Page:United States Statutes at Large Volume 52.djvu/1001

 PUBLIC LAWS-CH. 600-JUNE 23, 1938 49 Stat. 2004. Contract readjust- ments. Excess profits; re- capture provision. 49 Stat. 2005 . Capital reserve fund. Deposit of proceeds of insurance, indemni- ties, etc., in. 49 Stat. 2005 . Payment from fund of sums owing but not due. 49 Stat. 2006. Special reserve fund. Excess profits, de- posit and disburse- ments. 49 Stat. 2006 . Reimbursement to general funds for cur- rent operating losses. 49 Stat. 2007. Disposition of re- quired reserve funds upon termination of contract. Voluntary increases in reserve funds. SEC. 22. Section 606 (5) of such Act is amended to read as follows: "(5) That when at the end of any ten-year period during which an operating-differential subsidy has been paid, or when prior to the end of any such ten-year period the contract shall be terminated, if the net profit of the contractor on his subsidized vessels and services inci- dent thereto during such period or time (without regard to capital gains and capital losses), after deduction of depreciation charges based upon a twenty-year life expectancy of the subsidized vessels, has averaged more than 10 per centum per annum upon the contrac- tor's capital investment necessarily employed in the operation of the subsidized vessels, services, routes, and lines, the contractor shall pay to the United States an amount equal to one-half of such profits in excess of 10 per centum per annum as partial or complete reimburse- ment for operating-differential subsidy payments received by the con- tractor for such ten-year period, but the amount of excessive profit so recaptured shall not in any case exceed the amount of the operating- differential-subsidy payments theretofore made to the contractor for such period under such contract and the repayment of such reim- bursement to the Commission shall be subject to the provisions of section 607;". SEC. 23. The last sentence of the first paragraph of section 607 (b) of such Act is amended to read as follows: 'The proceeds of all insurance and indemnities received by the contractor on account of total loss of any subsidized vessel and the proceeds of any sale or other disposition of such vessel shall also be deposited in the capital reserve fund." SEC. 24. Section 607 (b) of such Act is amended by adding at the end thereof a new sentence to read as follows: "The contractor may, with the consent of the Commission, pay from said fund any sums owing but not yet due on notes secured by mortgages on subsidized vessels." SEC. 25. The second paragraph of section 607 (c) of such Act is amended to read as follows: "If the profits, without regard to capital gains and capital losses, earned by the business of the subsidized vessels and services incident thereto exceed 10 per centum per annum and exceed the percentage of profits deposited in the capital reserve fund, as provided in sub- section (b) of this section, the contractor shall deposit annually such excess profits in this reserve fund. From the special reserve fund the contractor may make the following disbursements and no others:". SEC. 26. Section 607 (c) (2) of such Act is amended to read as follows: "(2) Reimbursement to the contractor's general funds for current operating losses on completed voyages of subsidized vessels whenever the Commission shall determine it is improbable that such current losses will be made up by profits on other voyages during the current year;". SEC. 27. Section 607 of such Act is amended by inserting after subsection (e) two new subsections to read as follows: "(f) Unless otherwise provided in the operating-differential sub- sidy contract, upon the termination of any such contract, the reserve funds required under this Act shall be the property of the contractor, except for such amounts as may be due the United States. "(g) With the approval of the Commission, the contractor may voluntarily increase the amount of either or both reserve funds by depositing in such fund or funds any or all of the earnings otherwise available for distribution to stockholders, or may transfer funds from the special reserve funds to the capital reserve fund." [52 STAT.

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