Page:United States Statutes at Large Volume 97.djvu/712

 97 STAT. 680 PUBLIC LAW 98-94—SEPT. 24, 1983 26 USC 168. Termination liability. Request submittal to Congress. "(ii) the initial term of which is for a period of less than five years but which contains an option to renew or extend the agreement for a period which, when added to the initial term (or any previous renewal or extension), is five years or longer. Such term includes the extension or renewal of a lease or charter agreement if the term of the extension or renewal thereof is for a period of five years or longer or if the term of the lease or charter agreement being extended or renewed was for a period of five years or longer. "(B) In the case of an agreement under which the lessor first places the property in service under the agreement or the property has been in service for less than one year and there is allowable to the lessor or charterer an investment tax credit or depreciation for the property leased, chartered, or otherwise provided under the agreement under section 168 of the Internal Revenue Code of 1954 (unless the lessor or charterer has elected depreciation on a straight- line method for such property), the term long-term lease or charter* means a lease, charter, service contract, or conditional sale agreement— "(i) the term of which is for a period of three years or longer; or "(ii) the initial term of which is for a period of less than three years but which contains an option to renew or extend the agreement for a period which, when added to the initial term (or any previous renewal or extension), is three years or longer. Such term includes the extension or renewal of a lease or charter agreement if the term of the extension or renewal thereof is for a period of three years or longer or if the term of the lease or charter agreement being extended or renewed was for a period of three years or longer. "(2) For the purposes of this section, the United States shall be considered to have a substantial termination liability under a contract— "(A) if there is an agreement by the United States under the contract to pay an amount not less than the amount equal to 25 percent of the value of the vessel or aircraft under lease or charter, calculated on the basis of the present value of the termination liability of the United States under such charter or lease (as determined under regulations prescribed by the Secre- tary of Defense); or (B) if (as determined under regulations prescribed by the Secretary of Defense) the sum of— "(i) the present value of the amount of the termination liability of the United States under the contract as of the end of the term of the contract (exclusive of any option to extend the contract); and "(ii) the present value of the total of the payments to be made by the United States under the contract (excluding any option to extend the contract) attributable to capital- hire, is more than one-half the price of the vessel or aircraft involved. "(e)(1) Whenever a request is submitted to Congress for the au- thorization of the long-term lease or charter of aircraft or naval vessels or for the authorization of a lease or charter of aircraft or naval vessels which provides for a substantial termination liability on the part of the United States, the Secretary of Defense shall submit with that request an analysis of the cost to the United States

�