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46 U.S.C. § 53405 — Obligations and rights under operating agreements
Federal law — U.S. Code and appendices · legal_authorities
**(a) Operation of Vessel.—** 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—
(1) 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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section12111&num=0&edition=prelim), in foreign-to-foreign commerce, or under a charter to the United States;
(2) not be operated in the coastwise trade except as described in paragraph (1); and
(3) be documented under chapter 121 of this title.
**(b) Annual Payments by the Secretary.—**
(1) **In general.—** — An operating agreement under this chapter shall require, subject to the availability of appropriations, that the Secretary make a payment to the program participant in accordance with section 53406.
(2) **Operating agreement is an obligation of the 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 the operating agreement, including an agreement terminated under section 53404(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 program participant with respect to an operating agreement, including an agreement terminated under section 53404(c)(2), shall continue to be bound by the provisions of section 53407 until the date
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Source file: Laws/federal/codes/united-states-code/title-46/section-53405-obligations-and-rights-under-operating-agreements--c0f8e91af5.md
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Source location: Title 46, Chapter 534, § 53405; chapter-534-tanker-security-fleet.md
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**(a) Operation of Vessel.—** 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—
(1) 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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section12111&num=0&edition=prelim), in foreign-to-foreign commerce, or under a charter to the United States;
(2) not be operated in the coastwise trade except as described in paragraph (1); and
(3) be documented under chapter 121 of this title.
**(b) Annual Payments by the Secretary.—**
(1) **In general.—** — An operating agreement under this chapter shall require, subject to the availability of appropriations, that the Secretary make a payment to the program participant in accordance with section 53406.
(2) **Operating agreement is an obligation of the 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 the operating agreement, including an agreement terminated under section 53404(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 program participant with respect to an operating agreement, including an agreement terminated under section 53404(c)(2), shall continue to be bound by the provisions of section 53407 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 53407 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 program participant, the Secretary of Transportation, and the Secretary of Defense.
**(e) Transfer of Operating Agreements.—** A program participant may transfer an operating 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 Secretary of Transportation and the Secretary of Defense determine that the transfer is in the best interests of the United States.
**(f) Replacement of Vessels Covered by Agreements.—** A program participant may replace the vessel with another vessel that is eligible to be included in the Fleet under section 53402(b), if the Secretary of Transportation, in coordination with the Secretary of Defense, approves the replacement of the vessel. No court shall have jurisdiction to review a decision by the Secretary of Transportation or the Secretary of Defense pertaining to the replacement of a vessel under this section.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Requirements.—** A registry endorsement may be issued for a vessel that satisfies the requirements of [section 12103 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section12103&num=0&edition=prelim).
**(b) Authorized Activity.—** A vessel for which a registry endorsement is issued may engage in foreign trade or trade with Guam, American Samoa, Wake, Midway, or Kingman Reef.
**(c) Certain Vessels Owned by Trusts.—**
(1) **Nonapplication of beneficiary citizenship requirement.—** — For the issuance of a certificate of documentation with only a registry endorsement, the beneficiaries of a trust are not required to be citizens of the United States if the trust qualifies under paragraph (2) and the vessel is subject to a charter to a citizen of the United States.
(2) **Requirements for trust to qualify.—**
(A) *In general.—* — Subject to subparagraph (B), a trust qualifies under this paragraph with respect to a vessel only if—
(i) each trustee is a citizen of the United States; and
(ii) the application for documentation of the vessel 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.
(B) *Authority of non-citizens.—* — If any person that is not a citizen of the United States has authority to direct or participate in
Source: Supplied U.S. Code snapshot — release unconfirmed · 46 U.S.C. § 12111
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Annual Payments.—**
(1) **In general.—** — Subject to the availability of appropriations and the other provisions of this section, the Secretary shall pay to a program participant for an operating agreement under this chapter, for each vessel that is covered by the operating agreement, an amount equal to—
(A) $8,160,000 for each of fiscal years 2025 and 2026;
(B) $8,380,000 for each of fiscal years 2027 and 2028;
(C) $8,606,000 for each of fiscal years 2029 and 2030;
(D) $8,839,000 for each of fiscal years 2031 and 2032;
(E) $9,078,000 for each of fiscal years 2033 and 2034;
(F) $9,323,000 for each of fiscal years 2035 and 2036;
(G) $9,574,000 for each of fiscal years 2037 and 2038; and
(H) $9,833,000 for each of fiscal years 2039 and 2040.
(2) **Timing.—** — The amount payable to a program participant under paragraph (1) for a fiscal year shall be paid in 12 equal monthly installments at the end of each month during that fiscal year. The amount payable for any fiscal year may 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 program participant shall certify, in accordance with regulations issued by the Secretary, that the vessel has been and will be operated in accordance with [section 53405(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53405/a&num=0&edition=prelim) 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.
**(c) General Limitations.—** The Secretary may not make any payment under this
Source: Supplied U.S. Code snapshot — release unconfirmed · 46 U.S.C. § 53406
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Federal law — U.S. Code and appendices · legal_authorities
Page 422
TITLE 46—SHIPPING
§ 53405
provided by this chapter for that fiscal year,
then the Secretary shall notify the Committee
on Armed Services and the Committee on Com-
merce, Science, and Transportation of the Sen-
ate and the Committee on Armed Services and
the Committee on Transportation and Infra-
structure of the House of Representatives that
operating agreements authorized under this
chapter for which sufficient funds are not avail-
able 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 fur-
ther obligation under the operating agree-
ment;
(2) the program participant for the vessel
may transfer and register such vessel under a
foreign registry that is acceptable to the Sec-
retary of Transportation and the Secretary of
Defense, notwithstanding section 56101 of this
title; and
(3) if chapter 563 of this title is applicable to
the vessel after registration, then the vessel is
available to be requisitioned by the Secretary
pursuant to chapter 563 of this title.
(Added Pub. L. 116–283, div. C, title XXXV,
§ 3511(a), Jan. 1, 2021, 134 Stat. 4413; amended
Pub. L. 117–81, div. C, title XXXV, § 3515(b), Dec.
27, 2021, 135 Stat. 2243; Pub. L. 118–159, div. C,
title XXXV, § 3531(a), Dec. 23, 2024, 138 Stat. 2312.)
Editorial Notes
AMENDMENTS
2024—Subsec. (a). Pub. L. 118–159 substituted ‘‘2040’’
for ‘‘2035’’.
2021—Subsec. (b). Pub. L. 117–81 substituted ‘‘Any’’ for
‘‘The program participant of a’’, inse
Source: Supplied 2024 U.S. Code historical extraction · 46 U.S.C. § 53405
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