46 U.S.C. § 53404 — Effectiveness of operating agreements

Page 421 TITLE 46—SHIPPING § 53404 1 So in original. The period probably should not appear. certification from a foreign classification so- ciety 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 recip- rocal basis to the American Bureau of Shipping; and (ii) if the foreign classification society has offices and maintains records in the United States. (Added Pub. L. 116–283, div. C, title XXXV, § 3511(a), Jan. 1, 2021, 134 Stat. 4409.) Statutory Notes and Related Subsidiaries DEADLINE FOR ACCEPTING APPLICATIONS Pub. L. 116–283, div. C, title XXXV, § 3511(c), Jan. 1, 2021, 134 Stat. 4419, provided that: ‘‘(1) IN GENERAL.—The Secretary of Transportation shall begin accepting applications for enrollment of vessels in the Tanker Security Fleet established under chapter 534 of title 46, United States Code, as added by subsection (a), by not later than 60 days after the date of the enactment of this title [Jan. 1, 2021]. ‘‘(2) APPROVAL.—Not later than 90 days after receipt of an application for the enrollment of a vessel in the Tanker Security Fleet, the Secretary of Transpor- tation, in coordination with the Secretary of Defense shall— ‘‘(A) approve the application and enter into an op- erating agreement with the applicant; or ‘‘(B) provide to the applicant a written explanation for the denial of the application. ‘‘(3) VESSELS OPERATING IN MARITIME SECURITY FLEET.—Notwithstanding the requirements of section 53402(b) of title 46, United States Code, the Secretary of Transportation shall approve an application submitted under chapter 534 of title 46, United State Code, for a product tank vessel for which there is, on the date of enactment of this title, an effective operating agree- ment under chapter 531 of title 46, United States Code.’’ § 53403. Award of operating agreements (a) IN GENERAL.—The Secretary of Transpor- tation shall require, as a condition of including any vessel in the Fleet, that the program partic- ipant of the vessel enter into an operating agreement with the Secretary under this sec- tion. (b) PROCEDURE FOR APPLICATIONS.— (1) ELIGIBLE VESSELS.—The Secretary of Transportation shall accept an application for an operating agreement for an eligible product tank vessel under the priority under para- graph (2) only from a person that has author- ity to enter into an operating agreement under this chapter. (2) ESTABLISHMENT OF PRIORITY.—The Sec- retary of Transportation may enter into a new operating agreement with an applicant that meets the requirements of section 53402(c) for a vessel that meets the qualifications of sec- tion 53402(b), and shall give priority to appli- cations based on— (A) vessel capabilities, as established by the Secretary of Defense; then (B) after consideration of vessel type, ac- cording to an applicant’s record of owning and operating vessels; then (C) after consideration of ownership and operation, according to such additional pri- orities as the Secretary of Transportation may consider appropriate. (3) CONCURRENCE OF AWARD.—The Secretary of Transportation may not approve an applica- tion for an operating agreement without the concurrence of the Secretary of Defense. (c) LIMITATION.—The Secretary of Transpor- tation may not award operating agreements under this chapter that require payments under section 53406 of this title for more than—.1 (1) for each of fiscal years 2022 and 2023, 10 vessels; and (2) for any subsequent fiscal year, 20 vessels. (d) JUDICIAL REVIEW.—No court shall have ju- risdiction to review the Secretary’s decision with respect to the award or non-award of an op- erating agreement issued under this chapter. (Added Pub. L. 116–283, div. C, title XXXV, § 3511(a), Jan. 1, 2021, 134 Stat. 4412; amended Pub. L. 117–263, div. C, title XXXV, § 3501(b)(2), Dec. 23, 2022, 136 Stat. 3064.) Editorial Notes AMENDMENTS 2022—Subsec. (c). Pub. L. 117–263 substituted ‘‘The Secretary’’ for ‘‘For any fiscal year, the Secretary’’ and ‘‘more than—’’ for ‘‘more than 10 vessels’’, designated existing provisions as introductory provisions, and added pars. (1) and (2). § 53404. Effectiveness of operating agreements (a) IN GENERAL.—Subject to the availability of appropriations for such purpose, the Secretary may enter into an operating agreement under this chapter for fiscal year 2022 and any subse- quent fiscal year. The agreement shall be effec- tive only for 1 fiscal year, but shall be renew- able, subject to the availability of appropria- tions, for each fiscal year through the end of fis- cal year 2040. (b) VESSELS UNDER CHARTER TO THE UNITED STATES.—Any vessel under long term charter to the United States is not eligible to participate in the Fleet. (c) TERMINATION.— (1) TERMINATION BY SECRETARY FOR LACK OF PROGRAM PARTICIPANT COMPLIANCE.—If the pro- gram participant with respect to an operating agreement materially fails to comply with the terms of the agreement— (A) the Secretary shall notify the program participant and provide a reasonable oppor- tunity to comply with the operating agree- ment; and (B) the Secretary shall terminate the oper- ating agreement if the program participant fails to achieve such compliance. (2) TERMINATION BY PROGRAM PARTICIPANT.— If a program participant provides notice of the intent to terminate an operating agreement under this chapter on a date specified by not later than 60 days prior to the date specified by the program participant for such termi- nation, such agreement shall terminate on the date specified by the program participant. (d) NONRENEWAL FOR LACK OF FUNDS.—If, by the first day of a fiscal year, sufficient funds have not been appropriated under the authority 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’’, inserted ‘‘long term’’ before ‘‘charter’’ and ‘‘not’’ before ‘‘eligible’’, and sub- stituted ‘‘participate in the Fleet’’ for ‘‘receive pay- ments pursuant to any operating agreement that cov- ers such vessel’’. § 53405. Obligations and rights under operating agreements (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 com- merce and domestic trade allowed under a reg- istry endorsement issued under section 12111 of this title, in foreign-to-foreign commerce, or under a charter to the United States; (2) not be operated in the coastwise trade ex- cept 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 Sec- retary make a payment to the program partic- ipant in accordance with section 53406. (2) OPERATING AGREEMENT IS AN OBLIGATION OF THE UNITED STATES GOVERNMENT.—An oper- ating agreement under this chapter con- stitutes a contractual obligation of the United States Government to pay the amounts pro- vided for in the agreement to the extent of ac- tual appropriations. (c) DOCUMENTATION REQUIREMENT.—Each ves- sel covered by the operating agreement, includ- ing an agreement terminated under section 53404(c)(2), shall remain documented under chap- ter 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 accord- ing 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 Trans- portation, 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 eligi- ble to enter into that operating agreement under this chapter, if the Secretary of Transpor- tation 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 re- place the vessel with another vessel that is eligi- ble to be included in the Fleet under section 53402(b), if the Secretary of Transportation, in coordination with the Secretary of Defense, ap- proves the replacement of the vessel. No court shall have jurisdiction to review a decision by the Secretary of Transportation or the Sec- retary of Defense pertaining to the replacement of a vessel under this section. (Added Pub. L. 116–283, div. C, title XXXV, § 3511(a), Jan. 1, 2021, 134 Stat. 4414.) § 53406. Payments (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 pro- gram participant for an operating agreement under this chapter, for each vessel that is cov- ered 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;