusal to deal'' rule is to make sure 
that we don't create the unintended consequence of all these 
empties being left. So, you are totally onto something.
    I will say, though, that it does also exemplify how much 
the ocean supply chain is dependent on the rest of the supply 
chain. If we had more warehouse space, if we had better roads, 
better highways--if you build a bridge in Middle America, it 
helps me. So, we can't just look at the ports. But it is a very 
good point, sir.
    Mr. Ezell. Thank you. Recent reports have shown the 
container volumes at most U.S. ports have fallen, as we have 
talked about, in the last year, and certainly has lowered since 
the height of COVID and related consumer spending, which you 
mentioned in your testimony.
    When considering these facts, do you think more amendments 
to the Shipping Act are needed to prevent supply chain 
congestion in the U.S. ports? Or should we let markets adjust?
    And can we talk about what FMC is doing to provide 
certainty to exporters during the implementation of the act?
    Mr. Maffei. I will answer the second part of that question 
first, certainty to exporters. I mean, we are just trying to 
make everything we do completely transparent. We are in close 
touch with a number of the exporter groups, particularly the 
largest ag groups.
    There are some disadvantages to being a five-appointee 
Commission; there are a lot of advantages. And one of those 
advantages is all of us, one way or another, have hit the road 
and gone out and spoken to a lot of these groups in various--
and if it is groups meeting in your district, we are happy to 
come there too, because it is very important. It is a huge 
industry, it affects everything, but it is actually, in some 
ways, a very small industry. So, we have been trying to do that 
as much as we can.
    In terms of additional amendments, I mean, I feel a little 
bit like my daughter does. I have an 8-year-old daughter, and 
she eats a bowl of Cheerios every night before bed. But I am 
trying to get her to bed, right? So, she is halfway through the 
bowl of Cheerios. I am like, well, what else do you want? What 
other snack do you want? We are still eating the Cheerios in 
the first act. It doesn't mean that we might not need something 
further. There is a lot of stuff. There are certain court 
decisions that might come down, there are certain other kinds 
of things. But it does make it such that I think my biggest 
focus is to implement what you have already passed, sir.
    Mr. Ezell. Very good. So, it is fair to say that you agree 
the FMC must avoid actions that would disincentivize the flow 
of cargo?
    Mr. Maffei. Absolutely. That's the trick, right?
    Mr. Ezell. Yes.
    Mr. Maffei. Figuring out what those actions are.
    Mr. Ezell. Well, I will tell you, in Mississippi and the 
Port of Gulfport, we have real good roads that go right to I-
10. So, if the Port of Houston gets too backed up, we have got 
plenty of room over there.
    Mr. Maffei. I was at the Port of Gulfport just before----
    Mr. Ezell [interposing]. Yes.
    Mr. Maffei [continuing]. The pandemic, and you are quite 
right.
    Our gulf ports, by the way, a lot more traffic is coming to 
them. There is speculation, oh, it is the labor issues on the 
west coast. I think that may be a small part of it. But a lot 
of that traffic is going to stay because of improvements that 
the gulf ports have made, improvements in the Panama Canal, 
and, frankly, the change in where the cargo is coming from, 
more cargo coming from Southeast Asia and India.
    Mr. Ezell. Thank you.
    Mr. Chairman, I yield back. Thank you.
    Mr. Webster of Florida. Thank you. OK, Representative 
Scholten.
    Ms. Scholten. Thank you so much. Thank you, Chairman 
Webster. Thank you, Rear Admiral Phillips. And thank you, Mr. 
Maffei, for your incredible testimony today and answering our 
questions.
    This question is for Rear Admiral Phillips. If we can turn 
back to EMBARC briefly for a moment--and I want to thank you 
for your extensive testimony on this already, and answering all 
of our questions. But there is a specific portion that I wanted 
to ask about.
    EMBARC included both near- and long-term requirements on 
shipping companies. And we have some information about some of 
the near-term requirements, the short-term requirements. But 
how are those companies complying with some of the longer term 
requirements like video surveillance and master key controls 
and the like?
    Admiral Phillips. Congresswoman Scholten, thank you for 
that question. As you have pointed out, there are things that 
it will take companies some time to move forward with. The 
specific items that you mentioned, key control cameras and 
other security matters, are now also in the Coast Guard 
Authorization Act from 2023. And Coast Guard will be developing 
processes for them, and there is a timeframe under which those 
actions must be implemented so that companies do have some time 
to implement these. They were a part of EMBARC, and we are 
seeing companies take action on their own now, which I find 
heartening.
    I should also note that we have a rulemaking required under 
the NDAA for EMBARC, which we are proceeding with 
expeditiously. That will not impact things under the Coast 
Guard Act, but it will help us put our processes in place for 
EMBARC more thoroughly, so that companies can follow those as 
we move forward, in particular with regard to any actions we 
might take to withhold payments should companies not be in 
compliance.
    Ms. Scholten. Just as a followup, in terms of the time 
requirements for complying, do you think they are sufficient to 
give the companies enough time to fully comply, but also timely 
enough to ensure that they are taking appropriate and prompt 
action?
    Admiral Phillips. Thank you, ma'am. I think they are 
appropriate to the circumstances. And again, we are seeing 
companies move out in advance of that. So, with optimism, they 
won't need the full amount of time to move forward.
    And we thank them, I would say, for their actions in 
response to this.
    Ms. Scholten. That is wonderful. That is heartening to 
hear. Thank you so much.
    I yield back the remainder of my time.
    Mr. Webster of Florida. Representative Johnson, you are 
recognized for 5 minutes.
    Mr. Johnson of South Dakota. Thank you very much, Mr. 
Chairman, and it has been gratifying to hear so many good words 
said about the Ocean Shipping Reform Act.
    And one of the surprising things that happens to all of us 
when we get to Congress is that we realize that there are 
actually good Members here, that not everybody is sort of a 
cartoonish villain. And I discovered one such good person in 
John Garamendi, who has just been an incredible partner.
    The House works a lot harder than the Senate, and nobody 
doubts that, of course. But we passed the Ocean Shipping Reform 
Act out not once, not twice, not three times, but four times. 
And as John mentioned, we don't think we are quite done yet.
    And I appreciate that Chairman Maffei--by the way, I have 
heard five different pronunciations of your last name today.
    Mr. Maffei. When I was in this body, the Congress, I used 
to say it rhymes with buffet.
    Mr. Johnson of South Dakota. Yes. Well, that is actually 
helpful.
    Mr. Maffei. Everything for $9.95.
    [Laughter.]
    Mr. Johnson of South Dakota. And I understand that you are, 
as you are saying, busy eating Cheerios. But Mr. Garamendi and 
I think you could probably use another bowl on deck for when 
you get done eating the first bowl. And so, next week, we will 
be introducing the Ocean Shipping Reform Act 2.0, I think, as 
John mentioned, to undo some of the damage the Senate did with 
their revisions. And I think we will do a better job of hitting 
the center of the target.
    But getting to OSRA 1.0, Mr. Chairman, one of the things we 
did is provide you the power to promulgate rules around this 
refusal to deal. You have talked a bit about that. And I know 
we had 120 Members of Congress weigh in, and then you had an 
additional notice of proposed rulemaking, and solicited 
comments.
    Do we have a timeline? Do we have a sense of when you are 
going to be done?
    Mr. Maffei. Yes. Because of so many valuable comments when 
we did the first notice of proposed rulemaking, we are making 
significant enough changes that we want to do a supplemental. 
It just wouldn't be right to just go to final rule without 
having a comment period so the public could comment on what we 
are coming up with.
    I expect that supplemental to be out very soon--let's see, 
I am trying to think. I don't want to promise next week, but I 
will say in the next month. We are working very hard on that.
    Mr. Johnson of South Dakota. So, I heard next week, just--
everybody heard next week.
    [Laughter.]
    Mr. Maffei. So, yes, we are working on that. It is very 
important.
    I will say this. The good thing about the current 
environment is that we aren't experiencing these problems to 
the same degree that we were in the midst of COVID. So, when 
you wrote, ``Do this really, really fast,'' every hour, 
practically, was of the essence. It is less that now. And it is 
so important that we do get it right, because, as many of your 
colleagues have pointed out, there could be unintended 
consequences on these very exporters that we are trying to help 
if we don't get this right.
    Mr. Johnson of South Dakota. Well, and I would note that I 
have had a number of these foreign-flagged ocean carriers admit 
to me in my office that, because they know the cop on the beat 
has new tools available at their disposal--maybe not perfectly 
well defined yet, but getting close--they have, of course, 
changed the way they do business, and that is to the benefit of 
American exporters, for sure.
    So, I want to shift to the vessel operating--the common 
carrier audit system that you all have. And for those of you 
who don't know, this collects detention and demurrage billing 
information for the nine large foreign-flagged ocean carriers.
    And you had mentioned in your testimony, sir, that this is 
really valuable information. Clearly, I know that you are not 
going to have company-specific audit findings released to 
Congress. There would be all kinds of business information, why 
that might not be appropriate. But do you think summaries of 
your findings could be beneficial for lawmakers?
    Mr. Maffei. I think potentially.
    First of all, we are happy, of course, to give any lawmaker 
a detailed briefing on various things. There are some 
requirements of OSRA, for instance, that we haven't implemented 
yet. We haven't gotten to that deadline yet. But in terms of 
reporting overall import and export volumes, that we certainly 
will do.
    There are probably other areas that could be useful, both 
to Congress and the public, and I am happy to look into that. I 
think these audits, which actually, I established when I became 
Chairman because it was so important that we--I mean, these are 
foreign carriers, but we do want to communicate to them what 
the best practices are. We want to give them some opportunity 
to follow our detention and demurrage rules, to make sure they 
have measures in place to avoid unfair retaliation against an 
exporter or importer who maybe brings a case against them, to 
make sure that they do have a vibrant export program. So, that 
is what it is for.
    But yes, I am happy to get together with you----
    Mr. Johnson of South Dakota [interrupting]. Mr. Chairman, I 
am out of time. I will close by noting that the bowl of 
Cheerios Congress gave your team to devour was enormous. And I 
want to thank every single employee of the Federal Maritime 
Commission for the incredible work you all are doing.
    Mr. Maffei. That is very kind of you, Congressman, 
particularly because, as you know so well, it is really the 
staff that the biggest burden lands on. So, thank you for 
thanking them.
    Mr. Johnson of South Dakota. I yield back.
    Mr. Webster of Florida. Representative Auchincloss.
    Mr. Auchincloss. Thank you, Chairman.
    Rear Admiral, I appreciate you being here again with us. I 
would like to ask you about offshore wind. Over 25 different 
types of vessels will be needed to build each offshore wind 
farm. To help build these vessels, on June 21, 2022, MARAD 
designated offshore wind vessels under the Federal Ship 
Financing Program, also known as title XI, as vessels of 
national interest. Since that designation, has MARAD seen an 
increase in title XI applications? And do you know how many 
more than previously?
    Admiral Phillips. We have seen an increase in title XI 
applications. We have seven applications pending now, we 
anticipate more, and five of those seven are for offshore wind 
vessels.
    Mr. Auchincloss. Do you know what kind of vessels?
    Admiral Phillips. All kinds. Small to large.
    Mr. Auchincloss. Yes.
    Admiral Phillips. Everything, including Rock Fall vessels 
and other things.
    Mr. Auchincloss. Do you agree that we need further 
investment in U.S. offshore wind vessels to meet President 
Biden's goal of deploying 30 gigawatts of offshore wind by 
2030?
    And would you be willing to work with my office on that 
effort?
    Admiral Phillips. Thank you for that question, sir. We 
certainly agree that we would absolutely be willing to work 
with your office, and additional investment is always welcome 
in the maritime industry to grow the industry and grow jobs, 
and certainly jobs in the maritime workforce.
    Mr. Auchincloss. Yes, and I will note that the title XI 
program has not received appropriations since fiscal year 2018, 
and has only been funded by Congress twice in the last decade. 
I believe it should receive increased appropriations to help 
build the hundreds of vessels needed for the new American 
offshore wind industry.
    And I will move on, but continue questioning you, Rear 
Admiral, about the mariner shortage. When you testified before 
the committee on September 14, 2022, you stated that vessel 
operators report that mariner availability is still a 
challenging issue, and that you were hosting a summit on 
September 23rd to discuss recruitment and retention challenges 
for mariners.
    As you know, one of the issues impeding mariner retention 
is the antiquated merchant mariner credentialing system. 
Section 11511 of the fiscal year 2023 NDAA requested a report 
by the USCG Commandant, in consultation with the Maritime 
Administration, on modernizing the merchant mariner 
credentialing system. It was due 2 years after the passage of 
that law. How is MARAD helping modernize the merchant mariner 
credentialing process, and have you started to work on this 
study?
    Admiral Phillips. So, thank you for that question, sir. The 
credentialing system belongs entirely to the Coast Guard. We 
work closely with them on this particular matter. And the 
challenge for them, of course, is the system was built to 
manage credentials and not to be searchable.
    So, what would be helpful to us, and for the Coast Guard, 
as well, is a database where we could search to understand how 
many qualified mariners we have, and what qualifications they 
actually hold. It is not possible to ascertain that querying 
their database right now. Much of it is on paper.
    Mr. Auchincloss. Well, this is why we asked the USCG to 
consult with you, as they were doing. Have they been 
consultative?
    Admiral Phillips. We are working with them on this issue. 
It is a very common topic of discussion with the Coast Guard.
    And I would add that they are working very hard to solve 
this issue and come to a resolution.
    Mr. Auchincloss. So, you have confidence that they will be 
able to issue this report on time?
    Admiral Phillips. Congressman Auchincloss, I can't speak to 
the report. I know that they understand the need.
    Mr. Auchincloss. I will actually yield back the rest of my 
time, Chairman.
    Mr. Webster of Florida. Thank you very much. So, we have 
maybe another round here with Representative Garamendi.
    You don't want it? OK. Are there any--well, everybody has 
left.
    [Laughter.]
    Mr. Webster of Florida. Nobody can ask questions, so, that 
is it.
    Seeing none, that concludes our hearing today, and I would 
like to thank the witnesses for their testimony. It is really 
appreciated. Thanks for listening.
    I ask unanimous consent for the record of today's hearing 
to remain open until such time as witnesses have time to 
provide answers to questions that may be submitted to them in 
writing.
    Without objection, so ordered.
    I also wanted to ask unanimous consent that the record 
remain open for 15 days for any additional comments or 
information submitted by the Members or witnesses to be 
included in today's hearing.
    Without objection, so ordered.
    The subcommittee stands adjourned.
    [Whereupon, at 3:59 p.m., the subcommittee was adjourned.]

                               Appendix

                              ----------                              


  Question from Hon. Daniel Webster to Ann C. Phillips, Rear Admiral, 
      U.S. Navy (Ret.), and Administrator, Maritime Administration

    Question 1. The Port Infrastructure Development Program (PIDP) 
includes a specific legislative requirement prohibiting award 
recipients from using funding received through the program for the 
procurement of fully automated cargo handling equipment if the 
Secretary of Transportation determines that such equipment would result 
in a net loss of jobs within a port or port terminal. While the United 
States Marine Highway Program (USMHP) has no such legislative 
requirement, the Maritime Administration has decided to apply this PIDP 
requirement to USMHP funding opportunities.
    Please provide the rationale for why your Agency included this 
limitation on award uses in USMHP when there is no legislative 
requirement to do so.
    Answer. The USMHP promotes the use, efficiency, and public benefits 
of our marine highway services, including the creation and sustainment 
of jobs in U.S. vessels, ports, and shipyards. MARAD supports the Biden 
Administration policies which maintain good-paying jobs across the 
United States maritime workforce, including port workers, who are an 
essential part of the supply chain.

 Questions from Hon. Mike Ezell to Ann C. Phillips, Rear Admiral, U.S. 
        Navy (Ret.), and Administrator, Maritime Administration

Support for Expansion of Capital Construction Fund Eligibility
    Question 1. As you know, last year in Section 3544 of the National 
Defense Authorization Act for Fiscal Year 2023, Congress enacted 
important amendments to the Capital Construction Fund authority to 
expand eligibility to all U.S. built vessels which are engaged in the 
domestic or foreign commerce of the United States. This expansion did 
away with limitations on the availability of the CCF program to certain 
geographic trades that had been in effect for decades. It also opened 
substantial new opportunities for vessel owners, carriers, and 
shipbuilders to amass the private capital necessary to address the 
needs of the U.S. maritime industry.
    Looking at the pent up demand and unmet needs for upgrading and 
modernizing infrastructure at our ports and marine terminals, expanding 
eligibility of Capital Construction Funds to apply to zero or near-zero 
emission cargo handling equipment, micro-grid and transmissions 
technologies, and other expensive unmet needs could attract and provide 
substantial private sector capital and multiply the reach and 
effectiveness of federal grants awarded through MARAD's Port 
Infrastructure Development Program, Small Shipyards Grant Program and 
United State Marine Highway Program.
    Question 1.a. Would the Biden administration look favorably on this 
type of eligibility expansion for the use of CCFs? Is this idea 
something the administration is considering?
    Answer. An expansion of CCF eligibility would not be of use for 
publicly owned ports, which do not pay Federal taxes, and the 
availability of U.S.-built zero or near-zero emission cargo handling 
equipment that could be acquired with CCF funds is limited. Therefore, 
MARAD is not currently considering such an expansion.

    Question 1.b. Do you agree with the premise that opening up CCFs to 
be used for cargo handling equipment would have a multiplier effect on 
the value of the federal investments being made under the Bipartisan 
Infrastructure Law and Inflation Reduction Act?
    Answer. For many decades acquisition of cargo handling equipment 
that is used primarily on a vessel has been an eligible use of CCF 
funds. MARAD has not studied whether there would be a multiplier effect 
on the value of the federal investments being made under the Bipartisan 
Infrastructure Law and Inflation Reduction Act.

 Questions from Hon. Aaron Bean to Ann C. Phillips, Rear Admiral, U.S. 
        Navy (Ret.), and Administrator, Maritime Administration

    Question 1. Considering the global pandemic, supply chain 
disruptions, historic inflation, and overall costs increases in 
material pricing from steel to the hiring and retaining a skilled 
workforce, it appears the Vessel Construction Manager (VCM) contracting 
model implemented commercial best practices that helped to reduce risk 
for the construction and delivery of the first, and follow-on, National 
Security Multi-Mission Vessels (NSMV). This appears to be a tremendous 
success for MARAD in managing the VCM. I welcome your thoughts on the 
success of this ship acquisition program and if MARAD could implement 
such a contracting structure for other programs such as the 
recapitalization of the Ready Reserve Fleet or other auxiliary logistic 
ships?
    Answer. It is only recently that the sealift and auxiliary type 
vessels were completely integrated into the Department of the Navy's 
Long Term Shipbuilding Plan (the 30-year shipbuilding plan). Using a 
VCM approach to construct new ships aligns with both MARAD and the 
Navy's strategic objectives, to have sufficient ship construction and 
repair in the nation for any conflict.
    Because these are non-combatant vessels and are frequently crewed 
by civilian merchant mariners--both Federal employees and government 
contractors--commercial standard construction is an ideal way to build, 
operate, and maintain ships with robust marine inspection and 
classification society oversight. In fact, the Navy's survivability 
instruction specifically states that these vessels are constructed to 
commercial marine design standards.
    For specific Department of Defense (DoD) stakeholder concerns about 
survivability, reliability, and military utility, there is a long 
history of including National Defense Features (NDF), resourced through 
the National Defense Sealift Fund (NDSF), and other ways, included as 
integral capabilities installed during ship construction. This could 
include redundant power systems, speed advantage, and communications 
equipment, or more modern constructs such as environmental compliance 
measures, underwater ambient noise attenuation measures, and resilient 
positioning, navigation, and timing arrangements, as well as enhanced 
cybersecurity.
    The VCM approach worked well because it considered stakeholder 
requirements in-depth, achieved consensus on the vessel's required 
capabilities, and the planned effort could meet the necessary schedule 
within a reasonable program cost model. This approach leveraged 
commercial ship operator's expertise to help select a shipyard and 
lock-in the firm fixed price for each ship.

    Question 2. Recent studies have suggested that the U.S. will need a 
tanker security fleet of 100 tankers and cable lay vessels for the Navy 
in a contingency. Considering the affordable nature of MARAD managing a 
VCM contract structure that implements commercial best practices and 
firmed-fixed-price contracts, wouldn't these shipbuilding programs be a 
strong fit for this type of acquisition program?
    Answer. MARAD works with the U.S. Transportation Command 
(USTRANSCOM) which has the responsibility for global bulk fuel 
management for the DoD. MARAD is aware of the studies which project a 
need for a large number of tank vessels to meet DoD's requirements. 
MARAD will continue to support USTRANSCOM's efforts to find reasonable 
contingency planning solutions. MARAD is not aware of the Navy's 
specific requirements for cable laying vessels. If the DoD has 
requirements to build vessels to meet their requirements, MARAD can 
certainly share its acquisition approach of using a commercial vessel 
construction manager as an effective approach with the Navy.

    Question 3. The fiscal year 2023 National Defense Authorization Act 
(NDAA) authorized MARAD to utilize a similar contracting structure to 
support the acquisition of ten ships for the National Defense Reserve 
Fleet (NDRF). How do you envision the Administration may utilize the 
VCM contracting structure in the future to support such acquisitions?
    Answer. The VCM contract to construct a new ship type was always 
limited in scope to the necessary vessels to replace the aging fleet of 
training ships. MARAD supported our stakeholders and worked closely 
with those stakeholders on a common design, desired capabilities, and 
reasonable considerations to keep the ship type affordable. The most 
critical consideration was the ability of the ship production line to 
achieve the planned schedule.
    The use of a VCM in this context would enable the Department and 
MARAD to recapitalize about one-fifth of the expected Ready Reserve 
Force (RRF) fleet, with newer, more sustainable platforms. With 
continued transfer of aging ships from Department of the Navy, the RRF 
component of the NDRF will number around 50 vessels by the end of FY25.
    Structuring the VCM contract requires that we consider our 
strategic interests in shipbuilding capability. For any protracted 
conflict with a peer competitor, shipbuilding capacity is essential to 
replacement of ships that are lost to combat, wear out from material 
failures due to the greater frequency of use for sealift missions, or 
require renewal for new technology integration.
    Shipbuilding programs work best when the industrial base can 
anticipate and plan for shipbuilding lines that avoid the boom-and-bust 
cycles or winner-takes-all awards. Any VCM contract would benefit from 
an indefinite delivery/indefinite quantity (IDIQ), and multiple award 
construct, meaning more than one shipyard could be awarded a contract, 
with options for more vessels. During World War II, the United States 
had dozens more shipyards which reduced ship production times 
dramatically. The VCM approach enables the VCM to work with domestic 
shipbuilders and develop proposals for consideration by MARAD.
    At the same time, we must invest in and re-establish support 
mechanisms that create more opportunity for ship construction 
employers, skilled laborers, apprenticeship programs, and ways that 
operating companies can afford to construct their vessels in the United 
States. Like the Navy's Shipyard Infrastructure Optimization Program 
(SIOP), we need the ability to modernize our shipbuilding 
infrastructure, without relying solely on an accompanying ship 
construction line to fund that cost.

Questions from Hon. Chris Pappas to Ann C. Phillips, Rear Admiral, U.S. 
        Navy (Ret.), and Administrator, Maritime Administration

Real-time Emissions Monitoring and Decarbonization Efforts
    Question 1. MARAD's Fiscal Year 2024 budget request includes $6.5 
million to support decarbonization and energy efficiency efforts 
through the Maritime Environmental and Technical Assistance (META) 
Program. While the request highlights several META projects that the 
agency is hoping to focus on, there is no mention of real-time 
emissions monitoring technology as a potential solution to decarbonize 
the maritime industry.
    Real-time emissions monitoring produces actionable data that can be 
used to pinpoint the exact return on investment and environmental 
impact of operations. The current industry standard of using calculated 
estimates is neither accurate nor timely.
    How can MARAD support further exploration of the benefits of using 
real-time emissions monitoring through META projects?
    Answer. We agree that real-time emissions monitoring is helpful to 
identify areas for vessel and port operation emissions improvement.
    The META program has supported in-situ emissions testing aboard 
vessels in the past to verify modeled data for various fuels and 
technology applications and continues to do so for current and future 
demonstration projects.
    META is also engaged in discussion with private sector companies 
that offer real-time emissions monitoring software/hardware solutions 
to industry; however, MARAD does not promote one company over another. 
In addition, a select number of large ports regularly monitor emissions 
and have maintained emissions inventories over the years.
    Finally, the META program has supported multimodal emissions 
modeling tools in the past and is currently working on a greenhouse gas 
emissions calculator for vessels that will help the industry baseline 
emissions for their operations so they may better understand how to 
improve overall fleet performance.

Cable Ship Security Fleet Program and Undersea Communication Cables
    Question 2. In the Fiscal Year 2018 National Defense Authorization 
Act, Congress took a bold step in creating a new program under the 
DOT's Maritime Administration (MARAD) called the Cable Ship Security 
Fleet (``CSF'') program. This program is a vital component of the 
United States' national security infrastructure and is responsible for 
maintaining the security and integrity of undersea communication cables 
that are critical for U.S. interests in global communication, economic 
stability, and national defense. These cables transmit over 99% of 
international data on a 24/7/365 basis, including financial 
transactions that the Federal Reserve estimate at $10 trillion per day, 
government communications, and military intelligence. A disruption to 
these cables would have significant implications, from economic 
instability to military vulnerability. The CSF program plays a critical 
role in preventing and restoring such disruptions by ensuring the 
security and integrity of these cables.
    The contractor of this program that installs undersea cables 
connecting the world, which is based in my district in Newington, New 
Hampshire. They operate American flagged ships with American sailors 
and mariners around the world that, when called upon should there be a 
declaration of war or state of emergency, would immediately be directed 
by the Department of Defense to guard, repair, and replace damaged 
undersea cables anywhere in the world.
    In 2017, when Congress authorized this program, it modeled the 
program after other successful programs, such as MARAD's Maritime 
Security Program (MSP). Congress authorized the CSF program at $5 
million per year per vessel. Because the number of U.S. mariners and 
other personnel needed to run a cable ship, which is actually a 
construction vessel, is three times the number of personnel to run a 
typical transport ship--as well as due to inflationary factors, 
actuaries have analyzed that the stipend for each vessel per year 
should be increased from $5 million to $12 million. These numbers have 
been reviewed and concurred by MARAD and the U.S. Navy's Military 
Sealift Command.
    While we understand that MARAD cannot advocate for funding that was 
not in the President's Budget request, due to these concerns, as well 
as the imperative that the CSF program operators bring to U.S. national 
and economic security, it is essential that the CSF program's stipend 
is increased.
    Though the program is vital to our national security and China 
should be nowhere near our undersea communication cables, the CSF 
program is overseen by MARAD, and your leadership in supporting our 
country's submarine cables is essential for our economic and national 
security interests. If Congress were to provide an increase in funding, 
can you confirm your support to increasing the cost of $12M per year 
per vessel of the Cable Ship Security Fleet program?
    Answer. The President's FY24 Budget request does not include 
funding for the Cable Ship Security Fleet Program as, unlike similar 
US-flag ship stipend programs included in the President's Budget, it 
does not meet a DoD need. However, MARAD will implement any changes in 
the program in accordance with the law.

  Questions from Hon. Mike Ezell to Richard W. Spinrad, Ph.D., Under 
  Secretary of Commerce for Oceans and Atmosphere, and Administrator, 
            National Oceanic and Atmospheric Administration

Status of Right Whale Rulemaking and Vessel Speed Restrictions
    Question 1. NOAA's National Marine Fisheries Service (NMFS) manages 
commercial fisheries and protects threatened and endangered marine 
mammal populations, none more so than the North Atlantic right whale 
population. Despite NMFS's development and initiation of a take 
reduction plan in 1999 and modified subsequently by NMFS, population 
survey data from 2020 and 2021 suggests the right whale population has 
continued to decline and may now total fewer than 350 individuals.
    NMFS initiated a rulemaking process in 2021 to revise its Atlantic 
Large Whale Take Reduction Plan and regulations to mitigate mortality 
associated with commercial fisheries to stem this ongoing decline. 
Furthermore, NMFS proposed changes to its North Atlantic right whale 
vessel speed regulations to broaden the spatial boundaries and timing 
of seasonal management areas along the U.S. East Coast, and to expand 
mandatory speed restrictions of 10 knots or less to include most 
vessels 35-65 feet in length. Not surprising, these proposed actions 
drew intense opposition from the commercial fishing industry, 
recreational boaters, commercial carriers, vessel pilots, and port and 
marine terminal operators, especially because of negative impacts to 
navigation safety.
    Question 1.a. What is the status of NMFS's rulemaking to revise its 
regulations to reduce accidental and incidental mortality in the North 
Atlantic Right Whale population? Does NMFS have a new timeline for 
publishing a final rule?
    Answer. NOAA Fisheries anticipates taking final action on the 
proposed vessel speed rule in 2023.

    Question 1.b. NMFS denied in January of this year a petition filed 
by several ocean conservation groups seeking NMFS to utilize its 
emergency authority to impose the new vessel speed restrictions. Is 
NMFS reevaluating the entire proposed rule or limited parts of it?
    Answer. NOAA Fisheries received approximately 90,000 comments on 
the proposed action. The agency is in the process of reviewing the 
public input received.

    Question 1.c. Congress enacted a couple of provisions regarding 
North Atlantic Right Whale in Division JJ of the Consolidated 
Appropriations Act, 2023 (Pub.L. 117-328), and additional provisions 
were enacted in the James M. Inhofe National Defense Authorization Act 
for Fiscal Year 2023 (Pub.L. 117-263). What is the status of NMFS 
implementation of these new statutory directives? What are the 
spillover effects on NMFS ongoing right whale rulemaking?
    Answer. Division JJ, Title II, Section 201 of the Consolidated 
Appropriations Act of 2023 authorized appropriations to NMFS of up to 
$50M (and no less than $40M for innovative fishing gear) in grants for 
projects ``designed to reduce the lethal and sub-lethal effects of 
human activities on North Atlantic right whales.'' Under Division N of 
the bill, $20M was appropriated as `no-year' supplemental funding, and 
this $20M can only be used to support the adoption of innovative 
fishing gear deployment and fishing techniques to reduce entanglement 
risk. As allowed by the Consolidated Appropriations Act of 2023, we 
have announced a cooperative agreement with the National Fish and 
Wildlife Foundation (NFWF) to implement the grant program and hope to 
move these efforts along quickly.
    Title CXIII of the National Defense Authorization Act of 2023 
(NDAA) directed NOAA to develop a new Vessel Strike Reduction Grant 
Program and authorized up to $10M annually from 2023-2028. No new 
funding was appropriated for this new authority. To comply with the 
requirement to develop the grant program, NOAA is planning to develop 
an Assistance Listing Number (ALN), while making it clear that it does 
not have any funds available at this time.
    Title CXIII of the NDAA also requires NOAA to design and deploy a 
near real-time monitoring and mitigation program for threatened or 
endangered large cetaceans (Mysticeti, Physeter, or Orcinus). The bill 
calls for a pilot program for North Atlantic right whales to be 
deployed within 3 years, and a plan for a full program must be 
developed within 6 years. The bill authorized appropriations of up to 
$5M annually on this program from 2023-2027, but no funds were 
appropriated. NMFS already conducts near-real time monitoring of many 
marine mammal stocks, including North Atlantic right whales, as 
outlined in the pilot study. To comply with this requirement, NMFS will 
collate existing near-real time monitoring efforts for North Atlantic 
right whales to form a cohesive pilot program.
    These new statutory requirements have not affected NMFS' ongoing 
North Atlantic right whale vessel strike reduction rulemaking. However, 
The Consolidated Appropriations Act of 2023 found that the 
implementation of the 2021 Atlantic Large Whale Take Reduction Plan 
rule was sufficient under the Endangered Species Act and Marine Mammal 
Protection Act to authorize the lobster and Jonah crab fisheries until 
2028. NMFS will continue the next round of Plan modifications prior to 
2028 for fisheries other than lobster and Jonah crab.

                             [all]