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




                                  


 
REVIEW OF FISCAL YEAR 2025 MARITIME TRANSPORTATION BUDGET REQUESTS, PT. 
       1: MARITIME ADMINISTRATION AND FEDERAL MARITIME COMMISSION

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

                                (118-55)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 30, 2024

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure 
             
          [GRAPHIC(S) 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 
 56-506               WASHINGTON : 2024                       
                             
                             
                             
                             
                             
                             
                             
                             
                             

             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

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

        Subcommittee on Coast Guard and Maritime Transportation

                   Daniel Webster, Florida, Chairman
             Salud O. Carbajal, California, Ranking Member
Brian Babin, Texas                   John Garamendi, California
Brian J. Mast, Florida               Chris Pappas, New Hampshire
Jenniffer Gonzalez-Colon,            Jake Auchincloss, Massachusetts
  Puerto Rico                        Mary Sattler Peltola, Alaska
Jefferson Van Drew, New Jersey       Hillary J. Scholten, Michigan,
Mike Ezell, Mississippi, Vice          Vice Ranking Member
    Chairman                         Rick Larsen, Washington (Ex 
Aaron Bean, Florida                      Officio)
Sam Graves, Missouri (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...........................................     8

                               WITNESSES

Ann C. Phillips, Rear Admiral, U.S. Navy (Ret.), and 
  Administrator, Maritime Administration, oral statement.........    10
    Prepared statement...........................................    11
Hon. Daniel B. Maffei, Chairman, Federal Maritime Commission, 
  oral statement.................................................    16
    Prepared statement...........................................    18

                                APPENDIX

Questions to Ann C. Phillips, Rear Admiral, U.S. Navy (Ret.), and 
  Administrator, Maritime Administration, from Hon. Jenniffer 
  Gonzalez-Colon.................................................    35




                             April 26, 2024

    SUMMARY OF SUBJECT MATTER

    TO:      LMembers, Subcommittee on Coast Guard and Maritime 
Transportation
    FROM:  LStaff, Subcommittee on Coast Guard and Maritime 
Transportation
    RE:      LSubcommittee Hearing on ``Review of Fiscal Year 
2025 Maritime Transportation Budget Requests, Pt. 1: Maritime 
Administration and Federal Maritime Commission''
_______________________________________________________________________


                               I. PURPOSE

    The Subcommittee on Coast Guard and Maritime Transportation 
of the Committee on Transportation and Infrastructure will hold 
a hearing on Tuesday, April 30, 2024, at 2:00 p.m. ET in 2167 
Rayburn House Office Building to receive testimony on the 
``Review of Fiscal Year 2025 Maritime Transportation Budget 
Requests, Pt. 1: Maritime Administration and Federal Maritime 
Commission.'' The Subcommittee will receive testimony from the 
Maritime Administrator and the Chairman of the Federal Maritime 
Commission (FMC).

                             II. BACKGROUND

MARITIME ADMINISTRATION

    The Maritime Administration (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 
(USMMA), 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\ The Committee on Armed Services 
has jurisdiction over the Merchant Marine Academy, Federal 
assistance to state maritime academies, and the National 
defense aspects of the Merchant Marine.\4\ The Committee on 
Transportation and Infrastructure has jurisdiction over the 
non-National defense aspects of the Merchant Marine.\5\
---------------------------------------------------------------------------
    \1\ U.S. Dep't of Transp., A Short History of the Maritime 
Administration, available at https://www.maritime.dot.gov/outreach/
history/short-history-maritime-administration.
    \2\ U.S. Dep't of Transp., Budget Estimates Fiscal Year 2025: 
Maritime Admin., available at https://www.transportation.gov/mission/
budget/marad-cj-fy-2025-estimates [hereinafter DOT FY 2025 Budget 
Estimate].
    \3\ U.S. Dep't of Transp., Key personnel, available at https://
www.maritime.dot.gov/office-administrator/key-personnel/rear-admiral-
ann-c-phillips-us-navy-ret.
    \4\ Rules of the House of Representatives, 118th Cong., Rule X, 
clause (1)(c).
    \5\ Rules of the House of Representatives, 118th Cong., Rule X, 
clause (1)(r).
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FEDERAL MARITIME COMMISSION

    FMC was established in 1961 as an independent agency that 
regulates ocean-borne transportation in the foreign commerce of 
the United States through the administration of the limited 
anti-trust exemption provided to ocean carriers.\6\ FMC 
protects shippers and carriers from restrictive or unfair 
practices of ocean carriers, including foreign-flagged carrier 
alliances. FMC also enforces laws related to cruise vessel 
financial responsibility to ensure cruise vessel operators have 
sufficient resources to pay judgments to passengers for 
personal injury or death or for nonperformance of a voyage.\7\
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    \6\ 46 U.S.C. Sec.  46101.
    \7\ Federal Maritime Commission, Federal Maritime Commission FY 
2025 Budget Justification, available at https://www.fmc.gov/wp-content/
uploads/2024/03/FY2025Congressional
BudgetJustification2024.pdf [hereinafter FMC FY 2025 Budget 
Justification].
---------------------------------------------------------------------------
    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 the President in March 2021.\8\
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    \8\ Federal Maritime Commission, Daniel B. Maffei, available at 
https://www.fmc.gov/commissioners/daniel-b-maffei/.
---------------------------------------------------------------------------

              III. BUDGET FOR THE MARITIME ADMINISTRATION

    The President's fiscal year (FY) 2025 budget request for 
MARAD compares to the FY 2024 enacted funding levels as shown 
here: \9\
---------------------------------------------------------------------------
    \9\ See DOT FY 2025 Budget Estimate, supra note 2; Consolidated 
Appropriations Act, 2024, Pub. L. No. 118-42, 137 Stat. 112 
[hereinafter Consolidated Appropriations Act, 2024].

                     MARAD FY 2024 Enacted to FY 2025 President's Budget Request Comparison
                                             (Dollars in Thousands)
----------------------------------------------------------------------------------------------------------------
                                                                   President's FY                    FY 2024 to
                     Account                          FY 2024       2025 Budget     FY 2024 to FY      FY 2025
                                                      Enacted         Request      2025 Change ($)   Change (%)
----------------------------------------------------------------------------------------------------------------
Operations and Training.........................       $ 267,775        $ 285,000         $ 17,225         6.43%
  Maritime Environmental and Technical                   $ 7,500          $ 6,000        $ (1,500)          -20%
   Assistance Program...........................
  United States Marine Highway Program..........         $ 5,000         $ 10,000          $ 5,000          100%
Assistance to Small Shipyards...................         $ 8,750         $ 20,000         $ 11,250       128.57%
Ship Disposal Program...........................         $ 6,000          $ 6,000             $ --            0%
Maritime Security Program.......................       $ 318,000        $ 318,000             $ --            0%
Title XI--Administrative Expenses...............         $ 3,000          $ 3,700            $ 700        23.33%
Title XI--Loan Guarantees.......................        $ 50,586             $ --       $ (50,586)         -100%
State Maritime Academy Operations...............       $ 125,788         $ 87,000       $ (38,788)       -30.84%
Cable Security Fleet Program....................        $ 10,000             $ --       $ (10,000)         -100%
Tanker Security Program.........................        $ 60,000         $ 60,000             $ --            0%
Port Infrastructure Development Program.........   $ 120,460.124         $ 80,000   $ (40,460.124)       -33.59%
                                                 ---------------------------------------------------------------
  Total.........................................   $ 970,359.124        $ 859,700  $ (110,659.124)        -11.4%
----------------------------------------------------------------------------------------------------------------
 Funding levels for the Operations and Training Account and the Port Infrastructure Development Program Account
  do not include supplemental appropriations provided by the Infrastructure Investment and Jobs Act (P.L. 117-
  58).


    The President requests $859.7 million in FY 2025 for the 
activities of MARAD, a $110.66 million decrease (11.4 percent) 
from the FY 2024 enacted level.\10\
---------------------------------------------------------------------------
    \10\ See DOT FY 2025 Budget Estimate, supra note 2; Consolidated 
Appropriations Act, 2024, supra note 8.
---------------------------------------------------------------------------
    MARAD's FY 2025 budget request does not include funding 
for:
     LThe Maritime Transportation System Emergency 
Relief Program;
     LThe Cable Security Fleet Program; or
     LTitle XI Loan Guarantees.

OPERATIONS AND TRAINING

    The President's FY 2025 budget requests $285 million for 
Operations and Training, an increase of $17.225 million (6.43 
percent) above the FY 2024 enacted level. Included in this 
request is: $191 million for academic operating expenses, 
capital improvements, and facility maintenance and repair of 
the USMMA; $6 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 $10 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.\11\ The authorization levels for 
these programs in the National Defense Authorization Act (NDAA) 
for FY 2024 include: $198.5 million for USMMA operations, 
capital improvements, and facility maintenance and repair; $15 
million for the META program; and $15 million for the United 
States Marine Highway Program.\12\ USMMA is under the 
jurisdiction of the House Committee on Armed Services. The FY 
2025 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 (IIJA) (P.L. 117-58) 
that will remain available through the end of FY 2032.\13\
---------------------------------------------------------------------------
    \11\ DOT FY 2025 Budget Estimate, supra note 2.
    \12\ National Defense Authorization Act for Fiscal Year 2024, Pub. 
L. No. 118-31, 137 Stat. 136 [hereinafter NDAA FY 2024].
    \13\ Infrastructure Investment and Jobs Act, Pub. L. No. 117-58, 
135 Stat. 429 [hereinafter IIJA].
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ASSISTANCE TO SMALL SHIPYARDS

    The President's FY 2025 budget requests $20 million for the 
Assistance to Small Shipyards grant program, an increase of 
$11.25 million (128.57 percent) above the FY 2024 enacted 
level. The Assistance to Small Shipyards grant program provides 
capital assistance to privately-owned shipyards to expand and 
modernize shipbuilding capacity, efficiency, and 
competitiveness. The program's authorized funding level was $30 
million in the FY 2024 NDAA.\14\ The application window for the 
FY 2024 round of the Small Shipyard Grant Program closes on May 
8, 2024.\15\ Past grant awards can be found here: https://
www.maritime.dot.gov//grants-finances/historical-small-
shipyard-grant-information.
---------------------------------------------------------------------------
    \14\ NDAA FY 2024, supra note 12.
    \15\ U.S. Dep't of Transp., Maritime Admin., Small Shipyard Grants, 
available at https://www.maritime.dot.gov/grants-finances/small-
shipyard-grants#::text=Grant%20applications
%20must%20be%20received,424%20must%20accompany%20all%20applications.
---------------------------------------------------------------------------

SHIP DISPOSAL

    The President's FY 2025 budget requests $6 million for the 
Ship Disposal Program, which is equal to the FY 2024 enacted 
level. The program's authorized funding level was $6.021 
million in the FY 2024 NDAA.\16\ 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 unfueled nuclear reactor, components, and equipment is 
in progress.\17\ This funding also includes $3 million for Ship 
Disposal Program support, including salaries and overhead.\18\ 
The National Defense Reserve Fleet is under the jurisdiction of 
the House Committee on Armed Services.
---------------------------------------------------------------------------
    \16\ NDAA FY 2024, supra note 12.
    \17\ DOT FY 2025 Budget Estimate, supra note 2.
    \18\ Id.
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MARITIME SECURITY PROGRAM

    The President's FY 2025 budget requests $318 million for 
the Maritime Security Program (MSP), which is equal to the FY 
2024 enacted level, to maintain a viable commercial fleet that 
can support a United States presence in foreign commerce. The 
program's authorized funding level was $318 million in the FY 
2024 NDAA.\19\ Under this program, $318 million in direct 
payments are allocated among a maximum of 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 it results in $5.3 million per stipend payment 
for each of the 60 ships in the program.\20\ 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.\21\ MSP is 
under the jurisdiction of the House Committee on Armed 
Services.
---------------------------------------------------------------------------
    \19\ NDAA FY 2024, supra note 12.
    \20\ DOT FY 2025 Budget Estimate, supra note 2.
    \21\ 46 U.S.C. Sec.  53104.
---------------------------------------------------------------------------

TITLE XI_ADMINISTRATIVE EXPENSES

    The President's FY 2025 budget requests $3.7 million for 
administrative expenses to carry out the guaranteed loan 
program, which is $700,000 above the FY 2024 enacted level. 
$3.02 million was authorized for Title XI administrative 
expenses in the FY 2024 NDAA.\22\ 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.\23\
---------------------------------------------------------------------------
    \22\ NDAA FY 2024, supra note 12.
    \23\ DOT FY 2025 Budget Estimate, supra note 2.
---------------------------------------------------------------------------

STATE MARITIME ACADEMY OPERATIONS

    The President's FY 2025 budget requests $87 million for the 
six State Maritime Academies (SMA), which is a decrease of 
$38.788 million (30.84 percent) compared to the FY 2024 enacted 
level. This request includes: $57.7 million for vessel 
management, logistics, and maintenance oversight to support the 
integration of National Security Multi-Mission Vessels (NSMV) 
into the fleet of SMA training vessels; $17.1 million to 
maintain the legacy SMA training vessels; $6 million in direct 
payments to the SMAs; $2.4 million for the Student Incentive 
Payment Program; and $3.8 million for training ship fuel 
assistance. SMA programs were authorized funding levels of 
$66.58 million while the NSMV program was authorized $75 
million in the FY 2024 NDAA.\24\ Much of the $38.788 million 
funding decrease can be attributed to decreases in funding 
needed for the NSMV program and legacy SMA training vessel 
maintenance. The SMA Operations account provides Federal 
assistance to the six SMAs to help educate and train mariners 
to support the United States marine transportation system.\25\ 
These graduates promote commerce in the United States and aid 
in the National defense by serving in the Merchant Marine.\26\ 
SMAs are under the jurisdiction of the House Committee on Armed 
Services.
---------------------------------------------------------------------------
    \24\ NDAA FY 2024, supra note 12.
    \25\ DOT FY 2025 Budget Estimate, supra note 2.
    \26\ Id.
---------------------------------------------------------------------------

TANKER SECURITY PROGRAM

    The President's FY 2025 budget requests $60 million for the 
Tanker Security Program (TSP), an amount equal to the FY 2024 
enacted level. 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.\27\ 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.\28\ The program will also 
sustain a base of United States merchant mariners to support 
National security requirements during times of urgent need.\29\ 
TSP is under the jurisdiction of the House Committee on Armed 
Services.
---------------------------------------------------------------------------
    \27\ William M. (Mac) Thornberry National Defense Authorization Act 
for Fiscal Year 2021, Pub. L. No. 116-283, 134 Stat. 3388.
    \28\ DOT FY 2025 Budget Estimate, supra note 2.
    \29\ Id.
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PORT INFRASTRUCTURE DEVELOPMENT PROGRAM

    The President requests $80 million for the Port 
Infrastructure Development Program (PIDP), which is a decrease 
of $40.46 million (33.59 percent) below the FY 2024 enacted 
level. This request is in addition to the $450 million in 
advanced appropriations that will be provided in FY 2025 under 
IIJA.\30\ PIDP was authorized at a funding level of $500 
million in the FY 2024 NDAA.\31\ 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.\32\ The Notice of 
Funding Opportunity (NOFO) for the FY 2024 round of PIDP grants 
is currently available, and applications will be accepted 
through May 10, 2024. The NOFO can be found here: https://
www.maritime.dot.gov/ports/port-infrastructure-development-
program/pidp-nofo-fy2024. Past grant awards can be found here: 
https://www.maritime.dot.gov/PIDPgrants.
---------------------------------------------------------------------------
    \30\ IIJA, supra note 13.
    \31\ NDAA FY 2024, supra note 12.
    \32\ U.S. Dep't of Transp., Maritime Admin., Port Infrastructure 
Development Program, available at https://www.maritime.dot.gov/
PIDPgrants#::text=The%20Port%20Infrastructure
%20Development%20Program,around%2C%20or%20within%20a%20port.
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                           IV. BUDGET FOR FMC

    The President's FY 2025 budget request for FMC compares to 
the FY 2024 enacted funding level as shown here: \33\
---------------------------------------------------------------------------
    \33\ See FMC FY 2025 Budget Justification supra note 5; 
Consolidated Appropriations Act, 2024 supra note 8.

                      FMC FY 2024 Enacted to FY 2025 President's Budget Request Comparison
                                             (Dollars in Thousands)
----------------------------------------------------------------------------------------------------------------
                                                                  President's FY   FY 2024 to FY   FY 2024 to FY
                     Account                          FY 2024      2025 Budget      2025 Change     2025 Change
                                                      Enacted        Request            ($)             (%)
----------------------------------------------------------------------------------------------------------------
Operations and Administrative Program............      $ 40,000         $ 48,452         $ 8,452          21.13%
----------------------------------------------------------------------------------------------------------------


    The President requests $48.452 million in FY 2025 for the 
activities of the FMC, an increase of $8.452 million (21.13 
percent) above the FY 2024 enacted level, and a decrease of 
$748 thousand (1.52 percent) below the FY 2025 authorized 
level.\34\ The request would permit the funding of salaries and 
benefits for 167 full-time positions, a two percent projected 
pay raise for personnel, rent and building security needs, and 
information technology system improvements.\35\ This increase 
is to pay for implementation of the significant new 
responsibilities imposed on the Commission by Congress in the 
Ocean Shipping Reform Act of 2022 (P.L. 117-146).
---------------------------------------------------------------------------
    \34\ Ocean Shipping Reform Act of 2022, Pub. L. 117-146, 136 Stat. 
1272.
    \35\ FMC FY 2025 Budget Justification, supra note 5.
---------------------------------------------------------------------------

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. This legislation authorizes appropriations for FMC 
through FY 2025; sets standards that detention and demurrage 
charges must comply with and penalties for charges deemed 
inaccurate; allows FMC to set minimum contract standards for 
ocean shipping service contracts to protect United States 
shippers from actions that leave export cargoes stranded at 
United States ports; and increases protections for United 
States shippers from retaliation by foreign ocean carriers.\36\
---------------------------------------------------------------------------
    \36\ Ocean Shipping Reform Act of 2022, Pub. L. No. 117-146, 136 
Stat. 1272.
---------------------------------------------------------------------------
    The Commission has signaled that all statutorily mandated 
requirements are well underway and projected to be complete 
before FY 2025.\37\ Since the Act's enactment on June 16, 2022, 
FMC has:
---------------------------------------------------------------------------
    \37\ FMC FY 2025 Budget Justification, supra note 5.
---------------------------------------------------------------------------
     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.\38\
---------------------------------------------------------------------------
    \38\ Federal Maritime Commission, Industry Advisory--Interim 
Procedures for Submitting ``Charge Complaints'' Under 46 U.S.C. Sec.  
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.\39\
---------------------------------------------------------------------------
    \39\ Federal Maritime Commission, 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/.
---------------------------------------------------------------------------
     LReviewed public comments and submitted to the 
Office of Management and Budget (OMB) materials detailing a new 
data collection system for containerized vessel imports and 
exports to and from the United States.\40\ FMC has also updated 
existing Information Technology to ease the submission and 
processing of required data and anticipates OMB approval of the 
new system in FY 2024 with data collection beginning soon 
after.\41\
---------------------------------------------------------------------------
    \40\ FMC FY 2025 Budget Justification, supra note 5.
    \41\ Id.
---------------------------------------------------------------------------
     LReviewed public comments on a proposed rule 
requiring inclusion of specific information on demurrage and 
detention invoices and is working to finalize the rule in FY 
2024.\42\
---------------------------------------------------------------------------
    \42\ Id.
---------------------------------------------------------------------------
     LIssued a supplemental proposed rule that would 
define unreasonable refusal to deal or negotiate with respect 
to vessel space accommodations provided by an ocean common 
carrier.\43\
---------------------------------------------------------------------------
    \43\ Id.
---------------------------------------------------------------------------
     LEstablished the Bureau of Enforcement, 
Investigations, and Compliance for improved effectiveness of 
the Commission's enforcement and compliance activities.\44\
---------------------------------------------------------------------------
    \44\ Federal Maritime Commission, New FMC Enforcement Structure, 
(July 29, 2022) available at https://www.fmc.gov/new-fmc-enforcement-
structure/.
---------------------------------------------------------------------------
     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.\45\
---------------------------------------------------------------------------
    \45\ Nat'l 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)''.\46\
---------------------------------------------------------------------------
    \46\ Federal Maritime Commission Fact Finding Investigation 29 
Final Report, Effects of the COVID-19 Pandemic on the U.S. Internat'l 
Ocean Supply Chain: Stakeholder Engagement and Possible Violations of 
46 U.S.C. Sec.  41102(c), (2022), available at https://www2.fmc.gov/
readingroom/docs/FFno29/Fact%20Finding%2029%20Final%20Report.pdf/.
---------------------------------------------------------------------------

                              V. WITNESSES

     Rear Admiral Ann C. Phillips, Administrator, 
Maritime Administration
     The Honorable Daniel B. Maffei, Chairman, Federal 
Maritime Commission


REVIEW OF FISCAL YEAR 2025 MARITIME TRANSPORTATION BUDGET REQUESTS, PT. 
       1: MARITIME ADMINISTRATION AND FEDERAL MARITIME COMMISSION

                              ----------                              


                        TUESDAY, APRIL 30, 2024

                  House of Representatives,
                    Subcommittee on Coast Guard and
                           Maritime Transportation,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:10 p.m. in 
room 2167 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 the committee hearing.
    Without objection, show that ordered.
    I ask for unanimous consent that the Members not on the 
subcommittee be permitted to sit in the subcommittee at today's 
hearing and ask questions.
    Without objection, show that ordered.
    As a reminder, Members, to insert a document into the 
record, here is where you send it: email it to 
[email protected].
    OK. 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. We meet today to review the fiscal 
year 2025 budget requests for the Federal maritime 
transportation programs administered by the Maritime 
Administration and the Federal Maritime Commission.
    Welcome to our guests, Rear Admiral Ann Phillips, 
Administrator of the Maritime Administration, and the Honorable 
Dan Maffei, Chairman of the Federal Maritime Commission.
    First, I would like to thank both of your agencies for 
their efforts and coordination with other relevant agencies to 
ensure the continued operation of maritime commerce in the 
aftermath of the Francis Scott Key Bridge collapse in 
Baltimore. While recovery efforts continue, it is important 
that we also maintain stable trade flows. So, we thank you for 
your assistance to the maritime industry. Thank you both for 
doing that.
    MARAD is the promotional agency within the Department of 
Transportation responsible for fostering, promoting, and 
developing the maritime industry of the United States. The 
President's fiscal year 2025 budget request for MARAD includes 
$859.7 million for the administration of programs that 
strengthen our national security and economy, train our future 
mariner workforce, and build a more efficient maritime 
transportation system.
    Among these programs is the Port Infrastructure Development 
Program, known as PIDP, a discretionary grant program to fund 
infrastructure projects that improve the safety, efficiency, 
and reliability of the movement of goods at coastal seaports, 
inland river ports, and Great Lakes ports. The President's 
budget request includes $80 million for this program, which is 
in addition to the $450 million in advanced appropriations the 
program receives annually through fiscal year 2026 in the 
Infrastructure Investment and Jobs Act.
    PIDP has grown exponentially since it was first 
appropriated funds in fiscal year 2019. Unfortunately, this 
growth comes with administrative challenges that severely 
impact the effectiveness of the program. These include long 
delays for grant recipients in getting grant contracts signed, 
which slows the obligation of funds and leaves project scopes 
vulnerable to inflationary pressures. These delays harm the 
program's ability to improve our ports. I look forward to 
discussing ways we can streamline this process to ensure that 
the program is carried out as efficiently as possible.
    MARAD also oversees the Deepwater Port Licensing Program, 
which provides permits for the construction of ports in waters 
off the shore of the United States. While the prolonged 
timeline for processing these permits is an ongoing issue, I am 
encouraged by MARAD's recent approval of an application for 
construction of a deepwater port off the coast of Texas.
    However, I remain concerned that there are several other 
applications waiting for a decision that are far beyond the 
356-day statutory timeline for review. I hope to work with 
MARAD to ensure all applications are processed in a timely 
fashion as required by law, and I continue to work with my 
colleagues to correct the long-term administration of this 
important program.
    Lastly, the subcommittee remains interested in the study 
currently underway that will inform the national maritime 
strategy. I hope to hear how MARAD is working with the 
federally funded research and development center conducting the 
study to ensure its serves as a helpful tool in the needed 
revitalization of our maritime industry.
    Additionally, we have the Chairman of the Federal Maritime 
Commission, or FMC, with us today to discuss the state of the 
ocean shipping industry and their ongoing work implementing 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 President's fiscal year 2025 budget request includes $48.5 
million to fund the salaries and capital needs of FMC.
    The supply chain crisis caused by COVID-19 dramatically 
increased ocean shipping costs while congesting ports and 
impairing maritime trade flows. In response, Congress enacted 
and tasked FMC with implementing OSRA to help address many of 
the challenges experienced by United States exporters. FMC has 
worked diligently since the enactment of OSRA to implement its 
enhanced authorities. I look forward to hearing from Chairman 
Maffei today on the status of FMC's efforts.
    Thank you both for appearing here.
    [Mr. Webster of Florida's prepared statement follows:]

                                 
    Prepared Statement of Hon. Daniel Webster of Florida, Chairman, 
        Subcommittee on Coast Guard and Maritime Transportation
    We meet today to review the fiscal year 2025 budget requests for 
federal maritime transportation programs administered by the Maritime 
Administration and the Federal Maritime Commission. Welcome to our 
witnesses--Rear Admiral Ann Phillips, Administrator of the Maritime 
Administration, and the Honorable Dan Maffei, Chairman of the Federal 
Maritime Commission.
    First, I'd like to thank both of your agencies for your efforts and 
coordination with other relevant agencies to ensure the continued 
operation of maritime commerce in the aftermath of the Francis Scott 
Key Bridge collapse in Baltimore. While recovery efforts continue, it 
is important that we also maintain stable trade flows, so thank you for 
your assistance to the maritime industry.
    MARAD is the promotional agency within the Department of 
Transportation responsible for fostering, promoting, and developing the 
maritime industry of the United States. The President's fiscal year 
2025 budget request for MARAD includes $859.7 million for the 
administration of programs that strengthen our national security and 
economy, train our future mariner workforce, and build a more efficient 
marine transportation system.
    Among these programs is the Port Infrastructure Development Program 
(PIDP), a discretionary grant program to fund infrastructure projects 
that improve the safety, efficiency, and reliability of the movement of 
goods at coastal seaports, inland river ports, and Great Lakes ports. 
The President's budget request includes $80 million for this program, 
which is in addition to the $450 million in advanced appropriations the 
program receives annually through fiscal year 2026 in the 
Infrastructure Investment and Jobs Act.
    PIDP has grown exponentially since it was first appropriated funds 
in fiscal year 2019. Unfortunately, this growth comes with 
administrative challenges that severely impact the effectiveness of the 
program. This includes long delays for grant recipients in getting 
grant contracts signed, which slows the obligation of funds and leaves 
project scopes vulnerable to inflationary pressures. These delays harm 
the program's ability to improve our ports. I look forward to 
discussing ways we can streamline this process to ensure the program is 
carried out as efficiently as possible.
    MARAD also oversees the Deepwater Port Licensing Program, which 
provides permits for the construction of ports in waters off the coast 
of the United States. While the prolonged timeline for processing these 
permits is an ongoing issue, I am encouraged by MARAD's recent approval 
of an application for construction of a deepwater port off the coast of 
Texas.
    However, I remain concerned that there are several other 
applications waiting for a decision that are far beyond the 356-day 
statutory timeline for review. I hope to work with MARAD to ensure all 
applications are processed in a timely fashion as required by law, and 
I will continue to work with my colleagues to correct the long-term 
administration of this important program.
    Lastly, the Subcommittee remains interested in the study currently 
underway that will inform the National Maritime Strategy. I hope to 
hear how MARAD is working with the Federally Funded Research and 
Development Center conducting the study to ensure it serves as a 
helpful tool in the needed revitalization of our maritime industry.
    Additionally, we have the Chairman of the Federal Maritime 
Commission (FMC) with us today to discuss the state of the ocean 
shipping industry and their ongoing work implementing the Ocean 
Shipping Reform Act of 2022 (OSRA). FMC is an independent agency 
responsible for the regulation of ocean-borne transportation in the 
foreign commerce of the United States. The President's fiscal year 2025 
budget request includes $48.5 million to fund the salaries and capital 
needs of FMC.
    The supply chain crisis caused by COVID-19 dramatically increased 
ocean shipping costs while congesting ports and impairing maritime 
trade flows. In response, Congress enacted and tasked FMC with 
implementing OSRA to help address many of the challenges experienced by 
United States exporters. FMC has worked diligently since the enactment 
of OSRA to implement its enhanced authorities, and I look forward to 
hearing from Chairman Maffei today on the status of FMC's efforts.

    Mr. Webster of Florida. I recognize the ranking member, Mr. 
Carbajal, for an opening statement for 5 minutes.
    Mr. Carbajal. Thank you, Mr. Chair.
    I will yield to our ranking member of our T&I Committee. 
But before I do that, I see some young people that have come to 
our hearing. I see a lot of ``Members of Congress to be'' in 
the future over there in the corner. I wanted to recognize them 
before I turn it over to our Ranking Member Larsen.
    Thank you, Mr. Chair.

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

    Mr. Larsen of Washington. Thank you, Chair, for scheduling 
today's hearing to review the fiscal year 2025 budget request 
of the Maritime Administration and the FMC.
    Together, these agencies promote the U.S. maritime industry 
and protect consumers against unfair shipping practices.
    Ocean shipping is dominated by foreign shipping companies 
who transport over 98 percent of imports and exports. Between 
pandemic-related supply chain issues and ongoing international 
conflicts, we have learned the importance of a vibrant U.S. 
maritime industry, and now is the time to strengthen and 
support that industry.
    The President's fiscal year 2025 budget request includes, 
though, an 11-percent decrease in discretionary funds for the 
Maritime Administration and a 21-percent increase for the 
Federal Maritime Commission.
    While the funding request for the FMC will ensure fairness 
for American shippers and consumers, I am concerned MARAD will 
not have the resources it needs to support a robust supply 
chain.
    Investment in the U.S. maritime industry is long overdue. 
For years, we have faced a mariner shortage as workers retire 
and the industry struggles to appeal to younger Americans. To 
attract new workers, we must strengthen education and training, 
as well as ensure good wages and a robust job market for those 
entering the industry.
    I am disappointed that the President's budget includes a 
35-percent cut in funding for the Port Infrastructure 
Development Program. While there remains robust funding for the 
program as a result of advanced appropriations included in the 
Bipartisan Infrastructure Law, it was never the intent of 
Congress for that funding to supplant regular appropriations.
    Infrastructure investments in seaports provide 
opportunities to bolster our economy, strengthen the supply 
chain, create and sustain jobs, and enhance our international 
competitiveness.
    In my own district, the Swinomish Port Authority--a small 
port and one of the few Tribal-run port authorities--recently 
received an $11 million grant to fund a master plan for the 
port and to begin the design and engineering of a new 
commercial pier. So, we can see the local and regional impacts 
of this funding is immeasurable.
    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 robust funding must be provided for 
small ports through the PIDP.
    I am pleased that the President's budget request includes 
$20 million for the Small Shipyard Grant Program. I have 
several small shipyards in my district, and I have seen how 
these grants can be used to create jobs and bolster the local 
and national economy.
    I would be remiss if I did not bring up Admiral Phillips' 
ongoing work to address the sexual assault and sexual 
harassment at the U.S. Merchant Marine Academy, the State 
maritime academies, and across the commercial industry. Sexual 
assault and harassment have no place in society, and every 
mariner deserves respect and deserves to feel safe at sea.
    I want to commend Admiral Phillips and MARAD for their work 
in awarding the Bipartisan Infrastructure Law funding as well, 
and I look forward to seeing what projects are selected this 
fall.
    And, finally, in the last Congress, this committee passed 
the Ocean Shipping Reform Act of 2022. And under Chairman 
Maffei's leadership--good to see you again, Chairman Maffei--
the Federal Maritime Commission has been quick to implement new 
requirements for ocean carriers and 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, and I am 
heartened to see that the President understands this and 
included in his budget request a 21-percent increase for the 
FMC.
    Since passage of the Ocean Shipping Reform Act of 2022, 
container prices have fallen, vessel backlogs have eased, and 
the FMC has revamped the reporting process, making it easier 
for shippers to file complaints.
    Currently, the FMC is monitoring the shipping fees and 
surcharges associated with shipping disruptions in the Red Sea 
and drought conditions in the Panama Canal.
    Congress has asked a lot of the FMC, and the President's 
budget request recognizes the need for increased funding.
    I look forward to engaging our witnesses on both MARAD's 
and FMC's ongoing work to strengthen our supply chain and to 
grow the U.S. commercial maritime fleet.
    And with that, thank you, and I yield back.
    [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 today's hearing to review 
the Fiscal Year 2025 budget requests of the Maritime Administration and 
the Federal Maritime Commission.
    Together, these agencies promote the United States maritime 
industry and protect consumers against unfair shipping practices.
    Ocean shipping is dominated by foreign shipping companies who 
transport over 98 percent of imports and exports. Between pandemic 
related supply chain issues and ongoing international conflicts, we 
have learned the importance of a vibrant U.S. maritime industry. Now is 
the time to strengthen and support that industry.
    The President's fiscal year 2025 budget request includes an 11 
percent decrease in discretionary funds for the Maritime Administration 
and a 21 percent increase for the Federal Maritime Commission.
    While the funding request for the FMC will ensure fairness for 
American shippers and consumers, I'm concerned that MARAD will not have 
the resources it needs to ensure a robust supply chain.
    Investment in the U.S. maritime industry is long overdue. For 
years, we have faced a mariner shortage as workers retire and the 
industry struggles to appeal to younger Americans. To attract new 
workers, we must strengthen education and training as well as ensure 
good wages and a robust job market for those entering the industry.
    I am disappointed that the President's budget includes a 35 percent 
cut in funding for the Port Infrastructure Development Program. While 
there remains robust funding for the program as the result of advanced 
appropriations included in the Bipartisan Infrastructure Law, it was 
never the intent of Congress for that funding to supplant regular 
appropriations.
    Infrastructure investments in seaports provide opportunities to 
bolster our economy, strengthen the supply chain, create and sustain 
jobs and enhance our international competitiveness.
    In my own district, the Swinomish Port Authority--a small port and 
one of the few Tribal-run port authorities--received an $11 million 
grant to fund a master plan for the port and begin the design and 
engineering of a new commercial pier. The local and regional impact of 
this project is immeasurable.
    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 robust funding must be provided for small ports through the Port 
Infrastructure Development Program.
    I am pleased that the President's budget request includes $20 
million for the Small Shipyard Grant Program. I have several small 
shipyards in my district, and I have seen how these grants can be used 
to create jobs and bolster both the local and national economy.
    I would be remiss if I did not bring up Admiral Phillips' ongoing 
work to address sexual assault and sexual harassment at the United 
States Merchant Marine Academy, the State Maritime Academies and across 
the commercial industry. Sexual assault and harassment have no place in 
society. Every mariner deserves to be respected and deserves to feel 
safe out at sea.
    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.
    Finally, 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 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 21 
percent increase for the Federal Maritime Commission.
    Since passage of the Ocean Shipping Reform Act of 2022, container 
prices have fallen, vessel backlogs have eased, and the FMC has 
revamped the reporting process making it easier for shippers to file 
complaints.
    Currently, the FMC is monitoring shipping fees and surcharges 
associated with the shipping disruptions in the Red Sea and drought 
conditions in the Panama Canal.
    Congress has asked a lot of the FMC and the President's budget 
request recognizes the need for increased funding.
    I look forward to engaging our witnesses on MARAD and FMC's ongoing 
work to strengthen our supply chain and grow the United States 
commercial maritime fleet.
    Thank you, and I yield back.
    Mr. Webster of Florida. Mr. Carbajal.

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

    Mr. Carbajal. Thank you, Chair Webster, for scheduling 
today's hearing on the review of the fiscal year 2025 budget 
request for the Maritime Administration, MARAD, and the Federal 
Maritime Commission, FMC.
    I look forward to hearing from Chair Maffei and 
Administrator Phillips on the President's budget request and 
their agencies' priorities for the upcoming year.
    Stability in international shipping is integral to a strong 
economy. During the COVID-19 pandemic, weaknesses in our supply 
chain were amplified as landside port congestion and unfair 
shipping practices by foreign ocean carriers led to backlogs 
and price increases. This, in turn, contributed, no doubt, to 
inflation.
    Tasked with ensuring fairness in international shipping, 
the FMC has key authorities which allow it to safeguard 
transparent and equitable maritime commerce.
    The reforms in the bipartisan Ocean Shipping Reform Act, 
which passed out of this subcommittee last Congress before 
becoming law, strengthened the FMC's authority to investigate 
unfair ocean shipping carrier fees and facilitate the efficient 
movement of cargo through U.S. ports.
    In the 2 years since passage of the Ocean Shipping Reform 
Act, the FMC has worked expeditiously to utilize their new 
authorities, establish new regulations around detention and 
demurrage billing practices, and as a result, has made 
international shipping more fair for American shippers.
    It is important that the FMC is sufficiently funded so that 
it can properly continue to carry out these reforms which 
benefit American businesses and consumers alike. That is why I 
am happy to see an $8 million increase in the President's 
budget request for the FMC.
    Beyond a fairer shipping process, the U.S. economy depends 
upon a robust maritime industry. I fear that without continued 
support for our U.S.-flag fleet, fair shipping practices will 
only get us so far. The U.S. merchant marine is shrinking, and 
availability of American merchant mariners is dwindling. This 
puts our sealift capabilities, national defense, and economy in 
jeopardy.
    More and more we rely on foreign ocean carriers to 
transport our goods. It is MARAD's responsibility to promote a 
vibrant maritime industry. I expect to hear today how we can 
revitalize the American maritime industry.
    Unfortunately, the fiscal year 2024 appropriations resulted 
in a substantial cut to MARAD discretionary programs meant to 
support the industry. I worry about the precedent this has 
created as the fiscal year 2025 funding request follows this 
downward spiral or trend.
    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 $6 million for 
META, which is a $1.5 million decrease over last year's budget. 
This is disappointing, to say the least.
    Decreases over 2 years are not the trend we want to see. 
This program supports the research, development, and deployment 
of new technology in the maritime industry, particularly low- 
or zero-carbon technologies.
    These technologies are crucial for reducing harmful 
emissions and protecting our public health and the environment, 
especially for port communities, where air pollution is 
statistically worse. We must continue to invest in these 
programs that foster innovation not only to address climate 
change but also to make the United States a leader in this new 
technology.
    The Port Infrastructure Development Program, referred to as 
PIDP, also supports decarbonization projects, which help reduce 
emissions and build a more resilient, reliable transportation 
system. Yet, despite the importance of this program, we saw a 
substantial decrease in fiscal year 2024 funding, and the 
fiscal year 2025 budget request follows suit.
    I am heartened to see an increase in funding for the U.S. 
Merchant Marine Academy. Administrator Phillips has done an 
excellent job continuing to pursue systemic change to the 
culture that has resulted in sexual violence and harassment 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 your leadership efforts to make the 
maritime industry a safe and desirable workplace for all.
    Thank you to our witnesses and attendees for your 
participation today. I look forward to a robust discussion 
about how the 2025 budget request can support investments in 
improving the U.S. Marine Transportation System.
    Mr. Chair, I yield back.
    [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, Chairman Webster, for scheduling today's hearing on the 
review of the Fiscal Year 2025 Budget Request for the Maritime 
Administration and the Federal Maritime Commission.
    I look forward to hearing from Chairman Maffei and Administrator 
Phillips on the President's budget request and their agency priorities 
for the upcoming year.
    Stability in international shipping is integral to a strong 
economy.
    During the COVID-19 pandemic, weaknesses in our supply chain were 
amplified as landside port congestion and unfair shipping practices by 
foreign ocean carriers led to backlogs and price increases. This, in 
turn, contributed to inflation.
    Tasked with ensuring fairness in international shipping, the FMC 
has key authorities which allow it to safeguard transparent and 
equitable maritime commerce.
    The reforms in the bipartisan Ocean Shipping Reform Act, which 
passed out of this Subcommittee last Congress before becoming law, 
strengthened the FMC's authority to investigate unfair ocean shipping 
carrier fees and facilitate the efficient movement of cargo through 
U.S. ports.
    In the two years since passage of the Ocean Shipping Reform Act, 
the FMC has worked expeditiously to utilize their new authorities, 
established new regulations around detention and demurrage billing 
practices, and as a result, have made international shipping more fair 
for American shippers.
    It is important that the FMC is sufficiently funded so that it can 
properly continue to carry out these reforms which benefit American 
businesses and consumers alike. That is why I am happy to see an $8 
million increase in the President's budget request for the FMC.
    Beyond a fair shipping process, the U.S. economy depends upon a 
robust maritime industry. I fear that without continued support for our 
U.S. flag fleet, fair shipping practices will only get us so far. The 
U.S. merchant marine is shrinking, and availability of American 
merchant mariners is dwindling. This puts our sealift capabilities, 
national defense, and economy in jeopardy.
    More and more we rely on foreign ocean carriers to transport our 
goods. It is MARAD's responsibility to promote a vibrant maritime 
industry. I expect to hear today how we can revitalize the American 
maritime industry.
    Unfortunately, the fiscal year 2024 appropriations resulted in a 
substantial cut to MARAD discretionary programs meant to support the 
industry. I worry about the precedent this has created as the FY25 
funding request follows this downward trend.
    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 $6 million for META, which 
is a $1.5 million decrease over last year's budget. This is 
disappointing.
    Decreases over two years are not the trend we want to see. This 
program supports the research, development, and deployment of new 
technology in the maritime industry, particularly low or zero-carbon 
technologies.
    These technologies are crucial for reducing harmful emissions and 
protecting our public health and the environment, especially for port 
communities, where air pollution is statistically worse. We must 
continue to invest in programs that foster innovation not only to 
address climate change but also to make the United States a leader in 
this new technology.
    The Port Infrastructure Development Program, referred to as PIDP, 
also supports decarbonization projects, which help reduce emissions and 
build a more resilient, reliable marine transportation system. Yet, 
despite the importance of this program, we saw a substantial decrease 
in FY24 funding and the FY25 budget request follows suit.
    I am heartened to see an increase in funding for the U.S. Merchant 
Marine Academy. Administrator Phillips has done an excellent job 
continuing to pursue systemic change to the culture that has resulted 
in sexual violence and harassment 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 your leadership 
efforts to make the maritime industry a safe and desirable workplace 
for all.
    Thank you to our witnesses and attendees for their participation 
today. I look forward to a robust discussion about how the 2025 budget 
request can support investments in improving the U.S. marine 
transportation system.

    Mr. Webster of Florida. I know both of our witnesses are 
fully aware of the lighting system we have. Green means go, 
yellow means slow down, and red means time to wrap it up.
    So, with that, I ask unanimous consent that the witnesses' 
full statements be included in the record.
    Without objection, show that ordered.
    I ask unanimous consent that the record of today's hearing 
remain open for such time as the witnesses have provided 
answers to questions that may be submitted to them in writing.
    Without objection, show that ordered.
    I ask unanimous consent that the record remain open for 15 
days for any additional comments or information submitted by 
its Members or the witnesses to be included in the record of 
today's hearing.
    Without objection, show that ordered.
    So, as the written testimony has been made a part of the 
record, the committee asks that you limit your remarks to 5 
minutes.
    And 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, Mr. Chair.
    Good afternoon, Chairman Graves, Ranking Member Larsen, 
Chairman Webster, and 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. I am honored to testify before you 
today and being joined by Federal Maritime Commission Chair Dan 
Maffei.
    Before I go further, allow me to express our condolences on 
behalf of the Department of Transportation to the families of 
those who lost their lives in March when the Francis Scott Key 
Bridge collapsed.
    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 budget for fiscal 
year 2025 requests $859.7 million for MARAD.
    It includes the Port Infrastructure Development Program, 
requesting $80 million for PIDP, to enhance port 
infrastructure, stimulate economic growth, improve safety, 
address climate change and environmental justice, and 
strengthen supply chains. The Bipartisan Infrastructure Law 
also provides advanced appropriations for this program in 2025.
    Last year, MARAD awarded more than $653 million in PIDP 
grants and awards to 41 projects in 25 States and 1 Territory.
    This year, thanks again to the BIL and funding provided in 
the 2024 appropriations measure, $500 million in funding is 
available for PIDP grants. An additional $72 million in fiscal 
year 2024 appropriations has already been congressionally 
directed to 22 projects. Applications for this program close 
May 10 this year.
    The 2025 budget requests $10 million for the United States 
Marine Highway Program to support marine supply chains and 
offer cost-effective transportation for U.S. shippers and 
manufacturers. MARAD awarded nearly $12 million in marine 
highway projects in 2023. In 2024, $5 million in funding is 
available.
    The 2025 budget also requests $20 million for MARAD's Small 
Shipyard Grants to improve infrastructure at small U.S. 
shipyards, enhancing their efficiency and competitiveness for 
commercial ship construction and maintenance; $8.5 million is 
available in 2024. Applications close May 8.
    Within MARAD's fiscal year 2025 budget request, $6 million 
will support the Maritime Environmental and Technical 
Assistance Program, and $3.7 million supports the Federal Ship 
Financing Program, Title XI. When combined with the fiscal year 
2024 appropriation for Title XI of $53 million, this will 
support $1.3 billion in outstanding loan guarantees.
    The President's fiscal year 2025 budget also requests $191 
million to support the U.S. Merchant Marine Academy and enable 
MARAD to continue to address the urgent and longstanding 
challenges at the Academy.
    This includes support for 975 midshipmen, 293 faculty and 
staff, funding for facility maintenance and for 21 new 
positions to implement congressionally directed NAPA 
recommendations, as well as address facility maintenance and 
repair needs and academic needs and aid in implementing the 
EMBARC program.
    MARAD continues to expand EMBARC participation. Today, 
there are 21 commercial operators enrolled which operate over 
180 vessels. We are working to develop a proposed EMBARC rule 
pursuant to the fiscal year 2023 NDAA.
    Also included in the 2025 budget for the Merchant Marine 
Academy is $86 million for capital improvements, including 
barracks renovations, Wiley Hall renovations for classrooms and 
offices, and Delano Hall, the dining hall and galley 
renovations, in addition to rehabilitation of roads, sidewalks, 
and parking lots, and addressing longstanding deferred 
maintenance.
    The 2025 budget also requests $87 million to support the 
six State maritime academies covering school ship maintenance 
and repair, Student Incentive Program, direct SMA support, fuel 
assistance, and NSMV pre- and post-delivery support.
    Four NSMVs remain under construction. The Empire State was 
delivered last fall. The second ship, Patriot State, will be 
delivered this summer to Massachusetts Maritime Academy. The 
State of Maine was launched earlier this month.
    Our Government-owned sealift fleet is supported by 
privately owned, commercially operated U.S.-flag vessels in the 
Maritime Security and Tanker Security Programs.
    The fiscal year 2025 budget requests the full authorization 
of $318 million for MSP, which is the heart of sustainment 
sealift.
    MARAD has also fully implemented the 10-vessel Tanker 
Security Program and is requesting $60 million for that 
program.
    The budget in 2025 requests $974 million from DoD for MARAD 
to acquire, upgrade, and maintain vessels in the NDRF and RRF. 
These funds ensure the fleet remains ready, reliable, and 
responsive, using commercial ship managers and crewed by U.S. 
mariners.
    In addition, MARAD continues to collaborate with 
stakeholders to address the mariner shortage and recently 
convened, on March 20, the first NDAA-directed Maritime 
Workforce Working Group. Our next meeting is May 8.
    These programs reflect MARAD's priorities supported by the 
President's budget.
    Thank you for the opportunity to testify today. I look 
forward to your questions.
    [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) 2025 
budget, and how this request will enable MARAD to continue to advance 
key priorities in support of our economic and national security.
    Before I go further, allow me to express on behalf of the 
Department of Transportation (DOT) our condolences to the families of 
those who lost their lives when the Francis Scott Key Bridge collapsed. 
I also want to express thanks to the United States Coast Guard for 
spearheading the Federal response at the Port of Baltimore, and to all 
of our Federal partners--especially my DOT colleagues at MARAD and the 
Federal Highway Administration, as well as Maryland state and local 
officials for their ongoing response to the Baltimore bridge collapse.
    This event highlights how important our maritime transportation 
system is to the Nation's economic and national security. The collapse 
of the Key Bridge, COVID, attacks in the Red Sea, and recent weather 
disasters serve as notable reminders of the need for flexibility and 
redundancy to support the transportation segments of our supply chain. 
As we overcome this tragedy, we demonstrate once again our great 
resolve and ability to respond as a Nation.
                         FY 2025 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 2025 Budget request of $859.7 
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, expand our efforts to 
address climate change, and advance environmental justice for port 
communities. In FY 2025, $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 $80 million to support PIDP, which would bring 
the total amount of funding available in FY 2025 to $530 million and 
enable us to continue modernizing our ports to help reduce the cost of 
moving goods from ships to shelves and from American farmers and 
factories to end-users at home and abroad.
    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 National Defense 
Authorization Act for Fiscal Year 2024 (FY 2024 NDAA).
            Economic and Climate Sustainability Investments
    Last year, MARAD awarded more than $653 million in PIDP grants. 
This total included the third tranche of $450 million in funding 
provided by the BIL, approximately $212 million in FY 2023 
appropriations, and unexpended funding from a prior PIDP round. The 
2023 PIDP awards funded 41 projects in 25 states and one territory. 
More than $100 million in the funding awarded last year focuses on port 
electrification to improve air quality, while nearly $202 million of 
the awarded funding supports projects that will advance offshore wind 
farm developments. These efforts are helping to advance the important 
objectives of the BIL, and the vital goal of President Biden's 
Justice40 Initiative--that 40 percent of the overall benefits of 
certain covered Federal investments flow to disadvantaged communities 
that are marginalized by underinvestment and overburdened by pollution.
    This year thanks again to the BIL and the funding provided in the 
FY 2024 appropriations measure, $500 million in funding is available 
for PIDP grants. An additional $72 million in FY2024 appropriations has 
already been congressionally directed to 22 projects. The Notice of 
Funding Opportunity (NOFO) for this program is open and applications 
are due by May 10, 2024.
    The FY 2025 Budget also requests $10 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. In 2023, MARAD awarded nearly $12 million 
in marine highway projects. The funding awarded last year will support 
8 projects across the nation--and nearly all the funding is supporting 
projects in disadvantaged communities or Federally designated community 
development zones. In FY 2024, $5 million in funding is available, and 
MARAD will begin accepting applications soon.
    The FY 2025 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 negative 
climate impacts and adapts technologies that reduce shipyard power 
consumption.
    Within MARAD's FY 2025 Budget request, $6 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 2025 funding will be focused on 
efforts related to decarbonization of the maritime transportation 
sector.
    The FY 2025 Budget request for MARAD includes $3.7 million for the 
Federal Ship Financing Program (Title XI) to provide the salaries and 
overhead support to manage the loan portfolio, currently at $1.3 
billion in outstanding loan guarantees. This program is designed to 
manage loans that help 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.
    The President's FY 2025 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, 
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.
    The President's FY 2025 Budget requests $191 million to support 
academic operating expenses for approximately 975 cadets and 293 
faculty and support staff, including expanded support for the extensive 
facility maintenance and repair needs of the Academy's aging physical 
plant. It includes 21 new positions to support National Academy of 
Public Administration (NAPA) recommendations and address various 
efficiency and effectiveness initiatives. The budget also seeks funding 
for the Every Mariner Builds a Respectful Culture (EMBARC) program 
implementation. 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.
    Today, there are 21 commercial operators enrolled in EMBARC; 
together, they operate more than 180 vessels. All vessel operators that 
are required to carry USMMA cadets under 46 U.S.C. Sec.  51307(b)--
i.e., operators with vessels enrolled in the MSP, TSP, and the CSP--
have enrolled in EMBARC, and MARAD is conducting both scheduled and 
unscheduled vessel assessments, at a rate greater than the 10 percent 
required under 46 U.S.C. Sec.  51322, to ensure compliance with EMBARC 
standards.
    In addition, USMMA's Sexual Assault Prevention and Response Office 
(SAPR) is working to build midshipman awareness and eliminate obstacles 
to reporting sexual assault and violence. MARAD is working as quickly 
as possible to develop an EMBARC rule pursuant to the authority 
provided by the FY 2023 NDAA. Additionally, the USMMA has established 
an Advisory Council, as required by 46 U.S.C. Sec.  51323, tasked with 
providing actionable recommendations on improving the Academy. 
Importantly, the Council includes experts in sexual assault and sexual 
harassment prevention and response.
    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 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.
    In early March, MARAD provided the Committees on Appropriations and 
made public USMMA's FY 2023 Capital Improvement Plan (CIP). The FY 2023 
CIP explains significant changes made to active and out-year projects 
since USMMA's last CIP report, which was provided in late 2022. 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 cadets 
and supporting the Academy's academic mission.
    The USMMA is in the process of developing a deferred maintenance 
plan that will focus on high impact maintenance actions that are both 
wide-spread and that most-directly impact the safety and quality of 
life of cadets and staff. The priorities include campus HVAC systems, 
plumbing, roofing and repair of building facades. In November 2023, the 
Academy started work on developing a Facilities Master Plan which will 
identify its priorities under its Capital Improvement Program. This 
plan, which will cover the next several years and will affect the 
entire campus, is expected to be in effect by the end of the year.
    Eighty-six million dollars in capital improvement funds are 
requested in FY 2025 that would enable us to initiate a barracks 
renovation program as well as renovations of Wiley and Delano Halls. 
Funding would also enable us to rehabilitate roads, sidewalks, and 
parking lots.
    The FY 2025 Budget request also includes $87 million to provide 
support to the six SMAs. This request includes funding for school ship 
maintenance and repair, the Student Incentive Program (SIP), direct SMA 
support, fuel assistance, and National Security Multi-Mission Vessel 
(NSMV) pre-delivery and post-delivery support. MARAD has cooperative 
agreements in place with three SMAs, with Maine Maritime Academy being 
the latest as of January 31, 2024. The amount of $58.3 million has been 
obligated for eligible pier upgrades necessary to enable heavy weather 
mooring of the NSMVs.
    Funding would also meet maintenance and repair costs to maintain 
the legacy school ships and continue our direct support to the SMAs.
    There are currently four NSMVs under construction with one ship--
the EMPIRE STATE--delivered last fall. The second ship--the PATRIOT 
STATE--has an anticipated delivery to Massachusetts Maritime Academy in 
July of this year.
    The FY 2024 NDAA also increases the authorized amount of SIP 
payments from $32,000 to $64,000, providing additional financial 
support to cadets who enroll in the Strategic Sealift Midshipman 
program.
                           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 78 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 Maritime Security Program (MSP) and the Tanker Security Program 
(TSP).
    The FY 2025 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 at home and abroad 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 jobs in the maritime industry.
    MARAD has fully implemented the TSP program, awarding ten operating 
agreements to four different U.S. companies between April 20, 2023, and 
December 17, 2023. One of the program participants voluntarily withdrew 
one of their vessels from the program after accepting a long-term-
charter to the U.S. Government, making the vessel ineligible to 
participate in the TSP. MARAD is in the process of filling that vacancy 
and anticipates filling the slot this summer. The FY 2025 Budget 
request for the TSP program is $60 million, for up to 10 enrolled 
tanker vessels. The TSP will strengthen the U.S. supply chain and 
improve the movement of liquid fuel products while creating good paying 
jobs. Moreover, these ships will ensure DOD has assured access to 
critically needed product tankers capable of loading, transporting, and 
storing on-station bulk petroleum refined products to support national 
economic security. We are preparing to deliver the requested report on 
Opportunities and Challenges to Grow the U.S.-Flag Tanker Fleet in 
International Trade to Congress soon.
    MARAD is partnering with our stakeholders, both Federal and non-
Federal, to work to identify strategies to help address the mariner 
shortage and ensure their readiness. As part of MARAD's effort to meet 
a FY 2024 NDAA requirement to establish a Maritime Workforce Working 
Group, MARAD held its first meeting on March 20, 2024. Consistent with 
the FY2024 NDAA the group will help identify the number of licensed and 
unlicensed mariners, make recommendations to improve United States 
merchant mariner recruitment and retention, and evaluate potential gaps 
or surpluses of credentialed merchant mariners required to maintain and 
operate the RRF. In addition, on April 16, 2024, MARAD hosted a Mariner 
Work-Life Balance Symposium which brought together stakeholders from 
across the maritime industry to discuss issues related to work-life 
balance and recommendations for improvement that will boost mariner 
recruitment and retention.
    We also note that the existing U.S. Coast Guard (USCG) licensing 
system (Merchant Mariner Licensing and Documentation system) relies on 
dated 1980s technology with relatively no querying capability on the 
number and availability of mariners with various credentials essential 
to meet our economic and national security needs. We fully support the 
USCG's ongoing efforts to modernize the system to enable efficient 
issuance of mariner credentials and provide enhanced querying 
capabilities.
    MARAD is also focused on supporting our U.S.-flagged fleet through 
opportunities to carry cargo. As I said in 2022 testimony before the 
Coast Guard and Maritime Transportation Subcommittee, put simply, 
without cargoes, ships will leave the U.S. flag and 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, we have again 
written to all Federal departments and agencies explaining how MARAD 
can help them ensure they meet their obligations under cargo preference 
laws and regulations. To date, 60 percent of these Federal agencies 
have responded, with some providing outstanding bills of lading. MARAD 
is currently preparing the annual report.
    MARAD is also working diligently on revisions to cargo preference 
regulations as required by the FY 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, last year, 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 and provide 
opportunity to diversify the types of vessels available to civilian 
agencies to carry cargoes. In return the vessels would be required to 
remain under U.S. flag for 3 years. This proposal became law as part of 
the FY 2024 NDAA but will only become effective January 1, 2030.
    The President's FY 2025 Budget requests $974 million from DOD 
budgetary authority for MARAD to acquire, upgrade, and maintain vessels 
in the NDRF and RRF. These funds enable MARAD to maintain the fleet in 
a ready, reliable, and responsive condition, using a contracted 
workforce of commercial ship managers and a small cadre of shipboard 
caretaker crewmembers. Sustaining sufficient resources for maintenance 
and recapitalization will ensure MARAD's ability 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. MARAD is now the sole surge sealift provider. Our RRF 
ships 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 48 vessels, with an 
average age of more than 45 years, maintained in a reduced operating 
status--ready to sail within five days of activation. The fleet will 
grow to 51 vessels after the planned transfer of additional surge 
sealift and prepositioning vessels from the Military Sealift Command is 
complete by the end of FY 2025.
    I note that four RRF vessels are currently berthed at the Port of 
Baltimore. While the restriction of movement for these vessels is 
affected by the Key Bridge collapse, crew on two of the vessels are 
currently conducting regulatory or casualty repairs and neither of the 
remaining ships has been activated. One ship normally berthed in 
Baltimore will remain in Hampton Roads, VA, while crew is conducting 
required regulatory repairs until harbor clearance operations are 
completed.
    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 now nearly 
50 years old or even older. Continued focus on safety, material 
condition, and regulatory compliance has 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 
with the limited authorities provided. MARAD is making use of the 
authority Congress provided to purchase vessels for RRF through a 
contracted Vessel Acquisition Manager (VAM). This innovative process 
allowed MARAD to efficiently purchase the first two ships in FY 2022. 
In Q2 FY 2023, the VAM completed purchase of three more extremely 
capable ships including one that is 10 and two that are 11 years old. 
These ships were purchased for approximately $90 million per ship.
    The reflagging process for these vessels is continuing along the 
stringent Alternate Compliance Program regulatory framework and the 
ships will be ready-for-tasking in Q3 2024. MARAD continues to work 
with our VAM and has identified several potential ships for purchase 
and engaging owners of the best four additional ships for purchase to 
reach the Congressionally limited number of 9 used ships.
    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. 
MARAD thanks Congress for appropriating $12 million in FY 2024 funds to 
initiate the vessel designs.
                               Conclusion
    These programs represent MARAD's priorities. 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. I appreciate that.
    And now we have Chairman Maffei. You are recognized for 5 
minutes for your testimony.

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

    Mr. Maffei. Thank you very much, Chairman Webster, Ranking 
Member Carbajal, full committee Ranking Member Larsen, 
distinguished members of the subcommittee.
    America's importers and exporters must adapt to rapidly 
changing circumstances around the world. They deserve a Federal 
Maritime Commission that also adapts to the challenges 
affecting cost, availability, reliability, and competitiveness 
in ocean shipping.
    While I am Chair of the FMC, I am fortunate to share 
decisionmaking with four other very devoted Commissioners, 
including Lou Sola and Max Vekich, who are here today sitting 
behind me.
    I want to thank all of my colleagues on the Commission, 
along with the dedicated professional staff, and the clear 
message from both the President and both parties in Congress. 
Because of these, the FMC has rapidly changed course to meet 
pressing ocean shipping policy challenges.
    Informed by our experience during the COVID pandemic and 
empowered by the Ocean Shipping Reform Act of 2022, or OSRA as 
the chairman mentioned, the Commission is more active than ever 
and increasingly serving as a venue that shippers turn to for 
assistance.
    Since June 2022, our consumer affairs office has responded 
to roughly 2,400 requests for assistance and continues to serve 
dozens of callers every week. The number of complaints filed 
with the FMC already this year is on pace to exceed last year, 
and matters brought before an FMC administrative law judge are 
triple what they were in 2019.
    Even 2 years after the end of the COVID-linked supply chain 
problems, the demand for FMC services remains high among 
American importers and exporters, a sign that they value the 
FMC's ability to resolve their concerns and have a positive 
impact on their businesses.
    When it comes to enforcing rules on cargo carriers, the FMC 
has gone from slow steaming to full speed ahead. In a short 
time, the FMC has built a robust enforcement capability, 
pursuing cases against even the most well-resourced potential 
violators.
    Our enforcement program has gone from assessing virtually 
no penalties in fiscal year 2020 and fiscal year 2021 to 
assessing $2 million in penalties in fiscal year 2022 and 
nearly $2.9 million in fiscal year 2023. So far in fiscal year 
2024, we are on pace to either meet or exceed last year's 
total. Foreign-based ocean vessel operators are paying the bulk 
of these penalties.
    In addition to enhanced enforcement, the FMC has 
implemented or made significant progress with all of OSRA's 
mandates. This includes building on the Incentive Principle 
interpretative rule.
    This rule, authored by Commissioner Rebecca Dye and put 
into effect in 2020, established that a detention or a 
demurrage charge must help promote the efficient movement of 
cargo and/or equipment, and it can't be for any other purpose.
    In February, the FMC unanimously approved a final bill on 
detention and demurrage practices. This rule sets requirements 
for how common carriers and marine terminal operators must bill 
these charges and provides clarity on who can be billed, within 
what timeframe, and the process for disputing bills. The rule 
is slated to take effect on May 28.
    Now, I would note here that the World Shipping Council, the 
group that represents the largest foreign-based shipping 
carriers, has appealed this new rule, contending that it 
exceeds the FMC's authority. I maintain this tough but fair 
rule is fully in line with the letter of the law as well as the 
intent of Congress in OSRA.
    The FMC is working hard to complete the three other 
required rulemakings. I anticipate there will be an 
announcement on Unreasonable Refusal to Deal within the next 
few months and one on Shipping Exchange Registries by the fall.
    The OSRA Charge Complaints process continues to be a 
popular avenue for shippers to seek expedited relief from 
improper bills and invoices. Since June 2022, almost $2.5 
million in charges and fees have been waived or refunded by 
common carriers.
    The FMC has largely delivered on the investment started 
when OSRA was signed almost 2 years ago. That said, we still 
have much to do in order to complete the changes and to ensure 
American importers and exporters have ongoing access to 
reliable, efficient, and affordable ocean transportation.
    The Commission's budget request for fiscal year 2025 is 
just less than the same amount that OSRA 2022 authorized. The 
FMC has established priorities and built plans based on OSRA. 
Funding at less than that will hamper our capacity to meet 
existing expectations.
    Recent events, such as those in the Suez Canal, the Panama 
Canal, and the Port of Baltimore are illustrative of the type 
of uncertainties that hit global shipping on an ongoing basis. 
Geopolitical events, shifting carrier alliances, new 
international regulations, and changes in trade policy and 
supply chain sourcing will continue to affect oceanborne 
commerce in unpredictable ways.
    A strong and engaged Federal Maritime Commission is vital 
for ensuring some stability for American businesses and 
consumers in a world filled with uncertainty.
    Thank you again for allowing me to testify along with 
Admiral Phillips, and I look forward to addressing your 
questions.
    [Mr. Maffei's prepared statement follows:]

                                 
Prepared Statement of Hon. Daniel B. Maffei, Chairman, Federal Maritime 
                               Commission
    Good afternoon, Chairman Webster and Ranking Member Carbajal. I 
appreciate having this opportunity to appear before you today to 
discuss the Fiscal Year 2025 budget request of the Federal Maritime 
Commission.
    America's importers and exporters are having to adapt to rapidly 
changing circumstances around the world that impact ocean shipping. 
They deserve a Federal Maritime Commission that is also able to adapt 
as rapidly as possible to the varying challenges that can affect the 
cost, availability, reliability, and competitiveness of ocean shipping 
available at container ports throughout the United States.
    As many of you know and some have probably experienced, changing 
the capacity, priorities, and culture of a government agency is not 
always as simple or as quick as we would like. Nonetheless, thanks to 
five devoted Commissioners, a professional staff truly dedicated to 
helping American shippers, and a clear message from Congress and from 
the President, the Federal Maritime Commission in just a few years has 
changed course to actively address many of the pressing issues in ocean 
shipping that became so evident during the COVID-related supply chain 
crisis.
    Informed by our experiences during the pandemic and empowered by 
the Ocean Shipping Reform Act of 2022 (OSRA 2022), the Commission is 
more active than ever, leaning into unfolding events, and increasingly 
serving as a venue that shippers turn to for assistance.
    Our consumer affairs team remains busy, averaging more than 100 
contacts monthly from individuals seeking help. Since June 2022, our 
Office of Consumer Affairs and Dispute Resolution Services (CADRS) has 
responded to approximately 2,400 requests for assistance, the great 
majority related to issues with commercial cargo shipments. CADRS is 
often successful in resolving matters quickly and amicably, and in a 
way that helps the parties avoid costly formal legal proceedings.
    Matters before the Office of the Administrative Law Judges are 
triple what they were in 2019, the last full year prior to the global 
spread of COVID-19. Almost 100 cases have been filed at the Commission 
since June 2022, which is an unmatched level of litigation in the 
agency's recent history. Nor is there any indication that the pace of 
work is lessening. In assessing year-to-date statistics, the Commission 
is on pace to meet or exceed the number of complaints it received last 
year. That even two years after the end of the COVID-linked supply 
chain disruption, the Commission remains a venue for shippers to bring 
matters for assistance and adjudication demonstrates that the need for, 
and value of, FMC services is strong. This suggests that one legacy of 
COVID is that the public and the industry are more aware of the FMC, 
and that American shippers view the FMC as the agency that can resolve 
their concerns and have a positive impact on their businesses.
    The Commission continues to build a robust enforcement capability 
with the wherewithal to conduct complex investigations, encourage 
compliance for regulated entities, and prosecute cases against even the 
most well-resourced potential violators. Effective enforcement creates 
meaningful deterrence to illegal behavior and assures the compliant 
businesses that we will not allow their competition to get ahead by 
breaking the rules.
    Our Bureau of Enforcement, Investigations, and Compliance (BEIC) is 
already rigorously reviewing the conduct of, and holding accountable, 
regulated entities. We have gone from assessing virtually no penalties 
in 2020 and 2021 to assessing $2.0 million in penalties in fiscal year 
2022, which followed on with $2.8 million in penalties assessed in 
fiscal year 2023. Our enforcement program continues to investigate many 
cases against foreign-based ocean carriers and other large companies 
that are accused of violating the law, and BEIC now is seeking 
penalties in the millions, and sometimes tens of millions of dollars. 
We expect to see to see at least a similar level of penalties assessed 
before the end of fiscal year 2024.
    The Bureau of Trade Analysis and the Bureau of Certification and 
Licensing (BCL) do critical work in ensuring marketplace integrity 
through oversight, analysis, and compliance of regulated entities. The 
efforts of these two bureaus are invaluable to protecting the public 
from unfair and deceptive practices, as well as guaranteeing a 
competitive and reliable international ocean transportation supply 
system that supports the U.S. economy. BCL also does important work to 
ensure cruise companies operate with the appropriate consumer 
protections in the event they fail to provide the service they promise.
    The Commission's ability to better serve American importers, 
exporters, and consumers was greatly enhanced by the additional 
authorities and resources contained in the Ocean Shipping Reform Act of 
2022. As we approach the second anniversary of the legislation's 
enactment, I can report that the Commission has implemented, or made 
significant progress toward completing nearly all the mandates 
contained in the statute.
    We continue to elaborate on the Incentive Principle interpretive 
rule in the manner prescribed by Congress. The Incentive Principle 
rule--authored by Commissioner Rebecca Dye and approved unanimously by 
the FMC in Spring 2020--established that for a detention or demurrage 
charge to be reasonable, it must help promote the efficient movement of 
cargo and/or equipment and not be for some other purpose.
    In February, a Final Rule on Demurrage and Detention Billing 
Practices was published following a unanimous vote of the five 
commissioners. The rule establishes requirements for how common 
carriers and marine terminal operators must bill for demurrage and 
detention charges and provides clarity on who can be billed, within 
what timeframe, and specifies the process for disputing bills. The rule 
is scheduled to take effect on May 28, 2024.
    As you know, OSRA 2022 mandates three other rulemakings: 
Unreasonable Refusal to Deal with Respect to Vessel Space 
Accommodations; Shipping Exchange Registries; and Unfair or Unjustly 
Discriminatory Methods. The Commission's staff is working hard on 
completing these remaining rulemaking requirements. I anticipate there 
will be an announcement on Unreasonable Refusal to Deal within the next 
few months and one on Shipping Exchange Registries by the end of the 
calendar year. Parts of the rulemaking on Unfair and Unjustly 
Discriminatory Methods--specifically the provision prohibiting carriers 
from unreasonably denying space accommodations to U.S. exports--will be 
incorporated into the rulemaking on Unreasonable Refusal to Deal. The 
remaining areas not included in that rule will be addressed in a 
separate rulemaking.
    The OSRA 2022 Charge Complaints process continues to be a popular 
avenue for shippers to seek relief from inappropriate bills and 
invoices. Since June 2022, almost $2.5 million in charges or fees have 
been waived or refunded by common carriers. This total only reflects 
results from Charge Complaints filed at the Federal Maritime 
Commission. It does not include any fees or charges waived or refunded 
by either direct shipper to common carrier communications or through 
the efforts of an independent third party, such as an attorney outside 
of those filed with the FMC. In short, this provision of OSRA 2022 is 
having a consequential impact by giving shippers an expedited, simple 
process to address an erroneous invoice.
    In recent months, the Commission has repeatedly demonstrated an 
ability to be dynamic in responding to events impacting shipping and 
supply chains. The Commission held a hearing on February 7, 2024, 
examining how events in the Red Sea and Gulf of Aden are affecting 
maritime trade and U.S.-based companies. The Commission issued two 
industry advisories putting regulated entities on notice that 
notwithstanding disruptions to regular vessel deployments in the Middle 
East or the inability to call Baltimore, all statutes and regulations 
administered by the FMC remain in effect. Common carriers and marine 
terminal operators were specifically reminded about the Commission's 
reasonableness standard for assessing demurrage and detention bills.
    Further, the Commission is using its Audit Program to engage the 
nine largest-by-volume ocean carriers calling the Port of Baltimore to 
remind them of their responsibilities and obligations in adjusting 
their operations. We are scrupulously examining fees and surcharges 
implemented following the disruptions that have taken place resulting 
from the events in Baltimore, Panama, and the Gulf of Aden and Red Sea 
region to ensure they comport with the law. Our Office of Consumer 
Affairs and Dispute Resolution Services is prepared to help informally 
resolve issues shippers are having resulting from these disruptions. 
Our Bureau of Enforcement, Investigations, and Compliance will pursue 
any substantive allegations of misconduct, and the Bureau of Trade 
Analysis continues with its review of carrier conduct and marketplace 
conditions.
    Global trade on our oceans continues to grow. Nonetheless, shifting 
ocean carrier alliances, international emissions regulations, changes 
in the geography of supply chain sourcing, and geo-political 
developments all will affect oceanborne commerce. A capable, well-
resourced Federal Maritime Commission is necessary to guarantee U.S. 
companies and consumers have access to reliable, efficient, and 
affordable ocean transportation services for both import and export 
trades.
    That said, there is no desire--at least not on my part--to put the 
Commission on a path where it seeks continuous growth and additional 
jurisdiction. The Commission has had to grow to meet the vision of 
Congress and be a potent regulator of international ocean 
transportation. That growth was reflected in OSRA 2022, and the FMC's 
budget requests have followed the budget and staff trajectories 
included in that legislation. If the Congress does decide to give us 
additional qualitative responsibilities, I only ask that you give us 
the additional resources to fulfill those new demands or understand 
when implementation is delayed or when other vital capabilities are 
cut.
    The Commission is requesting $48,452,000 to fund its Fiscal Year 
2025 operations. This is just less than the sum authorized by the Ocean 
Shipping Reform Act of 2022. This is $4,732,000 more than the 
$43,720,000 we requested--and was authorized by OSRA 2022--to fund our 
Fiscal Year 2024 operations. It is $8,452,000 more than what was 
provided by the Consolidated Appropriations Act 2024.
    As is usual with an FMC budget request, the great majority of our 
funds will pay for two categories of costs--personnel and rent. These 
two expenses combined will cost the Commission $40 million in FY 2025. 
As also is typical, costs in both categories continue to rise each 
fiscal year. The Commission has budgeted $35,871,000 for salary and 
benefits, which is a $5 million increase from FY 2024. Similarly, the 
rent and building security costs are rising by $1,341,000 to a total of 
$4,076,000 for the coming fiscal year.
    The Commission has also budgeted $5,877,000 for information 
technology operations and for modernization projects. Substantial 
upgrades to the Commission systems and networks are necessary to defend 
against malicious cyber activities and enable the Commission's systems 
to serve the public in the way that business is conducted today.
    The Commission has established priorities and built plans based on 
authorizations contained in OSRA 2022. The Commission will carry out 
its duties to the best of its ability with whatever sum it is 
appropriated, but not being funded at authorized levels means that 
difficult decisions about resource allocation must be made. The 
Commission had planned programs and activities based on authorizations 
contained in OSRA 2022. Appropriations at less than these levels will 
necessitate changing objectives and goals. Progress in expanding the 
capabilities of our offices most involved in protecting the public and 
overseeing regulated entities will be threatened.
    The Federal Maritime Commission has delivered on the investment 
made in it two years ago. That said, we still have much to do to fully 
execute on the changes we started and successfully position the agency 
to continue its mission in the long run. Now is the time to continue 
laying the foundation for the inevitable future needs of Americans who 
rely on ocean-linked supply chains. As events in Baltimore, Panama, and 
the Red Sea have shown, the world of ocean shipping can change in an 
instant in disruptive ways. A strong and engaged FMC is a vital 
component of ensuring some stability for American importers and 
exporters in a world filled with uncertainty.
    Thank you again for this opportunity to appear before you, for your 
attention, and for any questions you might have about my testimony or 
the work of the Federal Maritime Commission.

    Mr. Webster of Florida. Thank you so much.
    Thank you to both of you for your testimony.
    We will now turn to questions. I recognize myself for 5 
minutes for questions.
    Admiral Phillips, the Port Infrastructure Development 
Program has grown exponentially in size and scope over the last 
several years. Unfortunately, the effectiveness of the program 
is being restricted by long delays to get contracts in place, 
which means funds can't be obligated, construction can't begin, 
and inflation impacts the project cost.
    What is MARAD doing to address these inefficiencies in the 
grant award process?
    Admiral Phillips. Sir, thank you for that question.
    As you are aware, we have quite a number of grants underway 
right now, and we are excited about them because of the 
generational change they offer.
    We are working very diligently within our system to bring 
our timeline down so that we can ensure grant applicants get 
their money as soon as possible.
    Our current average time to work through both a NEPA 
process, the environmental assessment process, and the grant 
agreement process, which is basically scope, schedule, 
performance, is 20 months. We would like to get that down to 
12.
    We continue to work very closely with applicants to help 
provide them additional capacity. In advance of the application 
and NOFO process each year, we offer a series of online events 
for applicants to be able to spend time with us and understand 
what is coming.
    And then, once we receive and award applicants, we meet 
with each applicant individually to begin the process to 
understand where they are in their process and how they can 
move forward.
    I would also like to acknowledge that we have opportunities 
within the PIDP program under new authority from 2022 to do 
what we call pre-award authority, which allows applicants to 
draw down from their matching funds to begin to start pre-award 
processes. They can use this money for planning, for hiring 
additional staff, for doing engineering and design work.
    We have found that of the applicants that take advantage of 
this, and about 58 percent of the grants since 2022 have been 
able to do that, that we have much more success in moving them 
quickly through the program.
    I would add, finally, that the record is 6 months in 
getting to grant agreement signing and NEPA completion, and we 
have had a number of applicants be able to complete it within 1 
year. So, it is possible to do it, and we continue to work with 
applicants to help work them through the process.
    Thank you, sir.
    Mr. Webster of Florida. Thank you.
    And please keep me informed as you work through the award 
process.
    And also, Admiral Phillips, the Deepwater Port Licensing 
Program continues to have several applications that are far 
beyond the statutory timeline for review of 356 days.
    As the President's budget request for fiscal year 2025 
includes four new full-time positions for the deepwater port 
program office, will this be sufficient to help MARAD process 
the backlog of applications, or are there other challenges that 
we need to check into?
    Admiral Phillips. Sir, thank you for that question. And 
thank you for considering the request for four additional 
positions. My staff of four are actually here with me here 
today. And so, certainly those four additional billets will 
help move along the applications that we have right now.
    But to remind, we work with over 20 different Federal and 
State departments and agencies to complete this process, 
particularly in the initial application process. We work 
closely with the Coast Guard under the environmental review 
requirements, which they manage predominantly, until we get to 
the record of decision, which is MARAD's responsibility.
    So, it is quite a coordination effort, and we certainly 
appreciate and understand the law and the timeline and want to 
be able to follow the law, as we have said we will do, and move 
these projects forward.
    So, as you commented, sir, this SPOT license was issued 
this year. I would note that is the first license issued for a 
new application since the early 1980s, other than the LOOP 
application which shifted from an import to an export facility 
in 2012.
    So, there is quite a bit of additional interest in this 
program now, and we appreciate your interest in it and your 
willingness to consider our 2025 request.
    Mr. Webster of Florida. Thank you. And I would like to work 
with you as more decisions are issued this year.
    Chairman Maffei, stakeholders have expressed concern with 
the FMC extending its jurisdiction beyond regulated entities, 
such as ocean common carriers or maritime terminal operators, 
to other groups that regulated entities have contracts with.
    Do you believe your jurisdiction extends to the assets and 
operations of these other groups whenever a regulated entity 
enters into a contract with them, do you think?
    Mr. Maffei. Thank you for the question, Mr. Chairman.
    Our statute makes it clear that the three types of 
regulated entities are common carriers that own vessels, 
nonvessel operating common carriers, and marine terminal 
operators.
    That said, though, our jurisdiction goes along with the box 
from the water. So, as services are provided that involve that 
box and the shipper's ability, the American shipper's ability 
to interact with that box, then we have jurisdiction over those 
three kinds of companies and the way that they may make their 
deals and what is presented to the ocean shipper.
    So, no, our jurisdiction is very circumscribed, but it does 
include anything that involves what those three categories of 
folks do while they are doing ocean shipping.
    Mr. Webster of Florida. Thank you so much.
    I yield back. My time is gone.
    Mr. Carbajal.
    Mr. Carbajal. Thank you, Mr. Chair.
    Admiral Phillips, I would like to commend you on your 
ongoing commitment to ensuring a safe environment for all 
mariners on board ships.
    The culture of industry is changing. We have seen 
measurable improvements on board vessels, and the Coast Guard 
has taken action to remove and prosecute offenders. However, 
new requirements resulting from EMBARC and the Safer Seas Act 
only apply to U.S.-flag vessels.
    Could you detail how safety standards, including those 
related to sexual assault and sexual harassment, do not apply 
to foreign mariners on board flag-of-convenience vessels?
    Admiral Phillips. Congressman, thank you for that question.
    Of course, MARAD's focus is U.S.-flag vessels, and we are 
most concerned with the safety of our midshipmen sailing as 
cadets at sea and the safety of U.S. mariners, and in that 
context, we work very closely with the Coast Guard.
    From the context of how foreign-flag vessels are managed, 
that is outside of my purview and outside of the law, and I 
commend Congress for considering that and thinking of it.
    And I would also add that many other foreign nations have 
considered such circumstances with regard to vessels that call 
their ports that may or not be flagged in their country and 
have implemented opportunities to ensure that those mariners 
are treated fairly and paid fairly and are also subject to a 
safe environment.
    So, there are perhaps some foreign models that could be 
followed if that is an item of Congress' interest.
    Mr. Carbajal. Does the IMO have a role here and has anybody 
engaged the IMO on this issue?
    Admiral Phillips. Yes, sir. The IMO does have a role. And, 
of course, State is lead for IMO with Coast Guard as the agency 
involved in most of the--in fact, all of the committees 
involving mariner safety, mariner welfare, and including 
decarbonization and other requirements for vessels at sea.
    And so, certainly there is a great interest in the IMO in 
mariner safety, and I would defer to the Coast Guard for the 
specific details there.
    We do know they had a session just this summer where they 
looked at mariner safety broadly across the industry and also 
looked at sexual assault prevention and response and other 
kinds of harassment and challenges that mariners are 
experiencing at sea in an international context.
    Mr. Carbajal. Thank you.
    Admiral Phillips, as you say in your testimony, without 
cargo, ships will leave the U.S. fleet. While I appreciate 
MARAD's education efforts, the law is very clear: MARAD is the 
final authority in ensuring compliance with cargo preference. 
It is unacceptable that 40 percent of agencies have failed to 
provide you with bills of lading. Cargo preference is the 
shipping version of Buy America.
    When should Congress expect to see the final rule on cargo 
preference that ensures MARAD's oversight and enforcement 
authorities?
    Admiral Phillips. Sir, thank you for that question.
    We continue to work on a final rule and understand 
Congress' intent and interest there and certainly acknowledge 
that we are behind the due date of 270 days from the 2023 NDAA.
    I would add in the context of MARAD being able to receive 
bills of lading, it would be helpful to receive them in 
advance, and we only receive them after the fact and have to 
chase them down. As you well know, that is a challenge.
    And, of course, an easy way to make cargo preference more 
direct to implement would be to go to 100 percent cargo 
preference, notwithstanding that there are agencies who find 
challenges in that, which we certainly understand.
    And in that context I would add, we thank Congress for 
waiving the 3-year wait requirement to flag in and have access 
to preference cargoes and would say that implementing that 
sooner than 2030 would be helpful as well in this regard.
    It would give more access to preferred cargo vessel-
carrying capacity for those agencies which are challenged when 
they have to ship things in an emergent manner, like USAID and 
USDA.
    Thank you, sir.
    Mr. Carbajal. Thank you.
    Chairman Maffei, in your statement you mentioned the FMC's 
work to proactively contact carriers during shipping 
disruptions like those associated with the Red Sea, the Port of 
Baltimore, and the Panama Canal.
    How is that work important for shippers, particularly small 
shippers who may find it more burdensome to negotiate contracts 
and challenge fees?
    Mr. Maffei. Thank you for the question, Mr. Carbajal.
    What we have is called an audit program. It essentially is 
a way to have a continuing dialogue with ocean carriers and to 
continue to ask them. Now, they do have to volunteer for the 
program, but all of them have.
    It is important that we question them on a number of 
things. The particular issue--and we found this out in having a 
hearing of our own--with these charges was the lack of 
transparency.
    A lot of the charges, it wasn't so much that the shipper 
said, well, there is no cost here. They understood there was an 
additional cost, for instance, if you couldn't go through the 
Suez Canal, but what they didn't understand is what this new 
fund was going for.
    And so, we have been encouraging them to have a better 
relationship, better transparency. This is particularly 
important for the small shipper, as you mentioned. The larger 
shippers, they have that bargaining power that they can just 
demand those answers, but the smaller shipper really does not.
    So, that is what we are doing. It has been somewhat 
successful, though I do think that it is a matter still for 
discussion about whether all of these charges are completely 
kosher, for lack of a better term, and we certainly will 
investigate any allegations that they are not being used for 
their express purpose; that is, involving that particular 
maritime contingency.
    Mr. Carbajal. Thank you, Mr. Chair. I am out of time. I 
yield back.
    Mr. Webster of Florida. Thank you.
    Representative Larsen, you are recognized for 5 minutes--
well, yes, Ezell.
    Mr. Larsen of Washington. All right. You are the chair.
    Mr. Webster of Florida. OK. Mr. Ezell, you are recognized.
    Mr. Ezell. Thank you, Mr. Chair.
    Admiral Phillips, thank you for being here today, and both 
of you, appreciate your commitment.
    Admiral Phillips, as you know, my gulf coast colleague and 
I, Congressman Troy Carter and I, introduced legislation to 
expand MARAD's Capital Construction Fund Program. This 
expansion would give marine terminal operators access to 
deposit funds into the tax-deferred CCF account for purchases 
of cargo-handling equipment.
    When Secretary Buttigieg testified before the full T&I 
Committee last year, he said if Congress authorized our CCF 
expansion bill, he would fully implement it. I was very pleased 
to hear the Department's support.
    Can you explain how programs such as CCF complement 
programs such as PIDP and work to leverage private investment 
into our U.S. maritime transportation system?
    Admiral Phillips. Yes, sir. Thank you for that question.
    The Capital Construction Fund Program, as you point out, is 
a fund into which vessel owners or operators may deposit 
profits based on the profits generated by that vessel, and 
then, after a period of time, remove those profits from that 
fund, which actually is an IRS-operated program. We just manage 
it, and then we pass the information to the IRS.
    They can take that money back out and they can use it to 
either build a new vessel or improve a vessel, improve 
maintenance, et cetera.
    So, it has been a very successful program, and with the 
changes in the 2023 NDAA, it has become even more successful 
because it now includes a much wider range of vessels that may 
participate and there are no geographic restrictions. So, we 
have seen a tremendous uptick in that particular program's 
functionality.
    It serves really to support the maritime industry and the 
shipbuilding industry broadly in the country. Its connection to 
port infrastructure development would be really loosely tied to 
increased capacity in our shipbuilding industry to support 
moving the goods that come and go from port infrastructure. 
There is not a direct tie there.
    That said, I am aware of your legislation, of course, and 
understand your intent in trying to find ways for terminal 
operators to purchase equipment and take advantage of such a 
tax-deferred fund.
    It would be interesting to try to implement it in exactly 
the same way as the fund is currently administered. However, we 
are happy to work with your staff to try to better understand 
the objectives and find a way forward.
    Thank you, sir.
    Mr. Ezell. Thank you.
    The State of Mississippi is home to Taylor Machine Works, 
the United States largest manufacturer of wheeled cargo 
handling equipment.
    I believe securing America's supply chain is a matter of 
national security. Can you explain to us why it is important to 
support efforts to rebuild the manufacturing industry, 
especially as it relates to supply chains in the U.S. maritime 
industry?
    Admiral, I am sorry.
    Admiral Phillips. Yes, sir. Thank you.
    So, as you are well aware, in the context of port 
infrastructure development and the Small Shipyard Grant 
Program, we are very interested in port cargo handling 
equipment that is built in this country.
    There are manufacturers, and we are happy to understand 
where they are and who they are and grateful for the kinds of 
things that they do.
    And I would add in that context, we are working now with 
the American Association of Port Authorities on a survey that 
is surveying terminal operators around the country to 
understand what kinds of port equipment they need, and then 
surveying equipment manufacturers to understand what kinds of 
equipment they make to try to understand where we can build 
capacity and increase manufacturing and good-paying jobs in 
this country.
    So, we thank you for your interest there, sir, and are 
excited to get on with the study with AAPA so that we can help 
continue to build industry opportunities in this country for 
port infrastructure.
    Thank you.
    Mr. Ezell. Thank you.
    Also, Admiral, as we work towards fiscal year 2025 
appropriations, I want to discuss the Small Shipyard Grant 
Program, which received a large funding cut in the fiscal year 
2024 appropriations bill.
    Considering the current state of U.S. shipbuilding, can you 
discuss the need to fund this program at or above the level 
included in the President's budget request?
    Admiral Phillips. Yes, sir, certainly.
    So, there is $20 million in the President's budget request 
for 2025, but as you state, this is a very significant program. 
It is always oversubscribed. Typically for $20 million in 
grants available, we will receive more than $80 million in 
requests, funding requests. And I would expect this year we 
will easily exceed the funds available and probably by a factor 
of three or four.
    So, there is certainly a need, a consistent need over time, 
and we see tremendous benefit from this program. Not only does 
it provide additional capacity for small shipyards, but it 
generally improves their employment as well.
    Mr. Ezell. Thank you for that.
    And thank you both again.
    And, Mr. Chairman, I yield back.
    Mr. Webster of Florida. Thank you.
    Now the ranking member, Mr. Larsen, you are recognized.
    Mr. Larsen of Washington. Thanks, Mr. Chair.
    The first question is for Chairman Maffei, but I apologize 
for not recognizing the third greatest export out of Aberdeen, 
Washington: Commissioner Max Vekich.
    Of course, number one and number two happen to be two-
thirds of the members of Nirvana, so, you will always be number 
three in our hearts, Max. Good to see you.
    Chairman Maffei, a couple weeks ago, I had the opportunity 
to go up to Baltimore to see the bridge collapse and the 
ongoing recovery and salvage efforts. It is really hard to 
fathom the magnitude of the incident without seeing it in 
person, and I know the chairman went as well. A few others have 
gone up there to see it.
    Can you talk about the effect this incident is having on 
supply chains and the importance of--well, just generally the 
importance of a redundant supply chain?
    Mr. Maffei. Yes. Thank you, Mr. Larsen.
    And just quickly, I, of course, join Admiral Phillips in 
expressing my condolences to those families, and it is a big 
reminder that any transportation work is extremely--is 
dangerous and risky.
    In terms of the effect on the supply chain, I think the 
effect of knocking out the Port of Baltimore for a fairly 
limited amount of time in our--it has been incredible what the 
U.S. Navy and the Army Corps of Engineers and supporting 
agencies have been able to do to bring that channel and I think 
soon the entire channel back.
    But I will say, I think it has been a little bit overstated 
what that would be in the short run because we have 
alternatives to the Port of Baltimore. So, in that sense, I 
can't imagine it affecting overall inflation in the United 
States, for instance, those sort of things.
    That said, my concern is that in the long run, the Port of 
Baltimore is an extremely important strategic port when it 
comes to our supply chain. This is a deepwater port. In terms 
of container shipping, it is probably the fastest growing on 
the east coast. There is currently one container terminal, but 
there is going to be two open there.
    And if something were to happen to New York, New Jersey--I 
see Mr. Van Drew here--or Savannah, Georgia, or Norfolk, 
Virginia, and we didn't have Baltimore as a working maintained 
port, that could be a real problem for the United States supply 
chain.
    So, it's funny, these ports compete. But when it comes to a 
disaster like this, they all work together, and it's extremely 
important that we remember that with Baltimore.
    Mr. Larsen of Washington. Thanks.
    The ranking member of the subcommittee wanted to remind 
everyone he also has gone up to Baltimore as well.
    Admiral Phillips, it has already been noted about the Small 
Shipyard Grant, but could you just reiterate the number, the 
dollar amount of requests that you have received in the last 
year?
    Admiral Phillips. Yes, sir. For the $20 million on offer 
last year, we received more than $80 million in appropriations. 
And we are happy to take that for the record. We could give you 
historically what we typically receive there. But it is very 
much oversubscribed, as are all of our grant programs.
    Mr. Larsen of Washington. Yes. So, when you do those 
assessments of, say, the $80 million in requests, just so that 
the number is accurate, is it $80 million of all really great, 
super great projects only get $20 million or some not--some 
clearly aren't ready to go?
    Admiral Phillips. Sir, anecdotally, I would say that the 
Small Shipyard Grant in particular, that program, people are 
either qualified or they are not, and most applicants are 
qualified. Many are repeat applicants, as you are well aware 
from your district.
    Mr. Larsen of Washington. Yes.
    Admiral Phillips. So, people come back again and again and 
again, and with success, over time.
    Mr. Larsen of Washington. Yes. We have got quite a number 
of projects from past rounds doing great work.
    I was disappointed about the administration's request for 
the PIDP, which is $80 million. This is not enough. And as I 
noted when we did BIL, the idea was BIL money wouldn't supplant 
this money.
    And what the danger is if we don't do something like 
advanced appropriations in the future, then we are going to end 
up with a new standard of something well below what it was 
before we did the BIL.
    And so, on that point, you mentioned, I think in response 
to a question, the process that you can use to kind of get 
these projects moving.
    But what do you--I guess what do you--what information are 
you collecting for the future so in the future MARAD can go to 
the administration and say, if advanced appropriations are no 
longer going to be here, you need to understand the baseline 
isn't what we had last time, it is 120 or 160 or some other 
number that was larger before this year?
    Admiral Phillips. So, sir, thank you for that question.
    I think across the Department of Transportation, we are 
working collectively to develop a significant amount of data 
collections, which we already have within PIDP and other modes 
do as well, to understand what we see over time and what we see 
as the needs.
    Now, other modes are different. Some have formula funds and 
other things to go with their grants. But in our case, as a 
full discretionary grant program order, we are certainly 
keeping track of the need, the requests over time. And I can 
say that, again, we see three or four times the dollar value in 
requests versus funding available.
    Mr. Larsen of Washington. All right. Thank you.
    Thank you, Mr. Chair. I yield back.
    Mr. Webster of Florida. Mr. Van Drew, you are recognized 
for 5 minutes.
    Dr. Van Drew. Thank you, Mr. Chairman.
    Offshore wind projects--you knew this was what I was going 
to talk about a little bit--offshore wind projects are failing. 
And you know that the Orsted 1 project failed off the coast of 
my district in South Jersey, proposed projects now have failed 
in New York, and up and down the coast, many of them are in 
trouble.
    Yet for years at this point, the Maritime Administration, 
MARAD, has been giving subsidies to fund these projects, which 
many of them seem to be going towards the graveyard.
    In my opinion, no more funds should be allocated to these 
hemorrhaging money pits. Just last year, $202 million--almost 
$202 million were awarded to funding MARAD's budget support of 
these ventures.
    If this money can be better utilized to further fund 
accounts, such as operations and training or assistance to 
small shipyards, should we really be investing in something 
that is so obviously now becoming visibly nonviable and only 
drains our budget for very important work that you need to do? 
I believe the answer should be no, that we shouldn't be.
    Rear Admiral Phillips, thank you for being here today.
    How is the $202 million that was spent, how has that been 
implemented?
    Admiral Phillips. Sir, thank you for that question.
    It is correct that we have awarded over $200 million in 
grants to projects for port infrastructure development that 
have a connection to offshore wind. However, all of those grant 
projects that are in those ports support work that those ports 
would need anyway. They improve wharves. They improve 
transportation in and out of the port. They improve utilities.
    In fact, in New Jersey alone, a grant was awarded last 
year. That particular port is in part connected to offshore 
wind ostensibly, but all of the obligations and requirements in 
the application are related to utilities development. So, 
improving lighting, improving sewage, improving water, 
improving the infrastructure along the waterfront.
    So, I would submit that while these ultimate grant 
opportunities are in support of offshore wind, the work that is 
being done to strengthen these ports provides opportunities for 
those ports irrespective of what their ultimate cargo becomes.
    Dr. Van Drew. Thank you.
    If I am correct and offshore wind turns out to be 
nonviable--let's just pretend that it doesn't go anywhere--
those improvements are still well spent? You believe they will 
be utilized even without these offshore wind projects?
    Admiral Phillips. I do believe they will be used 
irrespective of the ongoing work in offshore wind or not.
    Dr. Van Drew. Do you believe the benefits of the funding 
outweigh the needs of other parts of MARAD's accounts, such as 
the Ship Disposal Program and the Tanker Security Program?
    Admiral Phillips. Sir, those programs are funded in 
separate lines, and certainly the discretionary grant program 
is meant for a specific outcome, which is improving the 
movement of goods, and it supports that.
    Dr. Van Drew. I understand they are in separate lines, but 
money, as they always taught me, is fungible, and that's 
dollars that could be used for other functions. And that is why 
I think we have to look at this carefully.
    Do you know if there are plans to ask for more money to 
fund offshore wind one way or another, even though the funds 
have already allocated to these projects previously?
    Admiral Phillips. Sir, MARAD's contributions to offshore 
wind support include port infrastructure development, as you 
have discussed, and also support through our Title XI 
shipbuilding program. Those are the two areas where we are most 
engaged in offshore wind opportunities.
    Dr. Van Drew. So, I know you can't answer this question in 
your position, but I was going to ask if you believe offshore 
wind is still a worthy investment. And I know you are going to 
give me a really good answer that that is not your job to 
determine, something along those lines.
    But I would think it's not, and I think that in these 
really frugal times, as you hear this committee talk about 
investments that they would like to see in other areas that are 
very much needed and are pending, that we perhaps could spend 
our money better.
    Appreciate your answers. To me, the offshore wind 
developments are a waste of taxpayers' money and MARAD's money 
when it is exclusively for them.
    I would urge the administration to stop spending money on 
those projects. And for some of these other good projects we 
have, in my mind and many others', they still actually pose a 
threat to maritime safety, to navigation, to fishing, to the 
whales, to the environment, to tourism, and to our utility 
rates, which I know is something you don't deal with.
    But our utility rates are going to increase significantly, 
drastically because of them. So, I am hopeful that we don't go 
forward with them.
    Thanks for your answers.
    And, Chairman, I yield back.
    Mr. Webster of Florida. Thank you.
    Mr. Auchincloss, you are recognized for 5 minutes.
    Mr. Auchincloss. Thank you, Chairman.
    Chairman Maffei, welcome. Appreciate your time.
    Last year, my colleague Mr. Ezell and I sent a letter to 
the Commission advocating for FMC to use its existing authority 
to establish a National Port Advisory Committee that would be 
comprised of public port authorities, marine terminal 
operators, and maritime labor organizations.
    This establishment of this committee would provide the 
maritime industry with the opportunity to share their concerns 
to the Commission regarding potential regulatory impacts on 
operations at America's ports and marine terminals.
    Do you support the establishment of a National Port 
Advisory Committee? And, if so, how can Congress help you to 
implement this?
    Mr. Maffei. Thank you, Mr. Auchincloss.
    I certainly support that we need to hear from all of those 
groups of people, and we need to hear from them often. And 
myself and all of the four Commissioners spend a lot of time 
communicating with those.
    I would say on a specific--I won't comment on specific 
legislation, but I do think in the long run, certainly it is 
very important.
    Here is my concern, and that is that we have one 
statutorily provided for committee that is a shippers 
committee, half exporters, half importers. It is a good thing 
to have. And I certainly support the principle, as I support 
the principle of what you are talking about.
    The danger, though, is that the assumption was that it 
would cost no money. And it does end up costing some money. I 
am not saying it is a huge amount of money. But the group has 
decided that it has, I think, quite a few meetings, not in 
Washington. We have to make sure that they follow open meeting 
laws and have IT support. And, therefore, we are often faced 
with either having to send a staffer or two across the country.
    We are not a big agency like Admiral Phillips' agency. So, 
even if small--I am kidding about that. We both come from very 
modest agencies. But we can't necessarily do that without a 
specific line item.
    So, I guess what I would say, to make it easier, if you do 
propose this, then definitely include the funding for it.
    The last thing I will say, though, is that if we want to do 
it, ideally, maybe they should all be one advisory committee. I 
am not sure whether having three or four advisory committees is 
the right way of going about it. It is certainly better than 
not hearing from these groups at all.
    But one of the advantages of these sort of committees is 
that it facilitates not only communication with us--which is 
very important. It came in handy, by the way, to have the 
shippers committee to find out what each one of them's 
experience was with Baltimore. But it is very important to have 
an exchange among the various stakeholders.
    So, I certainly support the principle. Not sure if I 
support the specifics.
    Mr. Auchincloss. All right. I appreciate the financial 
constraints and would support dedicated funding for those 
advisory committees, and also open to suggestions, as you put 
forward, about how we might synthesize them.
    And I would encourage you, as I know you do with your 
background as a Member in constituent services, is to continue 
to work through that shoe leather in getting input from the 
terminal operators in the ports as really as your constituents.
    Rear Admiral Phillips, thank you for your testimony today. 
I am a member of the Select Committee on China, and an area of 
significant concern for me is China's rapidly expanding 
shipbuilding capacity. Recent estimates indicate that China's 
current capacity is about 200 times the United States' capacity 
for shipbuilding, and its military and commercial fleets are 
rapidly expanding.
    There have been arguments that their quality is below ours. 
That is debatable. And what is not debatable is that quantity 
has a quality all of its own. When they are building that many 
ships, it matters.
    You mention in your testimony the important of 
recapitalizing the Ready Reserve Force and the commercial 
sealift programs. Can you speak to the importance of the 
President's budget request and what modifications or expansions 
of Title XI you might advocate for so that we can help you 
build more ships?
    Admiral Phillips. So, sir, thank you for that question.
    As you are aware, Title XI is a loan program that allows us 
to support industry in the capacity of being able to build 
vessels in this country. We have designated offshore wind 
vessels as Vessels of National Interest and have eight 
applications underway right now, many of which are related to 
offshore wind but not all. And, in fact, we are also allowed to 
loan money to ports for improvements, and we have one port loan 
in progress.
    So, the challenge with Title XI is that it takes some time, 
but the good news is that we pay or are allowed to loan to 
borrowers who may find themselves dealing with higher interest 
rates if they were to go into another program on the open 
market.
    So, our opportunity there is to expand capacity to continue 
to provide opportunities for builders to gain access to funds, 
to be able to build vessels. And that, of course, improves and 
expands our U.S.-flag fleet, particularly Jones Act fleet, as 
well.
    Mr. Auchincloss. As I indicated to you earlier, I would 
like to work with your office on legislation around Title XI to 
see how we can give you as many tools as possible to widen our 
shipbuilding pipeline in this country in the most cost-
effective way possible. So, I look forward to working with you 
on that.
    Admiral Phillips. Thank you, sir.
    Mr. Auchincloss. I yield back.
    Mr. Webster of Florida. Representative Scholten, you are 
recognized for 5 minutes.
    Ms. Scholten. Thank you so much, sir, and thanks for having 
this important hearing.
    This year's budget request, obviously, is noticeably 
smaller. We are going to be hitting on some of the same themes. 
But I think it is important to distill this.
    Obviously, the fiscal year 2025 request is about $110.66 
million lower, 11.4 percent.
    To both of you, can you give us a distillation of the 
impact on maritime performance as a country? And what should 
Congress keep in mind as we continue to look to be good 
partners?
    Admiral Phillips. Thank you, ma'am, for that question.
    I think what the industry broadly needs to see from 
Congress, budget request notwithstanding--we support the 
President's budget--is a clear signal that shipbuilding, that 
cargo--and, of course, we have, within MARAD, we are very 
focused on meeting DoD requirements.
    So, we have the fleet that our current requirements and our 
authorizations and our appropriations provide, and that is 
largely based on DoD requirements.
    So, signals to the industry that there is interest in 
sustaining long-term growth in the shipbuilding industry, long-
term cargo access for U.S.-flag vessels, in particular. And 
that then generates long-term job opportunities for mariners 
that keep people in industry.
    So, that is my primary focus, is U.S.-flag vessels, cargo 
for them to carry to meet our Nation's needs, and a sustained 
opportunity for U.S. mariners which will help us bring more 
mariners in, not only bring them in but retain them, keep them 
in the industry, ensuring their safety, ensuring the best 
quality of life possible for them.
    So, that is broadly the kind of signal that we need to see 
from Congress so that the industry knows they can move forward. 
Tying into that is an opportunity build those ships here, which 
then gives us an opportunity to build and sustain shipbuilding 
capacity, which not only supports the broader industry, the 
Jones Act fleet, but also our military capacity in 
shipbuilding, as well.
    So, it all ties together, but what industry wants to see is 
a clear signal from Congress that sustained interest and growth 
beyond the TSP program and things that we have managed to 
accomplish that have grown the fleet are there and will 
continue to be there for the future of the industry.
    Ms. Scholten. OK. Thank you.
    Mr. Maffei. As a regulatory agency, of course, our direct 
jurisdiction doesn't cover most of this. But since you asked--
--
    Ms. Scholten [interposing]. Yes.
    Mr. Maffei [continuing]. What I will say is the bipartisan 
infrastructure bill was very important, but it was like a down 
payment. If we really want to take full advantage of the ocean 
carriage in this country, we are probably going to need a lot 
more investment.
    The issue is that of supply chain resiliency. And I 
mentioned it a bit with Baltimore, our ports, but also a lot of 
the issues that happened during COVID, though there were issues 
at the ports, actually happened inland. I think I was quoted as 
saying if you build a bridge in Indiana, you are still helping 
me as Federal Maritime Commission Chair. And that is true.
    The biggest issue probably facing the Baltimore port, as we 
move forward and reopen the channel, is the fact that that 
bridge is down. Wait a minute? What does the bridge have to do 
with maritime? It has everything to do with maritime. A port is 
where water meets the land.
    So, I would just say, to the extent that you and your 
colleagues can work on it in a bipartisan way, we could use 
more investment, particularly in our ports, but, frankly, in 
our infrastructure all across America.
    Ms. Scholten. Thank you, sir. Very helpful.
    One more question.
    Rear Admiral Phillips, your testimony touches on the U.S. 
Marine Highway Program, and you mentioned how funding awarded 
this last year will support eight projects across the Nation.
    I am particularly excited to hear that nearly all the 
funding is supporting projects in disadvantaged communities or 
federally designated community development zones.
    Can you share where these projects are, and specifically if 
any of them are in the Great Lakes region?
    Admiral Phillips. So, ma'am, I will take that for the 
record because I don't think I can spout them out by memory 
here.
    But what I will say about the U.S. Marine Highway Program 
generally is this is a program with tremendous capacity to do 
more for our Nation. And it is chronically short of resources, 
and there is always an excess in applications for need.
    The one $25 million infusion we got under BIL, there was a 
significant increase in the amount of applications that year, 
and there is certainly a need.
    And particularly from an inland perspective of, I hear, 
when I talk to inland ports and port operators continually: We 
could use more money here. This is another opportunity for us 
to expand capacity.
    And it works well with PIDP. It can support things in a 
slightly different way.
    But there certainly is an opportunity there and an 
opportunity to move more goods on water, and there is plenty of 
capacity there. So, tremendous opportunity with that program.
    Ms. Scholten. Yes, I agree and will look forward to your 
response for the record.
    Thank you. I yield.
    Mr. Webster of Florida. OK. Well, first of all, I don't see 
any other questions.
    I thank the witnesses for being here. Thank you for your 
testimony. Really appreciate that.
    And with that, the meeting is adjourned.
    [Whereupon, at 3:37 p.m., the subcommittee was adjourned.]



                                Appendix

                              ----------                              


   Questions to Ann C. Phillips, Rear Admiral, U.S. Navy (Ret.), and 
 Administrator, Maritime Administration, from Hon. Jenniffer Gonzalez-
                                 Colon

    Question 1. Puerto Rico has benefited from the Port Infrastructure 
Development Program. Projects financed under these grants include the 
$10 million for the Pier 15 RO/RO Terminal that serves inter-island 
commerce. In recent years, our port operators have submitted 
applications every time they have been eligible, and I expect this to 
continue to be so. I will be supporting the continued funding of this 
program as well as of others in the budget request. What does MARAD see 
as the highest priorities in the upcoming years for this sort of grant? 
As in, what is the most urgent area of port infrastructure focus in the 
short and medium term?
    Answer. MARAD's priorities for the PIDP are derived directly from 
the legislation authorizing the program (46 U.S.C. Sec.  54301). MARAD 
continues to see overwhelming demand for port projects throughout the 
Nation that meet the statutory purpose of ``improving the safety, 
efficiency, or reliability of the movement of goods through ports and 
intermodal connections to ports.'' MARAD will continue to assess PIDP 
applications on the basis of statutory criteria and award grants to 
those projects that best address those statutory criteria.

    Question 2. Just last week my District Office had its Open House 
for students interested in the Service Academies including the Merchant 
Marine. One of the key selling points of the Academies is the notion 
that prospective attendees are headed for an environment that is 
strictly meritocratic and where they can feel safe. What can you advise 
us on progress of the Academy's Sexual Assault Prevention and Response 
Office and the Advisory Council recommendation process, and on the 
implementation of the recommendations to reduce incidents of harassment 
and violence?
    Answer. I'm pleased to report that the U.S. Merchant Marine Academy 
(USMMA) has significantly increased Sexual Assault and Sexual 
Harassment (SASH) Prevention and Response-focused resources and 
programming and, in so doing, has made gains in campus culture--while 
increasing awareness of, and building trust in, the SASH-incident-
reporting and investigation process. This effort continues to be driven 
by the Academy's Sexual Assault Prevention and Response Office (SAPRO), 
the mission of which is to prevent and respond to relationship and 
sexual misconduct against Midshipmen, including sexual assault, sexual 
and gender-based harassment, stalking, relationship violence, and 
retaliation. The office is currently staffed by a Director, a Sexual 
Assault Response Coordinator, and two Victim Advocate/Prevention 
Educators, one of whom focuses on misconduct at sea, and is an alum and 
a U.S. Navy Strategic Sealift Officer. SAPRO is dedicated to supporting 
USMMA's students, faculty, and staff by providing effective prevention 
training and robust victim advocacy. Each year, USMMA publishes a Plan 
of Action in its Annual Report on Sexual Assault and Sexual Harassment 
[https://www.usmma.edu/sites/
usmma.dot.gov/files/2024-06/Final%202022-2023%20Sexual%20Assault%20and
%20Sexual%20Harassment%20Report%20to%20Congress.pdf], recently released 
to Congress. This academic year's (AY 2022-2023) Plan of Action can be 
found on page 13 of the report.
    Based on its data collection, the contractor provided 
recommendations, which USMMA is incorporating into updates of its 
policies and practices. In revising its policy, USMMA will also 
consider the revised Title IX rule issued by the U.S. Department of 
Education in April 2024, and the experience of USMMA's Sexual Assault 
Review Board with administration of the current policies and 
procedures.
    On July 13, 2023, MARAD announced the 13 members of the USMMA 
Advisory Council. The Appointees to the Advisory Council are drawn from 
academia, the maritime industry and maritime labor, the senior ranks of 
the U.S. military, and five federal agencies: the Coast Guard, the 
Military Sealift Command, the Naval War College, the Department of 
Health and Human Services, and the Naval Facilities Engineering Systems 
Command. The Council members include experts in higher education 
administration and sexual assault and sexual harassment prevention and 
response.
    On August 7 and November 16, 2023, the Advisory Council met to 
discuss and formulate independent advice and recommendations on 
improving the Academy, including in the areas of curriculum development 
and training programs; diversity, equity, and inclusion; sexual assault 
prevention and response; infrastructure maintenance and redevelopment; 
Midshipmen health and welfare; governance and administrative policies; 
and other matters. As part of this work, the Council will develop 
strategies and recommendations to address the issues identified in the 
2021 National Academy of Public Administration's (NAPA) Comprehensive 
Assessment of the U.S. Merchant Marine Academy report. The first set of 
recommendations are due in Summer 2024.

    Question 3. Security in our maritime transportation industry is 
highly important. Puerto Nuevo Terminals, the private consortium that 
operates part of the container facilities in San Juan, was subjected 
last April 20 to a ransomware cyber-attack that, although it failed to 
stop operations, created serious delays in cargo movement and truck 
dispatch for a number of days. The FBI office in Puerto Rico is 
investigating the situation. On the maritime operations side, how is 
MARAD working with its partners to identify and address vulnerabilities 
of the fleet and its shoreside support, to this sort of trade 
disruption?
    Answer. MARAD works with the U.S. Coast Guard (USCG), Cybersecurity 
& Infrastructure Security Agency (CISA), and other U.S. government 
agencies on the continuing development of maritime cybersecurity policy 
and the dissemination of maritime threat (including cybersecurity) 
information to U.S.-flag maritime industry stakeholders, but maritime 
cybersecurity regulation and incident response is outside of the 
authorities and capabilities of MARAD; they reside with the USCG, CISA, 
and the Department of Justice's Federal Bureau of Investigation.
    The U.S. Maritime Alert and Advisory System, which is described in 
detail at http://www.maritime.dot.gov/msci, is a communication tool 
used by MARAD, the U.S. Coast Guard, and others to share information 
with maritime industry stakeholders on cybersecurity policy 
developments and threats, in addition to other maritime threat and 
resource information.