1266 
‘‘(I) that is eligible to document 
the vessel under chapter 121; 
‘‘(II) the chairman of the board of 
directors, chief executive officer, and a 
majority of the members of the board of 
directors of which are citizens of the 
United States under section 50501, 
and are appointed and subjected to re-
moval only upon approval by the Sec-
retary; and 
‘‘(III) that certifies to the Sec-
retary that there are no treaties, stat-
utes, regulations, or other laws that 
would prohibit the owner or operator 
for the vessel from performing its obli-
gations under an operating agreement 
under this chapter; 
‘‘(B) in the case of a vessel that will be de-
mise chartered to a person that is owned or con-
trolled by another person that is not a citizen of 
the United States under section 50501, the other 
person enters into an agreement with the Sec-
retary not to influence the operation of the vessel 
in a manner that will adversely affect the inter-
ests of the United States; and 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01266
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1267 
‘‘(C) the Secretary of Transportation and 
the Secretary of Defense notify the Committee on 
Armed Services and the Committee on Com-
merce, 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 the Secre-
taries concur with the certification required 
under subparagraph (A)(ii)(III), and have re-
viewed and agree that there are no legal, oper-
ational, or other impediments that would pro-
hibit the owner or operator for the vessel from 
performing its obligations under an operating 
agreement under this chapter. 
‘‘(3) VESSELS OWNED AND OPERATED BY A DE-
FENSE OWNER OR OPERATOR.—A vessel meets the re-
quirements of this paragraph if— 
‘‘(A) during the period of an operating 
agreement under this chapter that applies to the 
vessel, the vessel will be owned and operated by 
a person that— 
‘‘(i) is eligible to document a vessel 
under chapter 121; 
‘‘(ii) operates or manages other vessels 
of the United States for the Secretary of De-
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01267
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1268 
fense, or charters other vessels to the Sec-
retary of Defense; 
‘‘(iii) has entered into a special secu-
rity agreement for the purpose of this para-
graph with the Secretary of Defense; 
‘‘(iv) makes the certification described 
in paragraph (2)(A)(ii)(III); and 
‘‘(v) in the case of a vessel described in 
paragraph (2)(B), enters into an agreement 
referred to in that subparagraph; and 
‘‘(B) the Secretary of Transportation and 
the Secretary of Defense notify the Committee on 
Armed Services and the Committee on Com-
merce, 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 they concur 
with the certification required under subpara-
graph (A)(iv), and have reviewed and agree that 
there are no legal, operational, or other impedi-
ments that would prohibit the owner or operator 
for the vessel from performing its obligations 
under an operating agreement under this chap-
ter. 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01268
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1269 
‘‘(4) VESSELS OWNED BY DOCUMENTATION CITI-
ZENS AND CHARTERED TO SECTION 50501 CITIZENS.— 
A vessel meets the requirements of this paragraph if, 
during the period of an operating agreement under 
this chapter, the vessel will be— 
‘‘(A) owned by a person who is eligible to 
document a vessel under chapter 121; and 
‘‘(B) demise chartered to a person that is a 
citizen of the United States under section 50501. 
‘‘(d) REQUEST
BY SECRETARY
OF DEFENSE.—The 
Secretary of Defense shall request that the Commandant of 
the Coast Guard issue any waiver under section 501 that 
the Secretary of Defense determines is necessary for pur-
poses of this chapter. 
‘‘(e) VESSEL STANDARDS.— 
‘‘(1) CERTIFICATE
OF
INSPECTION.—A vessel 
used to provide oceangoing transportation that the 
Commandant of the Coast Guard determines meets 
the criteria of subsection (b) but which, on the date 
of enactment of this section, is not documented under 
chapter 121, shall be eligible for a certificate of in-
spection if the Commandant of the Coast Guard deter-
mines that— 
‘‘(A) the vessel is classed by and designed in 
accordance with the rules of the American Bu-
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01269
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1270 
reau of Shipping, or another classification soci-
ety accepted by the Commandant of the Coast 
Guard; 
‘‘(B) the vessel complies with applicable 
international agreements and associated guide-
lines, as determined by the country in which the 
vessel was documented immediately before becom-
ing documented under chapter 121; and 
‘‘(C) the country has not been identified by 
the Commandant of the Coast Guard as inad-
equately enforcing international vessel regula-
tions as to that vessel. 
‘‘(2) RELIANCE ON CLASSIFICATION SOCIETY.— 
‘‘(A) IN
GENERAL.—The Commandant of 
the Coast Guard may rely on a certification 
from the American Bureau of Shipping or, sub-
ject to subparagraph (B), another classification 
society accepted by the Commandant of the Coast 
Guard, to establish that a vessel is in compliance 
with the requirements of paragraph (1). 
‘‘(B) FOREIGN CLASSIFICATION SOCIETY.— 
The Secretary may accept certification from a 
foreign classification society under subparagraph 
(A) only— 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01270
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1271 
‘‘(i) to the extent that the government 
of the foreign country in which the society 
is headquartered provides access on a recip-
rocal basis to the American Bureau of Ship-
ping; and 
‘‘(ii) if the foreign classification society 
has offices and maintains records in the 
United States. 
‘‘§ 53203. Vessel standards 
‘‘(a) CERTIFICATE OF INSPECTION.—A vessel used to 
provide transportation service as a common carrier that the 
Secretary of Transportation determines meets the criteria 
of section 53102(b), which on the date of enactment of this 
section is not a documented vessel, shall be eligible for a 
certificate of inspection if the Secretary determines that— 
‘‘(1) the vessel is classed by and designed in ac-
cordance with the rules of the American Bureau of 
Shipping or another classification society accepted by 
the Secretary; 
‘‘(2) the vessel complies with applicable inter-
national agreements and associated guidelines, as de-
termined by the country in which the vessel was docu-
mented immediately before becoming a documented 
vessel (as defined in that section); and 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01271
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1272 
‘‘(3) that country has not been identified by the 
Secretary as inadequately enforcing international ves-
sel regulations as to that vessel. 
‘‘(b) CONTINUED ELIGIBILITY
FOR CERTIFICATE.— 
Subsection (a) does not apply to any vessel that has failed 
to comply with the applicable international agreements and 
association guidelines referred to in subsection (a)(2). 
‘‘(c) RELIANCE ON CLASSIFICATION SOCIETY.— 
‘‘(1) IN GENERAL.—The Secretary may rely on 
a certification from the American Bureau of Ship-
ping or, subject to paragraph (2), another classifica-
tion society accepted by the Secretary, to establish 
that a vessel is in compliance with the requirements 
of subsections (a) and (b). 
‘‘(2) FOREIGN
CLASSIFICATION
SOCIETY.—The 
Secretary may accept certification from a foreign 
classification society under paragraph (1) only— 
‘‘(A) to the extent that the government of the 
foreign 
country 
in 
which 
the 
society 
is 
headquartered provides access on a reciprocal 
basis to the American Bureau of Shipping; and 
‘‘(B) if the foreign classification society has 
offices and maintains records in the United 
States. 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01272
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1273 
‘‘§ 53204. Award of operating agreements 
‘‘(a) IN GENERAL.—The Secretary of Transportation 
shall require, as a condition of including any vessel in the 
Fleet, that the owner or operator of the vessel enter into 
an operating agreement with the Secretary under this sec-
tion. 
‘‘(b) PROCEDURE FOR APPLICATIONS.— 
‘‘(1) PARTICIPATING FLEET VESSELS.— 
‘‘(A) 
IN
GENERAL.—The 
Secretary 
of 
Transportation shall accept an application for 
an operating agreement for a participating Fleet 
vessel under the priority under paragraph (2) 
only from a person that has authority to enter 
into an operating agreement under this chapter. 
‘‘(B) VESSEL UNDER DEMISE CHARTER.— 
For purposes of subparagraph (A), in the case of 
a vessel that is subject to a demise charter that 
terminates by its own terms on September 30, 
2035 (without giving effect to any extension pro-
vided therein for completion of a voyage or to ef-
fect the actual redelivery of the vessel), or that is 
terminable at the will of the owner of the vessel 
after such date, only the owner of the vessel shall 
be treated as having the authority referred to in 
subparagraph (A). 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01273
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1274 
‘‘(C) VESSEL OWNED BY A UNITED STATES 
CITIZEN TRUST.—For purposes of subparagraph 
(B), in the case of a vessel owned by a United 
States citizen trust, the term ‘owner of the vessel’ 
includes the beneficial owner of the vessel with 
respect to such trust. 
‘‘(2) DISCRETION WITHIN PRIORITY.—The Sec-
retary of Transportation— 
‘‘(A) may award operating agreements 
under paragraph (1) according to such priorities 
as the Secretary considers appropriate; and 
‘‘(B) shall award operating agreements 
within any such priority— 
‘‘(i) in accordance with operational re-
quirements specified by the Secretary of De-
fense; 
‘‘(ii) in the case of operating agree-
ments awarded under subparagraph (B) of 
paragraph (1), according to applicants’ 
records of owning and operating vessels; 
and 
‘‘(iii) subject to approval of the Sec-
retary of Defense. 
‘‘(c) LIMITATION.—For any fiscal year, the Secretary 
may not award operating agreements under this chapter 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01274
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1275 
that require payments under section 53207 for more than 
10 vessels. 
‘‘§ 53205. Effectiveness of operating agreements 
‘‘(a) IN GENERAL.—Subject to the availability of ap-
propriations for such purpose, the Secretary of Transpor-
tation may enter into an operating agreement under this 
chapter for fiscal year 2021 and any subsequent fiscal year. 
Each such agreement may be renewed annually for up to 
seven years. 
‘‘(b) VESSELS UNDER CHARTER
TO
THE UNITED 
STATES.—The owner or operator of a vessel under charter 
to the United States is eligible to receive payments pursuant 
to any operating agreement that covers such vessel. 
‘‘(c) TERMINATION.— 
‘‘(1) TERMINATION BY SECRETARY FOR LACK OF 
OWNER OR OPERATOR COMPLIANCE.—If the owner or 
operator with respect to an operating agreement ma-
terially fails to comply with the terms of the agree-
ment— 
‘‘(A) the Secretary shall notify the owner or 
operator and provide a reasonable opportunity 
to comply with the operating agreement; and 
‘‘(B) the Secretary shall terminate the oper-
ating agreement if the owner or operator fails to 
achieve such compliance. 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01275
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1276 
‘‘(2) TERMINATION BY OWNER OR OPERATOR.— 
‘‘(A) IN GENERAL.—If an owner or operator 
provides notice of the intent to terminate an op-
erating agreement under this chapter by not 
later than 60 days prior to the date specified by 
the owner or operator for such termination, such 
agreement shall terminate on the date specified 
by the owner or operator. 
‘‘(B) REPLACEMENT.—An operating agree-
ment with respect to a vessel shall terminate on 
the date that is three years after the date on 
which the vessel begins operating under the 
agreement, if— 
‘‘(i) the owner or operator notifies the 
Secretary, by not later than two years after 
the date the vessel begins operating under 
the agreement, that the owner or operator 
intends to terminate the agreement under 
this subparagraph; and 
‘‘(ii) the Secretary of Transportation, 
in coordination with the Secretary of De-
fense, determines that— 
‘‘(I) an application for an oper-
ating agreement under this chapter has 
been received for a replacement vessel 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01276
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1277 
that is acceptable to the Secretaries; 
and 
‘‘(II) during the period of an op-
erating agreement under this chapter 
that applies to the replacement vessel, 
the replacement vessel will be— 
‘‘(aa) owned and operated by 
one or more persons that are citi-
zens of the United States under 
section 50501; or 
‘‘(bb) owned by a person who 
is eligible to document the vessel 
under chapter 121, and operated 
by a person that is a citizen of the 
United 
States 
under 
section 
50501. 
‘‘(d) NONRENEWAL FOR LACK OF FUNDS.— 
‘‘(1) IN GENERAL.—If sufficient funds are not 
made available to carry out an operating agreement 
under this chapter— 
‘‘(A) the Secretary of Transportation shall 
submit to 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 Trans-
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01277
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1278 
portation and Infrastructure of the House of 
Representatives notice that such agreement shall 
be not renewed effective on the 60th day of the 
fiscal year, unless such funds are made available 
before such day; and 
‘‘(B) effective on the 60th day of such fiscal 
year, terminate such agreement and provide no-
tice of such termination to the owner or operator 
of the vessel covered by the agreement. 
‘‘(2) RELEASE
OF
VESSELS
FROM
OBLIGA-
TIONS.—If an operating agreement for a vessel under 
this chapter is not renewed pursuant to paragraph 
(1), then the owner or operator of the vessel is released 
from any further obligation under the operating 
agreement as of the date of such termination or non-
renewal. 
‘‘(3) FOREIGN TRANSFER AND REGISTRATION.— 
The owner or operator of a vessel covered by an oper-
ating agreement under this chapter may transfer and 
register such vessel under a foreign registry that is ac-
ceptable to the Secretary and the Secretary of Defense, 
notwithstanding section 53201. 
‘‘(4) REQUISITION.—If chapter 563 is applicable 
to a vessel after registration, then the vessel is avail-
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01278
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1279 
able to be requisitioned by the Secretary pursuant to 
chapter 563. 
‘‘§ 53206. Obligations and rights under operating 
agreements 
‘‘(a) OPERATION OF VESSEL.—An operating agree-
ment under this chapter shall require that, during the pe-
riod 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 commerce and 
domestic trade allowed under a registry endorsement 
issued under section 12111, in foreign-to-foreign com-
merce, or under a charter to the United States; 
‘‘(2) not be operated in the coastwise trade except 
as described in paragraph (1); and 
‘‘(3) be documented under chapter 121. 
‘‘(b) OPERATING AGREEMENT IS AN OBLIGATION OF 
THE UNITED STATES GOVERNMENT.—An operating agree-
ment under this chapter constitutes a contractual obligation 
of the United States Government to pay the amounts pro-
vided for in the agreement to the extent of actual appropria-
tions. 
‘‘(c) OBLIGATIONS OF OWNER OR OPERATOR.— 
‘‘(1) IN GENERAL.—The owner or operator of a 
vessel covered by an operating agreement under this 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01279
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1280 
chapter shall agree, as a condition of such agreement, 
to remain obligated to carry out the requirements de-
scribed in paragraph (2) until the termination date 
specified in the agreement, even in the case of early 
termination of the agreement under section 53205(c). 
This subsection shall not apply in the case of an oper-
ating agreement terminated for lack of funds under 
section 53205(d). 
‘‘(2) REQUIREMENTS.—The requirements de-
scribed in this paragraph are the following: 
‘‘(A) To continue the documentation of the 
vessel under chapter 121. 
‘‘(B) To be bound by the requirements of 
section 53208. 
‘‘(C) That all terms and conditions of an 
emergency preparedness agreement entered into 
under section 53208 shall remain in effect, except 
that the terms of such emergency preparedness 
agreement may be modified by the mutual con-
sent of the owner or operator, the Secretary and 
the Secretary of Defense as provided in such sec-
tion. 
‘‘(d) TRANSFER OF OPERATING AGREEMENTS.—The 
owner or operator of a vessel covered by an operating agree-
ment under this chapter may transfer that agreement (in-
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01280
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1281 
cluding all rights and obligations under the agreement) to 
any person that is eligible to enter into that operating 
agreement under this chapter, if the transfer is approved 
by the Secretary of Transportation and the Secretary of De-
fense. 
‘‘(e) REPLACEMENT OF VESSELS COVERED BY AGREE-
MENTS.—An owner or operator of a vessel covered by an 
operating agreement under this chapter may replace the 
vessel with another vessel that is eligible to be included in 
the Fleet under section 53202(b), if the Secretary of Trans-
portation, in coordination with the Secretary of Defense, 
approves the replacement of the vessel. In selecting a re-
placement vessel, the owner or operator shall give primary 
consideration to— 
‘‘(1) the commercial viability of the vessel; 
‘‘(2) the utility of the vessel with respect to the 
operating requirements of the owner or operator; and 
‘‘(3) ensuring that the commercial and military 
utility of any replacement vessel is not less than that 
of the initial vessel. 
‘‘§ 53207. Payments 
‘‘(a) ANNUAL PAYMENT.—Subject to the availability of 
appropriations for such purpose and the other provisions 
of this chapter, the Secretary shall pay to the owner or oper-
ator of a vessel covered by an operating agreement under 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01281
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1282 
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 agreement. Such amount shall be paid in 
equal monthly installments on the last day of each month. 
The amount payable under this subsection may not be re-
duced except as provided by this section. 
‘‘(b) CERTIFICATION REQUIRED FOR PAYMENT.—As a 
condition of receiving payment under this section for a fis-
cal year for a vessel, the owner or operator of the vessel 
shall certify, in accordance with regulations issued by the 
Secretary, that the vessel has been and will be operated in 
accordance with section 53206 for at least 320 days during 
the fiscal year. Days during which the vessel is drydocked, 
surveyed, inspected, or repaired 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 re-
spect to any days for which the vessel is— 
‘‘(1) not operated or maintained in accordance 
with an operating agreement under this chapter; or 
‘‘(2) more than 25 years of age. 
‘‘(d) REDUCTIONS
IN PAYMENTS.—With respect to 
payments under this chapter for a vessel covered by an oper-
ating agreement, the Secretary— 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01282
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS
1283 
‘‘(1) except as provided in paragraph (2), may 
not reduce such a payment for the operation of the 
vessel to carry military or other preference cargoes 
under section 55302(a), 55304, 55305, or 55314, sec-
tion 2631 of title 10, or any other cargo preference 
law of the United States; 
‘‘(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 preference cargoes pursu-
ant to section 55302(a), 55305, or 55314, that is bulk 
cargo; and 
‘‘(3) shall make a pro rata reduction for each 
day less than 320 in a fiscal year that the vessel is 
not operated in accordance with section 53206. 
‘‘(e) LIMITATIONS REGARDING NONCONTIGUOUS DO-
MESTIC TRADE.— 
‘‘(1) IN GENERAL.—No owner or operator shall 
receive payments pursuant to this chapter during a 
period in which it participates in noncontiguous do-
mestic trade. 
‘‘(2) LIMITATION ON APPLICATION.—Paragraph 
(1) shall not apply to a owner or operator that is a 
citizen of the United States within the meaning of 
section 50501, applying the 75 percent ownership re-
quirement of that section. 
VerDate Sep 11 2014 
22:59 Jul 09, 2020
Jkt 099200
PO 00000
Frm 01283
Fmt 6652
Sfmt 6203
E:\BILLS\H6395.RH
H6395
pbinns on DSKJLVW7X2PROD with BILLS