§56503 — Title 46 Shipping | U.S. Code

Summary

When a ship’s agreement is changed under this law, the government must stop enforcing the rule that the ship operate in foreign trade under its subsidy contract or mortgage. The government must also stop the ship’s right to receive the operating-differential subsidy. The Secretary of Transportation may then arrange things like laying the ship up and paying necessary expenses or a fixed allowance; postponing or rescheduling government loan payments for up to the total lay-up period (even if some payments fall outside that time); postponing or canceling interest during lay-up; extending the vessel’s 20-year life limit by the lay-up period; allowing short-term emergency use instead of lay-up; and requiring the owner to pay back net profits above 10 percent a year on the capital used. The ship’s value counts as the owner’s capital, and the Secretary may require the ship as security for repayment.

Title 46, §56503

Shipping — Source: USLM XML via OLRC

(a)An adjustment or arrangement under this chapter shall include suspension of—

(1)the requirement to operate the vessel in foreign trade under the applicable operating-differential or construction-differential subsidy contract or mortgage or other agreement; and

(2)the right to operating-differential subsidy for the vessel.

(b)To the extent the Secretary of Transportation considers appropriate to carry out the purposes of this subtitle, an adjustment or arrangement under this chapter may include any of the following:

(1)Lay-up of the vessel by the owner or in the custody of the Secretary, with payment or reimbursement by the Secretary of necessary and proper expenses (including reasonable overhead and insurance) or a fixed periodic allowance instead of payment or reimbursement.

(2)Postponement, for not more than the total period of the lay-up, of the maturity date of each installment of the principal of obligations to the United States Government for the vessel (regardless of whether the maturity date is during a lay-up period), or rearrangement of those maturities.

(3)Postponement or cancellation of interest accruing on the obligations during a lay-up period.

(4)Extension, for not more than the total period of the lay-up, of the 20-year life limitation for the vessel and other limitations and provisions of this subtitle based on a 20-year life.

(5)Provision for temporary or emergency employment of the vessel (instead of lay-up) as may be practicable, with such arrangements for management of the vessel, payment of expenses, and application of the proceeds of the employment, as the Secretary may approve, with any period of operation being included as part of the lay-up period.

(6)Payment to the Secretary, on termination of the arrangements with the applicant, of the applicant’s net profits (earned while the arrangements were in effect) in excess of 10 percent a year on the capital necessarily employed in the applicant’s business, as reimbursement for obligations postponed or canceled and expenses incurred or paid by the Secretary under this section.

(c)Under subsection (b)(6), capital of the applicant represented by a vessel of the applicant laid-up or operated under this section shall be included in capital necessarily employed in the applicant’s business. The Secretary may require a vessel laid-up or operated under this section to be security for reimbursement.

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 5650346 App.:1242a(c).June 29, 1940, ch. 442, subdiv. (c), 54 Stat. 685; Pub. L. 97–31, § 12(132), Aug. 6, 1981, 95 Stat. 165.

§56503 Types of adjustments and arrangements

Summary

Title 46, §56503

Notes & Related Subsidiaries

Historical and Revision Notes

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