Congress enacts National Defense Authorization Act for fiscal year 2021

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On January 1, the U.S. Senate voted 81-13 to override a presidential veto of the National Defense Authorization Act for fiscal year 2021, following the 322-87 vote in the House of Representatives on December 28 to do the same thing. The legislation authorizes funding for the U.S. Armed Forces and nuclear weapons programs overseen by the Department of Energy. The legislation for this year also contains key U.S.-flag maritime provisions.

The William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (NDAA) does much to support the pivotal roles of the privately owned and operated U.S. merchant fleet and American merchant mariners in U.S national defense and security operations. Provisions in the NDAA include the establishment of a 10-ship Tanker Security Fleet modeled after the U.S.-flag Maritime Security Program, reaffirmation of congressional support of the Jones Act as critical to national security, tighter procedures for Jones Act waivers, confirmation of Jones Act jurisdiction over offshore wind turbine and non-mineral energy development projects, and a one-year study to determine how to better enforce U.S.-flag cargo preference laws.

The NDAA establishes the Tanker Security Fleet, which will consist of active, commercially viable, militarily useful, privately owned product tank vessels to meet national defense and other security requirements and to aid in maintaining a U.S. presence in international commercial shipping.

The funding authorization for the Tanker Security Fleet is $60 million per year from fiscal years 2022 through 2035, which will provide each vessel with a $6 million stipend. Like the Maritime Security Program, the funding for the Tanker Security Fleet will need to be appropriated each year.

The NDAA states the sense of Congress on the importance of the Jones Act and U.S. domestic maritime industry to national security. "United States coastwise trade laws promote a strong domestic trade maritime industry, which supports the national security and economic vitality of the United States and the efficient operation of the United States transportation system, and a strong commercial maritime industry makes the United States more secure," according to the NDAA.

The measure tightens the criteria under which the Jones Act can be waived with the approval of the Department of Defense.

Jones Act waivers would be permitted only when the Secretary of Defense determines that such exemptions are "necessary in the interest of national defense to address an immediate adverse effect on military operations."

The Secretary of Defense would be required to inform Congress of the reason for a waiver and to certify "there are insufficient qualified [Jones Act] vessels to meet the needs of national defense without a waiver."

Jones Act waivers would be permitted for no more than 10 days but may be extended for additional 10-day periods as necessary up to a maximum of 45 days.

Regarding development of offshore non-mineral energy resources, such as wind turbines, the NDAA states: "The Constitution and laws and civil and political jurisdiction of the United States are extended, to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction located within a State, to the subsoil and seabed of the outer Continental Shelf; all artificial islands on the outer Continental Shelf; installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources, including non-mineral energy resources; or any such installation or other device (other than a ship or vessel) for the purpose of transporting or transmitting such resources."

This measure clarifies offshore structures on the U.S. Outer Continental Shelf are part of the United States, and federal laws, including the Jones Act, do apply to construction, maintenance and transportation of cargoes in support of such energy resource development infrastructure.

Addressing the U.S.-flag cargo preference laws, the NDAA directs the Comptroller General of the United States to "conduct an audit regarding the enforcement of the United States Cargo Preference Laws," which set aside 100 percent of defense cargoes and at least 50 percent of all other government-financed imports and exports for U.S.-flagged merchant ships.

The Comptroller General would be required to report to Congress on this audit within one year and to recommend "actions that should be taken by agencies and organizations to fully comply with the United States cargo preference laws, and other measures that may compel agencies and organizations, and their contractors and subcontractors, to use United States flag vessels in the international transportation of ocean cargoes as mandated by the United States cargo preference laws."

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