§294.23. Special terms.
46 C.F.R. § 294.23
TSP Operating Agreement. Each TSP Operating Agreement will require that, during the period a TSP Fleet Vessel is operating under that TSP Operating Agreement, the TSP Fleet Vessel must:
Be documented as a vessel of the United States under 46 U.S.C. ch. 121;
Operate exclusively in—
Foreign commerce;
Mixed foreign commerce and domestic trade permitted under a registry endorsement issued under 46 U.S.C. 12111, and to those points identified in 46 U.S.C. 55101(b);
Foreign-to-foreign commerce; or
Under charter to the United States, except as provided in 46 U.S.C. 53404(b); and
Not otherwise operate in the coastwise trade of the United States;
Not receive payments during a period in which the Agreement Holder owns, operates, or charters a vessel engaged in noncontiguous domestic trade, unless the Agreement Holder is a section 50501 citizen, applying the 75 percent ownership requirements of 46 U.S.C. 50501; and
Enroll, for vessels 15 years or older, in their classification society's CAP and maintain a CAP rating of two or better.
Operating agreement as an obligation of the United States Government. The amounts payable to an Agreement Holder under a TSP Operating Agreement constitute a contractual obligation of the United States Government to the extent of actual appropriations.
Operating under a Continuing Resolution. In the event funds are available under a Continuing Resolution (CR), the terms and conditions of the TSP Operating Agreements will be in force and only for the period stipulated in the applicable CR. MARAD will continue to pay under each Operating Agreement to the extent of actual appropriations. For any Agreement Holder with a TSP Operating Agreement that does not receive funds, the terms and conditions of any applicable TSP Operating Agreement may be voided, and the Agreement Holder may request termination of the TSP Operating Agreement.
National security.
Each TSP Operating Agreement will require the Agreement Holder to enter into a Voluntary Tanker Agreement (VTA), as approved by the Secretary and the Secretary of War, or other agreement approved by the Secretaries.
No vessel that is operating under a charter from DOW pursuant to an activation under VTA or a similar agreement will be subject to the requirements of § 294.21(e), as determined by the Maritime Administrator.
The Secretary will not terminate an Operating Agreement with an Agreement Holder if the TSP Fleet Vessel covered by the relevant Operating Agreement suffers a marine casualty while operating under a VTA activation, provided that the Agreement Holder makes all reasonable efforts to repair or replace the affected vessel in a timely manner, as determined by the Maritime Administrator.
United States Merchant Marine Academy cadet training. The Agreement Holder must agree:
To carry on the TSP Fleet Vessel two United States Merchant Marine Academy cadets, if available, on each voyage; and
To implement prior to accepting an Operating Agreement appropriate policies, programs, and criteria necessary to comply with all MARAD cadet safety guidelines that address sexual harassment, sexual assault, and other inappropriate conduct.
Upon a finding of non-compliance, the Administrator may require the Agreement Holder to take corrective actions or find such failure to constitute a violation of the TSP Operating Agreement.
Notice of vessel maintenance and repair. The Agreement Holder must notify MARAD any time the TSP Fleet Vessel will enter a period of maintenance, survey, inspection, or repair such that the TSP Fleet Vessel is unable to move under its own power or is unable to meet its national security obligations under paragraph (d) of this section if immediately called to do so under the terms of VTA.
Notes, amendments, and revision history
Authority
Authority: 46 U.S.C. ch. 534, 49 CFR 1.93.
Source
Source: 91 FR 37326, June 23, 2026, unless otherwise noted.