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 Y3STAT.]

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PXJBLIC LAW 86-123-JULY 31, 1959

Public Law 86-123 AN ACT To amend title XI of the Merchant Marine Act, 1936, as amended, with respect to insurance of ship niortgaj;es, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That title X I of the Merchant Marine Act, 1936, as amended (46 U.S.C. 1271-1279), is amended— (1) by redesignating sections 1107, 1108, and 1109 as sections 1108, 1109, and 1110; (2) by striking out of section 1102 the reference "section 1109" and inserting in lieu thereof the reference "section 1110"; (3) by striking out of section 1104(f) the reference "sections 1101-1109" and inserting in lieu thereof the reference "sections 1101-1110"; (4) by striking out of section 1106, before the dash, the word "except and inserting in lieu thereof the words "except as provided in section 1107 or"; and (5) by inserting after section 1106 a new section 1107 to read as follows: "SEC. 1107. The Secretary of Commerce is authorized, upon such terms as he may prescribe, to make a commitment to the prospective owner of a vessel who is a citizen of the United States, prior to the time when the keel of such vessel is laid under a contract which such prospective owner has made with the shipbuilder for the construction of the vessel (or if the keel of the vessel was laid under such contract prior to the enactment of this Act, and the vessel owner or prospective owner has an unexpired commitment from the Secretary of Commerce to insure a mortgage on the vessel, issued prior to enactment of this Act under the law then existing, then prior to the expiration of such commitment), to insure the interest on and the unpaid balance of the principal of a mortgage or mortgages which such prospective owner, as mortgagor, may at any time place on the vessel in order to finance the construction, reconstruction, or reconditioning of other vessels or both to refinance a mortgage insured by the Secretary of Commerce on the vessel and to finance the construction, reconstruction, or reconditioning of other vessels, subject to the following conditions— " (1) the commitment shall not be assignable without the prior written approval of the Secretary of Commerce; "(2) the vessel is not, at the time of insuring the mortgage pursuant to the commitment, subject to a mortgage which has not been insured by the Secretary of Commerce; "(3) within a reasonable period prior to, or at the time of, insuring the mortgage pursuant to the commitment, the Secretary of Commerce makes the finding required by section 1104(c) of this Act (which requires a finding that the mortgaged vessel or the project with respect to which the mortgaged vessel is to be operated will be, in the opinion of the Secretary of Commerce, economically sound); "(4) the mortgage involves a principal obligation which when added to the unpaid balance of the principal obligations of prior mortgages on the vessel (other than mortgages that are being refinanced by this mortgage) will result in a sum which will not, (a) if the vessel was not built with the aid of construction-differential subsidy and complies with the requirements of section 509 of this Act exceed (A) if the vessel has not been reconstructed

July 31, 1959 [S. 1434]

Vessels. Insurance of ship tnort gages.. 52 Stat. 973.

Commitment.

Conditions.

Finding,,

46 USC 1274.

Principsil o b l i gation.

46 USC 1159.

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