[House Report 111-243]
[From the U.S. Government Publishing Office]
111th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 111-243
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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.
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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.
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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\
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\6\Maritime Administration, The Maritime Administration and the
U.S. Marine Transportation System: A Vision for the 21st Century 7
(2007).
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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.
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\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).
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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\
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\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).
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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.
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\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).
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By fiscal year, in millions of dollars--
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2010 2011 2012 2013 2014 2010-2014
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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
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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.