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21 propelled domestic container vessels are likely to continue to Legislation be "one off" designs (i.e., each one will be unique). Some have recommended the idea of building in militarily The policy challenge for government is to bridge the gap useful features in new ship construction such as roll-on/roll-off between present circumstances and future aspirations. Busi- ramps and heavy weight-bearing decks that could be paid for by nesses are not going to sacrifice potential profits purely for the U.S. Department of Defense as part of a military sealift con- "greening" their operations. Political entities must ultimately tingency program such as the current Maritime Security Pro- either tax what they wish to discourage or incentivize what gram. However, there is little incentive for a potential NAMH they wish to encourage. operator to incorporate militarily useful features into vessels. In Legislative activity to date at the federal level can be sep- addition, the potential disruption associated with diverting arated into two main categories: (1) attempts to modify or NAMH vessels to support large-scale military deployments eliminate HMT, and (2) designation or promotion of routes for the development of marine highways or SSS through infra- would not be easily absorbed. If such a program is established, structure grants or other mechanisms, along with attempts a contingency plan for continuing to serve shippers in the event to actually fund these programs. Efforts to eliminate HMT of a mass deployment would need to be taken into account. for domestic shipping have been unsuccessful to date. In the The American Recovery and Reinvestment Act of 2009 last four congressional sessions, a number of lawmakers have (ARRA) made $98 million available for grants on a 75%/25% sponsored bills providing HMT relief. Despite bipartisan basis. The Omnibus Appropriations Act of 2009 provided an support for the idea, none of those bills have made it out of additional $17,150,000 for grants. The application periods for committee. Such efforts are still underway. Bills that encour- both of these programs have expired. No more than 25% of age the development of marine transportation alternatives the funds available will be awarded to shipyard facilities that have met with more success, but there has been little fund- have more than 600 production employees. No recipient may ing attached to them. have more than 1,200 production employees. Appendix E provides a summary of legislative activity Freight ferries have been a major source of marine highway directly related to these two categories mentioned. It includes traffic in overseas markets. The Ferry Boat Discretionary Pro- both successful and unsuccessful legislative proposals. gram (FBD) provides a special funding category for the con- The HMT proposals may have been unsuccessful simply struction of ferry boats and ferry terminal facilities. It was because they did not receive priority consideration, but it created by Section 1064 of ISTEA (1991, Public Law 102-240). may also be because of trade-related issues. Congressional It has been reauthorized and continued through the Surface sources point out that a taxation scheme that differentiates Transportation Extension Acts. Section 1801 of SAFETEA-LU between international trade and domestic trade through- (Public Law 109-59) further continued the program and added ports could violate existing trade agreements and could result the program to 23 U.S.C. as Section 147, Construction of Ferry in an unfavorable ruling from the World Trade Organization Boats and Ferry Terminal Facilities. Additional funding was if challenged. provided by the ARRA (Recovery Act, Public Law 111-5). Most interviewees believe that if incentives are deemed to be There is a set of circumstances/requirements that eligible necessary, the best approach is to incentivize shippers, not projects must meet. The federal share of the costs for any proj- operators. In this manner, the decision makers will be directly ect eligible under the FBD program is 80%. affected. With increased demand, capacity will follow. If incen- Europe has created a program called CREATE3S that brings tives go to operators, there is no guarantee that the shipper together some of the lead companies in SSS and ship design will directly benefit and the effect of the incentive will be with the aim of developing a new generation of short sea ves- diminished. Furthermore, some analysts hold the view that sels utilizing advanced design and manufacturing techniques. for an incentive program to be effective, the recipient needs The program is intended to be equally applicable to container, to have a significant financial stake (e.g., a one-to-one match- dry bulk, and liquid cargoes. This approach will combine the ing grant); otherwise, there is not a strong incentive to "do ability for a "standard ship design" to be tuned to very differ- things right" from the outset. ent trades and commodities while using advanced construc- There is strong disagreement over demonstration projects. tion techniques such as the "industrial" fabrication of large Some believe that these projects often fail, and every failure series of standardized basic modules. This is expected to reduce makes it that much harder to convince a shipper that the both operational and manufacturing costs. Production lead- marine option will work. Others say that it is necessary to at times should also be trimmed by about 10%. According to least try these projects in highly congested areas in order to press reports, the total funding for this project is 64.2 million acquaint shippers with the concept and verify their technical with the European Union (EU) funding about 62.5 million effectiveness. The reality is that when public money is used of the total. The duration of the project, which started on Nov- to subsidize a service and it fails (as in the case of the Albany ember 1, 2006, is 36 months. Express service), it tends to create a negative reaction from