46 U.S.C. § 53406 — Payments

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; Page 423 TITLE 46—SHIPPING § 53407 (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 pro- gram participant under paragraph (1) for a fis- cal year shall be paid in 12 equal monthly in- stallments at the end of each month during that fiscal year. The amount payable for any fiscal year may not be reduced except as pro- vided by this section or section 51307(b). (b) CERTIFICATION REQUIRED FOR PAYMENT.—As a condition of receiving payment under this sec- tion for a fiscal year for a vessel, the program participant shall certify, in accordance with reg- ulations issued by the Secretary, that the vessel has been and will be operated in accordance with section 53405(a) of this title for at least 320 days during the fiscal year. Days during which the vessel is drydocked, surveyed, inspected, or re- paired shall be considered days of operation for purposes of this subsection. (c) GENERAL LIMITATIONS.—The Secretary may not make any payment under this chapter for a vessel with respect to any days for which the vessel is— (1) not operated or maintained in accordance with an operating agreement under this chap- ter; (2) more than 20 years of age; or (3) simultaneously operating under an agree- ment pursuant to chapter 531 of this title. (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), may not reduce such a payment for— (A) 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; or (B) any days in which the vessel is oper- ated under charter to the United States Gov- ernment; (2) may not make such a payment for any day that the vessel is engaged in transporting more than 7,500 tons of civilian bulk pref- erence cargoes pursuant to section 55302(a), 55305, or 55314 of this title; and (3) shall make a pro rata reduction for each day less than 320 in a fiscal year that the ves- sel is not operated in accordance with section 53405 of this title. (e) LIMITATIONS REGARDING NONCONTIGUOUS DOMESTIC TRADE.— (1) IN GENERAL.—No program participant shall receive payments pursuant to this chap- ter during a period in which it participates in noncontiguous domestic trade. (2) LIMITATION ON APPLICATION.—Paragraph (1) shall not apply to a program participant that is a citizen of the United States within the meaning of section 50501 of this title, ap- plying the 75 percent ownership requirement of that section. (3) PARTICIPATES IN A NONCONTIGUOUS TRADE DEFINED.—In this subsection the term ‘‘par- ticipates 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 Puer- to Rico, other than a point in Alaska north of the Arctic Circle. (Added Pub. L. 116–283, div. C, title XXXV, § 3511(a), Jan. 1, 2021, 134 Stat. 4415; amended Pub. L. 117–263, div. C, title XXXV, § 3517(b)(3), Dec. 23, 2022, 136 Stat. 3074; Pub. L. 118–159, div. C, title XXXV, § 3531(b), Dec. 23, 2024, 138 Stat. 2312.) Editorial Notes AMENDMENTS 2024—Subsec. (a). Pub. L. 118–159 amended subsec. (a) generally. Prior to amendment, text read as follows: ‘‘Subject to the availability of appropriations for such purpose and the other provisions of this chapter, the Secretary shall pay to program participant for an oper- ating agreement under this chapter an amount equal to $6,000,000 for each vessel covered by the agreement for each fiscal year that the vessel is covered by the agree- ment. Such amount shall be paid in equal monthly in- stallments on the last day of each month. The amount payable under this subsection may not be reduced ex- cept as provided by this section or section 51307(b).’’ 2022—Subsec. (a). Pub. L. 117–263 inserted ‘‘or section 51307(b)’’ after ‘‘this section’’. § 53407. National security requirements (a) EMERGENCY PREPAREDNESS AGREEMENT RE- QUIRED.—The Secretary of Transportation, in co- ordination with the Secretary of Defense, shall establish an emergency preparedness program under this section under which the program par- ticipant for an operating agreement under this chapter shall agree, as a condition of the oper- ating agreement, to enter into an emergency preparedness agreement with the Secretary. The Secretary shall negotiate and enter into an Emergency Preparedness Agreement with each program participant as promptly as practicable after the program participant has entered into the operating agreement. (b) TERMS OF AGREEMENT.—The terms of an agreement under this section— (1) shall provide that upon request by the Secretary of Defense during time of war or na- tional emergency, or whenever determined by the Secretary of Defense to be necessary for national security or contingency operation (as that term is defined in section 101 of title 10), the program participant shall make available commercial transportation resources (includ- ing services) described in subsection (d) to the Secretary of Defense; (2) shall include such additional terms as may be established by the Secretary of Trans- portation and the Secretary of Defense; and (3) shall allow for the modification or addi- tion of terms upon agreement by the Sec- retary of Transportation and the program par- ticipant and the approval by the Secretary of Defense.