§53104 Effectiveness of Operating Agreements

Summary

The Secretary may make operating agreements starting in fiscal year 2006. Each agreement lasts one fiscal year but can be renewed each year through the end of fiscal year 2040 if Congress provides money. If a ship is on a U.S. Government charter (not an Emergency Preparedness Agreement) when the agreement is made, the operating agreement begins when that government charter ends unless the applicant asks for an earlier start or the ship leaves the charter sooner. If a contractor seriously breaks the agreement, the Secretary must tell them, give a reasonable chance to fix it, and end the agreement if they do not. The Secretary can then use any funds set aside under the agreement to carry out the program. A contractor may end an agreement by telling the Secretary at least 60 days before the chosen end date. If funds are not approved by the first day of a fiscal year, the Secretary must notify the Senate Armed Services Committee, the Senate Commerce, Science, and Transportation Committee, and the House Armed Services Committee that agreements without funds will not be renewed unless money is provided by the 60th day of that fiscal year. If money is still not provided by that 60th day, each covered ship is released from the agreement, the owner may reflag the ship under a foreign registry approved by the Secretary of Transportation and the Secretary of Defense (even if another law would otherwise bar it), and if chapter 563 applies after reflagging, the Secretary of Transportation may requisition the ship under chapter 563.