
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC7233]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle C--Navy and Marine Corps
 
                     PART IV--GENERAL ADMINISTRATION
 
   CHAPTER 631--SECRETARY OF THE NAVY: MISCELLANEOUS POWERS AND DUTIES
 
Sec. 7233.\1\ Auxiliary vessels: extended lease authority

---------------------------------------------------------------------------
    \1\ So in original. No section 7232 has been enacted.
---------------------------------------------------------------------------
    (a) Authorized Contracts.--Subject to subsection (b), the Secretary 
of the Navy may enter into contracts with private United States 
shipyards for the construction of new surface vessels to be acquired on 
a long-term lease basis by the United States from the shipyard or other 
private person for any of the following:
        (1) The combat logistics force of the Navy.
        (2) The strategic sealift force of the Navy.
        (3) Other auxiliary support vessels for the Department of 
    Defense.

    (b) Contracts Required To Be Authorized by Law.--A contract may be 
entered into under subsection (a) with respect to a specific vessel only 
if the Secretary is specifically authorized by law to enter into such a 
contract with respect to that vessel. As part of a request to Congress 
for enactment of any such authorization by law, the Secretary of the 
Navy shall provide to Congress the Secretary's findings under subsection 
(g).
    (c) Term of Contract.--In this section, the term ``long-term lease'' 
means a lease, bareboat charter, or conditional sale agreement with 
respect to a vessel the term of which (including any option period) is 
for a period of 20 years or more.
    (d) Option To Buy.--A contract entered into under subsection (a) may 
include options for the United States to purchase one or more of the 
vessels covered by the contract at any time during, or at the end of, 
the contract period (including any option period) upon payment of an 
amount equal to the lesser of (1) the unamortized portion of the cost of 
the vessel plus amounts incurred in connection with the termination of 
the financing arrangements associated with the vessel, or (2) the fair 
market value of the vessel.
    (e) Domestic Construction.--The Secretary shall require in any 
contract entered into under this section that each vessel to which the 
contract applies--
        (1) shall have been constructed in a shipyard within the United 
    States; and
        (2) upon delivery, shall be documented under the laws of the 
    United States.

    (f) Vessel Operation.--(1) The Secretary may operate a vessel held 
by the Secretary under a long-term lease under this section through a 
contract with a United States corporation with experience in the 
operation of vessels for the United States. Any such contract shall be 
for a term as determined by the Secretary.
    (2) The Secretary may provide a crew for any such vessel using civil 
service mariners only after an evaluation taking into account--
        (A) the fully burdened cost of a civil service crew over the 
    expected useful life of the vessel;
        (B) the effect on the private sector manpower pool; and
        (C) the operational requirements of the Department of the Navy.

    (g) Contingent Waiver of Other Provisions of Law.--(1) The Secretary 
may waive the applicability of subsections (e)(2) and (f) of section 
2401 of this title to a contract authorized by law as provided in 
subsection (b) if the Secretary makes the following findings with 
respect to that contract:
        (A) The need for the vessels or services to be provided under 
    the contract is expected to remain substantially unchanged during 
    the contemplated contract or option period.
        (B) There is a reasonable expectation that throughout the 
    contemplated contract or option period the Secretary of the Navy 
    (or, if the contract is for services to be provided to, and funded 
    by, another military department, the Secretary of that military 
    department) will request funding for the contract at the level 
    required to avoid contract cancellation.
        (C) The timeliness of consideration of the contract by Congress 
    is such that such a waiver is in the interest of the United States.

    (2) The Secretary shall submit a notice of any waiver under 
paragraph (1) to the Committee on Armed Services of the Senate and the 
Committee on Armed Services of the House of Representatives.
    (h) Source of Funds for Termination Liability.--If a contract 
entered into under this section is terminated, the costs of such 
termination may be paid from--
        (1) amounts originally made available for performance of the 
    contract;
        (2) amounts currently available for operation and maintenance of 
    the type of vessels or services concerned and not otherwise 
    obligated; or
        (3) funds appropriated for those costs.

(Added Pub. L. 106-65, div. A, title X, Sec. 1014(a)(1), Oct. 5, 1999, 
113 Stat. 741.)


                             Effective Date

    Pub. L. 106-65, div. A, title X, Sec. 1014(c), Oct. 5, 1999, 113 
Stat. 742, provided that: ``Section 7233 of title 10, United States 
Code, as added by subsection (a), shall take effect on October 1, 
1999.''
