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Title 46 — ShippingRelease 119-73not60

§57305 Determination of Trade-in Allowance

Title 46 › Subtitle Subtitle V— Merchant Marine › Part F— Government-Owned Merchant Vessels › Chapter 573— VESSEL TRADE-IN PROGRAM › § 57305

Last updated Apr 5, 2026|Official source

Summary

The Secretary of Transportation must set the trade‑in allowance when an obsolete vessel is acquired. The allowance is the vessel’s fair value. To find that value, the Secretary looks at three things: scrap value, a depreciated value using a 20‑year or 25‑year life, and the vessel’s market value for world or U.S./foreign commerce. If the owner uses the old vessel while a new one is being built, the Secretary must lower the allowance by the fair value of that use and sets the use rate when the construction contract is signed.

Full Legal Text

Title 46, §57305

Shipping — Source: USLM XML via OLRC

(a)The Secretary of Transportation shall determine the trade-in allowance for an obsolete vessel at the time of acquisition of the vessel. The allowance shall be the fair value of the vessel. In determining the value, the Secretary shall consider—
(1)the scrap value of the obsolete vessel in American and foreign markets;
(2)the depreciated value based on a 20-year or 25-year life, whichever applies to the obsolete vessel; and
(3)the market value of the obsolete vessel for operation in world commerce or in the domestic or foreign commerce of the United States.
(b)If acquisition of the obsolete vessel occurs when the owner contracts for the construction of the new vessel, and the owner uses the obsolete vessel during the period of construction of the new vessel, the Secretary shall reduce the trade-in allowance by an amount representing the fair value of that use. The Secretary shall establish the rate for use of the obsolete vessel when the contract for construction of the new vessel is made.

Legislative History

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 57305(a)46 App.:1160(b) (3d sentence), (d) (1st, 2d sentences).June 29, 1936, ch. 858, title V, § 510(b) (3d sentence), (d), as added Aug. 4, 1939, ch. 417, § 7, 53 Stat. 1184; July 17, 1952, ch. 939, § 8, 66 Stat. 762; Pub. L. 86–518, § 1, June 12, 1960, 74 Stat. 216; Pub. L. 87–401, Oct. 5, 1961, 75 Stat. 833; Pub. L. 91–469, § 35(a), Oct. 21, 1970, 84 Stat. 1035; Pub. L. 97–31, § 12(91), Aug. 6, 1981, 95 Stat. 161. 57305(b)46 App.:1160(d) (3d, last sentences). In subsection (a), the words “fair value” are substituted for “fair and reasonable value” to eliminate unnecessary words. In paragraph (3), the word “commerce” is substituted for “trade” for consistency in the chapter. In subsection (b), the words “for the entire period of such use” are omitted as unnecessary.

Reference

Citations & Metadata

Citation

46 U.S.C. § 57305

Title 46 — Shipping

Last Updated

Apr 5, 2026

Release point: 119-73not60