---
kind: "section"
citation: "46 U.S.C. § 53404"
title: "46"
title_heading: "Shipping"
number: "53404"
heading: "Effectiveness of operating agreements"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/46/53404"
units:
  - "Subtitle V — Merchant Marine"
  - "Part C — Financial Assistance Programs"
  - "Chapter 534 — Tanker Security Fleet"
---

# §53404. Effectiveness of operating agreements

- (a) **In General.—** Subject to the availability of appropriations for such purpose, 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) 2022 and any subsequent [fiscal year](/usc/46/53201.md?p=6). 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 [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 the United States.—** Any [vessel](/usc/46/53501.md?p=9) under [long term charter](/usc/46/53401.md?p=8) to the [United States](/usc/46/53101.md?p=10) is not eligible to participate in the [Fleet](/usc/46/53101.md?p=3).
- (c) **Termination.—**
  - (1) **Termination by secretary for lack of program participant compliance.—** If the [program participant](/usc/46/53401.md?p=5) 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 [program participant](/usc/46/53401.md?p=5) and provide a reasonable opportunity to comply with the [operating agreement](/usc/46/53201.md?p=8); and
    - (B) the [Secretary](/usc/46/53101.md?p=8) shall terminate the [operating agreement](/usc/46/53201.md?p=8) if the [program participant](/usc/46/53401.md?p=5) fails to achieve such compliance.
  - (2) **Termination by program participant.—** If a [program participant](/usc/46/53401.md?p=5) provides notice of the intent to terminate an [operating agreement](/usc/46/53201.md?p=8) under this chapter on a date specified by not later than 60 days prior to the date specified by the [program participant](/usc/46/53401.md?p=5) for such termination, such [agreement](/usc/46/53201.md?p=8) shall terminate on the date specified by the [program participant](/usc/46/53401.md?p=5).
- (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 and the Committee on Transportation and Infrastructure 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 [program participant](/usc/46/53401.md?p=5) for 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 the [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](/usc/46/chstV/ptE/ch563.md) of this title.

## Source credit

(Added Pub. L. 116–283, div. C, title XXXV, § 3511(a), Jan. 1, 2021, 134 Stat. 4413; amended Pub. L. 117–81, div. C, title XXXV, § 3515(b), Dec. 27, 2021, 135 Stat. 2243; Pub. L. 118–159, div. C, title XXXV, § 3531(a), Dec. 23, 2024, 138 Stat. 2312.)

## Notes

### Editorial Notes

### Amendments

2024—Subsec. (a). Pub. L. 118–159 substituted “2040” for “2035”.

2021—Subsec. (b). Pub. L. 117–81 substituted “Any” for “The program participant of a”, inserted “long term” before “charter” and “not” before “eligible”, and substituted “participate in the Fleet” for “receive payments pursuant to any operating agreement that covers such vessel”.