Bills Create Prosperity Zone Questions

President Donald Trump’s 2025 Executive Order 14269 called for the creation of Maritime Prosperity Zones modeled on the 2017 Opportunity Zones in the Tax Cuts and Opportunity Act.

In response, two bills have been introduced in the House in July creating tax incentives for the MPZs, but they are drawing a host of questions and concerns from the maritime community. While everyone agrees with the overall goal of encouraging investment in shipbuilding, critics are concerned that the bills — due to vague language and poor targeting — could create ineffective tax shelters rather than true investment vehicles.

H.R. 9911, the Shipbuilding Investment and Workforce Act, would designate up to 100 designated waterfront census tracts as Maritime Prosperity Zones. A companion bill, H.R. 9921, creates a shipyard investment credit at new section 48F — generally 25 percent, but stepped up to 35 percent inside a designated Opportunity Zone. Both bills are currently sitting in the Ways and Means Committee.

Why 100?

The first question is where the figure of 100 designated MPZ zones came from. Charles “Bob” Brettell, whose firm, Prosody Consulting, helps ports and other entities apply for federal grants, points out that there are 1,428 census tracts with federally designated navigation facilities, including 1,104 on the inland rivers and Great Lakes and 324 on the coasts and Gulf. According to the Corps of Engineers, there are 8,943 navigation facilities with a recorded purpose or commodity.

“The 100 designations are discretionary, with no certification standard, so every claim rests on the quality of a nomination file rather than the quality of a waterfront,” Brettell said in a newsletter. “The Maritime Administrator has no role.”

Brettell has been raising the alarm on this issue, warning that many qualified facilities, specially on the inland rivers and waterways, could be shut out of this opportunity as it is currently drafted, especially because current Opportunity Zone rules (inclusion in which would bump the tax credit provisions from 25 percent to 35 percent) have inherited measurements for poverty within the zones as qualifying metrics.

Brettell wants the potential MPZs to be designated by rule, while the tax credits are redirected to new and expansion sites under existing, published certification criteria. “Define maritime use by operations on the property — cargo handling, vessel service, terminal operation — at the facility level, with the NAICS list kept as a safe harbor,” he urged in the newsletter.

Brettell also notes that current language for qualifying for the designation includes no time limits or windows, meaning that the MPZ designations could be permanent, with no need to be renewed. “This likely means that a few already-big coastal shipyards will get even bigger and crowd out incentives for smaller facilities,” he told The Waterways Journal. He wants to make the designations rolling with a 10-year limit so that slots that draw no investment can return to the pool.

At the very least, if the figure of 100 is maintained, he wants at least 25 percent to be reserved for inland and Great Lakes routes.

Assuming the bills move forward, the tax changes are set to take effect after December 31, 2026, and the Commerce Department must begin nominations no later than July 1, 2027.

“The design window is open now, and once the zones are set there will be no opportunity to alter them,” Brettell said.