Despite the continuing turmoil in Washington, D.C., over the Russian investigation into the Trump campaign, Congress is continuing to carry out its regular business of funding the federal government and authorizing agency programs. This article reviews the status of Coast Guard and related legislation, the FY 2017 final budget, and the proposed budget for FY 2018. Movement on Coast Guard, MARAD, and FMC Bills Both the Senate Commerce, Science and Transportation Committee (“Commerce Committee”) and the House Transportation and Infrastructure Committee (“T&I Committee”) have reported out bills to authorize the programs and operations of the U.S. Coast Guard. As of this writing, the bills have to go to their respective floors for final votes and then be reconciled in conference, but we expect a favorable outcome before the August recess. The Senate reported its bill (S. 1129) on May 18, 2017. The “Coast Guard Authorization Act of 2017” reauthorizes the activities of the Coast Guard for fiscal years 2018 and 2019, and contains the following significant provisions:
- makes training available on a reimbursable basis to nongovernmental emergency responder personnel;
- reduces the time period for commissioned officer retirement from 10 to eight years;
- authorizes leave for the birth of an adopted child;
- codifies and extends for 10 years the operations of numerous Coast Guard advisory committees, including the Chemical Transportation Advisory Committee, Commercial Fishing Safety Advisory Committee, Merchant Marine Personnel Advisory Committee, National Boating Safety Advisory Committee, National Offshore Safety Advisory Committee, and Towing Safety Advisory Committee;
- directs the Coast Guard, as it recapitalizes its assets, to ensure continuity of coverage of its maritime response programs;
- establishes a new deadline for fishing vessels to comply with alternative safety compliance programs;
- requires recreational vessels less than 25 feet in length to have engine cut-off switches;
- authorizes the Coast Guard to issue certificates of documentation for recreational vessels with effective periods of up to five years with a fee schedule based on the term of the certificate of documentation;
- requires the Coast Guard to submit a plan to Congress to replace the aging fleet of inland waterway and river tenders and bay class icebreakers no later than 545 days after the date of enactment;
- establishes alternative planning criteria for the captain of the Port Zone that includes the Arctic, if the commandant verifies that the equipment included in the plan can operate in Arctic conditions;
- directs the commandant, in one year, to submit to Congress a report on the progress made towards implementing the U.S. Coast Guard Arctic Strategy, dated May 2013; and
- directs a report to Congress on fleet requirements and assessment strategy.
In addition to authorizing the Coast Guard for the next two years, S. 1129 reauthorizes the programs of the Federal Maritime Commission for two years.
The Senate bill also reauthorizes the Hydrographic Services Improvement Act of 1998 for four years while directing the secretary of commerce to develop and implement a strategy for increasing contracting for hydrographic data collection with nongovernmental entities.
At the markup, Senators Cantwell (D-WA) and Sullivan (R-AK) offered an amendment to require a report for extending the service life of the Coast Guard Cutter POLAR STAR; and Senators Baldwin (D-WI) and Peters (D-MI) offered an amendment to authorize the use of Coast Guard funds for the construction of an icebreaker for the Great Lakes. Both amendments were accepted and included in S. 1129.
Vessel Incidental Discharge Act Part of Senate Coast Guard Bill
Finally, and perhaps the most controversial action taken by the Senate Commerce Committee, was to include in the Coast Guard authorization bill the Vessel Incidental Discharge Act (“VIDA”). VIDA addresses the administrative scheme to regulate ballast water discharges from ships entering U.S. waters. Under current law, both the Coast Guard—by regulation—and the Environmental Protection Agency (“EPA”)—through its general permit process—have a role in regulating ballast water discharges. VIDA attempts to simplify this arrangement and grant the Coast Guard primary authority over these discharges. After enactment of VIDA, a discharge of ballast water into navigable waters of the United States is no longer subject to the Clean Water Act and the EPA general permit. VIDA also attempts to establish a single national best management practice for ballast water discharges, while allowing states to petition the secretary of homeland security home of the Coast Guard to establish stricter standards if the state can establish that 1) the revised best management practice would reduce adverse effects of discharges, and 2) the revised practice would be economically achievable and operationally practicable.
Despite the inclusion of the state petition process in VIDA, a number of Democratic senators asked to be recorded “No” on the bipartisan Coast Guard bill because of its inclusion of VIDA. Chairman Thune (R-SD) urged that action be taken this year on ballast water management. It remains to be seen whether VIDA survives intact or at all on a Senate floor vote and the conference with the House.
The companion House Coast Guard bill, described below, does not include VIDA.
House Transportation and Infrastructure Committee Reports Coast Guard and FMC Bills
Prompted by Senate action on its Coast Guard bill, the House T&I Committee ordered its own Coast Guard bill (H.R. 2158) reported from the committee. The bill also reauthorizes the programs of the Coast Guard for two years. Following are some of the highlights of the House bill that are not also included in the Senate bill:
- requires the commandant to establish a land-based unmanned aircraft program to support and assist the Coast Guard;
- requires the National Academy of Sciences to review and recommend existing and emerging unmanned, autonomous, or remotely controlled maritime domain awareness technologies;
- authorizes the commandant of the Coast Guard to enter into multi-year acquisition contracts, subject to the availability of appropriations;
- authorizes two million dollars in funding for marine debris programs and requires implementation of the Atlantic Coast Port Access Study report;
- requires the commandant, before certifying an eighth National Security Cutter as Ready for Operation, to report to Congress on its cost and performance; and
- requires the secretary of homeland security (“HLS”) to establish a reliable land-based eLORAN system.
At the committee markup, Congressman Duncan Hunter, Chair of the Coast Guard Subcommittee, offered the manager’s amendment to H.R. 2518, which would also 1) add an authorization of $165M for the acquisition of six Fast Response Cutters in addition to the current 58; 2) add an authorization of three million dollars for ice trials of icebreaker vessels; 3) add an authorization of $165M for shoreside infrastructure improvements; and 4) similar to the Senate bill, require the secretary of HLS to not approve vessel response plans for the Arctic unless the equipment in the plan has been tested and proven capable.
The House T&I Committee also ordered reported H.R. 2593, reauthorizing the Federal Maritime Commission.
MARAD Authorization Reported from Senate Commerce Committee
The Senate Commerce Committee also reported S. 1096, the Maritime Administration Authorization and Enhancement Act for Fiscal Year 2018. This bill reauthorizes the programs of the U.S. Maritime Administration, including the U.S. Merchant Marine Academy, state maritime academies, and training vessels, and provides $36M for the National Security Multi-Mission Vessel Program. The Small Shipyard and Maritime Communities grant program was also reauthorized for three years and increased to $27.5M a year. A new Buy America requirement for steel, iron, and manufactured goods used in the Small Shipyard program was added.
As is the custom, the MARAD Authorization bill will be added on the House side to the National Defense Authorization Act and addressed by the House Armed Services Committee.
The Budget for Coast Guard and MARAD Programs
The authorizing committees and bills discussed above provide direction to the agencies on what Congress expects them to accomplish in the next two years. But, until the appropriation committees complete their work, it is not possible to say whether the agencies will get sufficient funds to carry out their programs and congressional edicts.
A brief review of the FY 2017 enacted and FY 2018 proposed budgets for the Coast Guard and MARAD follows.
FY 2017 Funding for Coast Guard and MARAD
On May 5, 2017, Congress finally concluded its work on the FY 2017 budget for most of the government when the Consolidated Appropriations Act, 2017, was signed into law (Pub. L. 115-31). Despite President Trump’s urging that the bill include funding for the southern border wall, no funding for the wall was included in the Appropriations Act. Funding could be considered in the FY 2018 budget bill, below.
The Coast Guard received $10.5B—an increase of $344M above the previous request and a decrease of $467M below 2016 levels. Of this amount, $1.37B was provided for modernization and recapitalization of vessels, aircraft, and facilities, including funding to start a new Polar Ice Breaking Vessel program, the acquisition of an Offshore Patrol Cutter, C-130-J aircraft, six Fast Response Cutters, and facility improvements.
MARAD received $523M, which represented an increase of $123M above the 2016 level; full funding for the Maritime Security Program ($300M); five millions dollars for small shipyard grants; and five million dollars for marine highway program grants.
The transportation section of the funding bill also included $500M for the everpopular TIGER grant program, the same as the 2016 level.
Trump Budget Proposal for FY 2018
On May 23, 2017, President Trump released his proposed budget for FY 2018, entitled “A New Foundation for American Greatness.” A skinnier version had been released earlier. Even staunch Republicans like Senators McCain (R-AZ) and Graham (R-SC) called the budget “dead on arrival,” and the Democrats opposed it because of its cuts to social programs. But, it does represent a starting point for the FY 2018 budget negotiations that are already underway. A few highlights of the FY 2018 Trump budget in relevant areas follow.
Contrary to rumored support of the program by Transportation Secretary Elaine Chao, the Trump budget proposal zeroes out TIGER grants. Will they miraculously reappear in the Trump infrastructure package? It remains to be seen. There are few details in the Trump-proposed infrastructure package, but the buzzword appears to be “public-private partnership” as reflected in a proposal for $200B in federal spending to leverage one trillion dollars in total investments. A Democratic proposal calls for IT in direct federal spending.
President Trump spoke at the 2017 Coast Guard Academy commencement exercises and promised more money for polar icebreakers—the United States barely has one functioning polar icebreaker—but the budget request doesn’t contain sufficient funds to build even one polar icebreaker.
On the MARAD side, things look even bleaker as small shipyard grants are zeroed out; there is no funding for the marine highway program and not even a single dollar to administer the title XI loan guarantee program, let alone breathe new life into the shipbuilding program. Level funding is requested for the Maritime Security Program ($210M).
The authorizing committees are doing their job by reporting out Coast Guard, MARAD, and FMC bills. The main policy difference in a House-Senate conference on the Coast Guard bill will be the inclusion of the VIDA title. For MARAD, there appear to be no controversial provisions. It also looks as if the House and Senate are thinking alike when it comes to FMC reforms. While it is too soon to predict the outcome of the FY 2018 budget, as Senate Majority Leader Mitch McConnell said to reporters, the Trump budget proposal is “only a recommendation” from the president.