(1) In general.— Subject to the availability of appropriations, the Secretary shall enter into operating agreements according to the following priority:
(A) New tank vessels.— First, for any tank vessel that
(i) is constructed in the United States after the effective date of this chapter;
(ii) is eligible to be included in the Fleet under section
53102 (b); and
(iii) during the period of an operating agreement under this chapter that applies to the vessel, will be owned and operated by one or more persons that are citizens of the United States under section
50501 of this title,
except that the Secretary shall not enter into operating agreements under this subparagraph for more than 5 such vessels.
(B) Participating fleet vessels.—
Second, to the extent amounts are available after applying subparagraph (A), for any participating fleet vessel, except that the Secretary shall not enter into operating agreements under this subparagraph for more than 47 vessels.
(C) Certain vessels operated by section 50501 citizens.— Third, to the extent amounts are available after applying subparagraphs (A) and (B), for any other vessel that is eligible to be included in the Fleet under section
53102 (b), and that, during the period of an operating agreement under this chapter that applies to the vessel, will be
(i) owned and operated by one or more persons that are citizens of the United States under section
50501 of this title; or
(ii) owned by a person that is eligible to document the vessel under chapter
121 of this title, and operated by a person that is a citizen of the United States under section
50501 of this title.
(D) Other eligible vessels.— Fourth, to the extent amounts are available after applying subparagraphs (A), (B), and (C), for any other vessel that is eligible to be included in the Fleet under section
53102 (b).
(2) Reduction in number of slots for participating fleet vessels.— The number in paragraph (1)(B) shall be reduced by 1
(A) for each participating fleet vessel for which an application for enrollment in the Fleet is not received by the Secretary within the 90-day period beginning on the effective date of this chapter; and
(B) for each participating fleet vessel for which an application for enrollment in the Fleet received by the Secretary is not approved by the Secretary and the Secretary of Defense within the 90-day period beginning on the date of such receipt.
(3) Discretion within priority.— The Secretary
(A) subject to subparagraph (B), may award operating agreements within each priority under paragraph (1) as the Secretary considers appropriate; and
(B) shall award operating agreements within a priority
(i) in accordance with operational requirements specified by the Secretary of Defense;
(ii) in the case of operating agreements awarded under subparagraph (C) or (D) of paragraph (1), according to applicants records of owning and operating vessels; and
(iii) subject to the approval of the Secretary of Defense.
(4) Treatment of tank vessel to be replaced.—
(A) For purposes of the application of paragraph (1)(A) with respect to the award of an operating agreement, the Secretary may treat an existing tank vessel that is eligible to be included in the Fleet under section
53102 (b) as a vessel that is constructed in the United States after the effective date of this chapter, if
(i)
(I) a binding contract for construction in the United States of a replacement vessel to be operated under the operating agreement is executed by not later than 9 months after the first date amounts are available to carry out this chapter; and
(II) the replacement vessel is eligible to be included in the Fleet under section
53102 (b); or
(ii)
(I) not later than 9 months after the first date amounts are available to carry out this chapter, the operator of the existing tank vessel enters into an agreement to charter one or more tank vessels to be built in the United States and operated as a documented vessel or documented vessels;
(II) the combined tonnage of the vessels required to be chartered under subclause (I) is equal to or greater than the tonnage of the existing tank vessel subject to an operating agreement;
(III) the operator enters into an agreement with the Secretary that is substantially the same as an Emergency Preparedness Agreement under section
53107 of this title, under which the operator shall make available commercial transportation resources as provided in that section;
(IV) if the person that is the owner or operator of the existing tank vessel owns or operates more than one existing tank vessel subject to an operating agreement, the combined tonnage of those vessels required to be chartered under subclause (I) by that person is equal to or greater than the combined tonnage of all such existing tank vessels owned or operated by such person that are subject to operating agreements.
(B) No payment under this chapter may be made for an existing tank vessel with respect to which a binding contract is entered into under subparagraph (A)(i) for which an operating agreement is awarded under this paragraph after the earlier of
(i) 4 years after the first date amounts are available to carry out this chapter; or
(ii) the date of delivery of the replacement tank vessel.
(C) For purpose of subparagraph (A)(ii), tonnage shall be measured under section
14502 of this title, or an alternate tonnage measured under section
14302 of this title as prescribed by the Secretary under section
14104 of this title.
(D) No payment under this chapter may be made for an existing tank vessel with respect to which an agreement is entered into under subparagraph (A)(ii) for any period occurring
(i) after the date that is 5 years after the first date that amounts became available to carry out this chapter, if the vessel or vessels required to be chartered under subparagraph (A)(ii) have not been delivered; or
(ii) after delivery of the vessel or vessels required to be chartered under such subparagraph, if any of such vessels is not chartered by the operator of the existing tank vessel.
