National Defense Authorization Act for Fiscal Year 2024 sets funding levels for maritime programs, bolsters enforcement and requirements for U.S. cargo preference

On December 22, President Biden signed into law the National Defense Authorization Act (NDAA) for Fiscal Year 2024, legislation that, among other things, authorizes funding for the U.S. Armed Forces – to include essential U.S. maritime programs supporting defense sealift services, the American maritime workforce and U.S. shipbuilding.

The NDAA contains authorization for several key U.S. maritime programs, which directly sustain and support jobs for U.S. merchant mariners, including members of American Maritime Officers, and broadly benefit the U.S. Merchant Marine and its crucial roles in strategic sealift and national defense shipping operations. The act also contains several provisions addressing issues of high importance to U.S. mariners and the operations of the U.S.-flag merchant fleet.

While the NDAA sets funding levels and authorizes spending on specific programs, actual funding must be appropriated separately by Congress and approved by the President. Depending on whether or not Congress appropriates money, and in what form such appropriations are crafted legislatively, actual funding levels for branches of the military, and government programs and agencies covered by the NDAA, may differ from the authorized levels.

For fiscal year 2024, the NDAA authorizes full funding of $318 million for the Maritime Security Program (MSP) fleet.

The MSP’s 60 militarily-useful U.S.-flagged ships are crewed by U.S. merchant mariners and operate in international commercial trades. The ships and their corresponding privately-owned intermodal cargo systems and networks are available to the Department of Defense for military sealift operations and in national security emergencies. The cost of the MSP amounts to a small fraction of the estimated $65 billion or more it would cost the government to replicate the sealift capacity and the intermodal infrastructure provided to the DOD by private-sector MSP participants. Some elements of the transportation and logistics networks made available through the MSP could not be duplicated by the government at any cost.

In the previous NDAA approved for fiscal year 2023, full funding for the Tanker Security Program was authorized for 10 commercially viable, militarily useful, privately-owned tank vessels to meet national defense and other security requirements. The fiscal year 2023 NDAA also mandated the expansion of the Tanker Security Program to 20 vessels for fiscal years 2024 through 2035, and authorized a corresponding increase in funding to meet the stipend for each vessel enrolled in the program. Like the Maritime Security Program, the funding for the Tanker Security Program will need to be appropriated each year, even though the program is fully authorized to be funded through 2035.

Funding for the U.S. Cable Security Program and its fleet of two ships was also authorized under previously approved legislation establishing the program.

The NDAA for fiscal year 2024 authorizes new money for the National Security Multi-Mission Vessel Program, to include $17.6 million for training ship fuel assistance. One NSMV has already been delivered to a maritime training academy and another four are in various stages of construction.

Additionally, $30.5 million for maintenance and repair of existing maritime academy training vessels, as well as $75 million in funding to support the ongoing construction of new training ships, is included in the NDAA for fiscal year 2024. These vessels will also be available for deployment, both domestically and abroad, in defense sealift and humanitarian crisis missions.

The NDAA authorizes $198.5 million in funding for the U.S. Merchant Marine Academy, and approximately $66.6 million to support the state maritime academies.

The act also authorizes a total of $40 million for new loan guarantees under the Maritime Administration’s Title XI shipbuilding loan guarantee program, which eases access to commercial credit for the construction of merchant vessels in U.S. shipyards, as well as $3 million for administrative expenses related to the program. The fiscal year 2024 authorization for Title XI is $10 million higher than that contained in the fiscal year 2023 NDAA.

The fiscal year 2024 NDAA also institutes a new rule requiring vessels being reflagged into U.S. registry to remain for a minimum of three years. U.S.-flag registry is among the requirements for participation in shipments of cargoes covered by U.S. cargo preference laws.

The NDAA also further empowers MARAD with authority over any waivers to cargo preference laws, as well as oversight authority for cargo preference compliance among U.S. government agencies.