PUBLIC LAW 87-401-OCT. 6, 1961
Public Law 87-401 AN ACT To amend section 510 of the Merchant Marine Act, 1936, to provide for the trade-in of obsolete vessels in connection with the construction of new vessels, either at the time of executing the construction contract or at the time of delivery of the new vessel.
October 5, 1961 [S. 1728]
Be it enacted by the Senate and House of Representatives of the Merchant Marine United States of America in Congress assembled, That section 510 of Act, 1936, amendment. the Merchant Marine Act, 1936 (46 U.S.C. 1160), is amended by: (1) Striking the present subsection (b) and inserting in lieu thereof s eOb 8 o l e t e v e s l s, trade-in. the following: 53 Stat. 1183. " (b) I n order to promote the construction of new, safe, and efficient vessels to carry the domestic and foreign waterborne commerce of the United States, the Commission is authorized, subject to the provisions of this section, to acquire any obsolete vessel in exchange for an allowance of credit. The obsolete vessel shall be acquired by the Commission, if the owner so requests, either at the time the owner contracts for the construction or purchase of a new vessel or within five days of the actual date of delivery of the new vessel to the owner. The amount of the allowance shall be determined at the time of the acquisition of the obsolete vessel by the Commission. In the event the obsolete vessel is acquired by the Commission at the time the owner contracts for the construction or purchase of the new vessel, the allowance shall not be paid to the owner of the obsolete vessel, but shall be applied upon the purchase price of a new vessel. I n the .case of a new vessel constructed under the provisions of this Act, such allowance may, under such terms and conditions as the Commission may prescribe, be applied upon the cash payments required under this Act. I n case the new vessel is not constructed under the provisions of this Act, the allowance shall, upon acquisition of the obsolete vessel by the Commission, be paid, for the account of the owner, to the shipbuilder constructing such new vessel. I n the event that title to the obsolete vessel is acquired by the Commission at the time of delivery of the new vessel, the allowance shall be deposited in the owner's capital reserve fund. This subsection shall apply to obsolete vessels exchanged for new vessels hereafter contracted to be built, or eligible for such exchange but not exchanged in connection with a contract for new vessels executed prior to October 1, 1960." (2) Striking the present subsection (d) and inserting in lieu thereof the following: " (d) The allowance for an obsolete vessel shall be the fair and Allowance. of Determination re9.sonable value of such vessel as determined by the Commission. anToTiirt I n making such determination the Commission shall consider: (1) the *^ "^^ ^^^° scrap value of the obsolete vessel both in American and foreign markets, (2) the depreciated value based on a twenty or twenty-five year life, whichever is applicable to the obsolete vessel, and (3) the market value thereof for operation in the world trade or in the foreign or domestic trade of the United States. I n the event the obsolete vessel is acquired by the Commission at the time the owner contracts for the construction of the new vessel, and the owner uses such vessel during the period of construction of the new vessel, the allowance shall be reduced by an amount representing the fair value of such use. The / a t e for the use of the obsolete vessel shall be fixed by the Commission for the entire period of such use at the time of execution of the contract for the construction of the new vessel." Approved October 5, 1961.