
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC2645]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                PART IV--SERVICE, SUPPLY, AND PROCUREMENT
 
                       CHAPTER 157--TRANSPORTATION
 
Sec. 2645. Indemnification of Department of Transportation for 
        losses covered by vessel war risk insurance
        
    (a) Prompt Indemnification Required.--(1) In the event of a loss 
that is covered by vessel war risk insurance, the Secretary of Defense 
shall promptly indemnify the Secretary of Transportation for the amount 
of the loss consistent with the indemnification agreement between the 
two Secretaries that underlies such insurance. The Secretary of Defense 
shall make such indemnification--
        (A) in the case of a claim for the loss of a vessel, not later 
    than 90 days after the date on which the Secretary of Transportation 
    determines the claim to be payable or that amounts are due under the 
    policy that provided the vessel war risk insurance; and
        (B) in the case of any other claim, not later than 180 days 
    after the date on which the Secretary of Transportation determines 
    the claim to be payable.

    (2) When there is a loss of a vessel that is (or may be) covered by 
vessel war risk insurance, the Secretary of Transportation may make, 
during the period when a claim for such loss is pending with the 
Secretary of Transportation, any required periodic payments owed by the 
insured party to a lessor or mortgagee of such vessel. Such payments 
shall commence not later than 30 days following the date of the 
presentment of the claim for the loss of the vessel to the Secretary of 
Transportation. If the Secretary of Transportation determines that the 
claim is payable, any amount paid under this paragraph arising from such 
claim shall be credited against the amount payable under the vessel war 
risk insurance. If the Secretary of Transportation determines that the 
claim is not payable, any amount paid under this paragraph arising from 
such claim shall constitute a debt to the United States, payable to the 
insurance fund. Any such amounts so returned to the United States shall 
be promptly credited to the fund or account from which the payments were 
made under this paragraph.
    (b) Source of Funds for Payment of Indemnity.--The Secretary of 
Defense may pay an indemnity described in subsection (a) from any funds 
available to the Department of Defense for operation and maintenance, 
and such sums as may be necessary for payment of such indemnity are 
hereby authorized to be transferred to the Secretary of Transportation 
for such purpose.
    (c) Deposit of Funds.--Any amount transferred to the Secretary of 
Transportation under this section shall be deposited in, and merged with 
amounts in, the Vessel War Risk Insurance Fund as provided in the second 
sentence of section 1208(a) of the Merchant Marine Act, 1936 (46 U.S.C. 
App. 1288(a)).
    (d) Notice to Congress.--In the event of a loss that is covered by 
vessel war risk insurance in the case of an incident in which the 
covered loss is (or is expected to be) in an amount in excess of 
$1,000,000, the Secretary of Defense shall submit to Congress--
        (1) notification of the loss as soon after the occurrence of the 
    loss as possible and in no event more than 30 days after the date of 
    the loss; and
        (2) semiannual reports thereafter updating the information 
    submitted under paragraph (1) and showing with respect to losses 
    arising from such incident the total amount expended to cover such 
    losses, the source of such funds, pending litigation, and estimated 
    total cost to the Government.

    (e) Implementing Matters.--(1) Payment of indemnification under this 
section is not subject to section 2214 or 2215 of this title or any 
other provision of law requiring notification to Congress before funds 
may be transferred.
    (2) Consolidation of claims arising from the same incident is not 
required before indemnification of the Secretary of Transportation for 
payment of a claim may be made under this section.
    (f) Construction With Other Transfer Authority.--Authority to 
transfer funds under this section is in addition to any other authority 
provided by law to transfer funds (whether enacted before, on, or after 
the date of the enactment of this section) and is not subject to any 
dollar limitation or notification requirement contained in any other 
such authority to transfer funds.
    (g) Annual Report on Contingent Liabilities.--Not later than March 1 
of each year, the Secretary of Defense shall submit to Congress a report 
setting forth the current amount of the contingent outstanding liability 
of the United States under the vessel war risk insurance program under 
title XII of the Merchant Marine Act, 1936 (46 U.S.C. App. 1281 et 
seq.).
    (h) Definitions.--In this section:
        (1) Vessel war risk insurance.--The term ``vessel war risk 
    insurance'' means insurance and reinsurance provided through 
    policies issued by the Secretary of Transportation under title XII 
    of the Merchant Marine Act, 1936 (46 U.S.C. App. 1281 et seq.), that 
    is provided by that Secretary without premium at the request of the 
    Secretary of Defense and is covered by an indemnity agreement 
    between the Secretary of Transportation and the Secretary of 
    Defense.
        (2) Vessel war risk insurance fund.--The term ``Vessel War Risk 
    Insurance Fund'' means the insurance fund referred to in the first 
    sentence of section 1208(a) of the Merchant Marine Act, 1936 (46 
    U.S.C. App. 1288(a)).
        (3) Loss.--The term ``loss'' includes damage to or destruction 
    of property, personal injury or death, and other liabilities and 
    expenses covered by the vessel war risk insurance.

(Added Pub. L. 104-201, div. A, title X, Sec. 1079(b)(1), Sept. 23, 
1996, 110 Stat. 2669; amended Pub. L. 105-85, div. A, title X, 
Sec. 1073(a)(57), Nov. 18, 1997, 111 Stat. 1903.)

                       References in Text

    The date of the enactment of this section, referred to in subsec. 
(f), is the date of enactment of Pub. L. 104-201, which was approved 
Sept. 23, 1996.
    The Merchant Marine Act, 1936, referred to in subsecs. (g) and 
(h)(1), is act June 29, 1936, ch. 858, 49 Stat. 1985, as amended. Title 
XII of the Act is classified generally to subchapter XII (Sec. 1281 et 
seq.) of chapter 27 of Title 46, Appendix, Shipping. For complete 
classification of this Act to the Code, see section 1245 of Title 46, 
Appendix, and Tables.


                               Amendments

    1997--Subsec. (a)(1)(B). Pub. L. 105-85 struck out ``on which'' 
after ``after the date on which''.
