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SUBCHAPTER I—DECLARATION OF POLICY Sec. 1101. Fostering development and maintenance of merchant marine. SUBCHAPTER II—CREATION AND FUNCTIONS OF MARITIME AGENCIES 1111. Powers and duties of agencies. (a), (b) Repealed. (c) Records of meetings; seal; rules and regulations. (d) Expenditures. (e) Officers and employees. (f) Traveling and subsistence expenses; pay for military officer on assignment. 1111a. Administrative expenses; limitations. 1112. Operation of property by Secretary. 1114. Transfer of powers; rules and orders. (a) Transfer of functions, powers, and duties. (b) Rules and regulations. (c) Enforcement of orders; penalties for violations. 1115. Discrimination at ports by carriers by water against other carriers. 1116. Construction fund. 1116a. Application to obligations against emergency ship construction fund. 1117. Power to contract; audit of accounts; reports of Comptroller General. 1118. Reports to Congress. 1119. Authorization of appropriations. 1120. Survey of existing merchant marine for creation of adequate American-owned fleet. 1121. Investigations, studies, records, etc. (a) Suitable ocean routes and lines to foreign ports; vessels and costs of operation. (b) Bulk cargo carrying services. (c) Vessels required in proposed routes. (d) Cost of construction in United States and abroad. (e) Relative cost of operation under laws of United States and foreign countries. (f) Foreign subsidies. (g) Shipyards. (h) Laws applicable to aircraft. (i) Transportation to foreign ports of cotton, coal, lumber, and cement. (j) New designs of vessels; intercoastal and inland water transportation. 1121–1. Priority loading for vessels engaged in coastwise transportation of coal; exception, report to Congress. 1121–2. National Maritime Enhancement Institutes. (a) Designation by Secretary of Transportation. (b) Activities. (c) Submission of applications. (d) Designation criteria. (e) Awards. (f) University transportation research funds. 1122. Maritime problems; cooperation with others; cargo carriage; recommendations. (a) Study of maritime problems. (b) Inducing preferences for American vessels; construction of super-liners. (c) Collaboration with owners and builders. (d) Liaison with other agencies and trade organizations. (e) Repealed. (f) Development and implementation of new methods of cargo carriage; preferences for cargo containers. (g) Recommendations for further legislation. 1122a. Vessel utilization and performance reports; filing; civil penalty; lien upon vessel; remission or mitigation of penalty. 1122b. Mobile trade fairs. (a) Use of United States flag vessels and aircraft insofar as practicable. (b) Technical and financial assistance; exceptions. (c) Use of foreign currencies. 1123. Obsolete tonnage; tramp service. 1124. Witnesses. (a) Summoning; oaths; production of books and papers; fees. (b) Refusal to obey subpena; court orders; contempt. 1125. Acquisition of vessels. 1125a. Construction, repair, etc., of vessels for Government agencies. 1126–1. Training of future naval officers under Naval Reserve Officer Training Corps programs at merchant marine academies for promotion of maximum integration of naval and merchant marine seapower of Nation. SUBCHAPTER III—AMERICAN SEAMEN 1131. Manning and wage scales; subsidy contracts. (a) Investigation of wages and working conditions; establishment of wage and manning scales; incorporation in subsidy contracts. (b) Subsidy contracts; provisions relative to officers and crew. 1132. Reemployment rights for certain merchant seamen. (a) In general. (b) Time for application. (c) Certification determination. (d) Equivalence to Military Selective Service Act certificate. SUBCHAPTER V—CONSTRUCTION-DIFFERENTIAL SUBSIDY 1151. Subsidy authorized for vessels to be operated in foreign trade. (a) Application for subsidy for construction; conditions precedent to granting. (b) Submission of plans to Navy Department; certification of approval. (c) Application for subsidy for reconstruction or reconditioning; conditions precedent to granting; contracts. 1152. Construction of vessels; bids; subsidies. (a) Approval of bids; contract with bidder; acceptance of negotiated price; shipyard records, availability; contract with applicant or qualified citizen for purchase of vessel. (b) Basis for fixing subsidy; cost of construction in foreign yards; annual recomputation and publication of foreign cost; limitation on construction differential; report on American shipbuilding industry. (c) Terms of sale of vessel to purchaser. (d) Repealed. (e) Construction in navy yards; sales to citizens; terms. (f) Survey of shipbuilding capability; correction of inadequacies; reimbursement of certain vessel construction and delivery expenses. (g) Sale of vessels acquired by Secretary. (h) Installation or removal of national defense features; title to such features. (i) Plans, specifications, and proposals for national defense features; certification of approval. 1153. Documentation of completed vessel under laws of United States; delivery to purchaser; first mortgage to secure deferred payments. 1154. Purchase of vessel constructed in accordance with application for subsidy; bid or negotiated price basis for subsidy and payments for cost of national defense features; documentation. 1155. Eligible shipyards; materials; conditions of contracts; limitation to American shipyards; American materials, waiver; ability of bidders; filing bids and data. 1156. Operation of subsidy constructed vessel limited to foreign trade; repayments to Secretary for deviations. 1157. Construction of new vessel to replace obsolete; purchase of old vessel by Secretary; bond of seller against liens. 1158. Disposition of vessels transferred to Maritime Administration of Department of Transportation. (a) Authority to scrap or sell obsolete vessels. (b) Authority to convey vessels. 1159. Vessels to be operated in domestic trade; terms and conditions of construction aid and sale to purchaser. 1160. Acquisition of obsolete vessels. (a) Definitions. (b) Promotion of construction of new vessels; allowance on obsolete vessels. (c) Utility value of new vessel; gross tonnage. (d) Amount of allowance on obsolete vessel; determination of amount. (e) Recognition of gain for income tax purposes; basis for gain or loss. (f) Report to Congress. (g) Use of vessels 25 years old or more. (h) Repealed. (i) Exchange of vessels; valuation; scrapping of traded out vessels. (j) Placement in national defense reserve fleet of acquired vessels. 1161. Reserve funds for construction or acquisition of vessels; taxation. (a) “New vessel” defined. (b) Establishment of construction reserve funds. (c) Recognition of gain for taxation where proceeds of sale or indemnity for loss deposited in fund. (d) Basis for determining gain or loss and for depreciation of new vessels. (e) Order, proportions, etc., of deposits and withdrawals. (f) Amounts in fund as accumulation of earnings or profits. (g) Benefits of section conditioned upon manner and time of expenditure of deposits. (h) Authorizations of extensions of time. (i) Taxation of deposits upon failure of conditions. (j) Assessment and collection of deficiency tax. (k) Taxable years governed by section. (l) Vessels deemed constructed or acquired by taxpayers owning stock in corporations constructing or acquiring vessels. (m) Definitions. (n) “Contract for the construction” and “construction contract” defined. (o) “Reconstruction and reconditioning” defined. 1162. Limitation on restrictions. SUBCHAPTER VI—VESSEL OPERATING ASSISTANCE PROGRAMS

Part A—Operating-Differential Subsidy Program

1171. Subsidy authorized for operation of vessels in foreign trade or in off-season cruises. (a) Application for subsidy; conditions precedent to granting. (b) Statements as to financial interests to accompany application; penalty for false statements. 1172. Determination of necessity of subsidy to meet competition. 1173. Contracts for payment of subsidy. (a) Authorization of contracts. (b) Amount of subsidy. (c) “Collective bargaining costs”, “base period costs”, “base period”, and “subsidizable wage costs of United States officers and crews” defined; determination of collective bargaining costs and establishment of new base periods; wage change index. (d) Foreign wage computation; foreign manning. (e) Monthly payment of wage subsidy; procedures for calculation and payment of subsidy on certain expenses. (f) Monthly percentage payment of other than wage subsidy; security for refund of overpayments; payment of remainder after audit of voyage accounts. 1174. Additional subsidy; when authorized. 1175. Vessels excluded from subsidy. (a) Vessels engaged in coastwise or intercoastal trade; vessels on inland waterways. (b) Vessels more than 25 years old. (c) Vessels to be operated in an essential service served by citizens of United States. 1176. Readjustments; change in service; withdrawal from service; payment of excess profits; wages, etc.; American materials. 1177. Capital construction fund. (a) Agreement rules; persons eligible; replacement, additional, or reconstructed vessels for prescribed trade and fishery operations; amount of deposits, annual limitation; conditions and requirements for deposits and withdrawals. (b) Ceiling on deposits; lessees; “agreement vessel” defined. (c) Investment requirements; depositories; fiduciary requirements; interest-bearing securities; stock: percentage for domestic issues, listing and registration, prudent acquisitions, value and percentage equilibrium, and treatment of preferred issues. (d) Nontaxability of deposits; eligible deposits. (e) Accounts within fund: capital account, capital gain account, and ordinary income account; limitation on capital losses. (f) Purposes of qualified withdrawals; nonqualified withdrawal treatment for nonfulfillment of substantial obligations. (g) Tax treatment of qualified withdrawals; basis: reduction. (h) Tax treatment of nonqualified withdrawals; FIFO and LIFO bases; interest rate; amounts not withdrawn after 25 years; highest marginal rate of tax. (i) Corporate reorganizations and partnership changes. (j) Treatment of existing funds; relation of old to new fund. (k) Definitions. (l) Records; reports; rules and regulations; termination of agreement upon changes in regulations with substantial effect on rights or obligations. (m) Departmental reports and certification. 1177–1. Small fishing vessel construction reserves. 1177a. Deposits in special reserve fund; excusal; tax treatment. 1178. Sale or assignment of contract; consent of Secretary; purchaser subject to terms of contract; rescinding contract on transfer without consent. 1179. Withholding payment to defaulting contractor. 1180. Vessels eligible to subsidy. 1181. Transfer of vessels to foreign registry on default of United States. (a) Application; hearing; grant or denial. (b) Appeal from denial of application. (c) Effectiveness of transfer. 1183. Off-season cruises by passenger vessels. (a) “Passenger vessel” defined. (b) Authorization for payment of subsidy. (c) Authorization for payment of subsidy to passenger vessels providing domestic service. (d) Conditions for cruises or domestic service while on voyages in an essential service in foreign commerce. (e) Application for approval of cruise; notice to other American flag operators. 1183a. Off-season cruises additional to right of operator to make voyages on regular service, route, or line, including approved deviations. 1184. Suspension of operating differential subsidy contracts by operator recipients. 1185. Construction, reconstruction, or acquisition of vessels over five thousand deadweight tons in foreign shipyards; preconditions. 1185a. Wind-up of program. (a) In general. (b) Existing subsidy contracts. (c) Essential service and port equity requirements. (d) Transfer and registration of vessel.

Part B—Maritime Security Fleet Program

1187 to 1187e. Repealed. SUBCHAPTER VII—PRIVATE CHARTER OPERATION 1191. Additional powers of Secretary for completion of program. 1192. Construction or reconditioning of vessels by Secretary. 1193. Competitive bidding. (a) Construction, reconstruction, or reconditioning of vessels. (b) Requirements. (c) Opening of bids. 1194. Charter or sale of vessels acquired by Department of Transportation. 1195. Employment of vessels on foreign trade routes; selection of routes; encouraging private operation by sale or charter; selling price. 1196. Advertising for bids for charters; rejection of bids. 1197. Awarding charter on bids. (a) Highest bid. (b) Rejection of highest bid. (c) Next highest bid; rejection of all bids and readvertisement. 1198. Payment of subsidies to charterers. 1199. Excess profit; payment to Secretary; formula for determining profit. 1200. Undertaking required of charterer. 1201. Terms and conditions of charters. 1202. Insurance requirements; repairs; inspection by Secretary; termination of charter in national emergency. 1203. Financial resources and other factors considered in awarding charters. 1204. Construction and chartering of vessels for unsuccessful routes; purchase of vessel by charterer; purchase price; operation of vessel in foreign trade. 1205. Experimental operation and testing of United States vessels; number; bareboat charters; review of charters and agency agreements; provisions applicable to charters and agreements. SUBCHAPTER VIII—CONTRACT PROVISIONS 1211. Provision for books and records; filing balance sheets; inspection and auditing by Secretary; rescission of contract on failure to comply with provisions. 1212. Purchase or requisition of vessels by United States; amount of payment. 1213. Contracts designed equitably for all ports; minimum allocation of funds; report to Congress; preference to citizens of United States; regional offices for Maritime Administration. SUBCHAPTER VIII–A—OFFENSES AND PENALTIES 1222. Repealed. 1223. Forbidden practices relating to coastwise service, salaries, officers, and employees. (a) Foreign trade subsidy contractor engaging in coastwise or intercoastal trade. (b) Contractor in default paying more than specified salary. (c) Repealed. (d) Employing other persons or concerns as managing or operating agent. (e) Repealed. (f) Penalty. 1226. Discrimination in respect to cargo. 1227. Agreements with other carriers forbidden; withholding subsidies; actions by injured persons for damages. 1228. Fines and penalties; conviction as rendering persons ineligible to receive benefits of law. SUBCHAPTER IX—MISCELLANEOUS PROVISIONS 1241. Transportation in American vessels of Government personnel and certain cargoes. (a) Requirement that officers and employees travel on American ships. (b) Cargoes procured, furnished or financed by United States; waiver in emergencies; exceptions; definition. (c) Motor vehicle owned by Government personnel. 1241–1. Shipment of exports financed by Government in United States vessels. 1241a. Vessel operations revolving fund; establishment; uses; limitation. 1241b. Availability of vessel operations revolving fund; vessels involved in mortgage-foreclosure or forfeiture proceedings; redelivery and layup of chartered ships; custody and husbanding of Government-owned ships. 1241c. Expenses for activation, repair and deactivation of merchant ships; receipts. 1241d. Findings and declarations with respect to export transportation of agricultural commodities. 1241e. Exemption of certain agricultural exports from requirements of cargo preference laws. 1241f. Shipment requirements for certain exports sponsored by Department of Agriculture. (a) Minimum requirement respecting gross tonnage transported in United States-flag commercial vessels; implementation. (b) Covered export activity. (c) Terms and conditions. (d) “Export activity” defined. (e) Prevailing world market price. 1241g. Minimum tonnage. 1241h. Financing of shipment of agricultural commodities in United States-flag vessels. (a) Financing by Secretary of Transportation of increased ocean freight charges. (b) Reimbursement of Secretary of Agriculture and Commodity Credit Corporation; computations. (c) Issuance, etc., of obligations for financing. (d) Authorization of appropriations. (e) Notification of Congress respecting failure to obtain funds necessary for financing. 1241i. Authorization of appropriations. 1241j. Termination of sections 1241e through 1241o of this Appendix. 1241k. National Advisory Commission on Agricultural Export Transportation Policy. (a) Establishment. (b) Membership; composition, appointment, etc. (c) Chairman; vacancy. 1241l. Duties of Commission. (a) Study and review of ocean transportation of agricultural exports subject to cargo preference laws; recommendations, scope, etc. (b) Reporting requirements; termination of Commission. (c) Contents of reports. 1241m. Information and assistance to be furnished to Commission. 1241n. Compensation and travel and subsistence expenses of Commission members. 1241o. Definition of United States-flag vessel eligible to carry cargoes under sections 1241f through 1241h of this Appendix. 1241p. Effect on other laws. 1241q. Exemption of American Great Lakes vessels from restriction on carriage of preference cargoes. (a) Exemption from restriction. (b) Restriction described. (c) Subsequent application of restriction. 1241r. Designation of American Great Lakes vessels. (a) In general. (b) Construction and purchase agreement. (c) Certain foreign registry and sale not prohibited. (d) Issuance of regulations. 1241s. Restrictions on operations of American Great Lakes vessels. (a) In general. (b) Off-season carriage exception. 1241t. Revocation and termination of designation. (a) Revocation. (b) Civil penalty. (c) Termination of designation. 1241u. Study and report. (a) Study. (b) Report. 1241v. Definitions. 1242. Requisition or purchase of vessels in time of emergency. (a) Compensation; restoration; consequential damages. (b) Determination of value of vessel. (c) Charter of vessels; compensation; reimbursement for loss or damage. (d) Determination of amount of compensation. (e) Use of vessels by Secretary; transfer to other departments or agencies; reimbursement of Secretary. 1242a. Maintenance of and adjustment of obligations with respect to essential vessels affected by Neutrality Act. (a) “Essential vessel” defined. (b) Adjustment of obligations and arrangements for maintenance of essential vessels. (c) Provisions included within adjustments and arrangements. (d) Readjustment or modification of adjustments and arrangements. (e) Expenses incurred in adjustments and arrangements. 1244. Definitions. 1245. Separability; short title of chapter. 1247. Appointment of Secretary as trustee or receiver; operation of vessels under court orders; payment of operating costs; claims against corporation. 1248. Enrollment in a sealift readiness program. 1249. Assistance for small shipyards and maritime communities. (a) Establishment of program. (b) Awards. (c) Use of funds. (d) Prohibited uses. (e) Matching requirements. (f) Application. (g) Audits and examinations. (h) Small shipyard defined. (i) Authorization of appropriations. SUBCHAPTER XI—FEDERAL SHIP MORTGAGE INSURANCE 1271. Definitions. 1272. Federal Ship Financing Fund. 1273. Authorization of Secretary or Administrator to guarantee obligations. (a) Principal and interest. (b) Security interest. (c) Amount of guarantee; percentage limitation; determination of actual cost of vessel. (d) Pledge of United States. (e) Proof of obligations. (f) Limitation on outstanding amount. (g) Restrictions on commitments to guarantee obligations on eligible export vessels. (h) Risk categories. (i) Priority for national defense tank vessels. (j) Priority for other vessels suitable for service as a naval auxiliary. 1273a. Certain loan guarantees and commitments. 1274. Eligibility for guarantee. (a) Purpose of obligations. (b) Contents of obligations. (c) Security. (d) Restrictions. (e) Guarantee fees. (f) Investigation of applications. (g) Disposition of moneys. (h) Additional requirements. (i) Limitation on authority to establish uniform percentage limitations. (j) Guarantees for eligible export vessels. (k) Monitoring. (l) Review of applications. (m) Agreement with obligor. (n) Decision period. 1274a. Authorization of Secretary or Administrator to guarantee obligations arising from statutorily mandated change in standards for operation of vessels. (a) Purpose of obligations; principal and interest. (b) Limitations on length and amount of guaranteed obligations; useful life of vessel. (c) Security against default; fees; Vessel Replacement Guarantee Fund. (d) Additional requirements. 1275. Defaults. (a) Rights of obligee. (b) Notice of default. (c) Secretary or Administrator to complete, sell or operate property. (d) Cash payments; issuance of notes or obligations. (e) Actions against obligor. (f) Default response. 1279a. Escrow fund. (a) Creation. (b) Disbursement prior to termination of escrow agreement. (c) Disbursement upon termination of escrow agreement. (d) Investment of fund. (e) Payment of income. (f) Terms of escrow agreement. (g) Payments required before disbursement. 1279b. Deposit fund. (a) Establishment of deposit fund. (b) Agreement. (c) Investment. (d) Withdrawals. 1279c. Ocean thermal energy conversion demonstration facilities and plantships. (a) Financing of construction, reconstruction, or reconditioning. (b) Certification of reasonableness of risk. (c) OTEC Demonstration Fund. (d) Notes and obligations. (e) Taxability of interest. 1279d. Loan guarantees for eligible export vessels. (a) Authority to guarantee obligations for eligible export vessels. (b) Interagency council. 1279e. Loan guarantees for shipyard modernization and improvement. (a) General authority. (b) Applicable laws, requirements, regulations, and procedures. (c) Transfer of funds. (d) Definitions. 1279f. Fisheries financing and capacity reduction. (a) Authorization for guarantees; issuance of obligations. (b) Requirements for guaranteed obligations. (c) Fishing capacity reduction fund; establishment; availability of amounts; deposit or investment. (d) Issuance of regulations. (e) “Program” defined. 1279g. Direct loan obligations for fisheries financing and capacity reduction. 1280. Advances to fund. 1280a. Eligible shipyards. 1280b. Annual report on program. SUBCHAPTER XII—WAR RISK INSURANCE 1281. Definitions. 1282. Authority to provide insurance; consideration of risk. (a) Authorization, approval, and consultation; criteria. (b) Consideration of risk. (c) Condition of availability in time of war or national emergency. 1283. Persons, property, and interests insurable. 1284. Risks other than war risks. 1285. Insurance of property of Government departments and agencies. 1286. Liability insurance for persons performing services or providing facilities for vessels. 1287. Reinsurance; rates; allowances to insurance carriers. 1288. Insurance fund; investments; appropriations. 1288a. Transfer of funds from Vessel Operations Revolving Fund. 1289. Administrative provisions. (a) Issuance of policies, rules, and regulations; settlement of claims; valuation; rejection and review of valuation. (b) Forms and policies; rates; fees. (c) Commercial practice controlling; limitation on fees. (d) Underwriting agents. (e) Employment of marine insurance experts. (f) Utilization of services of other Government agencies. 1290. Seamen’s rights unaffected. 1291. Reports to Congress. 1292. Actions on claims for losses; jurisdiction of courts; limitation of actions. 1293. Additional insurance with other underwriters. 1294. Expiration of authority to provide insurance. SUBCHAPTER XIII—MARITIME EDUCATION AND TRAINING 1295. Congressional declaration of policy. 1295a. Definitions. 1295b. Maintenance of Academy. (a) Duty of Secretary. (b) Nomination and appointment of cadets; designation and licensing of individuals from Trust Territory of Pacific Islands, Western Hemisphere nations and nations other than United States. (c) Appointment of cadet as midshipman in United States Navy Reserve; rights and privileges. (d) Uniforms, textbooks, and transportation allowances. (e) Commitment agreements. (f) Places of training. (g) Degrees awarded. (h) Board of Visitors. (i) Advisory Board. (j) Limitation on charges and fees for attendance. 1295c. State maritime academies. (a) Cooperation and assistance. (b) Regional maritime academies. (c) Training vessels. (d) Annual payments. (e) Detailing of personnel. (f) Conditions to receiving payments or use of vessels. (g) Student incentive payment agreements. (h) Appointment of cadet as midshipman in United States Navy Reserve. 1295c–1. Plan for sharing training vessels. 1295d. Additional training. (a) In general. (b) Equipment or supplies required for training. (c) Oil pollution prevention, response, and clean-up program. 1295e. United States Maritime Service. (a) Establishment and maintenance. (b) Enrollment; compensation; course of study and periods of training; uniforms. (c) Ranks, grades, and ratings same as for United States Coast Guard. (d) Awards and medals. 1295f. Civilian nautical school. (a) “Civilian nautical school” defined. (b) Examination and inspection of school; rating and certification. (c) Repealed. (d) Fines and penalties. 1295g. Powers and duties of Secretary. (a) Rules and regulations. (b) Excess vessels and equipment. (c) Securing of information, facilities, or equipment; detailing of personnel. (d) Employment of personnel.

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