561 



structlon subsidy for remodeling of fishing vessels, mak- 

 ing applicable provisions of existing paragraph for Defense 

 Department payments for features for national defense 

 uses. 



1964 — Pub. L. 88-498 substituted "50 per cent" for 

 "33 '/s per centum." 



§ 1406. Supervision of construction; submission of 

 plans to Secretary of Defense. 



Any fishing vessel for which a construction sub- 

 sidy is paid under this chapter shall be constructed 

 under the supervision of the Maritime Administra- 

 tor. The Maritime Administrator shall submit the 

 plans and specifications for the proposed vessel to 

 the Department of Defense for examination thereof 

 and suggestions for such changes therein as may be 

 deemed necessary or proper in order that such 

 vessel shall be suitable for economical and speedy 

 conversion into a naval or military auxiliary or 

 otherwise suitable for the use of the United States 

 Government in time of war or national emergency. 

 If the Secretary of Defense approves such plans and 

 specifications as submitted, or as modified, in ac- 

 cordance with the provisions of this subsection, he 

 shall certify such approval to the Administrator. 

 No construction subsidy shall be paid by the Secre- 

 tary under this chapter unless all contracts between 

 the applicant for such subsidy and the shipbuilder 

 who is to construct such vessel contain such pro- 

 visions with respect to the construction of the vessel 

 as the Maritime Administrator determines neces- 

 sary to protect the interests of the United States. 

 (Pub. L. 86-516, § 6, June 12, 1960, 74 Stat. 213.) 



§1407. Conditions of construction. 



All construction with resi>ect to which a construc- 

 tion subsidy is granted under this chapter shall be 

 performed in a shipyard in the United States as a 

 result of competitive bidding, after due advertising, 

 with the rights reserved in the applicant, and in the 

 Maritime Administrator, to disapprove any or all 

 bids. Beginning on the date of enactment of this 

 sentence, if the applicant disapproves the lowest re- 

 sponsible domestic bid certified by the Maritime 

 Administrator for convenience or other reasons, the 

 Secretary may permit the applicant to accept an- 

 other responsible domestic bid and agree to pay a 

 construction subsidy under subsection (b) or (c) of 

 s3ction 1405 of this title which shall not exceed the 

 amount the Secretary would have paid If the appli- 

 cant had accepted the lowest responsible domestic 

 bid. In all such construction the shipbuilder, sub- 

 contractor, material men, and suppliers shall use, so 

 far as practicable, only articles, materials, and sup- 

 plies of the growth, production, and manufacture of 

 the United States as defined in section 140l(lc) of 

 Title 19. No shipbuilder shall be deemed a responsible 

 builder unless he possesses the experience, ability, 

 financial resources, equipment, and other qualifica- 

 tions necessary properly to perform the proposed 

 contract. The submitted bid shall be accompanied 

 by all detailed estimates on which it is based, and 

 the Maritime Administrator may require that the 

 builder or any subcontractor submit any other per- 

 tinent data relating to such bids. (Pub. L. 86-516, 

 § 7; June 12, 1960, 74 Stat. 213: Pub. L. 91-279, § 4, 

 June 12, 1970, 84 Stat. 308.) 



Amendments 

 1970 — Pub. L. 91-279 Inserted provision for applicant's 

 acceptance of another responsible domestic bid {upon 

 disapproval of lowest responsible domestic bid for con- 

 venience or other reasons) and agreement to pay a con- 

 struction subsidy which shall not exceed the amount the 

 Secretary would have paid If the applicant had accepted 

 the lowest responsible domestic bid. 



§I40S. Acquisition of ownership by United .Stales; 

 payment for vessel; finality of determination. 



(a) Every contract executed by the Secretary 

 pursuant to section 1403 of this title shall provide 

 that in the event the United States shall, through 

 purchase or requisition, acquire ownership of any 

 fishing vessel on which a construction subsidy was 

 paid, the owner shall be paid therefor the value 

 thereof, but in no event shall such payment exceed 

 the actual depreciated construction cost thereof 

 (together with the actual depreciated cost of capital 

 improvements thereon) less the depreciated amount 

 of construction subsidy theretofore paid incident 

 to the construction of such vessel, or the fair and 

 reasonable scrap value of such vessel as determined 

 by the Maritime Administrator, whichever is the 

 greater. Such determination shall be final. In 

 computing the depreciated value of such vessel, de- 

 preciation shall be computed on each vessel on the 

 schedule accepted or adopted by the Internal 

 Revenue Service for income tax purposes. 



(b) The provisions of section 1402 of this title 

 and subsection (a) of this section relating to the 

 requisition or the acquisition of ownership by the 

 United States shall run with the title of each fishing 

 vessel and be binding on all owners thereof. (Pub. 

 L. 86-516, § 8. June 12, 1960, 74 Stat. 214.) 



§ 1409. Transfer of vessels to other fisheries; vessels 

 operated contrary to provisions of chapter; repay- 

 ments. 



The Secretary, in the exercise of his discretion, 

 after notice and a public hearing, may approve the 

 transfer of any vessel constructed with the aid of 

 a subsidy to another fishery when, as determined by 

 the Secretary, the operations of such vessel are 

 shown to be uneconomical or less economical either 

 because of an actual decline of the resource in the 

 particular fishery or fisheries in which such vessel 

 operates, or because of changed marlcet conditions 

 or a combination of these factors, and where he 

 determines that such transfer would not cause 

 economic hardship to operators of efficient vessels 

 already operating in the fishery to which the vessel 

 would be transferred, or where he determines that 

 such transfer would enable such vessel to operate 

 in a newly developed fishery not yet utilized to its 

 capacity by operators of efficient vessels. If any fish- 

 ing vessel constructed with the aid of a construction 

 subsidy in accordance with the provisions of this 

 chapter, is operated during its useful life, as deter- 

 mined by the Secretary, contrary to the provisions 

 of this chapter or any regulations issued thereunder, 

 the owner of such vessel shall repay to the Secretary, 

 in accordance with such terms and conditions as the 

 Secretary shall prescribe an amount not to exceed 

 the total depreciated construction subsidy paid by 

 the Secretary pursuant to this chapter and this 



