PUBLIC LAW 104-239—OCT. 8, 1996 110 STAT. 3121 "(2) shall not make any pa3m(ient for any day that a vessel is engaged in transporting more than 7,500 tons of civilian bulk preference cargoes pursuant to section 901(a), 901(b), or 901b that is bulk cargo; and "(3) shall make a pro rata reduction in payment for each day less than 320 in a fiscal year that a vessel covered by an operating agreement is not operated in accordance with subsection (b)(1), with days during which the vessel is drydocked or undergoing survey, inspection, or repair considered to be days on which the vessel is operated. " (i) PRIORITY FOR AWARDING AGREEMENTS.— Subject to the availability of appropriations, the Secretary shall enter into operating agreements according to the following priority: " (1) VESSELS OWNED BY CITIZENS. — "(A) PRIORITY.— First, for any vessel that is— "(i) owned and operated by persons who are citizens of the United States under section 2 of the Shipping Act, 1916; or "(ii) less than 10 years of age and owned and operated by a corporation that is— "(I) eligible to document a vessel under chapter 121 of title 46, United States Code; and "(II) affiliated with a corporation operating or managing for the Secretary of Defense other vessels documented under that chapter, or chartering other vessels to the Secretary of Defense. " (B) LIMITATION ON NUMBER OF OPERATING AGREE- MENTS.—The total number of operating agreements that may be entered into by a person under the priority in subparagraph (A)— "(i) for vessels described in subparagraph (A)(i), may not exceed the sum of— "(I) the number of United States-documented vessels the person operated in the foreign commerce of the United States (except mixed coastwise and foreign commerce) on May 17, 1995; and "(II) the number of United States-documented vessels the person chartered to the Secretary of Defense on that date; and "(ii) for vessels described in subparagraph (A)(ii), may not exceed 5 vessels. "(C) TREATMENT OF RELATED PARTIES.— For purposes of subparagraph (B), a related party with respect to a person shall be treated as the person. "(2) OTHER VESSELS OWNED BY CITIZENS AND GOVERNMENT CONTRACTORS.— To the extent that amounts are available after applying paragraph (1), any vessel that is owned and operated by a person who is— "(A) a citizen of the United States under section 2 of the Shipping Act, 1916, that has not been awarded an operating agreement under the priority established under paragraph (1); or "(B)(i) eligible to document a vessel under chapter 121 of title 46, United States Code; and "(ii) affiliated with a corporation operating or managing other United States-documented vessels for the Secretary
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