HR3151119th CongressWALLET

SHIPS for America Act of 2025

Sponsored By: Representative Kelly (MS)

In Committee

Summary

Rebuild U.S. commercial shipbuilding and a U.S.-flag strategic fleet by pairing new tax credits, grants, and operating payments with stronger cargo-preference rules and workforce and innovation programs to restore domestic capacity and sealift readiness. It centralizes maritime strategy in a White House advisor and a Maritime Security Board and funds a broad set of industrial, port, and training programs to favor U.S.-built, U.S.-crewed vessels.

Bill Overview

Analyzed Economic Effects

49 provisions identified: 30 benefits, 3 costs, 16 mixed.

Faster training and more mariner paths

The bill would cut required sea time for key deck credentials, such as from 3 years to 18 months in one case. It would let approved nautical school graduation replace some sea service and would start renewed credentials the day after the old one expires. Noncitizen nationals could get mariner licenses. It would allow noncompetitive federal hiring for USMMA grads who meet commitments and for mariners with 7+ years at sea, and let selected mariners study at the Naval Postgraduate School with DOT covering instruction costs. It would also fund maritime workforce promotion at $15 million per year for 2025–2028 and $25 million per year for 2029–2034.

VA education help for mariners

If enacted, some merchant mariners could qualify for VA Chapter 33 education benefits. You would need at least 10 years of full‑time, credentialed service and a qualifying combat‑zone award received after this becomes law. You must also not already qualify for VA benefits under other rules. The VA could receive money from the Maritime Security Trust Fund to run this.

Student incentive payments become tax‑free

If enacted, student incentive payments under 46 U.S.C. 51509 would not be taxed. This would apply to payments made after December 31, 2025. Students in these agreements would not include those payments in their taxable income.

Big boost for Merchant Marine Academy

This bill would fund a 10‑year plan to modernize the U.S. Merchant Marine Academy, starting within 180 days. It would authorize $1.02 billion for FY2026–FY2035, including $54 million in FY2026 and about $107.33 million each year from FY2027–FY2035. It would also authorize $125 million per year for Academy operations for FY2026–FY2035. The agency would report within 180 days on resources needed to raise enrollment.

More aid for maritime students

If enacted, Congress could fund $25 million a year for 2026–2035 for Centers of Excellence to expand maritime training. State maritime academies could get $10 million a year for 2026–2035, and new scholarships would help students pay summer sea‑term costs. Scholarships would be mostly funded by private partners, and recipients must get a license within 3 months and serve at least one year in qualifying jobs. The bill would also authorize $120 million a year for 2026–2035 to pay fuel for training ships (capped at $20 million per academy per year) and to support crew slots, with guardrails on fuel resale and housing use. The Navy would show the Naval Sea Cadet Corps as a line item, and outreach to K–12 would be encouraged.

Agency funding from Maritime Trust Fund

The bill would fund agency administration from the Maritime Security Trust Fund for 2026–2035. It would provide $30 million each year to the Maritime Administration, $30 million each year to the Coast Guard’s department, and $2 million each year to the Federal Maritime Commission. This would support day‑to‑day oversight of maritime programs.

New Maritime Security Trust Fund

This would create a Maritime Security Trust Fund to support merchant marine and industrial base programs. It would receive certain taxes, duties, penalties, and seizure revenues and be capped at $20 billion. Money in the fund could be used for bill obligations before October 1, 2035.

New revolving fund for ship loans

This would set up a Title XI revolving loan fund within 30 days. It would hold appropriations and program fees and could make guarantees and direct loans. The bill authorizes $100 million in FY2026 to capitalize the fund, available until spent.

New grants for U.S. shipbuilding

The bill would create a Shipbuilding Financial Incentives Program with $250 million each year for 2026–2035. It would also authorize $100 million each year for small shipyard assistance for 2026–2035. Awards would require U.S. shipyard construction, Buy America sourcing, milestone checks, emergency‑readiness participation, and a 5‑year ban on stock buybacks after funds are received.

Big tax credits for shipyards and ships

The bill would create two major credits. A 25% credit would apply to qualified investment in U.S. shipyard facilities for property placed in service after December 31, 2025 and not after December 31, 2032. A separate vessel credit would cover 33% of qualified investment, with up to 7% more for U.S. insurance and U.S. classification, for ships built in U.S. yards that operate under U.S. flag and meet a 10‑year use and readiness agreement. Both credits would be eligible for elective pay and transfer. Vessels must begin construction before January 1, 2033.

New limits on shipowner liability

For U.S. vessels, the liability cap would be the vessel’s value plus pending freight. For foreign vessels, the cap would be five times that amount. If there are multiple owners, each would be limited to their ownership share. Wage claims would not be limited, and for foreign owners, claims by non‑crew and non‑passengers for injury or death would not be limited. These rules would apply to liabilities arising on or after enactment.

New Strategic Commercial Fleet and rules

This bill would create a Strategic Commercial Fleet (SCF) of private ships useful to the military. Selection would start two years after enactment, with at least 10 ships chosen in the first year and 20 per year by year five. The fleet could not exceed 250 vessels. Ships would sign seven‑year operating agreements (renewable twice), sail only in foreign trade, and become permanently ineligible for coastwise trade. Owners would get milestone‑based operating and capital support, and must keep emergency service agreements so DoD can request their ships with fair market pay. Entry timing would be set: 180 days after agreement for qualified foreign‑built ships and 36 months for new U.S.‑built ships, with limited delays allowed. Covered vessels would need a set share of repair work done in U.S. shipyards and could not be repaired in countries of concern, unless waived for national security with notice to Congress.

Payments and rules for fleet agreements

MARAD would make milestone payments to covered companies if funded, but no pay would accrue on days a vessel is noncompliant or under U.S. charter. Payments for certain military or preference cargoes would be limited unless waived under strict rules. If an agreement is ended, a termination payment would use remaining life out of 21 years times the unrecovered U.S.–foreign build cost difference. Trust Fund authorizations would rise from $150 million (FY2026) to $2.1 billion (FY2035).

Some China imports must use U.S. ships

Starting five years after enactment, a growing share of goods made in China must be imported on U.S.-built, U.S.-crewed U.S. vessels. The share would start at 1% in year 5 and rise by about 1 point yearly to 10% in year 14 and after. MARAD must issue a final rule within 4 years and can fine noncompliant shippers more than the cost difference versus foreign open‑registry ships. Fines would go into the Maritime Security Trust Fund.

U.S. ships for crude oil exports

Crude exporters would need to ship a set share on qualifying U.S.-documented and domestically built (or retrofitted early on) vessels. The required share would be 3% in years 1–7, 6% in years 8–10, 8% in years 11–13, and 10% in year 14 and after. Early years allow a U.S. retrofit path; later years require U.S. build and listed U.S.-made components. The President could waive component rules if costs rise 25% or more, delays are unreasonable, or parts are not available, and trade‑agreement conflicts could be exempt. Owners would also need to provide training opportunities for credentialed mariners, using federal export data.

U.S. ships for natural gas exports

Natural gas export approvals would require a rising share to be shipped on qualifying U.S. vessels. The schedule would be 2% in years 1–7, 3% in years 8–9, 4% in years 10–11, 6% in years 12–13, 7% in years 14–15, 9% in years 16–17, 11% in years 18–19, 13% in years 20–21, and 15% in year 22 and after. Early years allow a U.S. retrofit path; from year 6, vessels must be U.S.-built with listed U.S.-made components, including LNG boil‑off equipment. Waivers could apply for cost, delay, or availability, and trade‑agreement conflicts could be exempt. The bill also clarifies that gas exportation rules are subject to a specific subsection of the Natural Gas Act.

Easier mariner licenses and retention

If enacted, the Coast Guard’s department would modernize mariner licensing systems, add a secure online portal, accept employer uploads, and allow electronic testing. The bill would authorize $20 million in FY2026 for this upgrade. A new Merchant Marine Career Retention Program would let credentialed mariners work an 8‑3‑1 schedule (8 months ashore, 3 months at sea, 1 month vacation). Employers would grant unpaid leave and reinstate members, with USERRA protections. The Maritime Administrator would publish a merchant mariner workforce report every two years, supported by up to $1 million per year from 2026–2030.

PSLF path for mariners and shipyards

The bill would add the U.S. Merchant Marine and U.S. shipyards to Public Service Loan Forgiveness. Mariners would need a Coast Guard credential and at least 150 days working on a U.S. vessel in a calendar year. If enacted, qualifying borrowers could earn PSLF credit while working in these roles.

Reimburse moving costs for mariner spouses

Spouses who move because a merchant mariner is reassigned to certain reserve officer roles could get reimbursements. You could receive up to $1,000 for relicensing and up to $1,000 for business costs per move. No reimbursements would cover costs paid after December 31, 2035. The bill would authorize $500,000 each year for FY2026–FY2035.

USMMA time counts toward federal retirement

If enacted, time served as a U.S. Merchant Marine Academy midshipman would count for federal retirement under CSRS and FERS. It would apply to past and future service and to annuities based on separations before, on, or after enactment. This could raise retirement benefits for affected workers.

Broader tax rules for qualifying vessels

Vessel owners could treat reconstructed, reconditioned, or repowered ships like newly constructed ones for reserve and depreciation rules. The bill would remove a 30‑day domestic limit so more domestic segments can count for certain shipping tax rules. It would also update which ships qualify, including some U.S.-owned foreign‑flag ships that meet ownership, management, registry, and emergency‑readiness tests.

De-risk maritime ties with China

If enacted, Defense and Homeland Security would deliver a de‑risking strategy within 180 days and every two years to address threats from China and others. Starting after October 1, 2027, the government would list foreign shipyards of concern through a public notice‑and‑comment process, with updates no more than once a year. Several agencies would also report within 180 days on ways to limit U.S. capital flows to Chinese maritime industries and to encourage investment in U.S. and allied maritime firms.

Port priority for U.S.-flag ships

If enacted, the Transportation Secretary could let U.S.-flag ships go ahead of waiting ships from countries of concern at U.S. ports. The Secretary could end that priority at a port if it is in the national interest and must notify Congress within 30 days of doing so.

White House maritime advisor and board

The President would name a Maritime Security Advisor within 60 days and set up a White House office. A Maritime Security Board would start within 90 days, meet quarterly, and set fleet targets within one year. The bill would authorize $5 million each year for 2026–2035 to staff the Board. The Advisor would submit and update a National Maritime Strategy at least every five years and post it online within six months of submission. DOT and the department running the Coast Guard would send implementation plans within 60 days, brief Congress 15 days later, and update every six months for two years; GAO reviews would begin in two years and repeat every two years for ten years. Agencies could use direct‑hire authority for critical positions tied to this Act.

Yearly plan and drills for sealift

If enacted, the Maritime Security Board would set a yearly plan to grow U.S. sealift using federal programs. The plan would set fleet goals and assess U.S. shipbuilding capacity. TRANSCOM would run a tabletop exercise within 180 days, then yearly drills to test control of key fleets, with briefings to Congress. In crises, the government would prioritize commercial U.S. vessels first, then U.S. government ships, then allies, then partners. The Maritime Administrator would also report every two years on using shipbuilding incentives to strengthen the reserve fleet.

Check ports and cable repair readiness

If enacted, DoD would report within 180 days on how ready USNS Zeus and the Cable Security Fleet are to fix undersea internet cables. MARAD would report within 180 days on what ships, ports, shipyards, and fuel infrastructure are needed to support commerce and security, including effects of limiting data sharing with certain foreign platforms. MARAD would also report every two years through December 31, 2035 on vessel repair duties, U.S. shipyard capacity, and steps to strengthen the repair base.

More paths into maritime jobs

This would create a $2 million per year international exchange program for mariners and engineers. It would form a maritime career and technical education advisory committee within one year. It would put state academy training ships into Navy exercises when practical and prioritize student participation. DoD recruiters would refer disqualified applicants to MARAD for training and job hand‑offs, and DoD would deliver a transition plan within 180 days. During national emergencies, the Secretary could renew certain expired mariner credentials for up to two years.

Help agencies use U.S.-flag ships

If enacted, a new Ship America Office would help agencies and businesses move cargo on U.S.-flag ships and train federal staff on cargo‑preference rules. The Maritime Security Advisor would set standard interagency agreements within 180 days to handle non‑availability requests with clear steps and deadlines. Covered agencies could be reimbursed when U.S.-flag shipping raises their freight bills. Each year, reimbursement would equal any ocean freight costs above 20% of the cargo’s value. DOT would sign agreements within 180 days, approve proper claims within 90 days, and its Inspector General would audit results yearly.

Plans to boost U.S.-flag shipping

If enacted, the government would study ways to move more cargo on U.S.-flag ships, including tax or duty options and vessel privileges. A report to favor U.S. vessels in rules, taxation, fees, insurance, and policy would be due by March 1, 2026. The Federal Maritime Commission would publish a yearly competitiveness report with cargo shares and price comparisons. MARAD would survey large U.S.-documented vessels within 180 days and then yearly about build, repair, and upgrade plans. State and Commerce would also report within one year on easing some export controls on foreign‑owned marine firms while protecting U.S. workers.

More federal financing for maritime

The bill would let maritime projects use DOE Title XVII loan guarantees. It would expand Title XI eligibility to cover more U.S.‑documented vessels, coastwise endorsements, conversions to military‑useful ships, and vessels in certain federal fleet programs. It would also require at least 50% of Title XI guarantees go to projects not getting other federal payments under that part.

Shipbuilding research and tech program

MARAD and the Navy would run a National Shipbuilding Research Program. It would fund R&D, tech transfer, and best practices to improve shipyard efficiency. This is aimed at strengthening the maritime industrial base.

Tax breaks for maritime operators

The bill would extend a fuel excise tax exemption to certain U.S. vessels trading between Atlantic or Pacific U.S. ports for fuel used after December 31, 2025. It would exclude specified federal maritime security payments from gross income, but deny related deductions or credits and require basis reductions. It would also raise the recoverable share on foreign vessel repairs to 70%, and to 200% for work in a country of concern, for repairs or purchases started after enactment.

No double claim of ship credits

If you take a section 48F credit in a tax year, you could not take the section 48G shipyard credit for property placed in service that same year. This rule would apply to property placed in service after December 31, 2025. It would not apply to property placed in service after December 31, 2032.

Penalty tax on foreign-linked fleets

The bill would add a new per‑ton penalty tax for vessels tied to foreign entities or shipyards of concern. Rates would be $5.00, $3.50, or $1.25 per ton based on ownership, registry, or shipyard links. If more than one rule applies, the highest rate would apply. This would take effect upon enactment.

Tonnage tax rises with inflation

This would remove fixed per‑ton caps and require the regular tonnage tax to increase each year for inflation. It would take effect upon enactment. Vessel owners would face rising taxes over time.

Stricter tracking of cadet service

Cadets with service obligations would need to report each year in an online system that they met their duty or have a valid deferment. The agency would send notices if a person does not report and could pursue penalties or cost recovery. A first report to Congress would be due within 180 days, then annually.

Capital Construction Fund changes for equipment

This would let Capital Construction Fund holders use withdrawals to buy or rebuild vessels or cargo handling equipment and to pay loan principal for those items. It would tie deposits to agreement terms, shorten the applicable period to 15 years, and set year‑16 to year‑20 payouts at 20%, 40%, 60%, 80%, and 100%. But you could not use funds to buy cranes made in the People’s Republic of China, and not for fully automated remote equipment if the Secretary finds it would cause net job loss at a marine terminal. Most tax changes would apply to tax years starting after December 31, 2025.

Tighter cargo preference and enforcement

Only the President or the Defense or Transportation Secretaries could grant a temporary waiver during a declared emergency, and only if MARAD finds no qualified U.S.-flag capacity at fair rates. The bill would expand cargo‑preference coverage to more food‑aid programs and require MARAD regulations within 180 days, plus 14‑day notifications to Congress for credible noncompliance. It would also insert cargo‑preference requirements into certain food‑aid laws and repeal a prior statutory deadline. An interagency waiver agreement would be due within 180 days.

All federal cargo on U.S. ships

The bill would raise cargo preference for U.S.‑flag ships from at least 50% to 100%. This would start 180 days after enactment. It could boost demand for U.S.‑flag shipping and may raise costs for federal shippers and their partners.

Buy America rules for shipbuilding funds

Buy America rules would apply to Title XI loans, shipbuilding financial incentives, and money used to build or repair U.S.-built vessels. This could raise costs or shift purchases to U.S. suppliers. It would apply upon enactment.

Updates to ship investment savings rules

The bill would change Capital Construction Funds and Construction Reserve Funds. It would allow more flexible investing in CCFs, but bar withdrawals to buy cranes from the People’s Republic of China or foreign entities of concern, and block funding for fully automated gear if it would cause net job loss at a terminal. It would require U.S. citizenship and a 5‑year commitment to build or acquire an eligible vessel for CRFs, with limited extensions up to 15 years in total.

Faster permitting for ports and shipyards

This would add shipyards, ports, and maritime manufacturing to the FAST Act definition of infrastructure construction. That could allow some projects to use programmatic planning or faster environmental review. It may shorten timelines for certain maritime projects.

Alternate inspection path for foreign ships

Within one year, the Secretary would set alternate standards so some foreign‑documented oceangoing ships can get a U.S. Coast Guard certificate. Owners must agree to apply for U.S. documentation and meet classification, safety, and cybersecurity checks. The Secretary could accept certain foreign classification society certifications under strict conditions.

More public data on energy exports

The Energy Information Administration would publish data and forecasts on crude oil and natural gas exports by vessel. Next‑year and multi‑year outlooks would be posted on the EIA website. This could help market planning and transparency.

Temporary duty break for fleet repairs

Until December 31, 2035, some parts and repairs done abroad on vessels in certain U.S. fleet programs could be duty‑free. MARAD must confirm the vessel is in a covered program, and the owner must certify they tried to buy or repair in the U.S. Work in countries of concern would not qualify.

Annual inspections and TWIC checks

If enacted, the Secretary would inspect each covered facility at least once a year to confirm a valid exemption. During these visits, the Secretary would also check that required crew hold a TWIC card. Covered facilities include vessels, rigs, platforms, and similar structures.

Changes to import duty cost tests

This would change the law to compare if the cost to import goods on a vessel is comparable to or greater than on another vessel. It would also exclude duties under that test from the law’s suspension‑of‑discriminating‑duties language. This shifts how duty‑suspension rules apply to U.S.-flag vessel imports.

New maritime planning and advisory rules

The Maritime Security Advisor would gain appointment powers for the national advisory committee, and key federal agencies must be represented. Private‑sector members would be added by Congressional leaders. Non‑federal members would serve three‑year terms with a two‑term limit. The national freight plan would also need to include U.S. strategic sealift goals and maritime networks.

Passenger fare rules for ocean carriers

The bill would treat passengers like cargo in several shipping rules and add “fare” alongside “rate” and “charge.” It would bar a controlled carrier from offering passenger service below a just and reasonable fare. This extends oversight to passenger pricing.

Sponsors & CoSponsors

Sponsor

Kelly (MS)

MS • R

Cosponsors

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    MI • D

    Sponsored 2/9/2026

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