December 14 , 2007

Energy Bill Advances

The Clean Energy Act of 2007 has advanced through both chambers of Congress and the Administration has indicated its willingness to sign the legislation into law. Of particular significance to the maritime industry are provisions contained in Section 1121 of the legislation to promote short sea shipping initiatives as an instrument to alleviate land-based cargo and passenger transport congestion. Specifically, the Department of Transportation is charged with the development of a short sea transportation program and the designation of selected projects to document the potential advantages of utilizing short sea shipping alternatives. Such projects would include the use of short sea shipping routes to accommodate federally owned or generated cargo movements and programs to further cooperation between local, state, regional and federal transportation entities to foster short sea shipping operations. Additionally, operators would be able to access their Capital Construction Fund for financing the construction of vessels to be deployed in contiguous short sea shipping ventures.

The House passed version of the bill included some $21 billion in alternative energy tax incentives including the repeal of approximately $13 billion in current tax breaks targeted to the petroleum industry. The Administration threatened to veto the bill if these tax provisions remained in the final bill. Following days of debate, the Senate voted to strip the tax language from the bill, and proceeded to pass the legislation 86 to 8. House Speaker Nancy Pelosi expressed her intent to pass the Senate version of the legislation as early as next week.

Fiscal Year 2008 Defense Authorization Passes House

The House passed the Fiscal Year 2008 Department of Defense Authorization conference report on December 12 th by a 379 to 49 vote. The $696 billion bill would authorize the funding of the wide array of defense activities, including over $189 billion to finance military operations in Afghanistan and Iraq.

Of interest to the maritime community, the legislation contained language regarding the agency’s vessel leasing practices. The House version essentially restricted such contracts to two years or less. The Senate version was silent on this issue. In conference, a compromise was struck whereby the agency could enter into two to five year contractual arrangements provided that the appropriate House and Senate committees were notified 30 Congressional days prior to execution of the contract.

The conference report now goes before the Senate where it enjoys broad bipartisan support.

U.S. Customs and Border Protection Announces Container Scanning Standards

The U.S. Customs and Border Protection Service (CBP) released its anticipated technical standards required of container scanning devices. The specifications constitute a roadmap for device manufacturers to achieve the goals of the container scanning mandate. CBP stated that all such devices must; detect door openings after it has been armed, utilize a non-proprietary/interoperable radio fre-quency wireless platform, and are able to provide reads at the point of origin, a pre-determined intermediate point and the destination point. The devices must also offer a high probability of detection and a low probability of false alarms or critical failure.