1. U.S. Code
  2. title 46
  3. subtitle V
  4. part C
  5. chapter 531
  6. § 53104

Collapse to view only § 53104. Effectiveness of operating agreements

§ 53101. DefinitionsIn this chapter:
(1)Bulk cargo.—The term “bulk cargo” means cargo that is loaded and carried in bulk without mark or count.
(2)Contractor.—The term “contractor” means an owner or operator of a vessel that enters into an operating agreement for the vessel with the Secretary under section 53103.
(3)Fleet.—The term “Fleet” means the Maritime Security Fleet established under section 53102(a).
(4)Foreign commerce.—The term “foreign commerce” means—
(A) commerce or trade between the United States, its territories or possessions, or the District of Columbia, and a foreign country; and
(B) commerce or trade between foreign countries.
(5)Participating fleet vessel.—The term “participating fleet vessel” means any vessel that—
(A) on October 1, 2015—
(i) meets the requirements of paragraph (1), (2), (3), or (4) of section 53102(c); and
(ii) is less than 20 years of age if the vessel is a tank vessel, or is less than 25 years of age for all other vessel types; and
(B) on December 31, 2014, is covered by an operating agreement under this chapter.
(6)Person.—The term “person” includes corporations, partnerships, and associations existing under or authorized by the laws of the United States, or any State, Territory, District, or possession thereof, or of any foreign country.
(7)Product tank vessel.—The term “product tank vessel” means a double hulled tank vessel capable of carrying simultaneously more than 2 separated grades of refined petroleum products.
(8)Secretary.—The term “Secretary” means the Secretary of Transportation.
(9)Tank vessel.—The term “tank vessel” has the meaning that term has under section 2101 of this title.
(10)United states.—The term “United States” includes the District of Columbia, the Commonwealth of Puerto Rico, the Northern Mariana Islands, Guam, American Samoa, the Virgin Islands.
(11)United states citizen trust.—
(A) Subject to subparagraph (C), the term “United States citizen trust” means a trust that is qualified under this paragraph.
(B) A trust is qualified under this paragraph with respect to a vessel only if—
(i) each of the trustees is a citizen of the United States; and
(ii) the application for documentation of the vessel under chapter 121 of this title includes the 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 that 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.
(C) If 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 for a trust without cause, either directly or indirectly through the control of another person, the trust is not qualified under this paragraph 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.
(D) This paragraph shall not be considered to prohibit a person who is not a citizen of the United States from holding more than 25 percent of the beneficial interest in a trust.
(12)United states-documented vessel.—The term “United States-documented vessel” means a vessel documented under chapter 121 of this title.
(Added Pub. L. 108–136, div. C, title XXXV, § 3531(a), Nov. 24, 2003, 117 Stat. 1803; amended Pub. L. 112–239, div. C, title XXXV, § 3508(a), Jan. 2, 2013, 126 Stat. 2223.)

CITE AS: 46 USC 53101

§ 53102. Establishment of Maritime Security Fleet
(a)In General.—The Secretary of Transportation, in consultation with the Secretary of Defense, shall establish a fleet of active, commercially viable, militarily useful, privately owned vessels 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, United States-documented vessels for which there are in effect operating agreements under this chapter, and shall be known as the Maritime Security Fleet.
(b)Vessel Eligibility.—A vessel is eligible to be included in the Fleet if—
(1) the vessel meets the requirements of paragraph (1), (2), (3), or (4) of subsection (c);
(2) the vessel is operated (or in the case of a vessel to be constructed, will be operated) in providing transportation in foreign commerce;
(3) the vessel is self-propelled and—
(A) is a tank vessel that is 10 years of age or less on the date the vessel is included in the Fleet; or
(B) is any other type of vessel that is 15 years of age or less on the date the vessel is included in the Fleet;
(4) the vessel—
(A) is suitable for use by the United States for national defense or military purposes in time of war or national emergency, as determined by the Secretary of Defense; and
(B) is commercially viable, as determined by the Secretary; and
(5) the vessel—
(A) is a United States-documented vessel; or
(B) is not a United States-documented vessel, but—
(i) 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
(ii) at the time an operating agreement for the vessel is entered into under this chapter, the vessel is eligible for documentation under chapter 121 of this title.
(c)Requirements Regarding Citizenship of Owners, Charterers, and Operators.—
(1)Vessel owned and operated by section 50501 citizens.—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.
(2)Vessel owned by section 50501 citizen or united states citizen trust, and chartered to documentation citizen.—A vessel meets the requirements of this paragraph if—
(A) during the period of an operating agreement under this chapter that applies to the vessel, the vessel will be—
(i) 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
(ii) demise chartered to a person—(I) that is eligible to document the vessel under chapter 121 of this title;(II) 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(III) that certifies to the Secretary that there are no treaties, statutes, regulations, or other laws that would prohibit the contractor for the vessel from performing its obligations under an operating agreement under this chapter;
(B) 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
(C) the Secretary 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 of the House of Representatives that they concur with the certification required under subparagraph (A)(ii)(III), and have reviewed and agree that there are no other legal, operational, or other impediments that would prohibit the contractor for the vessel from performing its obligations under an operating agreement under this chapter.
(3)Vessel owned and operated by defense contractor.—A vessel meets the requirements of this paragraph if—
(A) 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—
(i) is eligible to document a vessel under chapter 121 of this title;
(ii) operates or manages other United States-documented vessels for the Secretary of Defense, or charters other vessels to the Secretary of Defense;
(iii) has entered into a special security agreement for purposes of this paragraph with the Secretary of Defense;
(iv) makes the certification described in paragraph (2)(A)(ii)(III); and
(v) in the case of a vessel described in paragraph (2)(B), enters into an agreement referred to in that paragraph; and
(B) the Secretary 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 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 other legal, operational, or other impediments that would prohibit the contractor for the vessel from performing its obligations under an operating agreement under this chapter.
(4)Vessel owned by documentation citizen and chartered to section 50501 citizen.—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—
(A) owned by a person that is eligible to document a vessel under chapter 121 of this title; and
(B) demise chartered to a person that is a citizen of the United States under section 50501 of this title.
(d)Request by Secretary of Defense.—The Secretary of Defense shall request the Secretary of Homeland Security to issue any waiver under section 501 of this title that is necessary for purposes of this chapter.
(e)Vessel Standards.—
(1)Certificate of inspection.—A vessel used to provide oceangoing transportation which the Secretary of the department in which the Coast Guard is operating determines meets the criteria of subsection (b) of this section but which, on the date of enactment of the Maritime Security Act of 2003, is not documented under chapter 121 of this title, shall be eligible for a certificate of inspection if the Secretary determines that—
(A) 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;
(B) 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; and
(C) that country has not been identified by the Secretary as inadequately enforcing international vessel regulations as to that vessel.
(2)Continued eligibility for certificate.—Paragraph (1) does not apply to a vessel after any date on which the vessel fails to comply with the applicable international agreements and associated guidelines referred to in paragraph (1)(B).
(3)Reliance on classification society.—
(A)In general.—The Secretary may rely on a certification from the American Bureau of Shipping or, subject to subparagraph (B), another classification society accepted by the Secretary to establish that a vessel is in compliance with the requirements of paragraphs (1) and (2).
(B)Foreign classification society.—The Secretary may accept certification from a foreign classification society under subparagraph (A) only—
(i) 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
(ii) if the foreign classification society has offices and maintains records in the United States.
(f)Authority To Waive Age Restriction for Eligibility of a Vessel To Be Included in Fleet.—The Secretary of Defense, in conjunction with the Secretary of Transportation, may waive the application of an age restriction under subsection (b)(3) if the Secretaries jointly determine that the waiver—
(1) is in the national interest;
(2) is appropriate to allow the maintenance of the economic viability of the vessel and any associated operating network; and
(3) is necessary due to the lack of availability of other vessels and operators that comply with the requirements of this chapter.
(g)Authority To Extend Maximum Service Age for Vessel.—The Secretary of Defense, in conjunction with the Secretary of Transportation, may, for a particular participating fleet vessel, treat the ages specified in section 53101(5)(A)(ii) and section 53106(c)(3) as increased by up to 5 years if the Secretaries jointly determine that it is in the national interest to do so.
(Added Pub. L. 108–136, div. C, title XXXV, § 3531(a), Nov. 24, 2003, 117 Stat. 1805; amended Pub. L. 109–304, § 13(a)(1), Oct. 6, 2006, 120 Stat. 1700; Pub. L. 112–239, div. C, title XXXV, § 3508(b), Jan. 2, 2013, 126 Stat. 2223; Pub. L. 114–328, div. C, title XXXV, § 3502(a), Dec. 23, 2016, 130 Stat. 2774.)

CITE AS: 46 USC 53102

§ 53103. Award of operating agreements
(a)In General.—The Secretary shall require, as a condition of including any vessel in the Fleet, that the person that is the owner or operator of the vessel for purposes of section 53102(c) enter into an operating agreement with the Secretary under this section.
(b)Extension of Existing Operating Agreements.—
(1)Offer to extend.—Not later than 60 days after the date of enactment of this paragraph, the Secretary shall offer, to an existing contractor, to extend, through September 30, 2035, an operating agreement that is in existence on the date of enactment of this paragraph. The terms and conditions of the extended operating agreement shall include terms and conditions authorized under this chapter, as amended from time to time.
(2)Time limit.—An existing contractor shall have not later than 120 days after the date the Secretary offers to extend an operating agreement to agree to the extended operating agreement.
(3)Subsequent award.—The Secretary may award an operating agreement to an applicant that is eligible to enter into an operating agreement for fiscal years 2016 through 2035 if the existing contractor does not agree to the extended operating agreement under paragraph (2).
(c)Procedure for Awarding New Operating Agreements.—The Secretary may enter into a new operating agreement with an applicant that meets the requirements of section 53102(c) (for vessels that meet the qualifications of section 53102(b)) on the basis of priority for vessel type established by military requirements of the Secretary of Defense. The Secretary shall allow an applicant at least 30 days to submit an application for a new operating agreement. After consideration of military requirements, priority shall be given to an applicant that is a United States citizen under section 50501 of this title. The Secretary may not approve an application without the consent of the Secretary of Defense. The Secretary shall enter into an operating agreement with the applicant or provide a written reason for denying the application.
(d)Limitation.—The Secretary may not award operating agreements under this chapter that require payments under section 53106 for a fiscal year for more than 60 vessels.
(Added Pub. L. 108–136, div. C, title XXXV, § 3531(a), Nov. 24, 2003, 117 Stat. 1808; amended Pub. L. 109–304, § 13(a)(2), Oct. 6, 2006, 120 Stat. 1700; Pub. L. 109–364, div. C, title XXXV, § 3502(b)(1), Oct. 17, 2006, 120 Stat. 2515; Pub. L. 112–239, div. C, title XXXV, § 3508(c), Jan. 2, 2013, 126 Stat. 2224; Pub. L. 116–92, div. C, title XXXV, § 3502(a), Dec. 20, 2019, 133 Stat. 1969.)

CITE AS: 46 USC 53103

§ 53104. Effectiveness of operating agreements
(a)Effectiveness, Generally.—The Secretary may enter into an operating agreement under this chapter for fiscal year 2006. Except as provided in subsection (b), the agreement shall be effective only for 1 fiscal year, but shall be renewable, subject to the availability of appropriations, for each subsequent fiscal year through the end of fiscal year 2035.
(b)Vessels Under Charter to United States.—Unless an earlier date is requested by the applicant, the effective date for an operating agreement with respect to a vessel that is, on the date of entry into an operating agreement, on charter to the United States Government, other than a charter pursuant to an Emergency Preparedness Agreement under section 53107, shall be the expiration or termination date of the Government charter covering the vessel, or any earlier date the vessel is withdrawn from that charter.
(c)Termination.—
(1)Termination by secretary.—If the contractor with respect to an operating agreement materially fails to comply with the terms of the agreement—
(A) the Secretary shall notify the contractor and provide a reasonable opportunity to comply with the operating agreement;
(B) the Secretary shall terminate the operating agreement if the contractor fails to achieve such compliance; and
(C) upon such termination, any funds obligated by the agreement shall be available to the Secretary to carry out this chapter.
(2)Early termination by contractor, generally.—An operating agreement under this chapter shall terminate on a date specified by the contractor if the contractor notifies the Secretary, by not later than 60 days before the effective date of the termination, that the contractor intends to terminate the agreement.
(d)Nonrenewal for Lack of Funds.—If, by the first day of a fiscal year, sufficient funds have not been appropriated under the authority provided by this chapter for that fiscal year, then the Secretary shall notify the Committee on Armed Services and the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Armed Services of the House of Representatives that operating agreements authorized under this chapter for which sufficient funds are not available will not be renewed for that fiscal year if sufficient funds are not appropriated by the 60th day of that fiscal year.
(e)Release of Vessels From Obligations.—If funds are not appropriated for payments under an operating agreement under this chapter for any fiscal year by the 60th day of that fiscal year, then—
(1) each vessel covered by the operating agreement is thereby released from any further obligation under the operating agreement;
(2) the owner or operator of the vessel may transfer and register such vessel under a foreign registry that is acceptable to the Secretary of Transportation and the Secretary of Defense, notwithstanding section 56101 of this title; and
(3) if chapter 563 of this title is applicable to such vessel after registration of the vessel under such a registry, then the vessel is available to be requisitioned by the Secretary of Transportation pursuant to chapter 563.
(Added Pub. L. 108–136, div. C, title XXXV, § 3531(a), Nov. 24, 2003, 117 Stat. 1810; amended Pub. L. 109–304, § 13(a)(3), Oct. 6, 2006, 120 Stat. 1701; Pub. L. 111–383, div. C, title XXXV, § 3502(1), Jan. 7, 2011, 124 Stat. 4518; Pub. L. 112–239, div. C, title XXXV, § 3508(d), Jan. 2, 2013, 126 Stat. 2224; Pub. L. 116–92, div. C, title XXXV, § 3502(b), Dec. 20, 2019, 133 Stat. 1969.)

CITE AS: 46 USC 53104

§ 53105. Obligations and rights under operating agreements
(a)Operation of Vessel.—An operating agreement under this chapter shall require that, during the period a vessel is operating under the agreement—
(1) the vessel—
(A) shall be operated exclusively in the foreign commerce or, except as provided in paragraph (2), in mixed foreign commerce and domestic trade allowed under a registry endorsement issued under section 12111 of this title; and
(B) shall not otherwise be operated in the coastwise trade;
(2) in the case of a vessel, other than a replacement vessel under subsection (f), first covered by an operating agreement after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2018, the vessel shall not be operated in the transportation of cargo between points in the United States and its territories either directly or via a foreign port; and
(3) the vessel shall be documented under chapter 121 of this title.
(b)Annual Payments by Secretary.—
(1)In general.—An operating agreement under this chapter shall require, subject to the availability of appropriations, that the Secretary make a payment each fiscal year to the contractor in accordance with section 53106.
(2)Operating agreement is obligation of united states government.—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.
(c)Documentation Requirement.—Each vessel covered by an operating agreement (including an agreement terminated under section 53104(c)(2)) shall remain documented under chapter 121 of this title, until the date the operating agreement would terminate according to its terms.
(d)National Security Requirements.—
(1)In general.—A contractor with respect to an operating agreement (including an agreement terminated under section 53104(c)(2)) shall continue to be bound by the provisions of section 53107 until the date the operating agreement would terminate according to its terms.
(2)Emergency preparedness agreement.—All terms and conditions of an Emergency Preparedness Agreement entered into under section 53107 shall remain in effect until the date the operating agreement would terminate according to its terms, except that the terms of such Emergency Preparedness Agreement may be modified by the mutual consent of the contractor, the Secretary of Transportation, and the Secretary of Defense.
(e)Transfer of Operating Agreements.—A contractor under an operating agreement may transfer the agreement (including all rights and obligations under the operating agreement) to any person that is eligible to enter into the operating agreement under this chapter if the Secretary and the Secretary of Defense determine that the transfer is in the best interests of the United States. A transaction shall not be considered a transfer of an operating agreement if the same legal entity with the same vessels remains the contracting party under the operating agreement.
(f)Replacement Vessels.—A contractor may replace a vessel under an operating agreement with another vessel that is eligible to be included in the Fleet under section 53102(b), if the Secretary, in conjunction with the Secretary of Defense, approves the replacement of the vessel.
(Added Pub. L. 108–136, div. C, title XXXV, § 3531(a), Nov. 24, 2003, 117 Stat. 1812; amended Pub. L. 109–304, § 13(a)(4), Oct. 6, 2006, 120 Stat. 1701; Pub. L. 109–364, div. C, title XXXV, § 3502(a), Oct. 17, 2006, 120 Stat. 2514; Pub. L. 110–181, div. C, title XXXV, § 3526(f), Jan. 28, 2008, 122 Stat. 602; Pub. L. 112–239, div. C, title XXXV, § 3508(e), Jan. 2, 2013, 126 Stat. 2225; Pub. L. 115–91, div. C, title XXXV, § 3503(a), Dec. 12, 2017, 131 Stat. 1911.)

CITE AS: 46 USC 53105

§ 53106. Payments
(a)Annual Payment.—
(1)In general.—The Secretary, subject to the availability of appropriations and the other provisions of this section, shall pay to the contractor for an operating agreement, for each vessel that is covered by the operating agreement, an amount equal to—
(A) $5,000,000 for each of fiscal years 2018, 2019, and 2020;
(B) $8,233,463 for fiscal year 2021;
(C) $5,300,000 for each of fiscal years 2022, 2023, 2024, and 2025;
(D) $5,800,000 for each of fiscal years 2026, 2027, and 2028;
(E) $6,300,000 for each of fiscal years 2029, 2030, and 2031; and
(F) $6,800,000 for each of fiscal years 2032, 2033, 2034, and 2035.
(2)Timing.—The amount shall be paid in equal monthly installments at the end of each month. The amount shall not be reduced except as provided by this section or section 51307(b).
(b)Certification Required for Payment.—As a condition of receiving payment under this section for a fiscal year for a vessel, the contractor 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 paragraph (1) and (2) of section 53105(a), as otherwise applicable with respect to such vessel, for at least 320 days in 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.
(c)General Limitations.—The Secretary of Transportation shall not make any payment under this chapter for a vessel with respect to any days for which the vessel is—
(1) under a charter to the United States Government, other than a charter pursuant to an Emergency Preparedness Agreement under section 53107;
(2) not operated or maintained in accordance with an operating agreement under this chapter; or
(3) more than—
(A) 25 years of age, except as provided in subparagraph (B); or
(B) 20 years of age, in the case of a tank vessel.
(d)Reductions in Payments.—With respect to payments under this chapter for a vessel covered by an operating agreement, the Secretary—
(1) except as provided in paragraph (2), shall not reduce any 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;
(2) shall not make any 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 that is bulk cargo; and
(3) shall make a pro rata reduction in payment for each day less than 320 in a fiscal year that the vessel is not operated in accordance with paragraph (1) and (2) of section 53105(a), as otherwise applicable with respect to such vessel, with days during which the vessel is drydocked or undergoing survey, inspection, or repair considered to be days on which the vessel is operated.
(e)Limitation Regarding Noncontiguous Domestic Trade.—
(1)In general.—No contractor shall receive payments pursuant to this chapter during a period in which it participates in noncontiguous domestic trade.
(2)Limitation on application.—Paragraph (1) shall not apply to any person 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.
(3)Participates in a noncontiguous domestic trade defined.—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.
(Added Pub. L. 108–136, div. C, title XXXV, § 3531(a), Nov. 24, 2003, 117 Stat. 1813; amended Pub. L. 109–304, § 13(a)(5), Oct. 6, 2006, 120 Stat. 1701; Pub. L. 109–364, div. C, title XXXV, § 3502(c), Oct. 17, 2006, 120 Stat. 2516; Pub. L. 111–383, div. C, title XXXV, § 3502(2), Jan. 7, 2011, 124 Stat. 4518; Pub. L. 112–239, div. C, title XXXV, § 3508(f), Jan. 2, 2013, 126 Stat. 2225; Pub. L. 114–113, div. O, title I, § 101(e)(1), Dec. 18, 2015, 129 Stat. 2988; Pub. L. 114–328, div. C, title XXXV, § 3502(b), Dec. 23, 2016, 130 Stat. 2775; Pub. L. 115–91, div. C, title XXXV, § 3503(b), Dec. 12, 2017, 131 Stat. 1911; Pub. L. 115–232, div. C, title XXXV, § 3546(o), Aug. 13, 2018, 132 Stat. 2327; Pub. L. 116–92, div. C, title XXXV, § 3502(c), Dec. 20, 2019, 133 Stat. 1969; Pub. L. 116–283, div. C, title XXXV, § 3501(b), Jan. 1, 2021, 134 Stat. 4397; Pub. L. 117–263, div. C, title XXXV, § 3517(b)(1), Dec. 23, 2022, 136 Stat. 3074.)

CITE AS: 46 USC 53106

§ 53107. National security requirements
(a)Emergency Preparedness Agreement Required.—The Secretary shall establish an Emergency Preparedness Program under this section that is approved by the Secretary of Defense. Under the program, the Secretary, in conjunction with the Secretary of Defense, shall include in each operating agreement under this chapter a requirement that the contractor enter into an Emergency Preparedness Agreement under this section with the Secretary. The Secretary shall negotiate and enter into an Emergency Preparedness Agreement with each contractor as promptly as practicable after the contractor has entered into an operating agreement under this chapter.
(b)Terms of Agreement.—
(1)In general.—An Emergency Preparedness Agreement under this section shall require that a contractor for a vessel covered by an operating agreement under this chapter shall make commercial transportation resources (including services) available, upon request by the Secretary of Defense during a time of war or national emergency, or whenever the Secretary of Defense determines that it is necessary for national security or contingency operation (as that term is defined in section 101 of title 10, United States Code).
(2)Basic terms.—
(A) The basic terms of the Emergency Preparedness Agreement shall be established (subject to subparagraph (B)) by the Secretary and the Secretary of Defense.
(B) In any Emergency Preparedness Agreement, the Secretary and a contractor may agree to additional or modifying terms appropriate to the contractor’s circumstances if those terms have been approved by the Secretary of Defense.
(3)Defense measures against unauthorized seizures.—
(A) The Emergency Preparedness Agreement for any operating agreement that first takes effect or is renewed after the date of enactment of the National Defense Authorization Act for Fiscal Year 2010 shall require that any vessel operating under the agreement in the carriage of cargo for the Department of Defense in an area that is designated by the Coast Guard as an area of high risk of piracy shall be equipped with, at a minimum, appropriate non-lethal defense measures to protect the vessel, crew, and cargo from unauthorized seizure at sea.
(B) The Secretary of Defense and the Secretary of the department in which the Coast Guard is operating shall jointly prescribe the non-lethal defense measures that are required under this paragraph.
(c)Participation After Expiration of Operating Agreement.—Except as provided by section 53105(d), the Secretary may not require, through an Emergency Preparedness Agreement or operating agreement, that a contractor continue to participate in an Emergency Preparedness Agreement after the operating agreement with the contractor has expired according to its terms or is otherwise no longer in effect. After expiration of an Emergency Preparedness Agreement, a contractor may volunteer to continue to participate in such an agreement.
(d)Resources Made Available.—The commercial transportation resources to be made available under an Emergency Preparedness Agreement shall include vessels or capacity in vessels, intermodal systems and equipment, terminal facilities, intermodal and 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 contractor’s service to commercial shippers.
(e)Compensation.—
(1)In general.—The Secretary shall include in each Emergency Preparedness Agreement provisions approved by the Secretary of Defense under which the Secretary of Defense shall pay fair and reasonable compensation for all commercial transportation resources provided pursuant to this section.
(2)Specific requirements.—Compensation under this subsection—
(A) shall not be less than the contractor’s commercial market charges for like transportation resources;
(B) shall be fair and reasonable considering all circumstances;
(C) shall be provided from the time that a vessel or resource is required by the Secretary of Defense until the time that it is redelivered to the contractor and is available to reenter commercial service; and
(D) shall be in addition to and shall not in any way reflect amounts payable under section 53106.
(f)Temporary Replacement Vessels.—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—
(1) a contractor may operate or employ in foreign commerce a foreign-flag vessel or foreign-flag vessel capacity as a temporary replacement for a United States-documented vessel or United States-documented vessel capacity that is activated by the Secretary of Defense under an Emergency Preparedness Agreement or under a primary Department of Defense-approved sealift readiness program; and
(2) 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.
(g)Redelivery and Liability of United States for Damages.—
(1)In general.—All commercial transportation resources activated under an Emergency Preparedness Agreement shall, upon termination of the period of activation, be redelivered to the contractor in the same good order and condition as when received, less ordinary wear and tear, or the Secretary of Defense shall fully compensate the contractor for any necessary repair or replacement.
(2)Limitation on liability of u.s.—Except as may be expressly agreed to in an Emergency Preparedness Agreement, or as otherwise provided by law, the Government shall not be liable for disruption of a contractor’s commercial business or other consequential damages to a contractor arising from activation of commercial transportation resources under an Emergency Preparedness Agreement.
(Added Pub. L. 108–136, div. C, title XXXV, § 3531(a), Nov. 24, 2003, 117 Stat. 1814; amended Pub. L. 109–304, § 13(a)(6), Oct. 6, 2006, 120 Stat. 1701; Pub. L. 111–84, div. C, title XXXV, § 3505, Oct. 28, 2009, 123 Stat. 2720; Pub. L. 112–239, div. C, title XXXV, § 3508(g), Jan. 2, 2013, 126 Stat. 2225.)

CITE AS: 46 USC 53107

§ 53108. Regulatory relief
(a)Operation in Foreign Commerce.—A contractor 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.
(b)Other Restrictions.—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 that vessel is receiving payments for operation of that vessel under an operating agreement under this chapter.
(c)Telecommunications Equipment.—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—
(1) 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;
(2) that country has not been identified by the Secretary as inadequately enforcing international regulations as to that vessel; and
(3) at the end of its useful life, such equipment will be replaced with equipment that meets Federal Communications Commission equipment certification standards.
(Added Pub. L. 108–136, div. C, title XXXV, § 3531(a), Nov. 24, 2003, 117 Stat. 1816; amended Pub. L. 109–304, § 13(a)(7), Oct. 6, 2006, 120 Stat. 1701.)

CITE AS: 46 USC 53108

[§ 53109. Repealed. Pub. L. 112–239, div. C, title XXXV, § 3508(h), Jan. 2, 2013, 126 Stat. 2225]

CITE AS: 46 USC 53109

§ 53110. Regulations

The Secretary and the Secretary of Defense may each prescribe rules as necessary to carry out their respective responsibilities under this chapter.

(Added Pub. L. 108–136, div. C, title XXXV, § 3531(a), Nov. 24, 2003, 117 Stat. 1817.)

CITE AS: 46 USC 53110

§ 53111. Authorization of appropriations
There are authorized to be appropriated for payments under section 53106, to remain available until expended—
(1) $300,000,000 for each of fiscal years 2018, 2019, and 2020;
(2) $494,008,000 for fiscal year 2021;
(3) $318,000,000 for each of fiscal years 2022, 2023, 2024, and 2025;
(4) $348,000,000 for each of fiscal years 2026, 2027, and 2028;
(5) $378,000,000 for each of fiscal years 2029, 2030, and 2031; and
(6) $408,000,000 for each of fiscal years 2032, 2033, 2034, and 2035.
(Added Pub. L. 108–136, div. C, title XXXV, § 3531(a), Nov. 24, 2003, 117 Stat. 1817; amended Pub. L. 111–383, div. C, title XXXV, § 3502(3), Jan. 7, 2011, 124 Stat. 4518; Pub. L. 112–239, div. C, title XXXV, § 3508(i), Jan. 2, 2013, 126 Stat. 2225; Pub. L. 114–92, div. C, title XXXV, § 3504(b), Nov. 25, 2015, 129 Stat. 1219; Pub. L. 114–113, div. O, title I, § 101(e)(2), Dec. 18, 2015, 129 Stat. 2988; Pub. L. 115–232, div. C, title XXXV, § 3546(p), Aug. 13, 2018, 132 Stat. 2327; Pub. L. 116–92, div. C, title XXXV, § 3502(d), Dec. 20, 2019, 133 Stat. 1969; Pub. L. 116–283, div. C, title XXXV, § 3501(c)(1), Jan. 1, 2021, 134 Stat. 4397.)

CITE AS: 46 USC 53111