The Voluntary Tanker Agreement [VTA] is an agreement reached by the Maritime Administration that provides that U.S. commercial owners and operators voluntarily make their vessels available to meet the needs of the Department of Defense. It was designed to meet oil, oil and lubricant requirements point-to-point, not to address capacity constraints in refuelling operations. Since the proposed VTA will contain amendments, both old and new participants will be required to reapply as soon as the final text is published. VTA applications are available at MARAD for the people mentioned above in the FOR FURTHER INFORMATION CONTACT section. The proposed full draft agreement was published on November 1, 2019 in the Federal Register, 84 FR 58824-58829. Copies of the draft text are also available to the public on request. Funding Fights Continue in Congress On October 31, 2019, the Senate passed the Fiscal 2020 Transportation Expenditure Act, which contained a number of positive elements. For example, the bill would provide full approved funding for the Marine Security Program (MSP) to ensure that the 60 U.S.-flagged vessels that have been included in the program receive their total scholarships. The spending account also includes an additional $300 million to fund the construction of the third National Security Multi-Mission Vessel (NSMV), which would replace the State of Maine as the Maine Maritime Academy`s training vessel. The bill would also provide $20 million in funding for the Maritime Administration Grants Program (MARAD).
This agreement may be activated at the request of the commander of USTRANSCOM, with secDef`s permission, to assist emergency response in the event of an emergency capacity of tankers. A tanker capacity emergency is considered an emergency if the USTRANSCOM captain finds that the refuelling capacity required to support U.S. forces` operations outside the continental United States cannot be delivered to the commercial charter market, in accordance with existing laws and regulations or other voluntary agreements. The Administrator informs the Attorney General and the President of the FTC when such a finding is made. Please contact the author if you have any questions about the VTA or Tanker Security Fleet or if you are interested in commenting on the draft contract. Cozen O`Connor`s maritime lawyers, whose unrivalled direct oversight – and client management on all aspects – of MSP, VISA and MARAD authorities are ready to help you manage these emerging opportunities in the U.S. oil tanker market. Unlike last year`s bills, this year`s bill would prioritize the granting of agreements with the highest preference for ship capabilities, “as defined by the Secretary of Defense,” and then a priority for qualified U.S.
citizens. The bill would authorize $60 million per year from fiscal year 2021 (which begins October 1, 2020) to fiscal year 2035. The Minister of Transport is responsible for accepting applications for the program no later than 60 days after their adoption and granting grants no later than 90 days after applications have been received. As last year, the tanker program would be limited to ten tankers. This year`s legislation provides that a vessel is only eligible if it is a “double-hulled tanker capable of simultaneously carrying more than 2 distinct varieties of refined petroleum products” and must be less than ten years old at the first entry into the fleet. In addition, as last year, each contractor would receive $6 million per year per ship per month, and the vessel should be “commercially viable,” in addition to the fact that it is “fit to be used by the United States for national or military defence in times of war or national emergency.” Such a payment would be withheld for each day the ship`s charter in the United States.