Sec. 3511. Tanker Security Fleet
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Subtitle VII of title 46, United States Code, is amended by adding at the end the following: 70701. Definitions. 70702. Establishment of the Tanker Security Fleet. 70703. Vessel standards. 70704. Award of operating agreements. 70705. Effectiveness of operating agreements. 70706. Obligations and rights under operating agreements. 70707. Payments. 70708. National security requirements. 70709. Regulatory relief. 70710. Special rule regarding age of participating Fleet vessels. 70711.
Regulations. 70712. Authorization of appropriations. 70713. Acquisition of Fleet vessels. In this chapter: The term foreign commerce means— commerce or trade between the United States, its territories or possessions, or the District of Columbia, and a foreign country; and commerce or trade between foreign countries including trade between foreign ports in accordance with normal commercial bulk shipping practices in such a manner as will permit vessels of the United States freely to compete with foreign-flag liquid bulk carrying vessels in their operation or in competing charters, subject to rules and regulations promulgated by the Secretary of Transportation pursuant to this chapter or subtitle.
The term participating Fleet vessel means any tank vessel covered by an operating agreement under this chapter on or after January 1, 2021. The term person includes corporations, partnerships, and associations existing under, or authorized by, laws of the United States, or any State, territory, district, or possession thereof, or any foreign country. The term tank vessel has the meaning that term has under section 2101 of this title. The term United States citizen trust — means a trust for which— each of the trustees is a citizen of the United States; and the application for documentation of the vessel under chapter 121 of this title includes an affidavit of each trustee stating that the trustee is not aware of any reason involving a beneficiary of the trust that is not a citizen of the United States, or involving any other person who is not a citizen of the United States, as a result of which the beneficiary or other person would hold more than 25 percent of the aggregate power to influence or limit the exercise of the authority of the trustee with respect to matters involving any ownership or operation of the vessel that may adversely affect the interests of the United States; does not include a trust for which any person that is not a citizen of the United States has authority to direct, or participate in directing, a trustee for a trust in matters involving any ownership or operation of the vessel that may adversely affect the interests of the United States or in removing a trustee without cause, either directly or indirectly through the control of another person, unless the trust instrument provides that persons who are not citizens of the United States may not hold more than 25 percent of the aggregate authority to so direct or remove a trustee; and may include a trust for which a person who is not a citizen of the United States holds more than 25 percent of the beneficial interest in the trust.
The Secretary of Transportation, in consultation with the Secretary of Defense, shall establish a fleet of active, commercially viable, militarily useful, privately owned product tankers to meet national defense and other security requirements and maintain a United States presence in international commercial shipping. The fleet shall consist of privately owned vessels of the United States for which there are in effect operating agreements under this chapter, and shall be known as the Tanker Security Fleet (hereinafter in this chapter referred to as the Fleet ).
A vessel is eligible to be included in the Fleet if the vessel— meets the requirements under paragraph (1), (2), (3), or
(4)of subsection (c); is operated (or in the case of a vessel to be constructed, will be operated) in providing transportation in United States foreign commerce; is self-propelled; is not more than ten years of age on the date the vessel is first included in the Fleet and not more than 25 years of age at any time during which the vessel is included in the Fleet; is determined by the Secretary of Defense to be suitable for use by the United States for national defense or military purposes in time of war or national emergency; is commercially viable, as determined by the Secretary of Transportation; and is— a vessel of the United States; or not a vessel of the United States, but— the owner of the vessel has demonstrated an intent to have the vessel documented under chapter 121 of this title if it is included in the Fleet; and at the time an operating agreement is entered into under this chapter, the vessel is eligible for documentation under chapter 121 of this title. A vessel meets the requirements of this paragraph if, during the period of an operating agreement under this chapter that applies to the vessel, the vessel will be owned and operated by one or more persons that are citizens of the United States under section 50501 of this title. A vessel meets the requirements of this paragraph if— during the period of an operating agreement under this chapter that applies to the vessel, the vessel will be— owned by a person that is a citizen of the United States under section 50501 of this title or that is a United States citizen trust; and demise chartered to a person— that is eligible to document the vessel under chapter 121 of this title; the chairman of the board of directors, chief executive officer, and a majority of the members of the board of directors of which are citizens of the United States under section 50501 of this title, and are appointed and subjected to removal only upon approval by the Secretary; and that certifies to the Secretary that there are no treaties, statutes, regulations, or other laws that would prohibit the owner or operator for the vessel from performing its obligations under an operating agreement under this chapter; in the case of a vessel that will be demise chartered to a person that is owned or controlled by another person that is not a citizen of the United States under section 50501 of this title, the other person enters into an agreement with the Secretary not to influence the operation of the vessel in a manner that will adversely affect the interests of the United States; and the Secretary of Transportation and the Secretary of Defense notify the Committee on Armed Services and the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Armed Services and the Committee on Transportation and Infrastructure of the House of Representatives that the Secretaries concur with the certification required under subparagraph (A)(ii)(III), and have reviewed and agree that there are no legal, operational, or other impediments that would prohibit the owner or operator for the vessel from performing its obligations under an operating agreement under this chapter. A vessel meets the requirements of this paragraph if— during the period of an operating agreement under this chapter that applies to the vessel, the vessel will be owned and operated by a person that— is eligible to document a vessel under chapter 121 of this title; operates or manages other vessels of the United States for the Secretary of Defense, or charters other vessels to the Secretary of Defense; has entered into a special security agreement for the purpose of this paragraph with the Secretary of Defense; makes the certification described in paragraph (2)(A)(ii)(III); and in the case of a vessel described in paragraph (2)(B), enters into an agreement referred to in that subparagraph; and the Secretary of Transportation and the Secretary of Defense notify the Committee on Armed Services and the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Armed Services and the Committee on Transportation and Infrastructure of the House of Representatives that they concur with the certification required under subparagraph (A)(iv), and have reviewed and agree that there are no legal, operational, or other impediments that would prohibit the owner or operator for the vessel from performing its obligations under an operating agreement under this chapter. A vessel meets the requirements of this paragraph if, during the period of an operating agreement under this chapter, the vessel will be— owned by a person who is eligible to document a vessel under chapter 121 of this title; and demise chartered to a person that is a citizen of the United States under section 50501 of this title. The Secretary of Defense shall request that the Commandant of the Coast Guard issue any waiver under section 501 of this title that the Secretary of Defense determines is necessary for purposes of this chapter. A vessel used to provide oceangoing transportation that the Commandant of the Coast Guard determines meets the criteria of subsection
(b)but which, on the date of enactment of this section, is not documented under chapter 121 of this title, shall be eligible for a certificate of inspection if the Commandant of the Coast Guard determines that— the vessel is classed by and designed in accordance with the rules of the American Bureau of Shipping, or another classification society accepted by the Commandant of the Coast Guard; the vessel complies with applicable international agreements and associated guidelines, as determined by the country in which the vessel was documented immediately before becoming documented under chapter 121 of this title; and the country has not been identified by the Commandant of the Coast Guard as inadequately enforcing international vessel regulations as to that vessel. The Commandant of the Coast Guard may rely on a certification from the American Bureau of Shipping or, subject to subparagraph (B), another classification society accepted by the Commandant of the Coast Guard, to establish that a vessel is in compliance with the requirements of paragraph (1). The Secretary may accept certification from a foreign classification society under subparagraph
(A)only— to the extent that the government of the foreign country in which the society is headquartered provides access on a reciprocal basis to the American Bureau of Shipping; and if the foreign classification society has offices and maintains records in the United States. A vessel used to provide transportation service as a common carrier that the Secretary of Transportation determines meets the criteria of section 53102(b) of this title, which on the date of enactment of this section is not a documented vessel (as that term is defined in section 106 of this title), shall be eligible for a certificate of inspection if the Secretary determines that— the vessel is classed by and designed in accordance with the rules of the American Bureau of Shipping or another classification society accepted by the Secretary; the vessel complies with applicable international agreements and associated guidelines, as determined by the country in which the vessel was documented immediately before becoming a documented vessel (as defined in that section); and that country has not been identified by the Secretary as inadequately enforcing international vessel regulations as to that vessel. Subsection
(a)does not apply to any vessel that has failed to comply with the applicable international agreements and association guidelines referred to in subsection (a)(2). The Secretary may rely on a certification from the American Bureau of Shipping or, subject to paragraph (2), another classification society accepted by the Secretary, to establish that a vessel is in compliance with the requirements of subsections
(a)and (b). The Secretary may accept certification from a foreign classification society under paragraph
(1)only— to the extent that the government of the foreign country in which the society is headquartered provides access on a reciprocal basis to the American Bureau of Shipping; and if the foreign classification society has offices and maintains records in the United States. The Secretary of Transportation shall require, as a condition of including any vessel in the Fleet, that the owner or operator of the vessel enter into an operating agreement with the Secretary under this section. The Secretary of Transportation shall accept an application for an operating agreement for a participating Fleet vessel under the priority under paragraph
(2)only from a person that has authority to enter into an operating agreement under this chapter. For purposes of subparagraph (A), in the case of a vessel that is subject to a demise charter that terminates by its own terms on September 30, 2035 (without giving effect to any extension provided therein for completion of a voyage or to effect the actual redelivery of the vessel), or that is terminable at the will of the owner of the vessel after such date, only the owner of the vessel shall be treated as having the authority referred to in subparagraph (A). For purposes of subparagraph (B), in the case of a vessel owned by a United States citizen trust, the term owner of the vessel includes the beneficial owner of the vessel with respect to such trust. The Secretary of Transportation— may award operating agreements under paragraph
(1)according to such priorities as the Secretary considers appropriate; and shall award operating agreements within any such priority— in accordance with operational requirements specified by the Secretary of Defense; in the case of operating agreements awarded under subparagraph
(B)of paragraph (1), according to applicants’ records of owning and operating vessels; and subject to approval of the Secretary of Defense. For any fiscal year, the Secretary may not award operating agreements under this chapter that require payments under section 70707 of this title for more than 10 vessels. Subject to the availability of appropriations for such purpose, the Secretary of Transportation may enter into an operating agreement under this chapter for fiscal year 2021 and any subsequent fiscal year. Each such agreement may be renewed annually for up to seven years. The owner or operator of a vessel under charter to the United States is eligible to receive payments pursuant to any operating agreement that covers such vessel. If the owner or operator with respect to an operating agreement materially fails to comply with the terms of the agreement— the Secretary shall notify the owner or operator and provide a reasonable opportunity to comply with the operating agreement; and the Secretary shall terminate the operating agreement if the owner or operator fails to achieve such compliance. If an owner or operator provides notice of the intent to terminate an operating agreement under this chapter on a date specified by not later than 60 days prior to such date, such agreement shall terminate on the date specified by the owner or operator. An operating agreement with respect to a vessel shall terminate on the date that is three years after the date on which the vessel begins operating under the agreement, if— the owner or operator notifies the Secretary, by not later than two years after the date the vessel begins operating under the agreement, that the owner or operator intends to terminate the agreement under this subparagraph; and the Secretary of Transportation, in coordination with the Secretary of Defense, determines that— an application for an operating agreement under this chapter has been received for a replacement vessel that is acceptable to the Secretaries; and during the period of an operating agreement under this chapter that applies to the replacement vessel, the replacement vessel will be— owned and operated by one or more persons that are citizens of the United States under section 50501 of this title; or owned by a person who is eligible to document the vessel under chapter 121 of this title, and operated by a person that is a citizen of the United States under section 50501 of this title. If sufficient funds are not made available to carry out an operating agreement under this chapter— the Secretary of Transportation shall submit to the Committee on Armed Services and the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Armed Services and the Committee on Transportation and Infrastructure of the House of Representatives notice that such agreement shall be not renewed effective on the 60th day of the fiscal year, unless such funds are made available before such day; and effective on the 60th day of such fiscal year, terminate such agreement and provide notice of such termination to the owner or operator of the vessel covered by the agreement. If an operating agreement for a vessel under this chapter is not renewed pursuant to paragraph (1), then the owner or operator of the vessel is released from any further obligation under the operating agreement as of the date of such termination or nonrenewal. The owner or operator of a vessel covered by an operating agreement under this chapter may transfer and register such vessel under a foreign registry that is acceptable to the Secretary and the Secretary of Defense, notwithstanding section 70701 of this title. If chapter 563 of this title is applicable to a vessel after registration, then the vessel is available to be requisitioned by the Secretary pursuant to chapter 563 of this title. An operating agreement under this chapter shall require that, during the period the vessel covered by the agreement is operating under the agreement the vessel shall— be operated in the United States foreign commerce, mixed United States foreign commerce and domestic trade allowed under a registry endorsement issued under section 12111 of this title, foreign-to-foreign commerce, or under a charter to the United States; not be operated in the coastwise trade except as described in paragraph (1); and be documented under chapter 121 of this title. An operating agreement under this chapter constitutes a contractual obligation of the United States Government to pay the amounts provided for in the agreement to the extent of actual appropriations. The owner or operator of a vessel covered by an operating agreement under this chapter shall agree, as a condition of such agreement, to remain obligated to carry out the requirements described in paragraph
(2)until the termination date specified in the agreement, even in the case of early termination of the agreement under section 70705(c) of this title. This subsection shall not apply in the case of an operating agreement terminated for lack of funds under section 70705(d) of this title. The requirements described in this paragraph are the following: To continue the documentation of the vessel under chapter 121 of this title. To be bound by the requirements of section 70708 of this title. That all terms and conditions of an emergency preparedness agreement entered into under section 70708 of this title shall remain in effect, except that the terms of such emergency preparedness agreement may be modified by the mutual consent of the owner or operator, the Secretary and the Secretary of Defense as provided in such section. The owner or operator of a vessel covered by an operating agreement under this chapter may transfer that agreement (including all rights and obligations under the agreement) to any person that is eligible to enter into that operating agreement under this chapter, if the transfer is approved by the Secretary of Transportation and the Secretary of Defense. A owner or operator may replace a vessel covered by an operating agreement with another vessel that is eligible to be included in the Fleet under section 70702(b), if the Secretary of Transportation, in coordination with the Secretary of Defense, approves the replacement of the vessel. In selecting a replacement vessel, the owner or operator shall give primary consideration to— the commercial viability of the vessel; the utility of the vessel with respect to the operating requirements of the owner or operator; and ensuring that the commercial and military utility of any replacement vessel is not less than that of the initial vessel. Subject to the availability of appropriations for such purpose and the other provisions of this chapter, the Secretary shall pay to the owner or operator of a vessel covered by an operating agreement under this chapter an amount equal to $6,000,000 for each vessel covered by the agreement for each fiscal year that the vessel is covered by the agreement. Such amount shall be paid in equal monthly installments on the last day of each month. The amount payable under this subsection may not be reduced except as provided by this section. As a condition of receiving payment under this section for a fiscal year for a vessel, the owner or operator for the vessel shall certify, in accordance with regulations issued by the Secretary, that the vessel has been and will be operated in accordance with section 70706 of this title for at least 320 days during the fiscal year. Days during which the vessel is drydocked, surveyed, inspected, or repaired shall be considered days of operation for purposes of this subsection. The Secretary may not make any payment under this chapter for a vessel with respect to any days for which the vessel is— not operated or maintained in accordance with an operating agreement under this chapter; or more than 25 years of age. With respect to payments under this chapter for a vessel covered by an operating agreement, the Secretary— except as provided in paragraph (2), may not reduce such a payment for the operation of the vessel to carry military or other preference cargoes under section 55302(a), 55304, 55305, or 55314 of this title, section 2631 of title 10, or any other cargo preference law of the United States; may not make such a payment for any day that the vessel is engaged in transporting more than 7,500 tons of civilian bulk preference cargoes pursuant to section 55302(a), 55305, or 55314 of this title, section 90l(a) or
(b)of the Merchant Marine Act, 1936 ( 46 App. U.S.C. 124l(a) , 1241(b), or 1241(f)), that is bulk cargo; and shall make a pro rata reduction for each day less than 320 in a fiscal year that the vessel is not operated in accordance with section 70706 of this title. No owner or operator shall receive payments pursuant to this chapter during a period in which it participates in noncontiguous domestic trade. Paragraph
(1)shall not apply to a owner or operator that is a citizen of the United States within the meaning of section 50501 of this title, applying the 75 percent ownership requirement of that section. In this subsection the term participates in a noncontiguous domestic trade means directly or indirectly owns, charters, or operates a vessel engaged in transportation of cargo between a point in the contiguous 48 States and a point in Alaska, Hawaii, or Puerto Rico, other than a point in Alaska north of the Arctic Circle. The Secretary of Transportation, in coordination with the Secretary of Defense, shall establish an emergency preparedness program under this section under which the owner or operator of a vessel covered by an operating agreement under this chapter shall agree, as a condition of the operating agreement, to enter into an emergency preparedness agreement with the Secretaries. Each such emergency preparedness agreement shall be entered into as promptly as practicable after the owner or operator has entered into the operating agreement. The terms of an agreement under this section— shall provide that upon request by the Secretary of Defense during time of war or national emergency, or whenever determined by the Secretary of Defense to be necessary for national security or contingency operation (as that term is defined in section 101 of title 10), the owner or operator shall make available commercial transportation resources (including services) described in subsection
(d)to the Secretary of Defense; shall include such additional terms as may be established by the Secretary of Transportation and the Secretary of Defense; and shall allow for the modification or addition of terms upon agreement by the Secretary of Transportation and the owner or operator and the approval by the Secretary of Defense. Except as provided by section 70706 of this title, the Secretary may not require, through an emergency preparedness agreement or an operating agreement, that an owner or operator of a vessel covered by an operating agreement continue to participate in an emergency preparedness agreement after the operating agreement has expired according to its terms or is otherwise no longer in effect. After the expiration of an emergency preparedness agreement, a owner or operator may voluntarily continue to participate in the agreement. The commercial transportation resources to be made available under an emergency preparedness agreement shall include vessels or capacity in vessels, terminal facilities, management services, and other related services, or any agreed portion of such nonvessel resources for activation as the Secretary of Defense may determine to be necessary, seeking to minimize disruption of the owner or operator’s service to commercial customers. Each emergency preparedness agreement under this section shall provide that the Secretary of Defense shall pay fair and reasonable compensation for all commercial transportation resources provided pursuant to this section. Compensation under this subsection— shall not be less than the owner or operator’s commercial market charges for like transportation resources; shall be fair and reasonable considering all circumstances; shall be provided from the time that a vessel or resource is required by the Secretary of Defense until the time it is redelivered to the owner or operator and is available to reenter commercial service; and shall be in addition to and shall not in any way reflect amounts payable under section 70707 of this title. Notwithstanding section 55302(a), 55304, 55305, or 55314 of this title, section 2631 of title 10, or any other cargo preference law of the United States— an owner or operator may operate or employ in foreign commerce a foreign-flag vessel or foreign-flag vessel capacity as a temporary replacement for a vessel of the United States or vessel of the United States capacity that is activated by the Secretary of Defense under an emergency preparedness agreement or a primary Department of Defense sealift readiness program; and such replacement vessel or vessel capacity shall be eligible during the replacement period to transport preference cargoes subject to sections 55302(a), 55304, 55305, and 55314 of this title and section 2631 of title 10 to the same extent as the eligibility of the vessel or vessel capacity replaced. All commercial transportation resources activated under an emergency preparedness agreement shall, upon termination of the period of activation, be redelivered to the owner or operator in the same good order and condition as when received, less ordinary wear and tear, or the Secretary of Defense shall fully compensate the owner or operator for any necessary repair or replacement. Except as may be expressly agreed in an emergency preparedness agreement, or as otherwise provided by law, the Government shall not be liable for disruption of an owner or operator’s commercial business or other consequential damages to an owner or operator arising from the activation of commercial transportation resources under an emergency preparedness agreement. An owner or operator for a vessel included in an operating agreement under this chapter may operate the vessel in the foreign commerce of the United States without restriction. The restrictions of section 55305(a) of this title concerning the building, rebuilding, or documentation of a vessel in a foreign country shall not apply to a vessel for any day the operator of the vessel is receiving payments for the operation of that vessel under an operating agreement under this chapter. The telecommunications and other electronic equipment on an existing vessel that is redocumented under the laws of the United States for operation under an operating agreement under this chapter shall be deemed to satisfy all Federal Communications Commission equipment certification requirements, if— such equipment complies with all applicable international agreements and associated guidelines as determined by the country in which the vessel was documented immediately before becoming documented under the laws of the United States; that country has not been identified by the Secretary as inadequately enforcing international regulations as to that vessel; and at the end of its useful life, such equipment shall be replaced with equipment that meets Federal Communications Commission equipment certification standards. Any age restriction under section 70702(b)(4) of this title shall not apply to a participating Fleet vessel during the 30-month period beginning on the date the vessel begins operating under an operating agreement under this chapter, if the Secretary of Transportation determines that the owner or operator of the vessel has entered into an arrangement to obtain and operate under the operating agreement for the participating Fleet vessel a replacement vessel that, upon commencement of such operation, will be eligible to be included in the Fleet under section 70702(b) of this title. The Secretary of Transportation and the Secretary of Defense may each prescribe rules as necessary to carry out their respective responsibilities under this chapter. There is authorized to be appropriated for payments under section 70707, $60,000,000 for each of fiscal years 2021 through 2035, to remain available until expended. Upon replacement of a Fleet Vessel under an operating agreement under this chapter, and subject to agreement by the owner or operator of the vessel, the Secretary of Transportation is authorized, subject to the concurrence of the Secretary of Defense, to acquire the vessel being replaced for inclusion in the National Defense Reserve Fleet. To be eligible for acquisition by the Secretary of Transportation under this section a vessel shall— have been covered by an operating agreement under this chapter for not less than three years; and meet recapitalization requirements for the Ready Reserve Force. A fair market value shall be established by the Maritime Administration for acquisition of an eligible vessel under this section. Vessel acquisitions under this section shall be subject to the availability of appropriations. Amounts made available to carry out this section shall be derived from amounts authorized to be appropriated for the National Defense Reserve Fleet. Amounts authorized to be appropriated to carry out the Maritime Security Program may not be use to carry out this section. . The table of chapters for subtitle VII of title 46, United States Code, is amended by adding at the end the following: 707. Tanker Security Fleet 70701 . The Secretary of Transportation shall begin accepting applications for enrollment of vessels in the Tanker Security Fleet established under chapter 707 of title 46, United States Code, as added by subsection (a), by not later than 30 days after the date of the enactment of this Act. Not later than 90 days after receipt of an application for the enrollment of a vessel in the Tanker Security Fleet, the Secretary, in coordination with the Secretary of Defense shall— approve the application and enter into an operating agreement with the applicant; or provide to the applicant a written explanation for the denial of the application.