Title: SEAL Act
Policy area: Transportation and Public Works

Summary:
Shipping and Environmental Arctic Leadership Act or the SEAL Act
This bill creates the U.S. Arctic Seaway Infrastructure Development Corporation to work with the U.S. Army Corps of Engineers, the state of Alaska, and regional port authorities, to construct deep water port facilities within the Alaskan region necessary to manage and facilitate increased marine traffic.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3740 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  2d Session
                                S. 3740

To establish a congressionally chartered seaway development corporation 
 in the Arctic, consistent with customary international law, with the 
 intention of uniting Arctic nations in a cooperative Arctic shipping 
union, where voluntary collective maritime shipping fees will help fund 
  the infrastructural and environmental demands of safe and reliable 
                        shipping in the region.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 11, 2018

 Ms. Murkowski (for herself and Mr. Sullivan) introduced the following 
 bill; which was read twice and referred to the Committee on Commerce, 
                      Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
To establish a congressionally chartered seaway development corporation 
 in the Arctic, consistent with customary international law, with the 
 intention of uniting Arctic nations in a cooperative Arctic shipping 
union, where voluntary collective maritime shipping fees will help fund 
  the infrastructural and environmental demands of safe and reliable 
                        shipping in the region.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Shipping and Environmental Arctic 
Leadership Act'' or the ``SEAL Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The Arctic seas have historically been considered 
        impassable and impractical maritime routes, but diminishing 
        Arctic sea ice, better icebreaking technology, and global 
        demand for Arctic resources has opened up opportunity for 
        international trade routes through Arctic Ocean waters.
            (2) According to the National Oceanic and Atmospheric 
        Administration, over the last 20 years atmospheric temperatures 
        have increased at a rate at least 3 times the global average, 
        and as of 2011 sea ice thickness was 42 percent below what it 
        was in 1979. If trends continue, summers may produce ice-free 
        waters in the Arctic Ocean by the late 2030s.
            (3) The Bering Strait is experiencing significant increases 
        in international traffic from vessels using the Northern Sea 
        Route, the Transpolar Sea Route, and the Northwest Passage. 
        Increases in international traffic are projected to continue.
            (4) While the Arctic Council's agreements on search and 
        rescue, spill prevention and response, and initiatives through 
        the International Maritime Organization to bring about a 
        mandatory polar code are significant, little or no cooperation 
        yet exists in the Arctic region to bring about needed maritime 
        infrastructure, nor do Arctic coastal states and user states 
        cooperate in establishing common seaway administration. 
        International coordination and investment in infrastructure for 
        shipping routes, icebreaker service and refuge, ports, spill 
        prevention and response, salvage, and LNG bunkering, would be 
        collectively beneficial for all associated states, the 
        environment, and global commerce.
            (5) Trans-Arctic shipping brings substantial commercial 
        benefits. Shipping distance between Europe and Asia could be 
        reduced by 4,500 nautical miles, saving a week's time and 40 
        percent in freight shipping distances compared to alternative 
        routes. Through a voluntary tariff model, user nations from the 
        remainder of the world can be invited to share with Arctic 
        nations the capital and operating costs necessary for safety 
        and reliability infrastructure in the Arctic Ocean and its 
        approaches.
            (6) As this new frontier emerges, the United States should 
        assume leadership to ensure safe, secure, and reliable Arctic 
        seaway development, and further to ensure that the Arctic 
        becomes a place of international cooperation rather than 
        competition or conflict.
            (7) Setting precedent for cooperative infrastructure 
        investment and greater reliability in domestic and 
        international shipping is the St. Lawrence Seaway between the 
        United States and Canada, which links the Great Lakes to the 
        Atlantic Ocean. The Seaway operates in internal waters, rather 
        than international waters, but offers ship operators a 
        coordinated suite of services, similar to what is needed in the 
        Arctic Ocean and its approaches.
            (8) The St. Lawrence Seaway Development Corporation, 
        established in 1954, is a model for a United States Government 
        corporation that constructs, operates, and maintains sea 
        passage infrastructure in water bodies shared with another 
        nation. It corresponds with its Canadian counterpart, the St. 
        Lawrence Seaway Management Corporation. In 2010 the Great 
        Lakes-Seaway system generated--
                    (A) 226,833 United States and Canadian jobs;
                    (B) $33,600,000,000 in business revenue from 
                maritime activity; and
                    (C) $4,600,000,000 in Federal, State, provincial, 
                and local tax revenue from maritime activity.
            (9) In 2012 the Russian Duma passed legislation to create a 
        single management agency called the Northern Sea Route 
        Administration, to manage all infrastructural and navigational 
        services across what Russia claims to be its Arctic territorial 
        waters. This is a claim the United States and many other 
        nations do not recognize. Russia is investing heavily into 
        Northern Sea Route infrastructure, anticipating an increase in 
        cargo transport from 1,800,000 tons in 2010 to 64,000,000 tons 
        by 2020. The Russian Northern Sea Route Administration charges 
        escort fees for international cargo ships as high as $500,000, 
        and aims to collect a share of revenues that might otherwise be 
        paid as tariffs on the Suez Canal where collections totaled 
        $5,300,000,000 in 2017.
            (10) The Russian Federation has considered legislation to 
        require all energy traffic on the Northern Sea Route to be 
        carried by Russian-flagged ships.
            (11) Rising transit in United States Arctic region waters 
        necessitates a management agency and infrastructure investment 
        in a transportation system. As identified in the Ten-Year 
        Prioritization of Infrastructure Needs in the United States 
        Arctic prepared by the United States Committee on the Marine 
        Transportation System Arctic Transportation Integrated Action 
        Team for the United States Department of Transportation, there 
        is a significant infrastructure gap in the Arctic in the areas 
        of--
                    (A) navigable waterways, such as waterway 
                coordination with international stakeholders;
                    (B) physical infrastructure, such as infrastructure 
                around Port Clarence and Port of Nome in Alaska to 
                support commercial activity;
                    (C) informational infrastructure, such as up-to-
                date nautical charts and electronic aids to navigation;
                    (D) MTS Response Services, such as emergency 
                response and rescue capabilities; and
                    (E) vessel operations, such as United States 
                icebreaking capabilities.
            (12) The Arctic offers economic value to the United States 
        through commercial shipping and international trade routes, 
        energy, mining, commercial fishing, tourism, and tug and barge 
        operations. The Arctic offers environmental and cultural value 
        through ecological significance, unique wildlife, indigenous 
        peoples and Alaskan communities, and scientific research. The 
        Arctic offers security value to the United States as a way to 
        move United States vessels and forces between the world's 
        oceans, and through other waters. While the United States does 
        not support mandatory tariffs in this region, it does not 
        currently have a way to collect voluntary tariffs for providing 
        assistance to vessels crossing through the Bering Strait or the 
        Arctic Ocean.
            (13) Reinvesting into infrastructural and environmental 
        demands with funds collected from international shipping fees 
        will be essential to the long-term viability of the Arctic.
            (14) Environmental protection of the Arctic takes the form 
        of pollution prevention, clean-up, and accident response.
            (15) Arctic prevention and clean-up involves all feasible 
        efforts to remove or mitigate pollutants from the environment. 
        Arctic ecosystems are more susceptible to biological damage 
        from pollutants than more temperate climates. Existing 
        removable hazards, such as dumped radioactive waste and other 
        toxic substances, must be handled.
            (16) Arctic pollution prevention takes collective adherence 
        to regulations and best practices. United States leadership on 
        clean practices in the Arctic will be essential in the 
        ecosystem's sustainability. Provision of bunkering facilities 
        to enable the use of clean LNG fuels for ships will strengthen 
        pollution prevention.
            (17) Environmental response capabilities in the Arctic are 
        weak, sparse, and have only begun to be internationally 
        coordinated. Transportation of oil and gas and maritime traffic 
        is expected to increase significantly in the Arctic, which will 
        increase the risk of accidents. The Arctic region is 
        particularly vulnerable to pollution from oil and gas shipping. 
        Because oil spills in ice are considerably more complicated to 
        address than oil spills in open waters, effects of oil spills 
        could remain in the region for periods of 50 years or more. In 
        2010 the International Maritime Organization passed Guidelines 
        for Ships Operating in Polar Waters, citing, ``the need to 
        ensure that all ship systems both are capable of functioning 
        effectively under anticipated operating conditions and provide 
        adequate levels of safety in accident and emergency 
        situations''.
            (18) In June 2014, the Government Accountability Office 
        (GAO) reported that the Coast Guard was experiencing a gap in 
        its heavy icebreaking capacity and was without a heavy 
        icebreaker from 2010 to 2013. Tariffs collected through this 
        system can help United States public and private icebreaker 
        capacity grow, and induce additional private investment in 
        marine safety and services.
            (19) During the most recent United States Chairmanship of 
        the Arctic Council, May 2017, the Arctic Council's Protection 
        of the Arctic Marine Environment Working Group established an 
        Arctic Shipping Best Practices Information Forum to help serve 
        as a resource hub of information, guidance, and guidelines that 
        aid decision makers involved in Arctic maritime navigation and 
        those affected by maritime operations related to the Polar 
        Code. Insurers of Arctic shipping encouraged this Forum to help 
        bring about safer and more reliable shipping in the Arctic 
        region, and to reduce losses. This Act is in support of the 
        same goals.

SEC. 3. CREATION OF THE U.S. ARCTIC SEAWAY INFRASTRUCTURE DEVELOPMENT 
              CORPORATION.

    (a) Establishment.--There is hereby created, subject to the 
direction and supervision of the Secretary of Transportation, which 
shall work in conjunction with the Department of State and with the 
Department in which the Coast Guard is operating, a body corporate to 
be known as the U.S. Arctic Seaway Infrastructure Development 
Corporation (hereinafter referred to as the ``Corporation'').
    (b) Management.--
            (1) Administrator.--The management of the Corporation shall 
        be vested in an Administrator who shall be appointed by the 
        Board of Directors of the Corporation with the approval of the 
        Secretary of Transportation.
            (2) Board of directors.--
                    (A) Composition.--There is established the Board of 
                Directors of the Corporation (hereinafter referred to 
                as the ``Board of Directors''), which shall be composed 
                of 9 members (each serving for a 4-year term or until a 
                new appointee is designated) as follows:
                            (i) The Chair of the Board of Directors 
                        shall be appointed and designated by the 
                        President of the United States.
                            (ii) The Administrator of the National 
                        Oceanic and Atmospheric Administration shall 
                        designate 1 senior representative to the Board 
                        of Directors.
                            (iii) The Secretary of State shall 
                        designate 1 senior representative to the Board 
                        of Directors.
                            (iv) The Secretary of Transportation shall 
                        designate 1 senior representative to the Board 
                        of Directors.
                            (v) The Secretary of the Department in 
                        which the Coast Guard is operating shall 
                        designate 1 senior representative to the Board 
                        of Directors.
                            (vi) The Governor of Alaska shall designate 
                        4 senior representatives to the Board of 
                        Directors--
                                    (I) 1 of whom shall represent the 
                                government of the State of Alaska;
                                    (II) 1 of whom shall represent the 
                                Alaska business community;
                                    (III) 1 of whom shall represent the 
                                Alaskan coastal and subsistence 
                                communities affected by the 
                                Corporation; and
                                    (IV) 1 of whom shall be nominated 
                                to represent Alaskan maritime labor 
                                organizations.
                    (B) Meetings.--The Board of Directors shall meet at 
                the call of the Chair, not less often than once every 
                90 days.
                    (C) Functions.--The Board of Directors shall 
                develop a set of policy recommendations regarding the 
                demands for construction of facilities and 
                infrastructure, including the following:
                            (i) The establishment of rules of 
                        measurement for vessels and cargo and rates of 
                        charges or tolls for the services provided by 
                        the Corporation.
                            (ii) All other matters which the Board of 
                        Directors determines to be relevant.

SEC. 4. FUNCTIONS OF THE U.S. ARCTIC SEAWAY INFRASTRUCTURE DEVELOPMENT 
              CORPORATION.

    (a) Deep Water Ports.--The Corporation is authorized to work with 
the United States Army Corps of Engineers, the State of Alaska, and 
regional port authorities, to construct deep water port facilities 
within the Alaskan region necessary to manage and facilitate increased 
marine traffic, including cargo, tugs, commercial fuel bunkering, and 
icebreaker vessels. The Corporation shall also maintain a relationship 
with east and west coast ports serving Arctic trade.
    (b) Provision of Facilities for Icebreakers.--The Corporation shall 
collaborate with the State of Alaska and the United States Coast Guard 
in the provision of facilities for icebreaker vessels necessary towards 
the navigation of the Bering Sea and Arctic Ocean. United States Coast 
Guard icebreakers shall be provided facilities on the condition that 
they are available, concurrent with meeting other Coast Guard missions, 
to assist in the navigation of the international Northern Sea Route, 
Transarctic Route, or the Northwest Passage, in cooperation with 
coastal States along those routes. The Corporation is authorized to 
lease private icebreakers and to cooperate in offering services with 
icebreakers of other nations.
    (c) Establishment of Places of Refuge and Improvement of 
Navigational Infrastructure.--The Corporation shall assist, with 
expertise and financial support, the Coast Guard in its role to 
determine the location and, where necessary, construction of places of 
refuge and points of navigational aid within United States territorial 
waters due to the Arctic's harsh and unpredictable climate. Charts of 
locations of places of refuge shall be made readily available to all 
vessels voyaging north of the Bering Strait in the interest of ensuring 
vessel safety.
    (d) Ties With Arctic Residents.--The Corporation shall establish 
strong ties with United States residents of the Arctic region, Arctic 
shippers, and the maritime insurance industry whose common goal of 
preventing loss and increasing reliability will assist in building an 
appropriate system to support shipping in the Arctic region. An annual 
meeting of the Corporation shall be held in the State of Alaska.

SEC. 5. GENERAL POWERS OF THE CORPORATION.

    For the purpose of carrying out its functions under this Act, the 
Corporation--
            (1) shall have succession in its corporate name;
            (2) may adopt and use a corporate seal, which shall be 
        judicially noticed;
            (3) may sue and be sued in its corporate name;
            (4) may adopt, amend, and repeal bylaws, rules, and 
        regulations governing the manner in which its business may be 
        conducted and the powers vested in it may be exercised;
            (5) may make and carry out contracts or agreements as are 
        necessary or advisable in the conduct of its business;
            (6) shall be held to be an inhabitant and resident of the 
        third judicial district of the State of Alaska within the 
        meaning of the laws of the United States relating to the venue 
        of civil suits;
            (7) may appoint and fix compensation, in accordance with 
        the provisions of subpart D of part III of title 5, United 
        States Code, for such officers, attorneys, and employees as may 
        be necessary for the conduct of its business, defining their 
        authority and duties, and delegating to them such powers vested 
        in the Corporation as the Administrator may determine;
            (8) may acquire, by purchase, lease, property, and any 
        interest therein, and may sell, lease, or otherwise dispose of 
        such property, as the Administrator deems necessary for the 
        conduct of its business;
            (9) shall determine the character and necessity for its 
        obligations and expenditures, and the manner in which they 
        shall be incurred, allowed, and paid, subject to provisions of 
        law specifically applicable to government corporations;
            (10) may retain toll revenues for purpose of eventual 
        reinvestment in the Corporation or publicly owned seaway 
        infrastructure and preservation of the surrounding ecosystem;
            (11) may provide services and facilities, at reasonable 
        prices, towards the servicing and maintenance of the Sea Routes 
        as well as vessels and visitors using the Bering Strait and 
        Arctic Ocean Routes;
            (12) may participate with partner development corporations 
        of Arctic or other nations regarding the ownership and 
        operation of a tolling company, and may lease icebreakers, and 
        enlist and return assets if the United States portion of the 
        revenue from the tolls charged to the users of any services 
        provided under this section is applied solely towards the 
        reinvestment in infrastructure and preservation of the 
        surrounding ecosystem as specified in paragraph (10); and
            (13) shall be credited with amounts received from any of 
        the activities authorized under paragraphs (10) and (11).

SEC. 6. BONDS; ISSUANCE; MATURITY; REDEMPTION; INTEREST; PURCHASE OF 
              OBLIGATIONS BY THE SECRETARY OF THE TREASURY.

    (a) In General.--To finance its activities, the Corporation may 
issue revenue bonds payable from corporate revenue to the Secretary of 
the Treasury.
    (b) Total Value.--The total value of all bonds issued as described 
in subsection (a) shall not exceed a sum that shall be determined by 
the Secretary of Transportation in conjunction with the Secretary of 
the Treasury.
    (c) Maturity Dates.--Bonds issued as described in subsection (a) 
shall have maturity dates agreed upon by the Corporation and the 
Secretary of the Treasury that shall not be in excess of 50 years. The 
obligations on such bonds may be redeemable at the option of the 
Corporation before the maturity in such a manner as may be stipulated 
in such obligations, but the obligations thus redeemed shall not be 
refinanced by the Corporation.
    (d) Coordination With Title 31.--
            (1) Authority to use proceeds from sale of treasury 
        securities.--For the purpose of purchasing obligations of the 
        Corporation, the Secretary of the Treasury may use as a public 
        debt transaction the proceeds from the sale by the Secretary of 
        any securities issued under chapter 31 of title 31, United 
        States Code, and the purposes for which securities may be 
        issued under such chapter are extended to include such 
        purchases.
            (2) Treatment of transactions.--All purchases and sales by 
        the Secretary of the Treasury of obligations issued by the 
        Corporation under this section shall be treated as public debt 
        transactions of the United States.

SEC. 7. REPORTS.

    (a) In General.--Not later than 1 year after the outset of 
corporate activities of the Corporation, the Corporation shall submit a 
special report to Congress regarding the success of the Corporation and 
its general operations.
    (b) Additional Reports.--
            (1) New proposals.--In addition to the report described in 
        subsection (a), the Corporation shall submit to Congress a 
        special report whenever there is proposed a new feature, 
        facility, design, or phase of the Corporation involving an 
        estimated value exceeding $1,000,000, that shall include 
        justification for the new feature, facility, design, or phase.
            (2) Progress reports.--The Corporation shall submit reports 
        upon the request of the Board of Directors, the President, or 
        Congress regarding progress of the undergoing of the 
        Corporation, including financial reports regarding expenses or 
        revenues, extreme weather patterns in the Arctic region, or 
        reports as determined necessary by Congress. Such reports shall 
        be submitted not later than 180 days after the date of the 
        initial request.
            (3) Environmental impact reports.--The Board of Directors 
        may direct the Corporation to compile detailed reports 
        regarding the environmental impact of increased marine shipping 
        within the Arctic region. Such reports shall be submitted not 
        later than 180 days after the date of the initial request from 
        the Board of Directors.

SEC. 8. THE ROLE OF THE DEPARTMENT OF STATE IN FACILITATING 
              INTERNATIONAL ENGAGEMENT.

    (a) Promoting International Cooperation.--The Secretary of State 
shall undertake a leadership role in engaging in multilateral dialogues 
with fellow member and observer nations of the Arctic Council with the 
intention of encouraging cooperation in providing coordinated services 
for shipping in the Arctic Ocean and its approaches. The Corporation 
shall encourage synergistic relationships with the fellow member and 
observer nations of the Arctic Council in order to establish fair and 
reasonable tolls and, where applicable, joint facilities, as described 
in section 5.
    (b) International Fees and Tolls.--The Corporation is hereby 
authorized and instructed to waive fees and tolls as necessary for 
international cooperation.
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