--- kind: "section" citation: "46 U.S.C. § 53104" title: "46" title_heading: "Shipping" number: "53104" heading: "Effectiveness of operating agreements" release: "119-102" date: "2026-07-12" url: "https://uscodex.org/usc/46/53104" units: - "Subtitle V — Merchant Marine" - "Part C — Financial Assistance Programs" - "Chapter 531 — Maritime Security Fleet" --- # §53104. Effectiveness of operating agreements - (a) **Effectiveness, Generally.—** The [Secretary](/usc/46/53101.md?p=8) may enter into an [operating agreement](/usc/46/53201.md?p=8) under this chapter for [fiscal year](/usc/46/53201.md?p=6) 2006. Except as provided in [subsection (b)](#b), the [agreement](/usc/46/53201.md?p=8) shall be effective only for 1 [fiscal year](/usc/46/53201.md?p=6), but shall be renewable, subject to the availability of appropriations, for each subsequent [fiscal year](/usc/46/53201.md?p=6) through the end of [fiscal year](/usc/46/53201.md?p=6) 2040. - (b) **Vessels Under Charter to United States.—** Unless an earlier date is requested by the applicant, the effective date for an [operating agreement](/usc/46/53201.md?p=8) with respect to a [vessel](/usc/46/53501.md?p=9) that is, on the date of entry into an [operating agreement](/usc/46/53201.md?p=8), on charter to the [United States](/usc/46/53101.md?p=10) Government, other than a charter pursuant to an Emergency Preparedness [Agreement](/usc/46/53201.md?p=8) under [section 53107](/usc/46/53107.md), shall be the expiration or termination date of the Government charter covering the [vessel](/usc/46/53501.md?p=9), or any earlier date the [vessel](/usc/46/53501.md?p=9) is withdrawn from that charter. - (c) **Termination.—** - (1) **Termination by secretary.—** If the [contractor](/usc/46/53101.md?p=2) with respect to an [operating agreement](/usc/46/53201.md?p=8) materially fails to comply with the terms of the [agreement](/usc/46/53201.md?p=8)— - (A) the [Secretary](/usc/46/53101.md?p=8) shall notify the [contractor](/usc/46/53101.md?p=2) and provide a reasonable opportunity to comply with the [operating agreement](/usc/46/53201.md?p=8); - (B) the [Secretary](/usc/46/53101.md?p=8) shall terminate the [operating agreement](/usc/46/53201.md?p=8) if the [contractor](/usc/46/53101.md?p=2) fails to achieve such compliance; and - (C) upon such termination, any funds obligated by the [agreement](/usc/46/53201.md?p=8) shall be available to the [Secretary](/usc/46/53101.md?p=8) to carry out this chapter. - (2) **Early termination by contractor, generally.—** An [operating agreement](/usc/46/53201.md?p=8) under this chapter shall terminate on a date specified by the [contractor](/usc/46/53101.md?p=2) if the [contractor](/usc/46/53101.md?p=2) notifies the [Secretary](/usc/46/53101.md?p=8), by not later than 60 days before the effective date of the termination, that the [contractor](/usc/46/53101.md?p=2) intends to terminate the [agreement](/usc/46/53201.md?p=8). - (d) **Nonrenewal for Lack of Funds.—** If, by the first day of a [fiscal year](/usc/46/53201.md?p=6), sufficient funds have not been appropriated under the authority provided by this chapter for that [fiscal year](/usc/46/53201.md?p=6), then the [Secretary](/usc/46/53101.md?p=8) shall notify the Committee on Armed Services and the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Armed Services of the House of Representatives that [operating agreements](/usc/46/53201.md?p=8) authorized under this chapter for which sufficient funds are not available will not be renewed for that [fiscal year](/usc/46/53201.md?p=6) if sufficient funds are not appropriated by the 60th day of that [fiscal year](/usc/46/53201.md?p=6). - (e) **Release of Vessels From Obligations.—** If funds are not appropriated for payments under an [operating agreement](/usc/46/53201.md?p=8) under this chapter for any [fiscal year](/usc/46/53201.md?p=6) by the 60th day of that [fiscal year](/usc/46/53201.md?p=6), then— - (1) each [vessel](/usc/46/53501.md?p=9) covered by the [operating agreement](/usc/46/53201.md?p=8) is thereby released from any further [obligation](/usc/46/53701.md?p=9) under the [operating agreement](/usc/46/53201.md?p=8); - (2) the owner or operator of the [vessel](/usc/46/53501.md?p=9) may transfer and register such [vessel](/usc/46/53501.md?p=9) under a foreign registry that is acceptable to the [Secretary](/usc/46/53101.md?p=8) of Transportation and the [Secretary](/usc/46/53101.md?p=8) of Defense, notwithstanding [section 56101 of this title](/usc/46/56101.md); and - (3) if [chapter 563](/usc/46/chstV/ptE/ch563.md) of this title is applicable to such [vessel](/usc/46/53501.md?p=9) after registration of the [vessel](/usc/46/53501.md?p=9) under such a registry, then the [vessel](/usc/46/53501.md?p=9) is available to be requisitioned by the [Secretary](/usc/46/53101.md?p=8) of Transportation pursuant to chapter 563. ## Source credit (Added Pub. L. 108–136, div. C, title XXXV, § 3531(a), Nov. 24, 2003, 117 Stat. 1810; amended Pub. L. 109–304, § 13(a)(3), Oct. 6, 2006, 120 Stat. 1701; Pub. L. 111–383, div. C, title XXXV, § 3502(1), Jan. 7, 2011, 124 Stat. 4518; Pub. L. 112–239, div. C, title XXXV, § 3508(d), Jan. 2, 2013, 126 Stat. 2224; Pub. L. 116–92, div. C, title XXXV, § 3502(b), Dec. 20, 2019, 133 Stat. 1969; Pub. L. 118–159, div. C, title XXXV, § 3502(b), Dec. 23, 2024, 138 Stat. 2304.) ## Notes ### Editorial Notes ### Amendments 2024—Subsec. (a). Pub. L. 118–159 substituted “2040” for “2035”. 2019—Subsec. (a). Pub. L. 116–92 substituted “2035” for “2025”. 2013—Subsec. (c)(3). Pub. L. 112–239, § 3508(d)(1), struck out par. (3) which related to early termination by contractor, with available replacement. Subsec. (e). Pub. L. 112–239, § 3508(d)(2), struck out “an operating agreement under this chapter is terminated under subsection (c)(3), or if” after “If” in introductory provisions. 2011—Subsec. (a). Pub. L. 111–383 substituted “2025” for “2015”. 2006—Subsec. (c)(3)(B)(ii). Pub. L. 109–304, § 13(a)(3)(A), substituted “section 50501 of this title” for “section 2 of the Shipping Act, 1916 (46 U.S.C. App. 802)” in subcls. (I) and (II). Subsec. (e)(2). Pub. L. 109–304, § 13(a)(3)(B), substituted “section 56101 of this title” for “section 9 of the Shipping Act, 1916 (46 U.S.C. App. 808)”. Subsec. (e)(3). Pub. L. 109–304, § 13(a)(3)(C), substituted “chapter 563 of this title” and “chapter 563” for “section 902 of the Merchant Marine Act, 1936 (46 U.S.C. App. 1242)” and “section 902 of such Act”, respectively.