--- kind: "section" citation: "46 U.S.C. § 53204" title: "46" title_heading: "Shipping" number: "53204" heading: "Effectiveness of operating agreements" release: "119-102" date: "2026-07-12" url: "https://uscodex.org/usc/46/53204" units: - "Subtitle V — Merchant Marine" - "Part C — Financial Assistance Programs" - "Chapter 532 — Cable Security Fleet" --- # §53204. 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) 2021. Except as provided in [subsection (d)](#d), the [agreement](/usc/46/53201.md?p=8) shall be effective only for one [fiscal year](/usc/46/53201.md?p=6), but shall be renewable, subject to available appropriations, for each subsequent year. - (b) **Vessels Under Charter to the United States.—** [Vessels](/usc/46/53501.md?p=9) under charter to the [United States](/usc/46/53101.md?p=10) are eligible to receive payments pursuant to their [Operating Agreements](/usc/46/53201.md?p=8). - (c) **Termination.—** - (1) **Termination by the 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 for it 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 a contractor.—** 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), not fewer than 60 days prior to 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) for all [Operating Agreements](/usc/46/53201.md?p=8), 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). If only partial funding is appropriated by the 60th day of such [fiscal year](/usc/46/53201.md?p=6), then the [Secretary](/usc/46/53101.md?p=8), in consultation with the [Operating Agency](/usc/46/53201.md?p=7), shall select the [vessels](/usc/46/53501.md?p=9) to retain under [Operating Agreements](/usc/46/53201.md?p=8), based on their determinations of which [vessels](/usc/46/53501.md?p=9) are most useful for national security. In the event that no funds are appropriated, then no [Operating Agreements](/usc/46/53201.md?p=8) shall be renewed and each [Contractor](/usc/46/53101.md?p=2) shall be released from its [obligations](/usc/46/53701.md?p=9) under the [Operating Agreement](/usc/46/53201.md?p=8). Final payments under an [Operating Agreement](/usc/46/53201.md?p=8) that is not renewed shall be made in accordance with section 53206. To the extent that sufficient funds are appropriated in a subsequent [fiscal year](/usc/46/53201.md?p=6), an [Operating Agreement](/usc/46/53201.md?p=8) that has not been renewed pursuant to this subsection may be reinstated if mutually acceptable to the [Secretary](/usc/46/53101.md?p=8), in consultation with the [Operating Agency](/usc/46/53201.md?p=7), and the [Contractor](/usc/46/53101.md?p=2), provided the [vessel](/usc/46/53501.md?p=9) remains eligible for participation pursuant to [section 53202](/usc/46/53202.md), without regard to subsection 53202 (b)(3). - (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 a [fiscal year](/usc/46/53201.md?p=6), and the [Secretary](/usc/46/53101.md?p=8), in consultation with the [Operating Agency](/usc/46/53201.md?p=7) determines to not renew a [Contractor](/usc/46/53101.md?p=2)’s [Operating Agreement](/usc/46/53201.md?p=8) for a [vessel](/usc/46/53501.md?p=9), then— - (1) each [vessel](/usc/46/53501.md?p=9) covered by the [Operating Agreement](/usc/46/53201.md?p=8) that is not renewed 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) whose [Operating Agreement](/usc/46/53201.md?p=8) was not renewed 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) and the [Operating Agency](/usc/46/53201.md?p=7), 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, then the [vessel](/usc/46/53501.md?p=9) is available to be requisitioned by the [Secretary](/usc/46/53101.md?p=8) pursuant to chapter 563. ## Source credit (Added Pub. L. 116–92, div. C, title XXXV, § 3521(a), Dec. 20, 2019, 133 Stat. 1993.)