§53404. Effectiveness of operating agreements

§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 subsequent fiscal year. The agreement shall be effective only for 1 fiscal year, but shall be renewable, subject to the availability of appropriations, for each fiscal year through the end of fiscal 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 program 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 opportunity to comply with the operating agreement; and

(B) the Secretary shall terminate the operating 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 termination, 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 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 and the Committee on Transportation and Infrastructure 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 program participant for 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 the vessel after registration, then the vessel is available to be requisitioned by the Secretary pursuant to chapter 563 of this title.

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 substituted "participate in the Fleet" for "receive payments pursuant to any operating agreement that covers such vessel".