IMX Session Discusses Shipyard Funding

Associates of the U.S. Maritime Administration (MarAd) representing the Small Shipyard Grant Coalition and the Capital Construction Program discussed funding opportunities for U.S. shipyards during the funding and financing session at the 2026 Inland Marine Expo (IMX) in Nashville, Tenn. James A. Kearns III, special counsel at Jones Walker, led the session. Panelists included Erica Young, director of the Small Shipyard Grant Coalition; Dave Matsuda, principal of Matsuda & Associates LLC; and David Gilmore, director of the office of marine financing at MarAd.

Small Shipyard Grant Coalition

Young opened the session by introducing the Small Shipyard Grant Coalition, which was started in 2008. The coalition advocates for and secures funding for the Small Shipyard Grant Program, a grant program through MarAd that provides funding to eligible shipyards for shipyard repairs, equipment, capital purchases, training programs and shipbuilding. The coalition appeals to Congress for funding, ensuring that shipyards aren’t left out of the conversation. Shipyards that work on vessels longer than 40 feet and have fewer than 1,200 production employees are eligible to apply.

“It’s been a labor of love in a way, but also a really great opportunity to pull a lot of like-minded individuals together and make sure your interests are being represented,” Young said.

Young explained that the coalition campaigns for aggressive amounts of funding through an authorization bill, which is then followed up with requesting funding through appropriations committees. According to Young, Congress agreed to provide $35 million in funding this year, with final funding still being negotiated.

David Matsuda acknowledged President Donald Trump, who has been pushing to bring more financing to shipbuilding in the United States, as an important factor in the funding amount. Though Congress approved $35 million of the $105 million Trump requested for the program, Matsuda said it’s the most money the program has seen in 15 years.

Matsuda, who worked in the U.S. Senate while the program legislation was authored, explained that grant funding cannot be used for new buildings or real estate acquisitions.

“The purpose of the program is to help the yard itself become more efficient,” Matsuda said. “It’s about production efficiency, how to reduce cost, reduce labor requirements for certain tasks in the repair and new construction fields.”

Capital Construction Program

David Gilmore then introduced the Capital Construction Fund (CCF) Program, which aims to aid owners and operators with construction, reconstruction and vessel acquisition. At 90 years old, the program had previously only been available for operators in offshore trades and the Great Lakes and was therefore closed to people working in the inland river business. After the National Defense Authorization Act was passed for the 2023 fiscal year (2023 NDAA), many restrictions were stripped by Congress, and the program is now available for any business, including shipyards, that own or operate U.S.-flagged vessels.

Gilmore explained that unlike the Small Shipyard Grant Program, the CCF program is not dependent on Congress for funding. Instead, CCF is a tax deferral program, in which businesses can invest for up to 25 years. The program currently includes more than 150 participants.

“It’s just a matter of submitting an application to our office to be able to take advantage of it,” Gilmore said. “It has the ability to capture ongoing income generated by your assets, as well as any income that you may have had when you sell an asset.”

Gilmore clarified that unless companies are taking part in an acquisition or merging, the program cannot be used to buy existing equipment.

“The theme with almost all of MarAd’s programs is to support domestic ship construction,” Gilmore said. “What can we do to support U.S. shipyards? So, the Small Shipyard Grant Program is intended to improve and provide small shipyards with an opportunity to be more efficient through additional equipment purchases, training, that kind of thing. With the CCF Program, while operators are benefitting from the tax deferral benefit of it, ultimately the goal of the program is to get operators to utilize U.S. shipyards for reconstruction or new builds.”

“In a way, I think about it as the purpose of the program is to enlarge the fleet in service, to improve the fleet in service, but not just rearrange the fleet that’s in service,” Kearns said.

Businesses that take part in the CCF program must submit an annual report of how much money was put into the CCF account, how much was taken out and what that money was used for. MarAd then submits that information on behalf of all participating companies to the IRS. According to Gilmore, even companies that made deposits but did not withdraw money must submit a report.

“As long as you have an active account, you have to submit an annual report,” Gilmore said.

Kearns brought up bonus depreciation, a frequent competitor to the CCF program. Gilmore explained that while bonus depreciation has its benefits, it may not be a reliable method year after year. Using CCF funds also reduces the amount by which companies can depreciate. For example, a $2 million barge that was built using $500,000 in CCF funds would then have a tax basis of $1.5 million for depreciation.

“CCF is a tool in the toolbox,” Gilmore said. “I think everybody is aware that depreciation, accelerated depreciation or bonus depreciation has come and gone in the past, whereas CCF is forever. Maybe it’s something where the bonus depreciation works for you now, but it may not work for you in the future.”

Featured photo caption: Panelists at the funding and financing session at the 2026 Inland Marine Expo, titled “Making the Most of the Moment: Updates on the MarAd Capital Construction Fund and Small Shipyard Grant Programs,” discussed funding opportunities for shipyards through U.S. Maritime Administration programs. Pictured from left to right: Dave Matsuda, principal of Matsuda & Associates LLC; Erica Young, director of the Small Shipyard Grant Coalition; and David Gilmore, director of the office of marine financing at MarAd. (Photo courtesy of ECN Photography)