46 U.S.C. § 53204 — Effectiveness of operating agreements

Page 412 TITLE 46—SHIPPING § 53204 (1) ACCEPTANCE OF APPLICATIONS.—Beginning no later than 60 days after the effective date of this chapter, the Secretary shall accept appli- cations for enrollment of vessels in the Cable Fleet. (2) ACTION ON APPLICATIONS.—Within 120 days after receipt of an application for enrollment of a vessel in the Cable Fleet, the Secretary shall approve the application in conjunction with the Operating Agency, and shall enter into an Operating Agreement with the appli- cant, or provide in writing the reason for de- nial of that application. (c) Priority for Awarding Agreements.—Sub- ject to the availability of appropriations, the Secretary shall enter into Operating Agree- ments with those vessels determined by the Op- erating Agency, in its sole discretion, to best meet the national security requirements of the United States. After consideration of national security requirements, priority shall be given to an applicant that is a United States citizen under section 50501 of this title. (Added Pub. L. 116–92, div. C, title XXXV, § 3521(a), Dec. 20, 2019, 133 Stat. 1992.) Editorial Notes REFERENCES IN TEXT The effective date of this chapter, referred to in sub- sec. (b)(1), probably means the date of enactment of Pub. L. 116–92, which enacted this chapter and was ap- proved Dec. 20, 2019. § 53204. Effectiveness of operating agreements (a) EFFECTIVENESS GENERALLY.—The Sec- retary may enter into an Operating Agreement under this chapter for fiscal year 2021. Except as provided in subsection (d), the agreement shall be effective only for one fiscal year, but shall be renewable, subject to available appropriations, for each subsequent year. (b) VESSELS UNDER CHARTER TO THE UNITED STATES.—Vessels under charter to the United States are eligible to receive payments pursuant to their Operating Agreements. (c) TERMINATION.— (1) TERMINATION BY THE 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 Con- tractor and provide a reasonable opportunity for it to comply with the Operating Agree- ment; (B) the Secretary shall terminate the Op- erating Agreement if the Contractor fails to achieve such compliance; and (C) upon such termination, any funds obli- gated by the Agreement shall be available to the Secretary to carry out this chapter. (2) EARLY TERMINATION BY A CONTRACTOR.— An Operating Agreement under this chapter shall terminate on a date specified by the Con- tractor if the Contractor notifies the Sec- retary, not fewer than 60 days prior to the ef- fective date of the termination, that the Con- tractor 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 for all Operating Agreements, then the Secretary shall notify the Committee on Armed Services and the Committee on Commerce, Science, and Transportation of the Senate and the Com- mittee on Armed Services of the House of Rep- resentatives that Operating Agreements author- ized under this chapter for which sufficient funds are not available will not be renewed for that fiscal year if sufficient funds are not appro- priated by the 60th day of that fiscal year. If only partial funding is appropriated by the 60th day of such fiscal year, then the Secretary, in consultation with the Operating Agency, shall select the vessels to retain under Operating Agreements, based on their determinations of which vessels are most useful for national secu- rity. In the event that no funds are appro- priated, then no Operating Agreements shall be renewed and each Contractor shall be released from its obligations under the Operating Agree- ment. Final payments under an Operating Agreement that is not renewed shall be made in accordance with section 53206. To the extent that sufficient funds are appropriated in a subse- quent fiscal year, an Operating Agreement that has not been renewed pursuant to this sub- section may be reinstated if mutually accept- able to the Secretary, in consultation with the Operating Agency, and the Contractor, provided the vessel remains eligible for participation pur- suant to section 53202, without regard to sub- section 53202 (b)(3). (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 a fiscal year, and the Secretary, in consultation with the Op- erating Agency determines to not renew a Con- tractor’s Operating Agreement for a vessel, then— (1) each vessel covered by the Operating Agreement that is not renewed is thereby re- leased from any further obligation under the Operating Agreement; (2) the owner or operator of the vessel whose Operating Agreement was not renewed may transfer and register such vessel under a for- eign registry that is acceptable to the Sec- retary and the Operating Agency, notwith- standing section 56101 of this title; and (3) if chapter 563 of this title is applicable to such vessel after registration, then the vessel is available to be requisitioned by the Sec- retary pursuant to chapter 563. (Added Pub. L. 116–92, div. C, title XXXV, § 3521(a), Dec. 20, 2019, 133 Stat. 1993.) § 53205. Obligations and rights under operating agreements (a) OPERATION OF VESSEL.—An Operating Agreement under this chapter shall require that, during the period the vessel is operating under the Agreement, the vessel— (1) shall be operated in the trade for Cable Services, or under a charter to the United States; and (2) shall be documented under chapter 121 of this title.