10 USC 7225 - Navy Reserve flag

The Secretary of the Navy shall prescribe a suitable flag to be known as the Navy Reserve flag. This flag may be flown by a seagoing merchant vessel if
(1) the vessel is documented under the laws of the United States;
(2) the vessel has been designated by the Secretary, under such regulations as he prescribes, as suitable for service as a naval auxiliary in time of war; and
(3) the master or commanding officer and at least half of the other licensed officers of the vessel are members of the Navy.