Strategic Commercial Fleet

(a) In general Part C of subtitle V of title 46, United States Code, is amended by inserting after chapter 535 the following: 536 Strategic Commercial Fleet Sec. 53601. Definitions. 53602. Establishment of Strategic Commercial Fleet. 53603. Operating agreements. 53604. Payments. 53605. National security requirements. 53606. Regulations. 53601. Definitions In this chapter: (1) Administrator The term Administrator means the Maritime Administrator. (2) Appropriate committees of congress The term appropriate committees of Congress means— (A) the Committee on Armed Services, the Committee on Commerce, Science, and Transportation, and the Committee on Appropriations of the Senate; and (B) the Committee on Armed Services, the Committee on Transportation and Infrastructure, and the Committee on Appropriations of the House of Representatives. (3) Coastwise trade The term coastwise trade means commerce or trade that is subject to the requirements of section 55102. (4) Covered entity The term covered entity means— (A) any owner or operator of a vessel eligible under section 53602(d); or (B) a bid team consisting of— (i) an entity eligible under subparagraph (A); (ii) a shipyard in the United States with the ability, experience, financial resources, and other qualifications necessary for— (I) the construction of a vessel eligible for inclusion in the Strategic Commercial Fleet; or (II) the repair of such a vessel; and (iii) another legal entity that is not a foreign entity of concern. (5) Fleet The term Fleet means the Strategic Commercial Fleet established under section 53602. (6) Foreign commerce The term foreign commerce means— (A) commerce or trade between the United States, its territories or possessions, or the District of Columbia, and a foreign country; and (B) commerce or trade between foreign countries. (7) Foreign country of concern; foreign entity of concern The terms foreign country of concern and foreign entity of concern have the meanings given such terms in section 4 of the Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act of 2025. (8) Qualified foreign built vessel The term qualified foreign built vessel — (A) means a vessel that— (i) is not more than 14 years of age; (ii) is, prior to entry into the Fleet, documented under the laws of the United States; and (iii) was constructed (or reconstructed) outside the United States; and (B) does not include a vessel that— (i) was owned or operated by a foreign entity of concern; (ii) is a vessel of a foreign country of concern; (iii) was constructed by a shipyard that was owned or operated by a foreign entity of concern or located in a foreign country of concern; or (iv) was registered as a vessel of a foreign country of concern at any time during the 3 years prior to entry into the Fleet. (9) United States built vessel The term United States built vessel means a vessel that is constructed in the United States (and, if reconstructed, reconstructed in the United States). (10) United States citizen trust The term United States citizen trust has the meaning given such term in section 53201. 53602. Establishment of Strategic Commercial Fleet (a) In general The Administrator, in consultation with the Secretary of Defense, shall establish a fleet, to be known as the Strategic Commercial Fleet, of active, commercially viable, militarily useful, privately owned vessels to meet national defense and other security requirements and maintain a United States presence in international commercial shipping. (b) Number of vessels The Administrator shall seek to select eligible vessels described in subsection (d) for the Fleet through an annual competitive selection process in accordance with the annual target number for the Fleet recommended by the Maritime Security Board under section 50401(b)(2)(B)(i). Through such annual selection process, the Administrator shall— (1) select for inclusion in the Fleet not fewer than 10 vessels in the 12-month period that begins on the date that is 2 years after the date of enactment of this section; (2) increase the number of vessels selected for inclusion in the Fleet annually such that not later than 5 years after such date of enactment, not fewer than 20 vessels are selected for such inclusion annually; and (3) ensure that the total number of vessels included in the fleet shall be not more than 250 vessels at any point in time. (c) Solicitation; entry into fleet (1) Solicitation (A) In general Not later than 1 year after the date of enactment of this section, the Administrator shall solicit applications from covered entities to competitively select vessels that are eligible under subsection (d) and meet the requirements of this subsection for inclusion in the Fleet. (B) Public solicitation requirements In soliciting applications under subparagraph (A), the Administrator— (i) shall— (I) publish a notice in the Federal Register, which, at a minimum, identifies the requirements for the number of vessels as established by the Administrator and the Maritime Security Board under subsection (b); and (II) allow applicants not less than 30 days to submit an application for entry into the Fleet; and (ii) may, in coordination with the Maritime Security Board, include in the notice in the Federal Register— (I) target numbers for each vessel type that will be selected for inclusion in the Fleet each year; and (II) guidance on proposed annual operating support payments and annual capital support payments for each vessel type solicited, to ensure— (aa) covered entities submit applications that are priced competitively and meet the needs of the Fleet; and (bb) there is a competitive selection process as described in this section. (2) Eligible applications The Administrator shall solicit and accept applications in separate processes for each of the following: (A) Newly constructed vessels (i) In general A covered entity may submit an application for the Fleet that involves the construction of a United States built vessel and operation of such vessel as a vessel of the United States in foreign commerce. (ii) Interim vessel An application described in clause (i) from a covered entity may include a proposal for the use of an interim vessel, if such proposal provides that— (I) the covered entity will operate a qualified foreign-built vessel as a vessel of the United States in foreign commerce as part of the Fleet until the United States built vessel described in such clause enters the Fleet, in accordance with the milestones established within the operating agreement under section 53603(c)(1); (II) when the United States built vessel enters the Fleet or the covered entity fails to meet milestones established in the operating agreement, the qualified foreign-built vessel shall be removed from the Fleet; and (III) the covered entity may then transfer and register the qualified foreign-built vessel under a registry of any foreign country that is not a foreign country of concern. (B) Qualified foreign-built vessels (i) In general Through fiscal year 2030, a covered entity may submit an application for the Fleet that involves the operation of a qualified foreign-built vessel as a vessel of the United States in foreign commerce. (ii) Exception After fiscal year 2030, the Administrator may not enter into a new agreement to bring a qualified foreign-built vessel into the Fleet unless— (I) the vessel is operating as an interim vessel under subparagraph (A)(ii); or (II) the Administrator and Secretary of Defense, in consultation with the Maritime Security Board, jointly certify to the appropriate committees of Congress that adding additional qualified foreign-built vessels to the Fleet is necessary for the national security of the United States until replaced by a newly constructed vessel to meet the schedule under subsection (b). (3) Procedure (A) In general A covered entity desiring to have a vessel selected for the Fleet shall submit an eligible application under paragraph (2) as at such time, in such manner, and containing such information as the Administrator may require. Such application shall include— (i) a proposed annual operating support payment, which may cover the difference in operating costs (including costs associated with vessel repair) associated with operating the vessel as a vessel of the United States as compared to a fair and reasonable estimate of the cost of operating that type of vessel under the laws of a foreign country; (ii) in the case of an application described in paragraph (2)(A), a proposed annual capital support payment, which may cover the difference in capital costs associated with constructing the vessel in the United States as compared to a fair and reasonable estimate of the cost of constructing that type of vessel in a foreign shipyard; and (iii) any other support payments needed to make a vessel commercially viable in foreign commerce. (B) Bid team In the case of an eligible entity that is a bid team described in section 53601(4)(B), such team shall jointly submit an application under this subsection for inclusion in the Fleet. (4) Acceptance into fleet (A) In general The Administrator shall evaluate eligible applications submitted under this subsection in order to, in accordance with this paragraph, select applications that meet the requirements of this section for acceptance in the Fleet. (B) Citizenship preference In selecting applications to meet the requirements of this section, the Administrator shall ensure, to the extent sufficient qualified applications are received under this subsection, that not less than 25 percent of vessels selected for the Fleet shall be owned or operated by a covered entity that is, or a bid team led by, a citizen of the United States under section 50501. (C) Priority In evaluating eligible applications for selection in the Fleet and subject to subparagraph (B), the Administrator shall give priority to— (i) applications that represent the best value to the Federal Government; and (ii) applications for vessels, or for vessels providing services, that are determined by the Maritime Security Board to have capabilities critical to the national and economic security of the United States. (D) Relationship to the tanker security fleet If the most recent Mobility Capability Requirements Study produced by United States Transportation Command identifies a need for a fleet of tanker vessels that are vessels of the United States that exceeds the size of the Tanker Security Fleet established under chapter 534 of this title, the Administrator, in coordination with the Maritime Security Board, may select for inclusion in the Fleet a number of tanker vessels that is consistent with the requirements of the Study. (E) Considerations for review In evaluating eligible applications submitted under this subsection for selection in the Fleet, the Administrator shall— (i) determine that any vessel so selected will be suitable for use by the United States for national defense or military purposes in time of war or national emergency; (ii) determine that any vessel so selected will aid in the promotion and development of foreign commerce; (iii) determine that— (I) the proposed use of the vessel in commercial service is reasonable; and (II) the owner or operator of the vessel possesses the ability, experience, financial resources, and other qualifications necessary for the operation and maintenance of the vessel; (iv) determine that a shipyard selected to construct a vessel under this section possesses the ability, experience, financial resources, equipment, and other qualifications necessary to properly construct the vessel; (v) determine that the price for the construction (if applicable) and operation of a vessel under this section is fair and reasonable; (vi) consider whether the covered entity commits to— (I) use equipment, materials, and supplies that are produced in the United States; and (II) utilize, to the maximum extent practicable, subcontractors and suppliers that are based in the United States; (vii) consider whether the covered entity commits to repair, repower, and recondition a vessel under this section in a shipyard in the United States; and (viii) consider whether the covered entity has made commitments to worker and community investment, including through— (I) programs to expand employment opportunity for economically disadvantaged individuals; or (II) securing commitments from regional educational and training entities and institutions of higher education, as defined in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002), to provide workforce training, including programming for training and job placement of economically disadvantaged individuals. (5) Timing (A) Qualified foreign vessel Not later than 180 days after entering into an operating agreement under section 53603 with a covered entity for inclusion of a qualified foreign-built vessel into the Fleet, such vessel shall be placed into service as part of the Fleet. (B) Newly constructed vessel Not later than 36 months after entering into an operating agreement under section 53603 with a covered entity for inclusion of a newly constructed United States built vessel described in paragraph (2)(A), such vessel shall be placed into service as part of the Fleet. (C) Delayed admission The Administrator may delay the entry of a vessel selected to participate in the Fleet for— (i) a delay in the construction of such vessel; or (ii) difficulty of the owner or operator of such vessel in recruiting United States mariners as required under section 53603(b)(1)(A). (d) Vessel eligibility A vessel is eligible to be included in the Fleet if— (1) the vessel— (A) is a vessel of the United States; or (B) is not a vessel of the United States, but— (i) the owner of the vessel has demonstrated an intent to have the vessel documented under chapter 121 of this title if it is included in the Fleet; and (ii) by the time an operating agreement is entered into under section 53603, the vessel is documented under chapter 121 of this title; (2) the vessel is a United States built vessel or a qualified foreign-built vessel; (3) the vessel is— (A) a bulk carrier vessel; (B) a tanker vessel; (C) a roll-on/roll-off vessel; (D) a liquefied natural gas tanker vessel; (E) a container vessel; (F) a multi-purpose vessel; (G) a cable vessel (as defined in section 53201 of this title); (H) a heavy-lift vessel; or (I) any other type of vessel determined appropriate by the Administrator, in consultation with the Maritime Security Board; (4) the vessel is operated (or will be operated) in providing transportation in foreign commerce; (5) the vessel meets the requirements of paragraph (1), (2), (3), or (4) of subsection (e); (6) the vessel— (A) is suitable for use by the United States for national defense or military purposes in time of war or national emergency, as determined by the Secretary of Defense; (B) is commercially viable, as determined by the Administrator; and (C) has dedicated space for the training of— (i) cadets of the Merchant Marine Academy consistent with the requirements of section 51307(b); (ii) students of a State maritime academy, consistent with the requirements of section 51507; or (iii) participants in another workforce training program identified by the Administrator; and (7) the vessel will, for the period of an operating agreement under section 53603 that applies to the vessel, meet any other requirement determined appropriate by the Administrator. (e) Requirements regarding citizenship of owners, charterers, and operators (1) Vessel owned and operated by section 50501 citizens A vessel meets the requirements of this paragraph if, during the period of an operating agreement under this chapter that applies to the vessel, the vessel will be owned and operated by 1 or more persons that are citizens of the United States under section 50501. (2) Vessel owned by section 50501 citizen or United States citizen trust and chartered to documentation citizen A vessel meets the requirements of this paragraph if— (A) during the period of an operating agreement under this chapter that applies to the vessel, the vessel will be— (i) owned by a person that is a citizen of the United States under section 50501 of this title or that is a United States citizen trust; and (ii) demise chartered to a person— (I) that is eligible to document the vessel under chapter 121 of this title; (II) the chairman of the board of directors, chief executive officer, and a majority of the members of the board of directors of which are citizens of the United States under section 50501 of this title, and are appointed and subjected to removal only upon approval by the Administrator; and (III) that certifies to the Administrator that there are no treaties, statutes, regulations, or other laws that would prohibit the covered entity for the vessel from performing its obligations under an operating agreement under this chapter; (B) in the case of a vessel that will be demise chartered to a person that is owned or controlled by another person that is not a citizen of the United States under section 50501 of this title, the other person enters into an agreement with the Administrator not to influence the operation of the vessel in a manner that will adversely affect the interests of the United States; and (C) the Administrator and the Secretary of Defense notify the appropriate committees of Congress that they concur with the certification required under subparagraph (A)(ii)(III) and have reviewed and agree that there are no other legal, operational, or other impediments that would prohibit the covered entity for the vessel from performing its obligations under an operating agreement under this chapter. (3) Vessel owned and operated by defense contractor A vessel meets the requirements of this paragraph if— (A) during the period of an operating agreement under this chapter that applies to the vessel, the vessel will be owned and operated by a person that— (i) is eligible to document a vessel under chapter 121 of this title; (ii) operates or manages other United States-documented vessels for the Secretary of Defense, or charters other vessels to the Secretary of Defense; (iii) has entered into a special security agreement for purposes of this paragraph with the Secretary of Defense; (iv) makes the certification described in paragraph (2)(A)(ii)(III); and (v) in the case of a vessel described in paragraph (2)(B), enters into an agreement referred to in that paragraph; and (B) the Administrator and the Secretary of Defense notify the appropriate committees of Congress that they concur with the certification required under subparagraph (A)(iv), and have reviewed and agree that there are no other legal, operational, or other impediments that would prohibit the covered entity for the vessel from performing its obligations under an operating agreement under this chapter. (4) Vessel owned by documentation citizen and chartered to section 50501 citizen A vessel meets the requirements of this paragraph if, during the period of an operating agreement under this chapter that applies to the vessel, the vessel will be— (A) owned by a person that is eligible to document a vessel under chapter 121; and (B) demise chartered to a person that is a citizen of the United States under section 50501. 53603. Operating agreements (a) In general The Administrator shall require, as a condition of including any vessel in the Fleet, that the covered entity for the vessel enter into an operating agreement under this section. (b) Requirements (1) General requirements An operating agreement required under subsection (a) shall require the vessel subject to such agreement to meet the following requirements: (A) During the period in which the vessel is operating under the agreement— (i) the vessel will be crewed in accordance with section 8103 of title 46, United States Code; (ii) the vessel shall be operated within the Fleet exclusively in foreign commerce and not in coastwise trade; (iii) the covered entity will have in effect an emergency preparedness agreement described in section 53605 for the period of such agreement; and (B) Beginning on the first day of the operating agreement, the vessel will be permanently ineligible for a coastwise endorsement under section 12112 of this title or to otherwise participate in the coastwise trade, even if the operating agreement is terminated or not renewed. (2) Vessel repair requirements (A) In general Subject to subparagraphs (B) and (C), the operating agreement required under subsection (a) shall— (i) require that the vessel subject to such agreement undergo a set percentage, agreed to between the Administrator and the covered entity, of repair work (excluding necessary repairs as described in paragraph (1) of section 466(d) of the Tariff Act of 1930 (19 U.S.C. 1466(d)(1))) at a shipyard in the United States; and (ii) prohibit the vessel subject to such agreement from receiving repairs at a shipyard in a foreign country of concern (as defined in section 4 of the SHIPS for America Act of 2025). (B) Exception for interim vessels The requirements of clauses (i) and (ii) of subparagraph (A) shall not apply to interim vessels included in the fleet under 53602(c)(2)(A)(ii). (C) Authority of the Secretary of Transportation Notwithstanding any other provision of law, the Secretary of Transportation may modify or waive any requirement of subparagraph (A) only if the Secretary, in consultation with the Maritime Security Board— (i) determines that waiving such requirements are in the national security interest of the United States; and (ii) makes such a determination publicly available in writing and submits the determination to the appropriate committees of Congress (as defined in section 4 of the Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act of 2025). (3) Coordination with Coast Guard regarding coastwise trade prohibition The Administrator shall coordinate with the Secretary of the Department in which the Coast Guard is operating to ensure that any vessel that is, or was, covered by an operating agreement under this chapter is permanently ineligible for a coastwise endorsement under section 12112 of this title or to otherwise participate in the coastwise trade, as required under paragraph (1)(B). (c) Milestones and payments The operating agreement shall— (1) prescribe specific milestones for project completion, as agreed upon between the Administrator and the covered entity; and (2) specify the schedule of operating support payments, and as applicable, capital support payments and other incentives and payments, based on completion of such milestones and consistent with the eligible application submitted by the covered entity under section 53602(c)(3)(A), as agreed to by the Administrator and the covered entity. (d) Incentives (1) State-of-the-art technology incentives An operating agreement required under subsection (a) may include incentives to support the testing or adoption of state-of-the-art technology, including artificial intelligence, advanced shipbuilding techniques, automation, modern propulsion systems, environmental performance, crew safety, national defense features, and other technologies identified by the Maritime Security Board to be relevant in advancing the military and economic security of the United States. (2) Performance incentives The operating agreement may include incentive payments for eligible entities that exceed the milestones established under subsection (c)(1). (e) Term of operating agreement (1) In general An operating agreement to participate in the Fleet shall be for a period of 7 years. (2) Renewal of agreement (A) In general A covered entity for a vessel participating in the Fleet under an operating agreement under this section may apply to renew such operating agreement. (B) Renewal limitation An operating agreement under this section may be renewed not more than 2 times. (3) Termination payment (A) No-fault termination during contract Subject to subparagraph (B), a covered entity for a vessel operating under an operating agreement under this section shall receive a termination payment if any of the following applies: (i) No-fault termination Capital support payments provided to a covered entity under an operating agreement are terminated during a contract term. (ii) No-fault non-renewal An operating agreement is not selected to be renewed under paragraph (2). (B) Administrator determination for material lack of compliance In any case in which the Administrator determines under subsection (f) that a covered entity for a vessel operating under an operating agreement under this section materially fails to comply with the terms of the operating agreement and, due to such failure to comply, the operating agreement is terminated or not selected for renewal, the Administrator may determine that the covered entity is not entitled to a termination payment and subparagraph (A) shall not apply. (C) Termination payment defined In this paragraph, the term termination payment means a payment in an amount that equals the product of— (i) the percentage of the remaining useful life of the vessel, calculated using 21 years as the maximum useful life of the vessel; multiplied by (ii) the difference in the cost of constructing the vessel in the United States and the cost of constructing the vessel in a foreign country, to the extent such cost difference was not recovered by the covered entity through payments received under any operating agreement under this section. (f) Termination by Administrator for lack of program participant compliance If a covered entity for a vessel operating under an operating agreement under this section materially fails to comply with the terms of the operating agreement— (1) the Administrator shall notify the covered entity and provide a reasonable opportunity to comply with the operating agreement; and (2) if the covered entity fails to achieve such compliance, the Administrator— (A) shall terminate the operating agreement; (B) shall not renew the operating agreement under subsection (e)(2); and (C) may take steps to recover an amount equal to the payments and incentives provided to the covered entity under this chapter. (g) Nonrenewal for lack of funds If, by the first day of a fiscal year, sufficient funds have not been appropriated under the authority provided by this chapter for that fiscal year, then the Administrator shall notify the appropriate committees of Congress that operating agreements authorized under this chapter for which sufficient funds are not available will not be renewed for that fiscal year if sufficient funds are not appropriated by the 60th day of that fiscal year. (h) Release of vessels from obligations (1) In general A vessel covered by an operating agreement under this chapter is released from any further obligation under the operating agreement, except for the requirements of paragraph (2), if— (A) the Administrator terminated or did not renew the operating agreement under subsection (f); (B) the covered entity elects to not renew its operating agreement with the Administrator; (C) the vessel is ineligible for renewal under subsection (e)(2); or (D) funds are not appropriated to the Administrator for payments under the operating agreement under this chapter for any fiscal year by the 60th day of that fiscal year. (2) Coastwise trade Consistent with the requirements of subsection (b)(1)(B), a vessel released from obligations under paragraph (1) shall remain permanently ineligible for a coastwise endorsement under section 12112 of this title or to otherwise participate in the coastwise trade. (3) Authority to transfer vessel (A) In general After a vessel is released from obligations under paragraph (1), the covered entity may transfer and register such vessel under a foreign registry that— (i) is acceptable to the Administrator and the Secretary of Defense, and allows the requisitioning of the vessel for title or use, notwithstanding section 56101 of this title; and (ii) is not a foreign country of concern. (B) Emergency acquisition of vessels If chapter 563 of this title is applicable to a vessel after registration in a foreign registry described in subparagraph (A), then the vessel is available to be requisitioned by the Secretary of Transportation pursuant to such chapter. (i) Judicial review No court shall have jurisdiction to review the Administrator's decision with respect to the award or non-award of an operating agreement issued under this chapter. 53604. Payments (a) In general An operating agreement under this chapter shall require that the Administrator make payments to the covered entity, in accordance with the milestones established under section 53603(c)(1) and the operating agreement under section 53603 and subject to the availability of appropriations under subsection (e). (b) Limitations Notwithstanding any other provision of this chapter, the Administrator shall not make any payment under this chapter for a vessel— (1) with respect to any day for which— (A) the vessel is not operated or maintained in accordance with an operating agreement under this chapter; (B) the vessel is under a charter to the United States Government; or (C) except as provided under subsection (c), the vessel is engaged in transporting military or other preference cargoes under section 55302(a), 55304, 55305, or 55314 of this title, section 2631 of title 10, or any other cargo preference law of the United States; or (2) that participates in the coastwise trade in violation of the operating agreement and section 53603(b)(1)(B). (c) Preference cargos (1) In general The Secretary of Transportation may waive the requirement of subsection (b)(1)(C) to the extent, in the manner, and on the terms the Secretary prescribes, only if— (A) the Administrator, acting in the Administrator's capacity as Director of the National Shipping Authority— (i) determines the non-availability of qualified vessels of the United States that are not enrolled in the Strategic Commercial Fleet; and (ii) notifies the Secretary of such determination; (B) the Secretary ensures reasonable notice has been provided to the owners and operators of qualified vessels of the United States that are not enrolled in the Strategic Commercial Fleet prior to making the waiver determination; and (C) by not later than 7 days after issuing a waiver under this subsection, the Secretary notifies the appropriate committees of Congress and posts such waiver on a public website of the Maritime Administration. (2) Non-delegation The Secretary of Transportation shall not delegate the waiver authority provided under paragraph (1). (d) Operating agreement is obligation of United States Government An operating agreement under this chapter constitutes a contractual obligation of the United States Government to pay the amounts provided for in the agreement, subject to the availability of appropriations under subsection (e). (e) Appropriations from the Maritime Security Trust Fund (1) In general There is authorized to be appropriated to the Administrator for payments to covered entities under this section, out of the Maritime Security Trust Fund established under section 50301(b) of this title— (A) for fiscal year 2026, $150,000,000; (B) for fiscal year 2027, $300,000,000; (C) for fiscal year 2028, $550,000,000; (D) for fiscal year 2029, $800,000,000; (E) for fiscal year 2030, $1,000,000,000; (F) for fiscal year 2031, $1,200,000,000; (G) for fiscal year 2032, $1,400,000,000; (H) for fiscal year 2033, $1,600,000,000; (I) for fiscal year 2034, $1,900,000,000; and (J) for fiscal year 2035, $2,100,000,000. (2) Availability Amounts made available under paragraph (1) shall remain available until expended. (f) Clarification The provision by the Administrator of a payment under this section shall not be considered to be a major Federal action under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) or an undertaking for the purposes of division A of subtitle III of title 54, United States Code. (g) Buy America Section 54101(d)(2) shall apply to any funds obligated by the Administrator under this section that are used to construct or repair a United States-built vessel. 53605. National security requirements (a) Emergency preparedness agreement required The Administrator, in coordination with the Secretary of Defense, shall establish an emergency preparedness program under this section under which the program participant for an operating agreement under this chapter shall agree, as a condition of the operating agreement, to enter into an emergency preparedness agreement with the Administrator. The Administrator shall negotiate and enter into an emergency preparedness agreement with each program participant as promptly as practicable after the program participant has entered into the operating agreement. (b) Use of existing program The Administrator may use an existing emergency preparedness program, as of the date of enactment of the Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act of 2025, to satisfy the requirements of subsection (a). (c) Terms of agreement The terms of an emergency preparedness agreement under this section shall— (1) provide that upon request by the Secretary of Defense during time of war or national emergency, or whenever determined by the Secretary of Defense to be necessary for national security or contingency operation (as that term is defined in section 101(a) of title 10), the program participant shall make available commercial transportation resources (including services) described in subsection (e) to the Secretary of Defense; (2) shall include such additional terms as may be established by the Administrator and the Secretary of Defense; and (3) shall allow for the modification or addition of terms upon agreement by the Administrator and the program participant and the approval by the Secretary of Defense. (d) Participation after expiration of operating agreement The Administrator may not require, through an emergency preparedness agreement or an operating agreement, that a program participant covered by an operating agreement continue to participate in an emergency preparedness agreement after the operating agreement has expired according to its terms or is otherwise no longer in effect. After the expiration of an emergency preparedness agreement, a program participant may voluntarily continue to participate in the agreement. (e) Resources made available The commercial transportation resources to be made available under an emergency preparedness agreement shall include vessels or capacity in vessels, terminal facilities, management services, and other related services, or any agreed portion of such nonvessel resources for activation as the Secretary of Defense may determine to be necessary, seeking to minimize disruption of the program participant's service to commercial customers. (f) Compensation (1) In general The Administrator shall include in each emergency preparedness agreement provisions approved by the Secretary of Defense under which the Secretary of Defense shall pay fair and reasonable compensation for all commercial transportation resources provided pursuant to this section. (2) Specific requirements Compensation under this subsection— (A) shall not be less than the program participant's commercial market charges for like transportation resources; (B) shall be fair and reasonable considering all circumstances; (C) shall be provided from the time that a vessel or resource is required by the Secretary of Defense until the time it is redelivered to the program participant and is available to reenter commercial service; and (D) shall be in addition to and shall not in any way reflect amounts payable under section 53604 of this title. (g) Temporary replacement vessels Notwithstanding section 55302(a), 55304, 55305, or 55314 of this title, section 2631 of title 10, or any other cargo preference law of the United States— (1) a program participant may operate or employ in foreign commerce a foreign vessel, or capacity in a foreign vessel, as a temporary replacement for a vessel of the United States or vessel of the United States capacity that is activated by the Secretary of Defense under an emergency preparedness agreement or a primary Department of Defense sealift-approved readiness program; and (2) such replacement vessel or vessel capacity shall be eligible during the replacement period to transport preference cargoes subject to sections 55302(a), 55304, 55305, and 55314 of this title and section 2631 of title 10, to the same extent as the eligibility of the vessel or vessel capacity replaced. (h) Redelivery and liability of the United States for damages (1) In general All commercial transportation resources activated under an emergency preparedness agreement shall, upon termination of the period of activation, be redelivered to the program participant in the same good order and condition as when received, less ordinary wear and tear, or the Secretary of Defense shall fully compensate the program participant for any necessary repair or replacement. (2) Limitation on United States liability Except as may be expressly agreed in an emergency preparedness agreement, or as otherwise provided by law, the Government shall not be liable for disruption of a program participant's commercial business or other consequential damages to the program participant arising from the activation of commercial transportation resources under an emergency preparedness agreement. 53606. Regulations The Administrator and the Secretary of Defense may each prescribe rules as necessary to carry out their respective responsibilities under this chapter.. (b) Conforming amendments Section 51307(b) of title 46, United States Code, is amended— (1) in paragraph (1)— (A) in the matter preceding subparagraph (A)— (i) by striking, or the and inserting, the; and (ii) by inserting, or the Strategic Commercial Fleet under chapter 536 of this title before to—; and (B) in subparagraph (A), by striking or Tanker Security Fleet vessel and inserting Tanker Security Fleet vessel, or Strategic Commercial Fleet vessel; and (2) in paragraph (2), by striking or 534 and inserting 534, or 536. (c) Clerical amendment The table of chapters for subtitle V of title 46, United States Code, is amended by inserting after the item relating to chapter 535 the following: 536. Strategic Commercial Fleet 53601.