[House Report 111-243]
[From the U.S. Government Publishing Office]


111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    111-243

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



 
                   MARITIME WORKFORCE DEVELOPMENT ACT

                                _______
                                

 July 31, 2009.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Oberstar, from the Committee on Transportation and Infrastructure, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 2651]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 2651) to amend title 46, United 
States Code, to direct the Secretary of Transportation to 
establish a maritime career training loan program, and for 
other purposes, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                       Purpose of the Legislation

    H.R. 2651, the ``Maritime Workforce Development Act'', 
establishes a maritime career training loan program that will 
provide assistance to merchant mariners who are enrolled in a 
course of study to obtain or upgrade a document or license. 
H.R. 2651 also establishes a program to award grants to 
maritime training institutions to enable them to carry out 
demonstration projects that will support the development and 
implementation of new methods of recruiting, training, and 
retaining individuals in the maritime workforce.

                  Background and Need for Legislation

    According to statistics released by the Maritime 
Administration in 2007, 95 percent of U.S. foreign trade is 
moved by ship--and foreign trade has comprised an increasing 
share of our national Gross Domestic Product (GDP) in recent 
years.\1\ Thus, while foreign trade (including all imports and 
exports) comprised 13 percent of GDP in 1990, it comprised 
nearly 22 percent of national GDP in 2006 and is projected to 
potentially comprise as much as 35 percent of national GDP by 
2020. In 2007, the Maritime Administration reported that the 
U.S. marine transportation system ``supports 13 million 
jobs.''\2\
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    \1\Maritime Administration, The Maritime Administration and the 
U.S. Marine Transportation System: A Vision for the 21st Century, 5 
(2007).
    \2\Id.
---------------------------------------------------------------------------
    Looking at just one facet of the maritime industry--the 
container trade--the Bureau of Transportation Statistics (BTS) 
in its Maritime Trade and Transportation 2007 assessment found 
that world container traffic had experienced an average annual 
growth rate of more than 10 percent between 1995 and 2006.\3\ 
In that same time period, total container flows through the 
United States increased at an average annual rate of 6.8 
percent; in 2006, the United States was second in the world in 
terms of share of world container traffic.\4\
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    \3\BTS, Maritime Trade & Transportation 2007 37 (2007).
    \4\Id.
---------------------------------------------------------------------------
    BTS also reported that between 2002 and 2007, U.S. water 
transportation had been ``in a period of renewal and expansion 
with a 24% increase in gross output, a 22% increase in value 
added (gross output less intermediate output), a 35% increase 
in industry assets, and over 6,000 jobs added over the last 5 
years.''\5\
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    \5\Id. at 49.
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    In addition, BTS reported that in 2006, there were 
approximately 162,000 jobs in the U.S. water transportation 
sector--up from nearly 148,000 jobs recorded in the industry in 
2002. BTS reported that of these 162,000 jobs, more than 61,000 
jobs were in water transportation, including more than 38,000 
jobs in sea, coastal, and Great Lakes transportation, and 
nearly 23,000 jobs were in inland water transportation.
    Looking at the ``Jones Act'' fleet, which conducts the 
domestic coastwise trade between U.S. ports, the Maritime 
Administration reported in 2007 that this fleet was comprised 
of more than 38,000 vessels and that ``[b]uilding and 
maintaining the Jones Act fleet sustains roughly 150,000 jobs 
throughout the U.S. economy.''\6\
---------------------------------------------------------------------------
    \6\Maritime Administration, The Maritime Administration and the 
U.S. Marine Transportation System: A Vision for the 21st Century 7 
(2007).
---------------------------------------------------------------------------
    However, the ongoing global economic downturn has had an 
impact on world and U.S. shipping volumes. In testimony before 
the Subcommittee on Coast Guard and Maritime Transportation, 
the Federal Maritime Commission (FMC) reported that ``[i]n 
fiscal year 2008, the total volume of U.S. liner exports 
shipped worldwide grew by 15%, while imports declined by 6%;'' 
however, the FMC noted that ``[t]hese growth rates mask the 
dramatic recent declines in cargo volumes.''\7\ Further, the 
FMC reported that ``roughly 11% of the global containership 
capacity lays idle.'' However, these declines are expected to 
be temporary and volumes are expected to rebound after economic 
growth resumes. Additionally, the newly expanded Panama Canal 
will open in 2014--allowing significantly larger vessels to 
call on East Coast ports, provided that port infrastructure is 
upgraded to accommodate such vessels.
---------------------------------------------------------------------------
    \7\FY 2010 Budget Requests of the Coast Guard, Maritime 
Administration, and the Federal Maritime Commission: Hearing before the 
House Subcommittee on Coast Guard and Maritime Transportation, 111th 
Cong. 2 (2009) (statement of Joseph E. Brennan, Commissioner of the 
Federal Maritime Commission).
---------------------------------------------------------------------------
    When the U.S. water transportation sector resumes its 
growth, the industry may face a labor shortage--particularly in 
on-the-water jobs--that could leave the United States without 
the workforce it needs to meet the demands that renewed growth 
in the maritime industry will create. In October 2007, at a 
hearing convened by the Subcommittee on Coast Guard and 
Maritime Transportation to examine trends in the maritime 
workforce, the Coast Guard indicated that the average age of a 
merchant mariner with a Master's license was 51, and the 
average age of a Chief Engineer was 50. At that time, more than 
28 percent of inland pilots and captains were over the age of 
55 and would be eligible to retire in the next five years. 
Approximately 216,000 individuals hold a professional merchant 
mariner's credential.
    Additionally, the 1995 Amendments to the Convention on the 
Standards of Training, Certification, and Watchkeeping have 
imposed significant new standards for training and continuing 
education on mariners around the world, including in the United 
States. The 1995 Amendments entered into force on February 1, 
1997, and all mariners were required to comply with the 
Amendments by February 1, 2003. U.S. mariners are subject to 
the 1995 Amendments if they sail beyond the U.S. boundary line 
(the boundary line separates the bays, harbors, and other 
inland waters from the ocean) on commercial vessels, even if 
the vessel is not on a voyage to a foreign country. Mariners 
are exempt from the requirements if they sail on vessels less 
than 200 gross tons on domestic voyages that begin and end in a 
U.S. port.
    The 1995 Amendments were adopted to improve safety in the 
maritime industry by ensuring that mariners are adequately 
trained for the positions they fill and, thus, that human 
factors will be reduced as the cause of maritime accidents. 
However, the 1995 Amendments have also had the effect of 
imposing expensive and time-consuming training requirements on 
mariners--particularly on those who are looking to upgrade a 
document or license to move up the career ladder. In essence, 
the 1995 Amendments created unfunded training and certification 
mandates for unlicensed mariners who had traditionally 
progressed to licensed officer positions through on-the-job 
training. The new standards raised the bar for new workers 
seeking to advance in a maritime career and have caused a 
significant number of older workers to retire early.
    The costs of obtaining a Master's or Mate's license can be 
as much $26,000 for the specialized training and certifications 
required by the 1995 Amendments. Ms. Berit Eriksson, testified 
before the Subcommittee that the Pacific Coast Maritime 
Consortium obtained a grant to provide training to mariners and 
found that it took ``a little more than two years for an 
unlicensed mariner working in the towing industry to complete 
all the certifications required for a third mate towing license 
at an approximate cost of $16,000 just for the courses.''\8\
---------------------------------------------------------------------------
    \8\Mariner Education and Workforce: Hearing before the House 
Subcommittee on Coast Guard and Maritime Transportation, 110th Cong. 47 
(2007) (statement of Berit Eriksson, Former Executive Director of the 
Pacific Coast Maritime Consortium).
---------------------------------------------------------------------------
    Employers in the maritime industry have traditionally 
provided little or no funding to help employees cover the costs 
of training, and there is growing concern within the maritime 
industry that the cost and complexity of meeting 1995 Amendment 
requirements for license renewals and/or upgrades is reducing 
the pool of potential seafarers.
    Importantly, maritime training programs are unique and are 
unlike typical two-year or four-year educational programs. 
Maritime training programs courses can be multi-week or multi-
month programs and mariners take such classes on a frequent 
basis to obtain certification in a specific new qualification. 
Due to the short course length and the frequency of enrollment 
in new courses, the costs of these programs are not easily 
served by existing student loan programs.
    In the 110th Congress, the Subcommittee held a hearing to 
consider trends in the maritime workforce on October 17, 2007. 
The Subcommittee received testimony on trends and innovations 
in mariner education and assessed how growing workforce 
shortages will affect the maritime industry and U.S. trade. The 
hearing also considered the possible impact of various factors 
on workforce shortages, including: wage levels; lifestyle 
challenges associated with employment in the maritime industry; 
and training requirements imposed by the Standards of Training, 
Certification, and Watchkeeping Convention.
    Witnesses testified about the significant challenges they 
have recruiting and retaining vessel personnel; they also 
discussed the challenges mariners face as they attempt to move 
from entry-level jobs on deck to become Masters or, similarly, 
to move from entry-level positions in the engine room to become 
Chief Engineers. Witnesses suggested that Federal assistance 
could be provided to support mariner education programs. The 
then-Administrator of the Maritime Administration, Sean 
Connaughton, also indicated that a major recapitalization was 
occurring in practically every segment of the U.S. merchant 
fleet and that towing, passenger, and offshore operators were 
all reporting workforce shortages.
    Witnesses also testified about the growth of maritime-
themed high schools across the United States. Captain Art 
Sulzer, a member of the Board of the Maritime Academy Charter 
High School in Philadelphia, Pennsylvania, testified about his 
research on maritime-themed high school education in support of 
his doctoral dissertation; he testified that through his 
research, he had identified 16 maritime middle and high 
schools.\9\ Such high schools--several of which are located in 
inner-city areas--are developing maritime programs that 
complement the traditional core high school curriculum and that 
can prepare a student to obtain an entry-level mariner 
qualification or to pursue education at a maritime training 
program or a state maritime academy.
---------------------------------------------------------------------------
    \9\Mariner Education and Workforce: Hearing before the House 
Subcommittee on Coast Guard and Maritime Transportation, 110th Cong. 45 
(2007) (statement of Captain Art Sulzer, Board Member of the Maritime 
Academy Charter High School).
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                       Summary of the Legislation


Section 1. Short title

    Section 1 states the legislation may be referred to as the 
``Maritime Workforce Development Act''.

Sec. 2. Maritime Education Loan Program

    Section 2 adds a new section 51705 to chapter 517 of title 
46, United States Code. Within new section 51705, subsections 
(a) through (d) establishes a program to make loans available 
to eligible students to fund their training in the maritime 
industry. The Secretary of Transportation (Secretary) is 
required to carry out the program established by this section 
acting through the Administrator of the Maritime 
Administration. The Secretary is also directed to develop an 
application process and allocate loans based on a student's 
needs.
            Subsection (e). Designation of maritime training 
                    institutions
    Subsection (e) permits the Secretary to designate Federal, 
State, commercial training institutions, and nonprofit training 
organizations as institutions eligible to participate in the 
maritime loan program; however, undergraduate students at the 
U.S. Merchant Marine Academy are not eligible for loans. In 
designating eligible institutions, the Secretary is required to 
consider geographic diversity and the scope of classes offered 
by institutions and to ensure that eligible institutions have 
the ability to administer the loan program and meet all 
requirements to provide Coast Guard-approved training.
    Subsection (e)(2) allows the Secretary to exclude maritime 
training institutions from participating in the loan program if 
they had severe performance deficiencies, including 
deficiencies demonstrated by audits or program reviews 
conducted within the five previous years. The Secretary is also 
directed to exclude from participation in the loan program 
those maritime training institutions with delinquent or 
outstanding debts to the United States. Further, the Secretary 
may exclude those institutions that have failed to comply with 
quality standards established by the Department of Labor, the 
Coast Guard or a State and those institutions that fail to meet 
other criteria established by the Secretary to protect the 
financial interest of the United States.
            Subsection (f). State maritime academies
    Subsection (f) allows the Secretary to obligate up to 50 
percent of funds appropriated during a fiscal year to the loan 
program to provide loans to undergraduate students at State 
maritime academies. Students receiving loans must maintain a 
cumulative C or equivalent average or academic standing 
consistent with the graduation requirements of the academy they 
are attending.
            Subsection (g). Loan amounts and use
    Subsection (g) limits loans to an individual student to 
$15,000 per calendar year or $60,000 in the aggregate. This 
subsection further specifies that loans may only be used at 
designated training institutions for postsecondary expenses 
including books, tuition, required fees, travel to and from the 
institution, and room and board.
            Subsection (h). Student eligibility
    Subsection (h) establishes eligibility requirements for 
students seeking a loan under the program. To be eligible for a 
loan, students must be able to hold a license or merchant 
mariner document issued by the Coast Guard; meet the enrollment 
criteria of a designated maritime training institution; and 
sign an agreement requiring the student to complete his/her 
course of study and subsequently maintain a license or document 
and serve as an officer or unlicensed mariner in the merchant 
marine on a documented vessel or vessel owned and operated by 
the United States for at least 18 months of sea service--
including service on ocean-going vessels, on the inland and 
coastal waterways, on the Great Lakes, or in a maritime 
industry position requiring a license or document--following 
the date of graduation. Students must also provide such 
information as the Secretary may require from the student.
            Subsection (i). Administration of loan
    Subsection (i) requires that loans be evidenced by a 
written agreement between the student borrower and the 
Secretary. This written agreement must provide for the 
repayment of the loan principal and any origination fees in 
equal installments payable quarterly, bimonthly, or monthly at 
the student's option over a period beginning nine months from 
the date on which the student completes or discontinues the 
course of study for which the student received the loan; 
repayments shall be completed within 10 years. The written 
agreement must also provide for acceleration of repayment at 
the option of the student; provide the loan without security; 
provide that the liability to repay the loan shall be cancelled 
upon the death of the student borrower; contain a notice of the 
system through which information about default on the loan 
shall be provided to credit bureaus; and include provisions for 
the deferral of repayment as determined by the Secretary.
    This subsection also details the rates of interest that 
will be assessed on loans; these rates will vary depending on 
when the first disbursement of funds is made.
    Further, the subsection details specific, written 
disclosures that must be made to a loan recipient. Such 
disclosures must include the address to which repayments are to 
be sent; the principal amount of the loan and of all related 
charges; the interest rate to be paid; the yearly and 
cumulative total that the student may still borrow; an 
explanation of options for loan consolidation or refinancing; 
and related information.
    This subsection authorizes the Secretary to require any 
student borrower in default on a loan to pay reasonable 
collection costs and to repay the loan pursuant to an income 
contingent repayment plan. The subsection also authorizes the 
Secretary to prescribe regulations reducing interest rates or 
origination fees as appropriate to encourage on-time loan 
repayment; such reductions may be offered only if they are cost 
neutral and in the best financial interest of the United 
States.
    This subsection requires the Secretary to exercise due 
diligence in collecting loan repayments, including garnishing a 
loan recipient's wages if necessary. The subsection authorizes 
the Secretary to enter into a contract or other arrangement 
with a State or nonprofit agency and, on a competitive basis, 
with collection agencies to ensure the servicing and collection 
of loans.
            Subsection (j). Revolving loan fund
    Subsection (j) requires the Secretary to establish a 
revolving loan fund that shall consist of loan and interest 
repayments received from borrowers and other monies paid by or 
on the behalf of individuals under the loan program. The funds 
available in the revolving loan fund are to be available 
without further appropriation to cover the administrative costs 
of the loan program and to make loans under the program.
            Subsection (k). Annual report
    Subsection (k) requires the Secretary to submit an annual 
report that details the number of students who received loans 
in the previous year, the total amount of loans dispersed in 
the previous year, and the total amount of loans that are in 
default.
            Subsection (l). Authorization of appropriation
    Subsection (l) authorizes the appropriation in each of 
fiscal years 2010 through 2015 of $10,000,000 to pay for loans 
under the loan program, and of $1,000,000 to cover the 
administrative expenses of this program.
    Section 2 also adds section 51706, Maritime recruitment, 
training, and retention grant program, to Chapter 517 of title 
46.
            Subsection (a). Strategic plan
    Subsection (a) of section 51706 requires that not later 
than one year after the date of enactment and at least once 
every three years thereafter, the Maritime Administration shall 
publish a plan that describes the demonstration, research, and 
multistate project priorities of the Department of 
Transportation concerning merchant mariner recruitment, 
training, and retention for the three-year period following the 
date of the publication of the plan. The plan shall contain 
strategies and identify potential projects to address merchant 
mariner recruitment, training, and retention issues in the 
United States.
    In developing this required plan, the Secretary shall 
consult with representatives of the maritime industry, labor 
organizations, other governmental entities and parties with an 
interest in the maritime industry. The plan shall consider, 
among other things, the results of existing research on these 
topics as well as the benefits of economies of scale and the 
efficiency of potential projects.
            Subsection (b). Demonstration projects
    Subsection (b) authorizes the Secretary to award grants to 
a maritime training institution to support demonstration 
projects that will implement the priorities identified in the 
Maritime Administration's plan on mariner recruitment, 
training, and retention. The Secretary shall establish 
guidelines and requirements to govern the award of grants on a 
competitive basis.
    Maritime training institutions wishing to apply for grants 
under this program must submit a grant proposal that must 
include, at a minimum, information demonstrating the estimated 
effectiveness of the proposed project as well as a method by 
which the effectiveness of the project can be evaluated.
    Projects eligible to receive grant funding may include:
           the establishment of maritime technology 
        skills centers to meet the unmet skills needs of the 
        maritime industry;
           projects that provide training to maritime 
        workers;
           projects that promote the use of distance 
        learning among maritime workers, using the internet or 
        other technologies;
           projects that provide services to support 
        the recruitment to the maritime industry of youth 
        residing in targeted high poverty areas within 
        empowerment zones and enterprise communities, including 
        for example the development of turn-key curriculum 
        packages intended for middle or high school-level 
        students and the development of strategic partnerships 
        between high schools and maritime entities to provide 
        internships or other educational training 
        opportunities;
           the establishment of partnerships with 
        national and regional organizations that have special 
        expertise in developing, organizing, and administering 
        merchant mariner recruitment and training services; 
        and,
           the establishment of maritime training 
        programs that foster technical skills and operational 
        productivity in communities with economies related to 
        or dependent on the maritime industry.
            Subsection (c). Projects authorized
    Subsection (c) authorizes the Secretary to award grants to 
support projects that will: design, develop and test a variety 
of ways of providing services to recruit, retain, or train 
people in one or more targeted populations; test various 
training approaches to determine effective practices; or 
develop and replicate service delivery strategies throughout 
the maritime industry as a whole. Research projects and 
multistate or regional projects are eligible to receive grants. 
The Secretary shall establish guidelines and requirements and 
award grants on a competitive basis.
            Subsection (d). Authorization of appropriations
    Subsection (d) authorizes the appropriation in each of 
fiscal years 2010 through 2015 of $10,000,000 to support the 
award of grants, and of $1,000,000 to cover the costs of 
administering this program.

            Legislative History and Committee Consideration

    On June 2, 2009, Coast Guard and Maritime Transportation 
Subcommittee Chairman Elijah E. Cummings introduced H.R. 2651. 
On June 4, 2009, the Committee on Transportation and 
Infrastructure met in open session, and ordered the bill 
reported favorably to the House by voice vote with a quorum 
present.

                              Record Votes

    Clause 3(b) of rule XIII of the House of Representatives 
requires each committee report to include the total number of 
votes cast for and against on each record vote on a motion to 
report and on any amendment offered to the measure or matter, 
and the names of those members voting for and against. There 
were no recorded votes taken in connection with consideration 
of H.R. 2651 or ordering the bill reported. A motion to order 
H.R. 2651 reported favorably to the House was agreed to by 
voice vote with a quorum present.

                      Committee Oversight Findings

    With respect to the requirements of clause 3(c)(1) of rule 
XIII of the Rules of the House of Representatives, the 
Committee's oversight findings and recommendations are 
reflected in this report.

                          Cost of Legislation

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives does not apply where a cost estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974 has been timely submitted prior to the filing of the 
report and is included in the report. Such a cost estimate is 
included in this report.

                    Compliance With House Rule XIII

    1. With respect to the requirement of clause 3(c)(2) of 
rule XIII of the Rules of the House of Representatives, and 
308(a) of the Congressional Budget Act of 1974, the Committee 
references the report of the Congressional Budget Office 
included in the report.
    2. With respect to the requirement of clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, the 
performance goals and objectives of this legislation are to 
create a maritime career program that will provide loans to 
merchant mariners who are enrolled in a course of study with 
the purpose of obtaining or upgrading a document or license. 
H.R. 2651 also establishes a program to award grants to 
maritime training institutions to enable them to carry out 
demonstration projects that will support the development and 
implementation of new methods of recruiting, training, and 
retaining individuals in the maritime workforce.
    3. With respect to the requirement of clause 3(c)(3) of 
rule XIII of the Rules of the House of Representatives and 
section 402 of the Congressional Budget Act of 1974, the 
Committee has received the enclosed cost estimate for H.R. 2651 
from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 13, 2009.
Hon. James L. Oberstar,
Chairman, Committee on Transportation and Infrastructure,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2561, the Maritime 
Workforce Development Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Daniel 
Hoople.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.
    Enclosure.

H.R. 2561--Maritime Workforce Development Act

    Summary: H.R. 2561 would authorize appropriations totaling 
$110 million over the 2010-2014 period, and $22 million in 
2015, for the Maritime Administration to provide loans for 
students attending certain maritime training institutions. Such 
funding also would be used to award grants to those 
institutions to increase the recruitment, training, and 
retention of merchant mariners. Assuming appropriation of the 
specified amounts, CBO estimates that implementing the bill 
would cost about $90 million over the 2010-2014 period, and $42 
million after 2014. Enacting the legislation would not affect 
direct spending or revenues.
    H.R. 2561 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2561 is shown in the following table. 
The costs of this legislation fall within budget function 400 
(transportation).

----------------------------------------------------------------------------------------------------------------
                                                               By fiscal year, in millions of dollars--
                                                    ------------------------------------------------------------
                                                       2010      2011      2012      2013      2014    2010-2014
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Maritime Career Training Loan Program:
    Authorization Level............................        11        11        11        11        11         55
    Estimated Outlays..............................         5         7         8         8         9         37
Maritime Grant Program:
    Authorization Level............................        11        11        11        11        11         55
    Estimated Outlays..............................         9        10        11        11        11         52
    Total Spending Under H.R. 2561:
        Authorization Level........................        22        22        22        22        22        110
        Estimated Outlays..........................        14        17        19        19        20         89
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that the 
bill will be enacted near the start of fiscal year 2010 and 
that the amounts specified will be provided for each year.

Maritime Career Training Loan Program

    H.R. 2561 would authorize the appropriation of $10 million 
in each of fiscal years 2010 through 2015 for the Maritime 
Administration to provide loans to students that enroll in one 
of the six state maritime academies or in another maritime 
training institution operated by a commercial and nonprofit 
organization. The legislation also would authorize the 
appropriation of $1 million in each year over the same period 
to administer the new loan program.
    Individual loans would be for a maximum of $15,000 per year 
and could only be used to cover expenses related to books, 
tuition, required fees, travel to and from training facilities, 
and room and board. Students accepting a loan would be required 
to serve on a vessel owned or operated by the United States for 
at least 18 months following graduation. Repayment would begin 
nine months after graduation at an interest rate that would 
vary depending on the date of initial disbursement. Principal 
and interest payments made by the borrower would be deposited 
into a revolving loan fund. Those amounts would be available to 
cover administrative costs as well as to make new loans under 
the program, without further appropriation action.
    The Federal Credit Reform Act (FCRA) requires that the 
budgetary impact of federal credit programs, including the loan 
program that would be established by this legislation, be 
measured in terms of the net present value of estimated cash 
flows. That measure is known as the subsidy cost. Under FCRA, 
agencies must receive an appropriation equal to the estimated 
subsidy cost before making loans. FCRA further specifies that 
repayments of loans are unavailable for spending and that new 
loan obligations may be made only to the extent that new budget 
authority is provided in advance. In other words, direct loan 
repayments are not available to ``revolve'' into new loans. 
Instead, such repayments are a means of financing the original 
loans. In CBO's view, the concept of using loan repayments to 
cover administrative costs and make new loans, as proposed in 
H.R. 2561, is inconsistent with the requirements of FCRA. It is 
possible that this inconsistency would result in the program 
not being implemented or being implemented in a form other than 
that proposed by the bill.
    For purposes of this estimate, CBO assumes that the loan 
program would be implemented as directed by the legislation and 
that amounts collected from loan repayments would be available 
to the program for administrative expenses and to make new 
loans. In that case, the effective subsidy cost of the loans 
would be 100 percent because cash flows into the government 
from borrower repayment would not be credited to the original 
loan (as normally would be required under FCRA) but would be 
used to cover other costs of the program. Therefore, CBO 
estimates that the provision of $60 million in loan subsidy 
over the 2010-2015 period, as authorized by the bill, would 
yield a loan volume of $60 million.
    Based on expected demand for student loans and historical 
expenditures of other loan programs operated by the Maritime 
Administration, CBO estimates that implementing the new loan 
program would cost $37 million over the next five years, 
including $5 million for administrative costs, and $29 million 
after 2014.

Maritime Grant Program

    H.R. 2561 would authorize the appropriation of $10 million 
in each of fiscal years 2010 through 2015 for the Maritime 
Administration to award grants to maritime training 
institutions to establish demonstration projects and other 
programs to increase mariner recruitment, training, and 
retention. The legislation also would authorize the 
appropriation of $1 million in each year over the same period 
to administer the new program. Based on the historical spending 
pattern of other grant programs operated by the agency, CBO 
estimates that implementing this provision would cost $52 
million over the next five years, including $5 million for 
administration, and $14 million after 2014.
    Intergovernmental and private-sector impact: H.R. 2561 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal costs: Daniel Hoople; Impact 
on state, local, and tribal governments: Melissa Merrell: 
Impact on the private sector: Marin Randall.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                     Compliance With House Rule XXI

    Pursuant to clause 9 of rule XXI of the Rules of the House 
of Representatives, H.R. 2651 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(d), 9(e), and 9(f) of rule XXI 
of the Rules of the House of Representatives.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, committee reports on a bill or joint 
resolution of a public character shall include a statement 
citing the specific powers granted to the Congress in the 
Constitution to enact the measure. The Committee on 
Transportation and Infrastructure finds that Congress has the 
authority to enact this measure pursuant to its powers granted 
under article I, section 8 of the Constitution.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act (P.L. 104-4).

                        Preemption Clarification

    Section 423 of the Congressional Budget Act of 1974 
requires the report of any Committee on a bill or joint 
resolution to include a statement on the extent to which the 
bill or joint resolution is intended to preempt state, local, 
or tribal law. The Committee states that H.R. 2651 does not 
preempt any state, local, or tribal law.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act are created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (P.L. 104-1).

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

              CHAPTER 517 OF TITLE 46, UNITED STATES CODE

        CHAPTER 517--OTHER SUPPORT FOR MERCHANT MARINE TRAINING

Sec.
51701. United States Maritime Service.
     * * * * * * *
51705. Maritime career training loan program.
51706. Maritime recruitment, training, and retention grant program.

           *       *       *       *       *       *       *


Sec. 51705. Maritime career training loan program

  (a) Establishment.--The Secretary of Transportation shall 
establish a maritime career training loan program (in this 
section referred to as the ``program'') in accordance with the 
requirements of this section.
  (b) Purpose.--The purpose of the program shall be to make 
maritime career training loans available to eligible students 
to provide for the training of United States mariners.
  (c) Administration.--The program shall be carried out by the 
Secretary, acting through the Administrator of the Maritime 
Administration.
  (d) Duties.--The Secretary shall--
          (1) allocate, on an annual basis, the award of loans 
        under the program based on the needs of students;
          (2) develop an application process and eligibility 
        criteria for the award of loans under the program;
          (3) approve applications for loans under the program 
        based on the eligibility criteria and allocations made 
        under paragraph (1); and
          (4) designate maritime training institutions at which 
        loans made under the program may be used.
  (e) Designation of Maritime Training Institutions.--
          (1) In general.--In designating maritime training 
        institutions under subsection (d)(4), the Secretary--
                  (A) may include Federal, State, and 
                commercial training institutions and nonprofit 
                training organizations, except that 
                undergraduate students at the United States 
                Merchant Marine Academy shall not be eligible 
                for loans under the program;
                  (B) shall designate institutions based on 
                geographic diversity and scope of classes 
                offered;
                  (C) shall ensure that designated institutions 
                have the ability to administer the program; and
                  (D) shall ensure that designated institutions 
                meet requirements to provide training 
                instruction for appropriate Coast Guard-
                approved training instruction.
          (2) Exclusions.--The Secretary--
                  (A) may exclude from participation in the 
                program a maritime training institution that 
                has had severe performance deficiencies, 
                including deficiencies demonstrated by audits 
                or program reviews conducted during the 5 
                calendar years immediately preceding the 
                present year;
                  (B) shall exclude from participation in the 
                program a maritime training institution that 
                has delinquent or outstanding debts to the 
                United States, unless such debts are being 
                repaid under or in accordance with a repayment 
                arrangement satisfactory to the United States, 
                or the Secretary in the Secretary's discretion 
                determines that the existence or amount of any 
                such debts has not been finally determined by 
                the appropriate Federal agency;
                  (C) may exclude from participation in the 
                program a maritime training institution that 
                has failed to comply with quality standards 
                established by the Department of Labor, the 
                Coast Guard, or a State; and
                  (D) may establish such other criteria as the 
                Secretary determines will protect the financial 
                interest of the United States and promote the 
                purposes of this section.
  (f) State Maritime Academies.--
          (1) Use of funds for loans to students attending 
        state maritime academies.--The Secretary may obligate 
        not more than 50 percent of the amounts appropriated to 
        carry out this section for a fiscal year for loans to 
        undergraduate students attending State maritime 
        academies receiving assistance under chapter 515 of 
        this title.
          (2) Academic standards for students.--Students at 
        State maritime academies receiving loans under the 
        program shall maintain satisfactory progress toward the 
        completion of their course of study as evidenced by the 
        maintenance of a cumulative C average, or its 
        equivalent, or academic standing consistent with the 
        requirements for graduation, as determined by the 
        institution.
  (g) Loan Amounts and Use.--
          (1) Maximum amounts.--The Secretary may not make 
        loans to a student under the program in an amount that 
        exceeds $15,000 in a calendar year or $60,000 in the 
        aggregate.
          (2) Use of loan proceeds.--A student who receives a 
        loan under the program may use the proceeds of the loan 
        only for postsecondary expenses incurred at an 
        institution designated by the Secretary under 
        subsection (d)(4) for books, tuition, required fees, 
        travel to and from training facilities, and room and 
        board.
  (h) Student Eligibility.--To be eligible to receive a loan 
under the program, a student shall--
          (1) be eligible to hold a license or merchant mariner 
        document issued by the Coast Guard;
          (2) provide to the Secretary such information as the 
        Secretary may require, including all current Coast 
        Guard documents, certifications, proof of United States 
        citizenship or permanent legal status, and a statement 
        of intent to enter a maritime career;
          (3) meet the enrollment requirements of a maritime 
        training institution designated by the Secretary under 
        subsection (d)(4); and
          (4) sign an agreement to--
                  (A) complete a course of instruction at such 
                a maritime training institution; and
                  (B)(i) maintain a license and serve as an 
                officer in the merchant marine on a documented 
                vessel or a vessel owned and operated by the 
                United States for at least 18 months of service 
                at sea following the date of graduation from 
                the maritime program for which the loan 
                proceeds will be used; or
                  (ii) serve as an unlicensed merchant mariner 
                on a documented vessel or a vessel owned and 
                operated by the United States for at least 18 
                months of service at sea following the date of 
                graduation from the maritime program for which 
                the loan proceeds will be used.
  (i) Administration of Loans.--
          (1) Contents of loan agreements.--Any agreement 
        between the Secretary and a student borrower for a loan 
        under the program shall--
                  (A) be evidenced by a note or other written 
                instrument that provides for the repayment of 
                the principal amount of the loan and any 
                origination fee, together with interest 
                thereon, in equal installments (or, if the 
                student borrower so requests, in graduated 
                periodic installments determined in accordance 
                with such schedules as may be approved by the 
                Secretary) payable quarterly, bimonthly, or 
                monthly, at the option of the student borrower, 
                over a period beginning 9 months from the date 
                on which the student borrower completes study 
                or discontinues attendance at the maritime 
                program for which the loans are used at the 
                institution approved by the Secretary and not 
                exceeding 10 years;
                  (B) include provision for acceleration of 
                repayment of the whole, or any part, of such 
                loan, at the option of the student borrower;
                  (C) provide the loan without security and 
                without endorsement;
                  (D) provide that the liability to repay the 
                loan shall be canceled upon the death of the 
                student borrower, or if the student borrower 
                becomes permanently and totally disabled, as 
                determined in accordance with regulations to be 
                issued by the Secretary;
                  (E) contain a notice of the system of 
                disclosure of information concerning default on 
                such loan to credit bureau organizations; and
                  (F) include provisions for deferral of 
                repayment, as determined by the Secretary.
          (2) Rate of interest.--A student borrower who 
        receives a loan under the program on or after January 
        1, 2010, and before October 1, 2015, shall be obligated 
        to repay the loan amount to the Secretary, together 
        with interest beginning in the period referred to in 
        paragraph (1)(A), at a rate to be determined as 
        follows:
                  (A) For a loan for which the first 
                disbursement is made on or after January 1, 
                2010, and before October 1, 2011, 5.6 percent 
                on the unpaid principal balance of the loan.
                  (B) For a loan for which the first 
                disbursement is made on or after October 1, 
                2011, and before October 1, 2012, 4.5 percent 
                on the unpaid principal balance of the loan.
                  (C) For a loan for which the first 
                disbursement is made on or after October 1, 
                2012, 3.4 percent on the unpaid principal 
                balance of the loan.
          (3) Disclosure required prior to disbursement.--
                  (A) In general.--The Secretary shall at or 
                prior to the time the Secretary makes a loan to 
                a student borrower under the program, provide 
                thorough and adequate loan information on such 
                loan to the student borrower. The disclosures 
                required by this paragraph may be made as part 
                of the written application material provided to 
                the student borrower, as part of the promissory 
                note evidencing the loan, or on a separate 
                written form provided to the student borrower.
                  (B) Contents.--The disclosures shall 
                include--
                          (i) the address to which 
                        communications and payments should be 
                        sent;
                          (ii) the principal amount of the 
                        loan;
                          (iii) the amount of any charges 
                        collected at or prior to the disbursal 
                        of the loan and whether such charges 
                        are to be deducted from the proceeds of 
                        the loan or paid separately by the 
                        student borrower;
                          (iv) the stated interest rate on the 
                        loan;
                          (v) the yearly and cumulative maximum 
                        amounts that may be borrowed;
                          (vi) an explanation of when repayment 
                        of the loan will be required and when 
                        the student borrower will be obligated 
                        to pay interest that accrues on the 
                        loan;
                          (vii) a statement as to the minimum 
                        and maximum repayment term that the 
                        Secretary may impose, and the minimum 
                        monthly payment required by law and a 
                        description of any penalty imposed as a 
                        consequence of default, such as 
                        liability for expenses reasonably 
                        incurred in attempts by the Secretary 
                        to collect on a loan;
                          (viii) a statement of the total 
                        cumulative balance, including the loan 
                        applied for, owed by the student 
                        borrower to the Secretary, and an 
                        estimate of the projected monthly 
                        payment, given such cumulative balance;
                          (ix) an explanation of any special 
                        options the student borrower may have 
                        for loan consolidation or other 
                        refinancing of the loan;
                          (x) a statement that the student 
                        borrower has the right to prepay all or 
                        part of the loan, at any time, without 
                        penalty;
                          (xi) a statement summarizing 
                        circumstances in which repayment of the 
                        loan or interest that accrues on the 
                        loan may be deferred, and a brief 
                        notice of the program for repayment of 
                        loans, on the basis of military 
                        service, pursuant to the Department of 
                        Defense educational loan repayment 
                        program (10 U.S.C. 16302);
                          (xii) a definition of default and the 
                        consequences to the student borrower if 
                        the student borrower defaults, together 
                        with a statement that the disbursement 
                        of, and the default on, a loan under 
                        this part shall be reported to a credit 
                        bureau or credit reporting agency;
                          (xiii) to the extent practicable, the 
                        effect of accepting the loan on the 
                        eligibility of the student borrower for 
                        other forms of student assistance; and
                          (xiv) an explanation of any cost the 
                        student borrower may incur in the 
                        making or collection of the loan.
                  (C) Information to be provided without 
                cost.--The information provided under this 
                paragraph shall be available to the Secretary 
                without cost to the student borrower.
          (4) Repayment after default.--The Secretary may 
        require any student borrower who has defaulted on a 
        loan made under the program to--
                  (A) pay all reasonable collection costs 
                associated with such loan; and
                  (B) repay the loan pursuant to an income 
                contingent repayment plan.
          (5) Authorization to reduce rates and fees.--
        Notwithstanding any other provision of this section, 
        the Secretary may prescribe by regulation any 
        reductions in the interest rate or origination fee paid 
        by a student borrower of a loan made under the program 
        as the Secretary determines appropriate to encourage 
        ontime repayment of the loan. Such reductions may be 
        offered only if the Secretary determines the reductions 
        are cost neutral and in the best financial interest of 
        the United States.
          (6) Collection of repayments.--The Secretary shall 
        collect repayments made under the program and exercise 
        due diligence in such collection, including maintenance 
        of all necessary records to ensure that maximum 
        repayments are made. Collection and servicing of 
        repayments under the program shall be pursued to the 
        full extent of the law, including wage garnishment if 
        necessary. The Secretary of the Department in which the 
        Coast Guard is operating shall provide the Secretary of 
        Transportation with any information regarding a mariner 
        that may aid in the collection of repayments under this 
        section.
          (7) Repayment schedule.--A student borrower who 
        receives a loan under the program shall repay the loan 
        quarterly, bimonthly, or monthly, at the option of the 
        student borrower, over a period beginning 9 months from 
        the date the student borrower completes study or 
        discontinues attendance at the maritime program for 
        which the loan proceeds are used and ending not more 
        than 10 years after the date repayment begins. 
        Provisions for deferral of repayment shall be 
        determined by the Secretary.
          (8) Contracts for servicing and collection of 
        loans.--The Secretary may--
                  (A) enter into a contract or other 
                arrangement with State or nonprofit agencies 
                and, on a competitive basis, with collection 
                agencies for servicing and collection of loans 
                under this section; and
                  (B) conduct litigation necessary to carry out 
                this section.
  (j) Revolving Loan Fund.--
          (1) Establishment.--The Secretary shall establish a 
        revolving loan fund consisting of amounts deposited in 
        the fund under paragraph (2).
          (2) Deposits.--The Secretary shall deposit in the 
        fund--
                  (A) receipts from the payment of principal 
                and interest on loans made under the program; 
                and
                  (B) any other monies paid to the Secretary by 
                or on behalf of individuals under the program.
          (3) Availability of amounts.--Amounts in the fund 
        shall be available to the Secretary, without further 
        appropriation--
                  (A) to cover the administrative costs of the 
                program, including the maintenance of records 
                and making collections under this section; and
                  (B) to the extent that amounts remain 
                available after paying such administrative 
                costs, to make loans under the program.
          (4) Maintenance of records.--The Secretary shall 
        maintain accurate records of the administrative costs 
        referred to in paragraph (3)(A).
  (k) Annual Report.--The Secretary, on an annual basis, shall 
submit to the Committee on Transportation and Infrastructure of 
the House of Representatives and the Committee on Commerce, 
Science, and Transportation of the Senate a report on the 
program, including--
          (1) the total amount of loans made under the program 
        in the preceding year;
          (2) the number of students receiving loans under the 
        program in the preceding year; and
          (3) the total amount of loans made under program that 
        are in default as of the date of the report.
  (l) Authorization of Appropriations.--There are authorized to 
be appropriated for each of fiscal years 2010 through 2015--
          (1) $10,000,000 for making loans under the program; 
        and
          (2) $1,000,000 for administrative expenses of the 
        Secretary in carrying out the program.

Sec. 51706. Maritime recruitment, training, and retention grant program

  (a) Strategic Plan.--
          (1) In general.--Not later than one year after the 
        date of enactment of this section, and at least once 
        every 3 years thereafter, the Secretary of 
        Transportation, acting through the Administrator of the 
        Maritime Administration, shall publish in the Federal 
        Register a plan that describes the demonstration, 
        research, and multistate project priorities of the 
        Department of Transportation concerning merchant 
        mariner recruitment, training, and retention for the 3-
        year period following the date of publication of the 
        plan.
          (2) Contents.--A plan published under paragraph (1) 
        shall contain strategies and identify potential 
        projects to address merchant mariner recruitment, 
        training, and retention issues in the United States.
          (3) Factors.--In developing a plan under paragraph 
        (1), the Secretary shall take into account, at a 
        minimum--
                  (A) the availability of existing research (as 
                of the date of publication of the plan);
                  (B) the need to ensure results that have 
                broad applicability;
                  (C) the benefits of economies of scale and 
                the efficiency of potential projects; and
                  (D) the likelihood that the results of 
                potential projects will be useful to 
                policymakers and stakeholders in addressing 
                merchant mariner recruitment, training, and 
                retention issues.
          (4) Consultation.--In developing a plan under 
        paragraph (1), the Secretary shall consult with 
        representatives of the maritime industry, labor 
        organizations, and other governmental entities and 
        parties with an interest in the maritime industry.
          (5) Transmittal to congress.--The Secretary shall 
        transmit copies of a plan published under paragraph (1) 
        to the Committee on Transportation and Infrastructure 
        of the House of Representatives and the Committee on 
        Commerce, Science, and Transportation of the Senate.
  (b) Demonstration Projects.--
          (1) In general.--The Secretary may award grants to a 
        maritime training institution to carry out 
        demonstration projects that implement the priorities 
        identified in the plan prepared under subsection 
        (a)(1), for the purpose of developing and implementing 
        methods to address merchant mariner recruitment, 
        training, and retention issues.
          (2) Grant awards.--Grants shall be awarded under this 
        subsection on a competitive basis under guidelines and 
        requirements to be established by the Secretary.
          (3) Applications.--To be eligible to receive a grant 
        for a project under this subsection, a maritime 
        training institution shall submit to the Secretary a 
        grant proposal that includes, at a minimum--
                  (A) information demonstrating the estimated 
                effectiveness of the project; and
                  (B) a method for evaluating the effectiveness 
                of the project.
          (4) Eligible projects.--Projects eligible for grants 
        under this subsection may include--
                  (A) the establishment of maritime technology 
                skill centers developed through local 
                partnerships of industry, labor, education, 
                community-based organizations, economic 
                development organizations, or Federal, State, 
                and local government agencies to meet unmet 
                skills needs of the maritime industry;
                  (B) projects that provide training to upgrade 
                the skills of workers who are employed in the 
                maritime industry;
                  (C) projects that promote the use of distance 
                learning, enabling students to take courses 
                through the use of media technology, such as 
                videos, teleconferencing, and the Internet;
                  (D) projects that assist in providing 
                services to address maritime recruitment and 
                training of youth residing in targeted high 
                poverty areas within empowerment zones and 
                enterprise communities;
                  (E) the establishment of partnerships with 
                national and regional organizations with 
                special expertise in developing, organizing, 
                and administering merchant mariner recruitment 
                and training services; and
                  (F) the establishment of maritime training 
                programs that foster technical skills and 
                operational productivity in communities in 
                which economies are related to or dependent 
                upon the maritime industry.
  (c) Projects Authorized.--
          (1) Projects.--The Secretary may award grants to 
        carry out projects identified in a plan published under 
        subsection (a)(1) under which the project sponsor 
        will--
                  (A) design, develop, and test an array of 
                approaches to providing recruitment, training, 
                or retention services to one or more targeted 
                populations;
                  (B) in conjunction with employers, organized 
                labor, other groups (such as community 
                coalitions), and Federal, State, or local 
                agencies, design, develop, and test various 
                training approaches in order to determine 
                effective practices; or
                  (C) assist in the development and replication 
                of effective service delivery strategies for 
                the national maritime industry as a whole.
          (2) Research projects.--The Secretary may award 
        grants to carry out research projects identified in a 
        plan published under subsection (a)(1) that will 
        contribute to the solution of maritime industry 
        recruitment, training, and retention issues in the 
        United States.
          (3) Multistate or regional projects.--The Secretary 
        may award grants to carry out multistate or regional 
        projects identified in a plan published under 
        subsection (a)(1) to effectively disseminate best 
        practices and models for implementing maritime 
        recruitment, training, and retention services designed 
        to address industry-wide skill shortages.
          (4) Grant awards.--Grants shall be awarded under this 
        subsection on a competitive basis under guidelines and 
        requirements to be established by the Secretary.
  (d) Authorization of Appropriations.--There are authorized to 
be appropriated for each of fiscal years 2010 through 2015--
          (1) $10,000,000 for making grants under this section; 
        and
          (2) $1,000,000 for administrative expenses of the 
        Secretary in carrying out this section.

                                  
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