46 U.S.C. § 53107 — National security requirements

(a) Emergency Preparedness Agreement Required. The Secretary^* must establish an Emergency Preparedness Program approved by the Secretary of Defense. Under that program, the Secretary, together with the Secretary of Defense, must require every operating agreement under this chapter to require the contractor^* to enter into an Emergency Preparedness Agreement with the Secretary. The Secretary must negotiate and enter into that agreement with each contractor as soon as practicable after the contractor enters into an operating agreement.

(b) Terms of Agreement.

(1) In general. An Emergency Preparedness Agreement must require the contractor for a vessel^* covered by an operating agreement to make commercial transportation resources, including services, available when the Secretary of Defense requests them during war or a national emergency, or whenever the Secretary of Defense determines that they are needed for national security or a contingency operation. “Contingency operation” has the meaning given in section 101 of title 10, United States^* Code; this section does not define that term.

(2) Basic terms.

(A) The Secretary and the Secretary of Defense must establish the agreement’s basic terms, subject to subparagraph (B).

(B) The Secretary and the contractor may agree to additional or changed terms suited to the contractor’s circumstances if the Secretary of Defense approves those terms.

(3) Defense measures against unauthorized seizures.

(A) An Emergency Preparedness Agreement for an operating agreement that first takes effect or is renewed after the National Defense Authorization Act for Fiscal Year 2010 was enacted must require any vessel operating under the agreement to carry appropriate non-lethal defense measures, at a minimum, when it carries Department of Defense cargo in an area the Coast Guard has designated as a high-risk area for piracy. The measures must protect the vessel, crew, and cargo from unauthorized seizure at sea.

(B) The Secretary of Defense and the Secretary of the department in which the Coast Guard operates must jointly prescribe the required non-lethal defense measures.

(c) Participation After Expiration of Operating Agreement. Except as section 53105(d) provides, the Secretary may not require, through an Emergency Preparedness Agreement or operating agreement, that a contractor continue participating in an Emergency Preparedness Agreement after its operating agreement expires under its terms or otherwise ends. After an Emergency Preparedness Agreement expires, the contractor may volunteer to continue participating in it.

(d) Resources Made Available. The resources made available under an Emergency Preparedness Agreement must include vessels or vessel capacity, intermodal systems and equipment, terminal facilities, intermodal and management services, and other related services. They may also include any agreed portion of nonvessel resources that the Secretary of Defense determines is necessary. The Secretary of Defense must seek to minimize disruption of the contractor’s service to commercial shippers.

(e) Compensation.

(1) In general. Each Emergency Preparedness Agreement must include provisions approved by the Secretary of Defense under which the Secretary of Defense must pay fair and reasonable compensation for all commercial transportation resources provided under this section.

(2) Specific requirements. Compensation under this subsection—

(A) may not be less than the contractor’s commercial market charges for similar transportation resources;

(B) must be fair and reasonable considering all circumstances;

(C) must cover the period from when the Secretary of Defense requires the vessel or resource until it is returned to the contractor and is available to reenter commercial service; and

(D) is in addition to, and must not reflect in any way, amounts payable under section 53106.

(f) Temporary Replacement Vessels. Despite sections 55302(a), 55304, 55305, and 55314 of this title, section 2631 of title 10, and any other United States cargo-preference law—

(1) a contractor may operate or employ in foreign commerce^* a foreign-flag vessel or foreign-flag vessel capacity as a temporary replacement for a United States-documented vessel^* or United States-documented vessel^* capacity that the Secretary of Defense activates under an Emergency Preparedness Agreement or under a primary Department of Defense-approved sealift readiness program; and

(2) during the replacement period, the replacement vessel or capacity is eligible to carry preference cargo subject to those listed provisions to the same extent that the replaced vessel or capacity is eligible.

(g) Redelivery and Liability of United States for Damages.

(1) In general. When the activation period ends, all commercial transportation resources activated under an Emergency Preparedness Agreement must be returned to the contractor in the same good order and condition as when received, except for ordinary wear and tear. Otherwise, the Secretary of Defense must fully compensate the contractor for necessary repair or replacement.

(2) Limitation on liability of United States. Unless an Emergency Preparedness Agreement expressly provides otherwise, or another law provides otherwise, the Government is not liable for disruption of the contractor’s commercial business or other consequential damages arising from activation of commercial transportation resources under an Emergency Preparedness Agreement.