Short sea provisions in energy bill
The energy bill passed last week by the House of Representatives, which among other things called for dramatic increases in the average fuel efficiency of cars and trucks, also includes sections promoting rail transportation and short-sea shipping.
“Instead of using trucks to move most our goods, we need to start investing in freight rail and water transportation to move goods,” said Rep. Jim Oberstar, D-Minn., chairman of the House Transportation and Infrastructure Committee.
The legislation sets aside $200 million for short-line and regional railroads to improve track and infrastructure.
Additionally, the energy bill would establish a new program to promote short-sea shipping to move cargo on the Great Lakes and along the sea coasts. Special tax incentives would help vessel owners construct a new class of cargo ships for short-sea shipping.
But a proposal in other versions of the legislation that would have provided up to $2 billion in Title XI load guarantees for construction of short sea vessels was dropped.
The bill calls for the secretary of Transportation to “establish a short-sea transportation program and designate short-sea transportation projects to be conducted under the program to mitigate landside congestion.”
The bill said the program should encourage the use of short-sea transportation through the development and expansion of vessels, ports and other landside infrastructure, shipper utilization of short-sea shipping, and “marine transportation strategies by state and local governments.”
Under the proposed law, vessel companies that want to build ships for moving containers, trailers or other wheeled freight will be able to do so with Capital Construction Fund (CCF) monies.
The CCF program was created to assist owners and operators of U.S.-flag vessels in accumulating capital necessary for the modernization and expansion of the U.S. merchant marine. The program encourages construction, reconstruction or acquisition of vessels through the deferment of federal income taxes on certain deposits of money or other property placed into a CCF.
In the past, CCF funds had to be spent on vessels built in the United States and documented under the laws of the United States for fishing boats or for operation in foreign, Great Lakes, or noncontiguous domestic trade such as ships or barges used between the U.S. mainland and Alaska or Hawaii. But the new law amends that requirement to allow vessels in contiguous trades, among the lower 48 states for example.
The bill also calls for the secretary of Transportation, in consultation with the administrator of the Environmental Protection Agency, to submit within a year a report to Congress on the program.