
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 107-107 Section 1048(e)(9)]
[CITE: 10USC2218]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                PART IV--SERVICE, SUPPLY, AND PROCUREMENT
 
                 CHAPTER 131--PLANNING AND COORDINATION
 
Sec. 2218. National Defense Sealift Fund

    (a) Establishment.--There is established in the Treasury of the 
United States a fund to be known as the ``National Defense Sealift 
Fund''.
    (b) Administration of Fund.--The Secretary of Defense shall 
administer the Fund consistent with the provisions of this section.
    (c) Fund Purposes.--(1) Funds in the National Defense Sealift Fund 
shall be available for obligation and expenditure only for the following 
purposes:
        (A) Construction (including design of vessels), purchase, 
    alteration, and conversion of Department of Defense sealift vessels.
        (B) Operation, maintenance, and lease or charter of Department 
    of Defense vessels for national defense purposes.
        (C) Installation and maintenance of defense features for 
    national defense purposes on privately owned and operated vessels 
    that are constructed in the United States and documented under the 
    laws of the United States.
        (D) Research and development relating to national defense 
    sealift.
        (E) Expenses for maintaining the National Defense Reserve Fleet 
    under section 11 of the Merchant Ship Sales Act of 1946 (50 U.S.C. 
    App. 1744), and for the costs of acquisition of vessels for, and 
    alteration and conversion of vessels in (or to be placed in), the 
    fleet, but only for vessels built in United States shipyards.

    (2) Funds in the National Defense Sealift Fund may be obligated or 
expended only in amounts authorized by law.
    (3) Funds obligated and expended for a purpose set forth in 
subparagraph (B) or (D) of paragraph (1) may be derived only from funds 
deposited in the National Defense Sealift Fund pursuant to subsection 
(d)(1).
    (d) Deposits.--There shall be deposited in the Fund the following:
        (1) All funds appropriated to the Department of Defense for 
    fiscal years after fiscal year 1993 for--
            (A) construction (including design of vessels), purchase, 
        alteration, and conversion of national defense sealift vessels;
            (B) operations, maintenance, and lease or charter of 
        national defense sealift vessels;
            (C) installation and maintenance of defense features for 
        national defense purposes on privately owned and operated 
        vessels; and
            (D) research and development relating to national defense 
        sealift.

        (2) All receipts from the disposition of national defense 
    sealift vessels, excluding receipts from the sale, exchange, or 
    scrapping of National Defense Reserve Fleet vessels under sections 
    508 and 510 of the Merchant Marine Act of 1936 (46 U.S.C. App. 1158, 
    1160), shall be deposited in the Fund.
        (3) All receipts from the charter of vessels under section 
    1424(c) of the National Defense Authorization Act for Fiscal Year 
    1991 (10 U.S.C. 7291 note).

    (e) Acceptance of Support.--(1) The Secretary of Defense may accept 
from any person, foreign government, or international organization any 
contribution of money, personal property (excluding vessels), or 
assistance in kind for support of the sealift functions of the 
Department of Defense.
    (2) Any contribution of property accepted under paragraph (1) may be 
retained and used by the Department of Defense or disposed of in 
accordance with procedures prescribed by the Secretary of Defense.
    (3) The Secretary of Defense shall deposit in the Fund money and 
receipts from the disposition of any property accepted under paragraph 
(1).
    (f) Limitations.--(1) Not more than a total of five vessels built in 
foreign ship yards may be purchased with funds in the National Defense 
Sealift Fund pursuant to subsection (c)(1).
    (2) Construction, alteration, or conversion of vessels with funds in 
the National Defense Sealift Fund pursuant to subsection (c)(1) shall be 
conducted in United States ship yards and shall be subject to section 
1424(b) of Public Law 101-510 (104 Stat. 1683).
    (g) Expiration of Funds After 5 Years.--No part of an appropriation 
that is deposited in the National Defense Sealift Fund pursuant to 
subsection (d)(1) shall remain available for obligation more than five 
years after the end of fiscal year for which appropriated except to the 
extent specifically provided by law.
    (h) Budget Requests.--Budget requests submitted to Congress for the 
National Defense Sealift Fund shall separately identify--
        (1) the amount requested for programs, projects, and activities 
    for construction (including design of vessels), purchase, 
    alteration, and conversion of national defense sealift vessels;
        (2) the amount requested for programs, projects, and activities 
    for operation, maintenance, and lease or charter of national defense 
    sealift vessels;
        (3) the amount requested for programs, projects, and activities 
    for installation and maintenance of defense features for national 
    defense purposes on privately owned and operated vessels that are 
    constructed in the United States and documented under the laws of 
    the United States; and
        (4) the amount requested for programs, projects, and activities 
    for research and development relating to national defense sealift.

    (i) Title or Management of Vessels.--Nothing in this section (other 
than subsection (c)(1)(E)) shall be construed to affect or modify title 
to, management of, or funding responsibilities for, any vessel of the 
National Defense Reserve Fleet, or assigned to the Ready Reserve Force 
component of the National Defense Reserve Fleet, as established by 
section 11 of the Merchant Ship Sales Act of 1946 (50 U.S.C. App. 1744).
    (j) Authority for Certain Use of Funds.--Upon a determination by the 
Secretary of Defense that such action serves the national defense 
interest and after consultation with the congressional defense 
committees, the Secretary may use funds available for obligation or 
expenditure for a purpose specified under subsection (c)(1)(A), (B), 
(C), and (D) for any purpose under subsection (c)(1).
    (k) Contracts for Incorporation of Defense Features in Commercial 
Vessels.--(1) The head of an agency may enter into a contract with a 
company submitting an offer for that company to install and maintain 
defense features for national defense purposes in one or more commercial 
vessels owned or controlled by that company in accordance with the 
purpose for which funds in the National Defense Sealift Fund are 
available under subsection (c)(1)(C). The head of the agency may enter 
into such a contract only after the head of the agency makes a 
determination of the economic soundness of the offer. As consideration 
for a contract with the head of an agency under this subsection, the 
company entering into the contract shall agree with the Secretary of 
Defense to make any vessel covered by the contract available to the 
Secretary, fully crewed and ready for sea, at any time at any port 
determined by the Secretary, and for whatever duration the Secretary 
determines necessary.
    (2) The head of an agency may make advance payments to the 
contractor under a contract under paragraph (1) in a lump sum, in annual 
payments, or in a combination thereof for costs associated with the 
installation and maintenance of the defense features on a vessel covered 
by the contract, as follows:
        (A) The costs to build, procure, and install a defense feature 
    in the vessel.
        (B) The costs to periodically maintain and test any defense 
    feature on the vessel.
        (C) Any increased costs of operation or any loss of revenue 
    attributable to the installation or maintenance of any defense 
    feature on the vessel.
        (D) Any additional costs associated with the terms and 
    conditions of the contract.
        (E) Payments of such sums as the Government would otherwise 
    expend, if the vessel were placed in the Ready Reserve Fleet, for 
    maintaining the vessel in the status designated as ``ROS-4 status'' 
    in the Ready Reserve Fleet for 25 years.

    (3) For any contract under paragraph (1) under which the United 
States makes advance payments under paragraph (2) for the costs 
associated with installation or maintenance of any defense feature on a 
commercial vessel, the contractor shall provide to the United States 
such security interests in the vessel, by way of a preferred mortgage 
under section 31322 of title 46 or otherwise, as the head of the agency 
may prescribe in order to adequately protect the United States against 
loss for the total amount of those costs.
    (4) Each contract entered into under this subsection shall--
        (A) set forth terms and conditions under which, so long as a 
    vessel covered by the contract is owned or controlled by the 
    contractor, the contractor is to operate the vessel for the 
    Department of Defense notwithstanding any other contract or 
    commitment of that contractor; and
        (B) provide that the contractor operating the vessel for the 
    Department of Defense shall be paid for that operation at fair and 
    reasonable rates.

    (5) The head of an agency may not delegate authority under this 
subsection to any officer or employee in a position below the level of 
head of a procuring activity.
    (6) The head of an agency may not enter into a contract under 
paragraph (1) that would provide for payments to the contractor as 
authorized in paragraph (2)(E) until notice of the proposed contract is 
submitted to the congressional defense committees and a period of 90 
days has elapsed.
    (l) Definitions.--In this section:
        (1) The term ``Fund'' means the National Defense Sealift Fund 
    established by subsection (a).
        (2) The term ``Department of Defense sealift vessel'' means any 
    ship owned, operated, controlled, or chartered by the Department of 
    Defense that is any of the following:
            (A) A fast sealift ship, including any vessel in the Fast 
        Sealift Program established under section 1424 of Public Law 
        101-510 (104 Stat. 1683).
            (B) A maritime prepositioning ship.
            (C) An afloat prepositioning ship.
            (D) An aviation maintenance support ship.
            (E) A hospital ship.
            (F) A strategic sealift ship.
            (G) A combat logistics force ship.
            (H) A maritime prepositioned ship.
            (I) Any other auxiliary support vessel.

        (3) The term ``national defense sealift vessel'' means--
            (A) a Department of Defense sealift vessel; and
            (B) a national defense reserve fleet vessel, including a 
        vessel in the Ready Reserve Force maintained under section 11 of 
        the Merchant Ship Sales Act of 1946 (50 U.S.C. App. 1744).

        (4) The term ``congressional defense committees'' means--
            (A) the Committee on Armed Services and the Committee on 
        Appropriations of the Senate; and
            (B) the Committee on Armed Services and the Committee on 
        Appropriations of the House of Representatives.

        (5) The term ``head of an agency'' has the meaning given that 
    term in section 2302(1) of this title.

(Added Pub. L. 102-484, div. A, title X, Sec. 1024(a)(1), Oct. 23, 1992, 
106 Stat. 2486; amended Pub. L. 102-396, title V, Oct. 6, 1992, 106 
Stat. 1896; Pub. L. 104-106, div. A, title X, Sec. 1014(a), title XV, 
Sec. 1502(a)(15), Feb. 10, 1996, 110 Stat. 423, 503; Pub. L. 106-65, 
div. A, title X, Secs. 1014(b), 1015, 1067(1), Oct. 5, 1999, 113 Stat. 
742, 743, 774; Pub. L. 106-398, Sec. 1 [[div. A], title X, Sec. 1011], 
Oct. 30, 2000, 114 Stat. 1654, 1654A-251.)

                       References in Text

    Section 1424 of Public Law 101-510, referred to in subsecs. (d)(3), 
(f)(2), and (l)(2)(A), is section 1424 of the National Defense 
Authorization Act for Fiscal Year 1991 which is set out as a note under 
section 7291 of this title.

                          Codification

    Pub. L. 102-396, title V, Oct. 6, 1992, 106 Stat. 1896, provided 
that section 1024 of the National Defense Authorization Act for Fiscal 
Year 1993 [H.R. 5006, Pub. L. 102-484], as it passed the Senate on Oct. 
3, 1992, shall be amended in subsection 2218(c)(2) proposed for 
inclusion in this chapter by deleting all after ``expended only'' down 
to and including ``appropriations Act'' and inserting in lieu thereof 
``in amounts authorized by law''. It further provided that for purposes 
of that amendment, Pub. L. 102-396 shall be treated as having been 
enacted after Pub. L. 102-484, regardless of the actual dates of 
enactment. The date of Oct. 3, 1992, referred to as the date the Senate 
passed the National Defense Authorization Act for Fiscal Year 1993, 
apparently is based on an order adopted by the Senate on Oct. 3, 1992 
[Cong. Rec., vol. 138, p. 30919] providing that when the conference 
report on the National Defense Authorization Act for Fiscal Year 1993 
was received by the Senate from the House of Representatives it would be 
deemed to have been agreed to. On Oct. 5, 1992, the Senate received the 
conference report from the House, and it was considered adopted pursuant 
to that order [Cong. Rec., vol. 138, p. 31565].


                               Amendments

    2000--Subsec. (k)(1). Pub. L. 106-398, Sec. 1 [[div. A], title X, 
Sec. 1011(1)], inserted at end ``As consideration for a contract with 
the head of an agency under this subsection, the company entering into 
the contract shall agree with the Secretary of Defense to make any 
vessel covered by the contract available to the Secretary, fully crewed 
and ready for sea, at any time at any port determined by the Secretary, 
and for whatever duration the Secretary determines necessary.''
    Subsec. (k)(2)(E). Pub. L. 106-398, Sec. 1 [[div. A], title X, 
Sec. 1011(2)], added subpar. (E).
    Subsec. (k)(6). Pub. L. 106-398, Sec. 1 [[div. A], title X, 
Sec. 1011(3)], added par. (6).
    1999--Subsec. (k). Pub. L. 106-65, Sec. 1015(a)(2), added subsec. 
(k). Former subsec. (k) redesignated (l).
    Subsec. (k)(2). Pub. L. 106-65, Sec. 1014(b), substituted ``that is 
any of the following:'' for ``that is--'' in introductory provisions, 
substituted ``A'' for ``a'' and a period for the semicolon in subpars. 
(A) and (B), ``An'' for ``an'' and a period for the semicolon in subpar. 
(C), ``An'' for ``an'' and a period for ``; or'' in subpar. (D), and 
``A'' for ``a'' in subpar. (E), and added subpars. (F) to (I).
    Subsec. (l). Pub. L. 106-65, Sec. 1015(a)(1), redesignated subsec. 
(k) as (l).
    Subsec. (l)(4)(B). Pub. L. 106-65, Sec. 1067(1), substituted 
``Committee on Armed Services'' for ``Committee on National Security''.
    Subsec. (l)(5). Pub. L. 106-65, Sec. 1015(b), added par. (5).
    1996--Subsec. (c)(1). Pub. L. 104-106, Sec. 1014(a)(1)(A), 
substituted ``only for the following purposes:'' for ``only for--''.
    Subsec. (c)(1)(A). Pub. L. 104-106, Sec. 1014(a)(1)(B), (C), 
substituted ``Construction'' for ``construction'' and ``vessels.'' for 
``vessels;''.
    Subsec. (c)(1)(B). Pub. L. 104-106, Sec. 1014(a)(1)(B), (C), 
substituted ``Operation'' for ``operation'' and ``purposes.'' for 
``purposes;''.
    Subsec. (c)(1)(C). Pub. L. 104-106, Sec. 1014(a)(1)(B), (D), 
substituted ``Installation'' for ``installation'' and ``States.'' for 
``States; and''.
    Subsec. (c)(1)(D). Pub. L. 104-106, Sec. 1014(a)(1)(B), substituted 
``Research'' for ``research''.
    Subsec. (c)(1)(E). Pub. L. 104-106, Sec. 1014(a)(1)(E), added 
subpar. (E).
    Subsec. (i). Pub. L. 104-106, Sec. 1014(a)(2), inserted ``(other 
than subsection (c)(1)(E))'' after ``Nothing in this section''.
    Subsec. (j). Pub. L. 104-106, Sec. 1502(a)(15)(A), substituted ``the 
congressional defense committees'' for ``the Committees on Armed 
Services and on Appropriations of the Senate and the House of 
Representatives''.
    Subsec. (k)(4). Pub. L. 104-106, Sec. 1502(a)(15)(B), added par. 
(4).
    1992--Subsec. (c)(2). Pub. L. 102-396 substituted ``in amounts 
authorized by law'' for ``for programs, projects, and activities and 
only in amounts authorized in, or otherwise permitted under, an Act 
other than an appropriations Act''. See Codification note above.
