§53204 Effectiveness of Operating Agreements

Summary

The Secretary can make one-year Operating Agreements starting for fiscal year 2021. Each agreement lasts one fiscal year and can be renewed each year if money is available. Ships that are chartered to the United States can get payments under these agreements. If a contractor seriously breaks the rules, the Secretary will warn them, give them time to fix it, and end the agreement if they do not comply. If the Secretary ends an agreement, any money set aside for it can be used by the Secretary for the program. A contractor can also end an agreement by telling the Secretary at least 60 days before the end date. If enough money is not approved by the first day of a fiscal year, the Secretary must tell certain congressional committees that some agreements will not be renewed unless money arrives by the 60th day of that year. If only part of the money is provided by day 60, the Secretary and the Operating Agency will pick which ships to keep based on national security. If no money is provided, no agreements are renewed and contractors are released from their duties; final payments follow section 53206. If an agreement is not renewed because of lack of funds, the ship is freed from its obligations, the owner may reflag the ship under a foreign registry the Secretary and Operating Agency accept, and if that makes other rules apply, the ship may be requisitioned under those rules.