§53204 Effectiveness of operating agreements

Summary

The Secretary may make an Operating Agreement for fiscal year 2021. Each agreement normally lasts one fiscal year but can be renewed each year if money is available. Vessels the United States has chartered can get payments under these agreements. If a contractor seriously breaks the agreement, the Secretary must warn them, give a fair chance to fix it, and end the agreement if they do not comply; any money already set aside can then be used by the Secretary. A contractor may also end its agreement by telling the Secretary at least 60 days before the end date. If by the first day of a fiscal year there is not enough money for all agreements, the Secretary must tell specified congressional committees and say which agreements will not be renewed unless funds arrive by the 60th day of the year. If only some money is provided by day 60, the Secretary and the Operating Agency will pick which vessels to keep based on national security. If no money is provided, no agreements are renewed and contractors are freed from their duties; final payments follow section 53206. If funds arrive later, an agreement may be restarted if both parties agree and the vessel still meets section 53202 rules (ignoring 53202(b)(3)). If an agreement is not renewed because of lack of funds by day 60, the vessel is released from the agreement, the owner may register it under an approved foreign flag despite section 56101, and, if chapter 563 applies after that registration, the vessel may be requisitioned under chapter 563.