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[House Report 109-709]
[From the U.S. Government Publishing Office]

109th Congress                                            Rept. 109-709
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

======================================================================

 
           MARITIME TERMINAL SECURITY ENHANCEMENT ACT OF 2006

                                _______
                                

               September 29, 2006.--Ordered to be printed

                                _______
                                

     Mr. Young of Alaska, from the Committee on Transportation and 
                Infrastructure, submitted the following

                              R E P O R T

                        [To accompany H.R. 4880]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 4880) to direct the Commandant of 
the Coast Guard to require that a security plan for a maritime 
facility be resubmitted for approval upon transfer of ownership 
or operation of such facility, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SEC. 1. SHORT TITLE.

    This Act may be cited as the ``Maritime Terminal Security 
Enhancement Act of 2006''.

SEC. 2. REVIEW OF FACILITY PLANS.

    The Commandant of the Coast Guard shall require that a security 
plan for a facility required under section 70103(c) of title 46, United 
States Code, shall be resubmitted for approval upon transfer of 
ownership or operation of such facility.

SEC. 3. FACILITY SECURITY OFFICERS.

    The Commandant of the Coast Guard shall require that the qualified 
individual having full authority to implement security actions who is 
required to be identified under section 70103(c)(3)(B) of title 46, 
United States Code, for a facility described in section 70103(c)(2) of 
that title shall be a citizen of the United States.

SEC. 4. TRANSPORTATION SECURITY CARDS.

    Section 70105(a)(1) of title 46, United States Code, is amended by 
striking ``The'' and inserting ``Not later than July 1, 2006, the''.

SEC. 5. FOREIGN PORT ASSESSMENTS.

    Section 70108 of title 46, United States Code, is amended by adding 
at the end the following:
    ``(d) Periodic Reassessment.--The Secretary, acting through the 
Commandant of the Coast Guard, shall reassess the effectiveness of 
antiterrorism measures maintained at ports as described under 
subsection (a) and of procedures described in subsection (b) not less 
than every 5 years.''.

SEC. 6. ENHANCED CREWMEMBER IDENTIFICATION.

    Section 70111 of title 46, United States Code, is amended--
          (1) in subsection (a) by striking ``The'' and inserting ``Not 
        later than July 1, 2006, the''; and
          (2) in subsection (b) by striking ``The'' and inserting ``Not 
        later than July 1, 2006, the''.

SEC. 7. LONG-RANGE VESSEL TRACKING.

    (a) Regulations.--Section 70115 of title 46, United States Code, is 
amended by striking ``The Secretary shall'' and inserting ``Not later 
than April 1, 2007, the Secretary shall''.
    (b) Voluntary Program.--The Secretary may issue regulations to 
establish a voluntary long-range automated vessel tracking system for 
vessels described in section 70115 of title 46, United States Code, 
during the period before regulations are issued to carry out section 
70115 of title 46, United States Code.

SEC. 8. CENTER OF EXCELLENCE FOR MARITIME DOMAIN AWARENESS.

    (a) Establishment.--The Secretary of the department in which the 
Coast Guard is operating shall establish a university-based Center for 
Excellence for Maritime Domain Awareness following the merit-review 
processes and procedures that have been established by the Secretary 
for selecting university program centers of excellence.
    (b) Duties.--The Center shall--
          (1) prioritize its activities based on the ``National Plan to 
        Improve Maritime Domain Awareness'' published by the Department 
        of Homeland Security in October 2005;
          (2) recognize the extensive previous and ongoing work and 
        existing competence in the field of maritime domain awareness 
        at numerous academic and research institutions, such as the 
        Naval Postgraduate School;
          (3) leverage existing knowledge and continue development of a 
        broad base of expertise within academia and industry in 
        maritime domain awareness; and
          (4) provide educational, technical, and analytical assistance 
        to Federal agencies with responsibilities for maritime domain 
        awarness, including the Coast Guard, to focus on the need for 
        interoperability, information sharing, and common information 
        technology standards and architecture.

SEC. 9. REQUIREMENTS RELATING TO ENTRY OF CONTAINERS INTO THE UNITED 
                    STATES.

    (a) Requirements.--Section 70116 of title 46, United States Code, 
is amended by adding at the end the following:
    ``(c) Requirements Relating to Entry of Containers.--
          ``(1) In general.--A container shipped, either directly or 
        via a foreign port, may enter the United States only if--
                  ``(A) the container is scanned with equipment that 
                meets the standards established pursuant to paragraph 
                (2)(A) and a copy of the scan is provided to the 
                Commandant of the Coast Guard; and
                  ``(B) the container is secured with a seal that meets 
                the standards established pursuant to paragraph (2)(B), 
                before the container is loaded on the vessel for 
                shipment.
          ``(2) Standards for scanning equipment and seals.--
                  ``(A) Scanning equipment.--The Commandant of the 
                Coast Guard shall establish standards for scanning 
                equipment required to be used under paragraph (1)(A) to 
                ensure that such equipment uses the best-available 
                technology, including technology to scan a container 
                for radiation and density and, if appropriate, for 
                atomic elements.
                  ``(B) Seals.--The Commandant of the Coast Guard shall 
                establish standards for seals required to be used under 
                paragraph (1)(B) to ensure that such seals are 
                developed and made using the best-available technology, 
                including technology to detect any breach into a 
                container and identify the time of such breach.
                  ``(C) Review and revision.--The Commandant of the 
                Coast Guard shall--
                          ``(i) review and, if necessary, revise the 
                        standards established pursuant to subparagraphs 
                        (A) and (B) not less than once every two years; 
                        and
                          ``(ii) ensure that any such revised standards 
                        require the use of technology, as soon as such 
                        technology becomes available, to--
                                  ``(I) identify the place of a breach 
                                into a container;
                                  ``(II) notify the Commandant of such 
                                breach before the container enters the 
                                Exclusive Economic Zone of the United 
                                States; and
                                  ``(III) track the time and location 
                                of the container during transit to the 
                                United States, including by truck, 
                                rail, or vessel.
                  ``(D) Definition.--In subparagraph (C), the term 
                `Exclusive Economic Zone of the United States' has the 
                meaning given the term `Exclusive Economic Zone' in 
                section 2101(10a) of this title.''.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out section 70116(c) of title 46, United States 
Code, as added by subsection (a) of this section, such sums as may be 
necessary for each of fiscal years 2007 through 2012.
    (c) Regulations; Application.--
          (1) Regulations.--
                  (A) Interim final rule.--The Commandant of the Coast 
                Guard shall issue an interim final rule as a temporary 
                regulation to implement section 70116(c) of title 46, 
                United States Code, as added by subsection (a) of this 
                section, not later than 120 days after the date of the 
                enactment of this section, without regard to the 
                provisions of chapter 5 of title 5, United States Code.
                  (B) Final rule.--The Commandant shall issue a final 
                rule as a permanent regulation to implement section 
                70116(c) of title 46, United States Code, as added by 
                subsection (a) of this section, not later than one year 
                after the date of the enactment of this section, in 
                accordance with the provisions of chapter 5 of title 5, 
                United States Code. The final rule issued pursuant to 
                that rulemaking may supersede the interim final rule 
                issued pursuant to subparagraph (A).
          (2) Phased-in application.--
                  (A) In general.--The requirements of section 70116(c) 
                of title 46, United States Code, as added by subsection 
                (a) of this section, apply with respect to a container 
                being shipped, either directly or via a foreign port, 
                and entering the United States beginning on--
                          (i) the last day of the 3-year period 
                        beginning on the date of the enactment of this 
                        Act, in the case of a container loaded on a 
                        vessel destined for the United States in a 
                        country in which more than 75,000 twenty-foot 
                        equivalent units of containers were loaded on 
                        vessels for shipping to the United States in 
                        2005; and
                          (ii) the last day of the 5-year period 
                        beginning on the date of the enactment of this 
                        Act, in the case of a container loaded on a 
                        vessel destined for the United States in any 
                        other country.
                  (B) Extension.--The Commandant of the Coast Guard may 
                extend by up to one year the period under clause (i) or 
                (ii) of subparagraph (A) for containers loaded in a 
                port, if the Commandant--
                          (i) finds that the scanning equipment 
                        required under section 70116(c) of title 46, 
                        United States Code, as added by subsection (a) 
                        of this section, is not available for purchase 
                        and installation in the port; and
                          (ii) at least 60 days prior to issuing such 
                        extension, transmits such finding to the 
                        Committee on Transportation and Infrastructure 
                        of the House of Representatives and the 
                        Committee on Commerce, Science, and 
                        Transportation of the Senate.

SEC. 10. SECURITY PLANS FOR CARGO TERMINAL FACILITIES.

    (a) In General.--Section 70103(c) of title 46, United States Code, 
is amended by adding at the end the following:
    ``(8) The Secretary may require the owner or operator of a facility 
that is required to have a security plan under paragraph (1) and that 
is a cargo terminal, to submit information, including contracts or 
other agreements that govern operations of such facilities, to the 
Secretary to determine if there is any security risk involving that 
owner or operator.''.
    (b) Annual Report.--The Secretary of the department in which the 
Coast Guard is operating shall annually submit to Congress a report 
regarding contracts and agreements that govern operation of facilities 
required to have a security plan under section 70103(c)(1) of title 46, 
United States Code. Such report shall detail the extent of foreign 
ownership of parties to such contracts and agreements and detail any 
security risks that such foreign ownership may pose.

                       Purpose of the Legislation

    H.R. 4880, the Maritime Terminal Security Enhancement Act 
of 2006, makes several amendments to current law to enhance 
maritime security at U.S. ports and aboard vessels that operate 
on U.S. waterways.

                Background and Need for the Legislation

    Following the attacks on September 11, 2001, Congress 
passed the Maritime Transportation Security Act of 2002 (MTSA) 
to establish a national framework to enhance security 
throughout the maritime domain. Under the MTSA, the Coast Guard 
and other Federal agencies have developed and implemented 
critical maritime security programs, systems, and procedures to 
improve awareness of activities in the maritime domain and 
capabilities to prevent future attacks to the Maritime 
Transportation System. However, despite this progress, several 
key mandates under the MTSA have not yet been completed. The 
Committee on Transportation and Infrastructure remains 
extremely concerned and frustrated by the Department of 
Homeland Security's failure to fully implement the maritime 
security measures required under the MTSA.
    The recently proposed takeover of port terminal operations 
by Dubai Ports World, a United Arab Emirates state-owned 
entity, raised several concerns regarding the responsibilities 
of port operators in maintaining security in U.S. ports. While 
it appears that the proposed takeover will not go forward, it 
brought the Nation's collective attention to the importance of 
maintaining high levels of security at our ports and the need 
for comprehensive and fully integrated security measures to 
protect each component of the Maritime Transportation System. 
The open and interrelated nature of the Maritime Transportation 
System necessitates that the full scope of security measures 
required under the MTSA be implemented quickly and completely.
    H.R. 4880 requires the Federal government to take several 
actions to enhance the capabilities of the Coast Guard and 
other Federal agencies to secure the maritime domain including 
the establishment of deadlines for several maritime security 
programs required under the MTSA.

                       Summary of the Legislation

    H.R. 4880 makes several amendments to current law to 
enhance maritime security at U.S. ports and aboard vessels that 
operate in U.S. waters.
    Section 1 states that the legislation may be referred to as 
``The Maritime Terminal Security Enhancement Act of 2006''.
    Section 2 requires the resubmission of a facility security 
plan for the Coast Guard's approval upon the transfer of 
ownership or operational control over a port terminal facility. 
Under section 70103 of title 46, United States Code, all U.S. 
facilities were required to submit and receive approval of a 
facility security plan prior to July 1, 2004. That section also 
requires such facilities to resubmit a facility security plan 
for approval if there is a change to the facility ``that may 
substantially affect the security of the . . . facility''; 
however it is unclear whether a change in ownership or 
operational control over a facility would require such a 
resubmission.
    Section 3 requires an individual that is designated as the 
Facility Security Officer under a facility security plan to be 
a U.S. citizen.
    Section 4 requires the Secretary of the department in which 
the Coast Guard is operating to issue regulations not later 
than July 1, 2006, to carry out a program to issue 
transportation security cards to provide maritime workers and 
merchant mariners access to secure areas within U.S. ports and 
aboard U.S.-flag vessels.
    The Transportation Security Administration (TSA) is in the 
process of developing a Transportation Worker Identification 
Credential (TWIC), in consultation with the Coast Guard, to 
meet the transportation security card requirements that were 
included in the MTSA (46 U.S.C. 70105). In the more than three 
years since the enactment of this requirement, little progress 
has been made in developing the TWIC program. The TSA recently 
completed a ``prototype phase'' which tested and evaluated 
several credential technologies and issuance procedures; 
however the TSA did not test or evaluate procedures to carry 
out security background checks or methods to collect and 
display biometric information on each credential. The Committee 
remains extremely concerned by the apparent lack of interest on 
the part of the TSA and the Department of Homeland Security in 
this vital homeland security mission. The TWIC will be one of 
the primary means of restricting access to potentially 
vulnerable areas within ports, terminal facilities, and aboard 
vessels in the United States.
    The TSA and the Coast Guard have finalized a Notice of 
Proposed Rulemaking for the implementation of the TWIC program 
in the maritime transportation sector and the development of a 
Merchant Mariner Credential that will combine the elements of 
Merchant Mariner's License, Merchant Mariner's Document, 
Certificate of Registry, and STCW Endorsement into one 
qualification credential. It is expected that the Notice of 
Proposed Rulemaking will be published in the Federal Register 
later this month and that the public will have an adequate 
period to comment on the proposed rules. The Committee will 
continue to monitor the progress of the proposed rules and will 
use its oversight function to ensure that any regulations take 
into account the concerns of merchant mariners and the general 
public.
    Section 5 requires the Coast Guard to periodically reassess 
foreign ports' compliance with international port security 
requirements and the effectiveness of antiterrorism measures 
maintained at those ports under such agreements not less than 
every 5 years. The Committee supports the Coast Guard's ongoing 
efforts to enhance maritime security at foreign ports through 
its foreign port assessments and through the International Port 
Security Program; however, the Committee believes that the 
Coast Guard should continue to validate foreign ports' 
compliance with international regulations through periodic 
reassessments.
    Section 6 requires the Secretary of the department in which 
the Coast Guard is operating to not later than July 1, 2006, 
develop standards and procedures for enhanced crewmember 
identification credentials for U.S. and foreign merchant 
mariners that are carried aboard vessels that call on U.S. 
ports and to issue regulations that require such crewmembers to 
carry such credentials and present them on demand as required 
under the MTSA (46 U.S.C. 70111). The Committee believes that 
the rulemaking for crewmembers' identification be carried out 
on the same timeline as the rulemaking for the TWIC. The 
Committee strongly recommends that the Secretary continue to 
work with our international partners to develop common 
standards and procedures for such credentials; however, failure 
to come to an agreement through the International Maritime 
Organization should not deter the United States from 
implementing this critical maritime security measure 
domestically by the statutory deadline of July 1, 2006.
    Section 7 amends section 70115 of title 46, United States 
Code, to require the Secretary of the department in which the 
Coast Guard is operating to issue regulations that establish 
and implement a long range vessel tracking system by not later 
than April 1, 2007. This system will have the capability to 
track vessels up to 2,000 nautical miles from shore and will 
compliment the near-shore tracking capabilities provided by the 
Automatic Identification System (AIS). The Coast Guard has 
previously testified to the Committee that they are working 
through the International Maritime Organization (IMO) to 
develop the components of a global system rather than 
implementing a long range vessel tracking system domestically.
    The IMO has announced that it is holding meetings in May 
2006 to discuss proposed standards and requirements for an 
international long-range vessel tracking system. The Committee 
understands that the final domestic system will have to be 
compatible with the system that will be implemented by our 
international partners; however, the Committee remains 
concerned by the Administration's apparent decision to delay 
the development and implementation of this system here at home. 
The Committee strongly recommends that the Coast Guard actively 
work through the IMO to develop standards and procedures; 
however, failure to come to an agreement through the IMO should 
not deter the United States from implementing this critical 
maritime security measure domestically by the statutory 
deadline of April 1, 2007.
    This section also authorizes the Secretary to establish a 
pilot program to track vessels who voluntarily agree to 
participate until such time as the program under this section 
becomes mandatory. The Committee strongly recommends that the 
Secretary utilize the pilot program to test and evaluate 
technologies and procedures to further the development of a 
mandatory, nationwide long-range vessel tracking system.
    Section 8 directs the Secretary of the department in which 
the Coast Guard is operating to establish a university-based 
Center for Excellence for Maritime Domain Awareness. The 
Department of Homeland Security has created six such Centers of 
Excellence which bring together the nation's best experts and 
focus its most talented researchers on a variety of threats to 
the Nation's homeland security. The Committee recommends that 
such a Center be established to improve the Federal 
government's capabilities to deter and respond to potential 
threats in the maritime domain by enhancing its awareness of 
all activities that occur within the maritime domain.
    Section 9 would prohibit maritime cargo containers from 
entering a U.S. port unless a container was screened using non-
intrusive scanning equipment in a foreign port, the results of 
the scan are provided to U.S. authorities, and the container is 
sealed with an enhanced seal. The provision establishes a 
timeline that would require all cargo containers originating 
from foreign nations that exported more than 75,000 twenty-foot 
equivalent units (TEUs) in calendar year 2005 to be screened 
and sealed by not later than three years after enactment. The 
provision further requires that containers originating from all 
other ports be screened and sealed by not later than five years 
after enactment. The provision further requires that containers 
originating from all other ports be screened and sealed by not 
later than five years after enactment. As the scanning 
technology develops, the Commandant of the Coast Guard could 
also require that the scan identify the atomic elements of the 
contents of the container. This will help decrease the rate of 
false positives in the scan results.
    The Committee is concerned that a weapon of mass 
destruction could be smuggled into the United States in one of 
the 11 million containers that enter the United States each 
year. After 9/11, the Coast Guard was the first agency to 
declare that we must ``push the borders out''. It is too late 
to screen the containers once they reach the United States.
    The major container terminals in Hong Kong have been 
scanning 100 percent of the containers entering the facility 
over the past year. They scan for radiation and for density. It 
costs $6.50 to scan a container at those terminals. This does 
not include the cost of reading and interpreting those scans.
    Section 9 also requires all containers shipped to the 
United States to have a container seal that will indicate 
whether any of the sides of a container have been breached. For 
years, thieves have drilled out the container hinges, stolen 
merchandise, and replaced the hinge bolts--without being 
caught. In the post-9/11 environment, it is important to be 
able to detect any breach in the shell of a container after it 
has been scanned to ensure that a weapon of mass destruction 
has not been smuggled into the container between the point of 
scanning and when it enters the United States.
    Section 10 would authorize the Secretary to request certain 
information from an owner or operator of a maritime facility 
that is necessary to determine the facility's security risk.

            Legislative History and Committee Consideration

    H.R. 4880, the Maritime Terminal Security Enhancement Act 
of 2006, was introduced by Coast Guard and Maritime 
Transportation Subcommittee Chairman Frank A. LoBiondo on March 
6, 2006. The bill was referred primarily to the Committee on 
Transportation and Infrastructure.
    The Subcommittee on Coast Guard and Maritime Transportation 
has held numerous hearings during the 109th Congress and 
previous Congresses to continue its oversight over the Federal 
government's implementation of maritime security measures as 
required by the Maritime Transportation Security Act of 2002 
and the Coast Guard and Maritime Transportation Security Act of 
2004. The Subcommittee held a field hearing on January 24, 
2006, in Philadelphia, Pennsylvania, to review the status of 
several maritime security programs including the requirement to 
develop a Transportation Workers' Identification Credential 
(TWIC). The Subcommittee held an additional oversight hearing 
on March 9, 2006 to investigate the impacts of foreign control 
of operations at U.S. ports on U.S. maritime security efforts.
    On April 5, 2005, the Subcommittee on Coast Guard and 
Maritime Transportation was discharged from consideration of 
the bill, and the bill was considered during a mark-up session 
of the Committee on Transportation and Infrastructure. At this 
mark-up, Coast Guard and Maritime Transportation Subcommittee 
Chairman, Mr. LoBiondo, offered an amendment to add several new 
sections to the end of the bill. The amendment was adopted 
unanimously by voice vote. Mr. Nadler of New York also offered 
an amendment to add a section requiring maritime cargo 
containers to be screened at foreign ports prior to entry at a 
U.S. port. The Nadler amendment was also adopted by voice vote. 
Mr. Cummings of Maryland offered an amendment to authorize the 
Secretary of the department in which the Coast Guard is 
operating to request certain information from the owner or 
operator of a maritime facility. The Cummings amendment was 
also adopted by voice vote.
    H.R. 4880, as amended, was approved by voice vote and was 
ordered favorably reported to the House.

                             Rollcall Votes

    Clause 3(b) of rule XIII of the House of Representatives 
requires each committee report to include the total number of 
votes cast for and against on each roll call vote on a motion 
to report and on any amendment offered to the measure or 
matter, and the names of those members voting for and against. 
There were no rollcall votes during committee consideration of 
the bill.

                      Committee Oversight Findings

    With respect to the requirements of clause 3(c)(1) of rule 
XIII of the Rules of the House of Representatives, the 
Committee's oversight findings and recommendations are 
reflected in this report.

                          Cost of Legislation

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives does not apply where a cost estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974 has been timely submitted prior to the filing of the 
report and is included in the report. Such a cost estimate is 
included in this report.

                    Compliance With House Rule XIII

    1. With respect to the requirement of clause 3(c)(2) of 
rule XIII of the Rules of the House of Representatives, and 
308(a) of the Congressional Budget Act of 1974, the Committee 
references the report of the Congressional Budget Office 
included below.
    2. With respect to the requirement of clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 4880.
    3. With respect to the requirement of clause 3(c)(3) of 
rule XIII of the Rules of the House of Representatives and 
section 402 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 
4880 from the Director of the Congressional Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 15, 2006.
Hon. Don Young,
Chairman, Committee on Transportation and Infrastructure,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4880, the Maritime 
Terminal Security Enhancement Act of 2006.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Deborah 
Reis (for Federal costs), Sarah Puro (for the State and local 
impact), and Paige Piper/Bach (for the private-sector impact).
            Sincerely,
                                          Donald B. Marron,
                                                   Acting Director.
    Enclosure.

H.R. 4880--Maritime Terminal Security Enhancement Act of 2006

    Summary: H.R. 4880 would amend the Maritime Transportation 
Security Act of 2002 (MTSA) to address new and ongoing issues 
relating to port security. Assuming appropriation of the 
necessary amounts, CBO estimates that implementing H.R. 4880 
would cost about $140 million over the next five years. We 
estimate that enacting this legislation would have no effect on 
revenues or direct spending.
    The bill contains intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA), but CBO estimates that 
the costs to public ports would not exceed the threshold 
established by that act ($64 million in 2006, adjusted annually 
for inflation).
    H.R. 4880 also would impose new private-sector mandates, as 
defined in UMRA, on the shipping industry. CBO estimates that 
the aggregate direct cost of complying with those mandates 
would exceed the annual threshold for private-sector mandates 
($128 million in 2006, adjusted annually for inflation) in at 
least one of the first five years the mandates would be in 
effect, beginning in 2010.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 4880 is shown in the following table. 
The costs of this legislation fall within budget function 400 
(transportation).

------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2007    2008    2009    2010    2011
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Spending for Center of
 Excellence
    Estimated Authorization            4       4       4       4       4
     Level......................
    Estimated Outlays...........       4       4       4       4       4
Spending to Implement Scan and
 Seal Requirements
    Estimated Authorization           10      15      30      40      45
     Level......................
    Estimated Outlays...........       5      10      25      35      45
    Total Spending Under H.R.
     4880
      Estimated Authorization         14      19      34      44      49
       Level....................
      Estimated Outlays.........       9      14      29      39      49
------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that H.R. 
4880 will be enacted near the end of fiscal year 2006 and that 
the entire amounts estimated to be necessary to carry out the 
bill will be appropriated for each of fiscal years 2007 through 
2011.
    CBO estimates that implementing most provisions of H.R. 
4880 would have no significant effect on federal spending 
because the activities that would be required by these 
provisions are already underway. Such provisions would 
establish new deadlines for ongoing projects, require new 
elements to be added to port security plans, and create new 
federal reporting requirements. The bill's provisions that 
would establish a Center for Excellence for Maritime Awareness 
and increase oversite of shipping container security would 
increase federal costs, assuming appropriation of the amounts 
needed to implement them. CBO estimates that, in total, these 
projects would cost about $9 million in 2007 and about $140 
million over the 2007-2011 period.

Center for excellence for maritime awareness

    H.R. 4880 would direct the United States Coast Guard (USCG) 
to establish a center for excellence for maritime awareness. 
The university-based center would provide educational and other 
assistance to federal agencies on issues relating to maritime 
security. Such centers sponsored by the Department of Homeland 
Security (DHS) typically receive between $3 million and $6 
million annually. Based on the costs of supporting similar 
centers established by other agencies within the department, 
CBO estimates that the USCG would provide a grant of $4 million 
a year to the new center beginning in 2007.

Container security

    H.R. 4880 would prohibit cargo containers from entering the 
United States unless they are sealed and have been scanned with 
imaging and radiation-detection equipment. Under the bill, the 
USCG would promulgate standards for scanning equipment and for 
seals to detect breaches in containers after they have been 
scanned. The new requirements would become effective within 
three years (for containers loaded in countries that originate 
more than 75,000 ``twenty-foot equivalent'' containers) and 
within five years (for countries originating a smaller volume 
of traffic). The bill would authorize the appropriation of 
whatever amounts are necessary for this purpose.
    Assuming appropriation of the necessary amounts, CBO 
estimates that implementing and enforcing this provision would 
cost about $5 million in 2007. Annual costs would rise to $45 
million by 2011. We estimate that most of these amounts would 
be used to equip, train, pay, and support an additional 300 to 
400 DHS employees to review container scans and enforce the 
bill's requirement that containers be sealed. We expect that 
annual costs would fall in later years (after 2011) because DHS 
would probably develop more efficient ways to review scans and 
inspect seals.
    For this estimate, CBO assumes that the cost of installing 
and maintaining the systems necessary to comply with the bill's 
requirements would be borne by foreign shipyards rather than 
the federal government, although we expect that DHS would 
probably finance some of this effort through its existing 
container security initiative (CSI). DHS received 
appropriations of nearly $140 million for the CSI program for 
2006. Industry experts have estimated that up-front costs to 
acquire and deploy the necessary scanning and detection 
equipment for nearly all foreign ports shipping containers to 
the U.S. would be about $1.5 billion over three years, with 
those costs borne primarily by foreign governments and the 
shipping industry.
    Estimated impact on State, local, and tribal governments: 
H.R. 4880 contains intergovernmental mandates as defined in 
UMRA because it would require ports to comply with certain 
regulations more quickly than under current law, to resubmit 
security plans to the Coast Guard in certain circumstances, and 
to hire a United States citizen for the position of chief 
security officer. Only the provisions that would require 
publicly owned ports to comply with regulations more quickly 
than under current law could impose costs on those entities. 
Based on information from industry and governmental sources, 
CBO estimates that the costs to intergovernmental entities of 
these provisions likely would total less than $3 million and 
therefore would not exceed the threshold established in UMRA 
($64 million in 2006, adjusted annually for inflation).
    Estimated impact on the private sector: H.R. 4880 would 
impose new private-sector mandates, as defined in UMRA, on 
shipping carriers and owners and operators of maritime terminal 
facilities. CBO estimates that the aggregate direct cost of 
complying with those mandates would exceed the annual threshold 
for private-sector mandates ($128 million in 2006, adjusted 
annually for inflation) in at least one of the first five years 
the mandates would be in effect, beginning in 2010. That 
conclusion is based on our analysis of the mandate with the 
highest cost that would require that all cargo containers that 
enter the United States be secured with a seal that meets 
certain standards.

Seal requirements for cargo containers

    The bill would impose a mandate on certain shipping 
carriers by requiring all containers to be secured with a seal 
that meets certain standards before the containers are loaded 
on the vessel for shipment to the United States. The bill would 
require seals that are able to detect any breach and identify 
the time of such breach. The requirement would be phased in 
over the next five years.
    While the standards for such seals have not been 
established, industry sources indicate that based on current 
technology certain electronic seals could be secured and read 
at a cost of approximately $30 to $45 per container for each 
shipment. Based on information from industry and government 
sources, approximately 15 million containers required to have 
such seals are projected to enter the United States in 2010. 
Based on this information, CBO expects that the direct costs to 
comply with this mandate would amount to at least $450 million 
or more in 2010, the first year the mandate would be in effect 
and thus, would exceed the annual threshold for private-sector 
mandates. In subsequent years, the direct cost of the mandate 
on shipping carriers would tend to decrease as the cost of 
seals may decrease according to industry sources, but CBO has 
no basis for estimating the change in costs.

Other requirements

    The bill also would impose mandates on owners and operators 
of maritime terminal facilities. The bill would require that 
any individual having full authority to implement security 
action at a terminal facility be a citizen of the United 
States. The bill also would authorize the Secretary of DHS to 
require that owners or operators of a terminal facility submit 
certain information that govern operations of the facility to 
the Secretary to determine if there is any security risk 
involving the owner or operator. Additionally, the bill would 
require that owners and operators of maritime terminal 
facilities resubmit their security plans for approval upon 
transfer of ownership or operation of the facility. And 
finally, the bill could impose additional mandates on the 
private-sector depending on how and when certain regulations 
addressed in the bill would be issued. Based on information 
from industry and government sources, CBO expects that the 
direct cost of complying with those requirements would be small 
relative to UMRA's annual threshold.

Other impacts

    The bill also would require all shipping containers 
entering the United States to be scanned with certain equipment 
with a copy of the scan to be sent to the Coast Guard. Because 
the bill does not specify who would be required to provide such 
scans, this provision may not impose a mandate as defined in 
UMRA on the private sector. Even so, to the extent that 
scanning causes a delay in the delivery of shipments, the 
private sector could incur additional costs.
    Previous CBO estimates: On May 9, 2006, CBO transmitted a 
cost estimate for S. 2495, the Greenlane Maritime Cargo 
Security Act, as ordered reported by the Senate Committee on 
Homeland Security and Governmental Affairs on May 2, 2006. On 
April 28, 2006, we transmitted a cost estimate for H.R. 4954, 
the Security and Accountability for Every Port Act, as ordered 
reported by the House Committee on Homeland Security on April 
26, 2006. On March 29, 2006, CBO transmitted a cost estimate 
for S. 1052, the Transportation Security Improvement Act of 
2005, as reported by the Senate Committee on Commerce, Science, 
and Transportation on February 27, 2006. Like H.R. 4880, all 
three of those bills would address concerns about port 
security, particularly regarding freight containers entering 
the United States from foreign ports, and would use different 
approaches to address such concerns, which are reflected in 
CBO's cost estimates.
    Estimate prepared by: Federal Costs: Deborah Reis. Impact 
on State, Local, and Tribal Governments: Sarah Puro. Impact on 
the Private Sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to clause (3)(d)(1) of rule XIII of the Rules of 
the House of Representatives, committee reports on a bill or 
joint resolution of a public character shall include a 
statement citing the specific powers granted to the Congress in 
the Constitution to enact the measure. The Committee on 
Transportation and Infrastructure finds that Congress has the 
authority to enact this measure pursuant to its powers granted 
under article I, section 8 of the Constitution.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act (Public Law 104-4).

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (Public Law 
104-1).

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

TITLE 46, UNITED STATES CODE

           *       *       *       *       *       *       *

Subtitle VI--Miscellaneous

           *       *       *       *       *       *       *

CHAPTER 701--PORT SECURITY

           *       *       *       *       *       *       *

Sec. 70103. Maritime transportation security plans

  (a) * * *

           *       *       *       *       *       *       *

  (c) Vessel and Facility Security Plans.--(1) * * *

           *       *       *       *       *       *       *

  (8) The Secretary may require the owner or operator of a 
facility that is required to have a security plan under 
paragraph (1) and that is a cargo terminal, to submit 
information, including contracts or other agreements that 
govern operations of such facilities, to the Secretary to 
determine if there is any security risk involving that owner or 
operator.

           *       *       *       *       *       *       *

Sec. 70105. Transportation security cards

  (a) Prohibition.--(1) [The] Not later than July 1, 2006, the 
Secretary shall prescribe regulations to prevent an individual 
from entering an area of a vessel or facility that is 
designated as a secure area by the Secretary for purposes of a 
security plan for the vessel or facility that is approved by 
the Secretary under section 70103 of this title unless the 
individual--
          (A) * * *

           *       *       *       *       *       *       *

Sec. 70108. Foreign port assessment

  (a) * * *

           *       *       *       *       *       *       *

  (d) Periodic Reassessment.--The Secretary, acting through the 
Commandant of the Coast Guard, shall reassess the effectiveness 
of antiterrorism measures maintained at ports as described 
under subsection (a) and of procedures described in subsection 
(b) not less than every 5 years.

           *       *       *       *       *       *       *

Sec. 70111. Enhanced crewmember identification

  (a) Requirement.--[The] Not later than July 1, 2006, the 
Secretary, in consultation with the Attorney General and the 
Secretary of State, shall require crewmembers on vessels 
calling at United States ports to carry and present on demand 
any identification that the Secretary decides is necessary.
  (b) Forms and Process.--[The] Not later than July 1, 2006, 
the Secretary, in consultation with the Attorney General and 
the Secretary of State, shall establish the proper forms and 
process that shall be used for identification and verification 
of crewmembers.

           *       *       *       *       *       *       *

Sec. 70115. Long-range vessel tracking system

  [The Secretary shall] Not later than April 1, 2007, the 
Secretary shall, consistent with international treaties, 
conventions, and agreements to which the United States is a 
party, develop and implement a long-range automated vessel 
tracking system for all vessels in United States waters that 
are equipped with the Global Maritime Distress and Safety 
System or equivalent satellite technology. The system shall be 
designed to provide the Secretary the capability of receiving 
information on vessel positions at interval positions 
appropriate to deter transportation security incidents. The 
Secretary may use existing maritime organizations to collect 
and monitor tracking information under the system.

Sec. 70116. Secure systems of transportation

  (a) * * *

           *       *       *       *       *       *       *

  (c) Requirements Relating to Entry of Containers.--
          (1) In general.--A container shipped, either directly 
        or via a foreign port, may enter the United States only 
        if--
                  (A) the container is scanned with equipment 
                that meets the standards established pursuant 
                to paragraph (2)(A) and a copy of the scan is 
                provided to the Commandant of the Coast Guard; 
                and
                  (B) the container is secured with a seal that 
                meets the standards established pursuant to 
                paragraph (2)(B), before the container is 
                loaded on the vessel for shipment.
          (2) Standards for scanning equipment and seals.--
                  (A) Scanning equipment.--The Commandant of 
                the Coast Guard shall establish standards for 
                scanning equipment required to be used under 
                paragraph (1)(A) to ensure that such equipment 
                uses the best-available technology, including 
                technology to scan a container for radiation 
                and density and, if appropriate, for atomic 
                elements.
                  (B) Seals.--The Commandant of the Coast Guard 
                shall establish standards for seals required to 
                be used under paragraph (1)(B) to ensure that 
                such seals are developed and made using the 
                best-available technology, including technology 
                to detect any breach into a container and 
                identify the time of such breach.
                  (C) Review and revision.--The Commandant of 
                the Coast Guard shall--
                          (i) review and, if necessary, revise 
                        the standards established pursuant to 
                        subparagraphs (A) and (B) not less than 
                        once every two years; and
                          (ii) ensure that any such revised 
                        standards require the use of 
                        technology, as soon as such technology 
                        becomes available, to--
                                  (I) identify the place of a 
                                breach into a container;
                                  (II) notify the Commandant of 
                                such breach before the 
                                container enters the Exclusive 
                                Economic Zone of the United 
                                States; and
                                  (III) track the time and 
                                location of the container 
                                during transit to the United 
                                States, including by truck, 
                                rail, or vessel.
                  (D) Definition.--In subparagraph (C), the 
                term ``Exclusive Economic Zone of the United 
                States'' has the meaning given the term 
                ``Exclusive Economic Zone'' in section 
                2101(10a) of this title.

           *       *       *       *       *       *       *

                                  
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