Page:United States Statutes at Large Volume 68 Part 1.djvu/713

 68

STAT.]

681

PUBLIC LAW 575~AUG. 10, 1954

"In no event shall the amount of credit allowed under this subsection or subsection (d) for a traded-in tanker exceed the price paid by the owner for such tanker, plus the cost of any additions or betterments to the tanker capitalized by such owner and allowed for income-tax purposes. "If an owner uses any tanker traded in pursuant to this section subsequent to the date of the contract for construction of a new tanker, the allowance determined shall be reduced by an amount equal to depreciation for the period of such use and computed in accordance with the schedule adopted or accepted by the Internal Revenue Service. Title to the traded-in tanker shall in all instances vest in the United States, and the allowance of credit shall be applied at the time of physical delivery of such tanker to the United States, which shall be no later than ninety days after delivery of the new tanker. The traded-in tanker shall thereupon be placed in the national defense reserve subject to the provisions of section 11 of the Merchant Ship Sales Act of 1946, as amended." Approved August 10, 1954. Public Law 575

CHAPTER

Restriction.

Title,

50 U S C 1744.

665

AN ACT To authorize the long term time chartering of tankers and the construction of tanljers by the Secretary of the Navy, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) the Secretary of the Navy or such officer as he shall designate is authorized to enter into contracts upon such terms as the Secretary of the Navy shall determine to be in the best interests of the Government for the time charter to the Navy of not to exceed fifteen tankers not now in being for periods of not more than ten years to commence upon tender of the tankers for service after completion of construction. The Secretary of the Navy shall (1) award such contracts on a competitive basis to the lowest responsible bidder, and (2) give preference to operators who are exclusively engaged in the operation of American flag ships. (b) The hire stipulated with respect to any tanker in any charter party entered into under this section shall not exceed an average rate for the life of the charter party of $5 per deadweight ton per month: Provided, That such average rate will not result in the recovery of more than two-thirds of the construction cost of such tanker. (c) No contract shall be entered into by the Secretary of the Navy pursuant to the provisions of this section unless the contractor agrees (1) that during the period of such contract he will not transfer to foreign registry any tanker owned by him at the time of entering into such contract, and (2) that the tanker or tankers contracted for shall remain under United States registry during the period in which such tanker or tankers are under charter to the United States. (d) Any contract entered into pursuant to this section shall grant to the Secretary of the Navy an option to purchase any tanker chartered pursuant to this section at the expiration of such contract at its then depreciated value or fair market value, whichever is less, and shall contain a provision that such option shall not be exercised later than one year prior to the expiration of such contract. SEC. 2. The President is authorized to undertake the construction of not to exceed five tankers, and there is hereby authorized to be appropriated not to exceed $37,500,000 for such purpose.

August 10, 1954 [S. 3458]

Tanker! Navy. Charter.

for

Hire.

U. S. registry.

Purchase opt ion,

Construction. Appropriation.

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