Page:United States Statutes at Large Volume 120.djvu/1700

 PUBLIC LAW 109–304—OCT. 6, 2006

120 STAT. 1669

Government with remaining periods to maturity comparable to the term of the charter, adjusted to the nearest one-eighth percent; and ‘‘(B) an allowance adequate in the judgment of the Secretary of Transportation to cover administrative costs. ‘‘(2) DEPRECIATION.—Depreciation under paragraph (1)(A) shall be based on— ‘‘(A) a 25-year life for dry-cargo and passenger vessels; and ‘‘(B) a 20-year life for tankers and other bulk liquid carrier vessels. ‘‘(c) OPTION TO PURCHASE.—The charter may contain an option to the charterer to purchase the vessels from the Secretary of Transportation within 5 years after delivery under the charter, on the same terms and conditions as provided in title V of the Merchant Marine Act, 1936, for the purchase of new vessels from the Secretary. However— ‘‘(1) the purchase price shall be the foreign cost less depreciation to the date of purchase based on the useful life specified in subsection (b)(2); ‘‘(2) the required cash payment payable at the time of the purchase shall be 25 percent of the purchase price; ‘‘(3) the charter may provide that any part of the charter hire paid in excess of the minimum charter hire provided for in this section may be credited against the cash payment payable at the time of the purchase; ‘‘(4) the balance of the purchase price shall be paid within the remaining years of useful life (as specified in subsection (b)(2)) after the date of delivery of the vessel under the charter and in approximately equal annual installments, except that the first installment, which shall be payable on the next ensuing anniversary date of the delivery under the charter, shall be a proportionate part of the annual installment; and ‘‘(5) interest shall be payable on the unpaid balances from the date of purchase, at a rate not less than— ‘‘(A) a rate determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the Government with remaining periods to maturity comparable to the average maturities of the loans, adjusted to the nearest one-eighth percent; plus ‘‘(B) an allowance adequate in the judgment of the Secretary of Transportation to cover administrative costs. ‘‘(d) OPERATION OF VESSEL.— ‘‘(1) PERMISSIBLE VOYAGES.—The charter shall provide for operation of the vessel exclusively— ‘‘(A) in foreign trade; ‘‘(B) on a round-the-world voyage; ‘‘(C) on a round voyage from the west coast of the United States to a European port that includes an intercoastal port of the United States; ‘‘(D) on a round voyage from the Atlantic coast of the United States to the Orient that includes an intercoastal port of the United States; or ‘‘(E) on a voyage in foreign trade on which the vessel may stop at Hawaii or an island territory or possession of the United States.

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