46 C.F.R. Subpart B—Establishment of MSP Fleet and Eligibility
Title 46 - Shipping
(a) Applicant. Any person may apply to MARAD for Enrollment of Eligible Vessels in MSP Operating Agreements for inclusion in the MSP Fleet pursuant to the provisions of subtitle B, title VI, of the act. Applications shall be addressed to the Secretary, Maritime Administration, 400 Seventh Street, S.W., Washington, D.C. 20590. (b) Eligible Vessel. A vessel eligible for enrollment in a MSP Operating Agreement shall be self-propelled and meet the following requirements: (1) Vessel Type—(i) Liner Vessel. The vessel shall be operated by a person as an Ocean Common Carrier. (ii) Specialty vessel. Whether in commercial service, on charter to the DOD, or in other employment, the vessel shall be either: (A) a Roll-on/Roll-off vessel with a carrying capacity of at least 80,000 square feet or 500 twenty-foot equivalent units; or (B) a LASH vessel with a barge capacity of at least 75 barges; or (iii) Other vessel. Any other type of vessel that is determined by the MARAD to be suitable for use by the United States for national defense or military purposes in time of war or national emergency; and (2) Vessel Requirements—(i) U.S. Documentation. Except as provided in paragraph (b)(2)(iv) of this section, the vessel is a U.S.-documented vessel; and (ii) Age. Except as provided in paragraph (b)(2)(iii), on the date a MSP Operating Agreement covering the vessel is first entered into is: (A) a LASH Vessel that is 25 years of age or less; or (B) any other type of vessel that is 15 years of age or less. (iii) Waiver Authority. In accordance with section 651(b)(2) of the act, MARAD is authorized to waive the application of paragraph (b)(2)(ii) of this section if MARAD, in consultation with the Secretary of Defense, determines that the waiver is in the national interest. (iv) Intent to document U.S. Although the vessel may not be a U.S.-documented vessel, it shall be considered an Eligible Vessel if the vessel meets the criteria for documentation under 46 U.S.C. chapter 121, the vessel owner has demonstrated an intent to have the vessel documented under 46 U.S.C. chapter 121, and the vessel will be less than 10 years of age on the date of that documentation; and (3) MARAD's determination. MARAD determines that the vessel is necessary to maintain a United States presence in international commercial shipping and the applicant possesses the ability, experience, resources and other qualifications necessary to execute the obligations of the MSP Operating Agreement, or MARAD, after consultation with the Secretary of Defense, determines that the vessel is militarily useful for meeting the sealift needs of the United States. (a) Action by MARAD—(1) Time Deadlines. Not later than 30 days after the enactment of the Maritime Security Act of 1996, Pub. L. 104–239, MARAD shall accept applications for Enrollment of vessels in the MSP Fleet. Within 90 days after receipt of a completed application, MARAD shall enter into a MSP Operating Agreement with the applicant or provide in writing the reason for denial of that application. (2) Closure of Applications. Applications for MSP Operating Agreements shall be made only at such time as, and in response to, publication of invitations to apply by MARAD in the (3) Reflagging for Eligible vessels. Except as provided in paragraph (a)(4) of this section, an applicant may remove a vessel from U.S. registry without MARAD approval if an application for a MSP Operating Agreement has been filed for that vessel, the applicant is qualified, and it has been determined by MARAD to be eligible under MSA section 651(b)(1) under a priority for which sufficient funds are available and the Administrator has not awarded an Operating Agreement for the vessel within 90 days of that application. (4) Reflagging ODS and MSC chartered vessels. Vessels eligible under MSA section 651(b)(1) which are also subject to ODS contracts or on charter to MSC, and for which applications have been denied pursuant to §295.11(a)(1) of this part, may be removed from U.S. registry only after those agreements have expired and only after the age requirement in section 9(e)(3) of the Shipping Act, 1916 (46 App. U.S.C. 808) has been met. (b) Action by the Applicant. Applicants for MSP Payments shall submit information on the following (Note: MARAD will accept electronic options (such as facsimile and Internet) for transmission of required information to MARAD, if practicable): (1) Intermodal network. A statement describing its operating and transportation assets, including vessels, container stocks, trucks, railcars, terminal facilities, and systems used to link such assets together; (2) Diversity of trading patterns. A list of countries and trade routes serviced along with the types and volumes of cargo carried; (3) Vessel construction date; (4) Vessel type and size; and (5) Military Utility. An assessment of the value of the vessel to DOD sealift requirements. [62 FR 37737, July 15, 1997, as amended at 68 FR 62537, Nov. 5, 2003; 69 FR 61451, Oct. 19, 2004] Subject to the availability of appropriations, MARAD shall enter into individual MSP Operating Agreements for Eligible Vessels according to the following priorities: (a) First priority requirements. First priority shall be accorded to any Eligible Vessel meeting the following requirements: (1) U.S. citizen ownership. Vessels owned and operated by persons who are Citizens of the United States as defined in §295.2; or (2) Other corporations. Vessels less than 10 years of age and owned and operated by a corporation that is: (i) eligible to document a vessel under 46 U.S.C. chapter 121; and (ii) affiliated with a corporation operating or managing for the Secretary of Defense other vessels documented under 46 U.S.C. chapter 121, or chartering other vessels to the Secretary of Defense. (3) Limitation on number of vessels. Limitation on the total number of Eligible Vessels awarded under paragraph (a) of this section shall be: (i) For any U.S. citizen under paragraph (a)(1), the number of vessels may not exceed the sum of: (A) the number of U.S.-flag documented vessels that the Contractor or a related party operated in the foreign commerce of the United States on May 17, 1995, except mixed coastwise and foreign commerce; and (B) the number of U.S.-flag documented vessels the person chartered to the Secretary of Defense on that date; and (ii) For any corporation under paragraph (a)(2) of this section, not more than five Eligible Vessels. (4) Related party. For the purpose of this section a related party with respect to a person shall be treated as the person. (b) Second priority requirements. To the extent that appropriated funds are available after applying the first priority in paragraph (a) of this section, the MARAD shall enter into individual MSP Operating Agreements for Eligible Vessels owned and operated by a person who is: (1) U.S. citizen. A Citizen of the United States, as defined in §295.2(g), that has not been awarded a MSP Operating Agreement under the priority in paragraph (a) of this section, or (2) Other. A person (individual or entity) eligible to document a vessel under 46 U.S.C. chapter 121, and affiliated with a person or corporation operating or managing other U.S.-documented vessels for the Secretary of Defense or chartering other vessels to the Secretary of Defense. (c) Third priority. To the extent that appropriated funds are available after applying the first and second priority, any other Eligible Vessel. (d) Number of MSP Operating Agreements Awarded. If appropriated funds are not sufficient to award agreements to all vessels within a priority set forth herein, MARAD shall award to each eligible applicant in that priority a number of Operating Agreements that bears approximately the same ratio to the total number of Operating Agreements requested under that priority, and for which timely applications have been made, as the amount of appropriations available for MSP Operating Agreements for Eligible Vessels in the priority bears to the amount of appropriations necessary for MSP Operating Agreements for all Eligible Vessels in the priority.
Title 46: Shipping
PART 295—MARITIME SECURITY PROGRAM (MSP)
Subpart B—Establishment of MSP Fleet and Eligibility
§ 295.10 Eligibility requirements.
§ 295.11 Applications.
§ 295.12 Priority for awarding agreements.
