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 1008 Temporary directors, appointment.

Jurisdiction.

80 Stat, 380; !1 Stat, 195, 5 USC 500.

Judicial review.

72 Stat. 941; 80 Stat. 1323.

80 Stat. 392. 5 USC 701.

62 Stat. 928.

PUBLIC LAW 91-468-OCT. 19, 1970

[84

STAT.

union are suspended pursuant to this section, the Administrator shall appoint persons to serve temporarily as directors in their place and stead pending the termination of such suspensions, or until such time as those who have been suspended cease to be directors of the credit union and their respective successors have been elected by the members at an annual or special meeting and have taken office. Directors appointed temporarily by the Administrator shall, within thirty days following their appointment, call a special meeting for the election of new directors, unless during the thirty-day period (A] the regular annual meeting is scheduled, or (B) the suspensions giving rise to the appointment of temporary directors are terminated. "(i)(1) Any hearing provided for in this section shall be held in the Federal judicial district or in the territory in which the principal office of the credit union is located, unless the party afforded the hearing consents to another place, and shall be conducted in accordance with the provisions of chapter 5 of title 5 of the United States Code. Such hearing shall be private unless the Administrator, in his discretion, after fully considering the views of the party afforded the hearing, determines that a public hearing is necessary to protect the public interest. After such hearingj and within ninety days after the Administrator has notified the parties that the case has been submitted to him for final decision, he shall render his decision (which shall include findings of fact upon which his decision is predicated) and shall issue and serve upon each party to the proceeding an order or orders consistent with the provisions of this section. Judicial review of any such order shall be exclusively as provided in this subsection (i). Unless a petition for review is timely filed in a court of appeals of the United States, as provided in paragraph (2) of this subsection, and thereafter until the record in the proceeding has been filed as so provided, the Administrator may at any time, upon such notice and in such manner as he may deem proper, modify, terminate, or set aside any such order. Upon such filing of the record, the Administrator may modify, terminate, or set aside any such order with permission of the court. order issued under this section to cease and desist from any of the practices or violations stated therein, may obtain a review of any order served pursuant to paragraph (1) of this subsection (other than an order issued with the consent of the credit union or the director, officer, committee member, or other person concerned or an order issued under subsection (h) of this section) by filing in the court of appeals of the United States for the circuit m which the principal office of the credit union is located, or in the United States Court of Appeals for the District of Columbia Circuit, within thirty days after the date of service of such order, a written petition praying that the order of the Administrator be modified, terminated, or set aside. A copy of such petition shall be forthwith transmitted by the clerk of the court to the Administrator, and thereupon the Administrator shall file in the court the record in the proceeding, as provided in section 2112 of title 28, United States Code. Upon the filing of such petition, such court shall have jurisdiction, which upon the filing of the record shall, except as provided in the last sentence of said paragraph (1), be exclusive, to affirm, modify, terminate, or set aside, in whole or in part, the order of the Administrator. Review of such proceedings shall be had as provided in chapter 7 of title 5, United States Code. The judgment and decree of the court shall be final, except that the same shall be subject to review by the Supreme Court upon certiorari, as provided in section 1254 of title 28, United States Code.
 * '(2) Any party to the proceeding, or any person required by an

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PUBLIC LAW 91-468-OCT. 19, 1970

"(3) The commencement of proceedings for judicial review under paragraph (2) of this subsection shall not, unless specifically ordered by the court, operate as a stay of any order issued by the Administrator. "(j) The Administrator may in his discretion apply to the United States district court, or the United States court of any territory within the jurisdiction of which the principal office of the credit union is located, for the enforcement of any effective and outstanding notice or order issued under this section, and such courts shall have jurisdiction and power to order and require compliance therewith. However, except as otherwise provided in this section, no court shall have jurisdiction to affect by injunction or otherwise the issuance or enforcement of any notice or order under this section or to review, modify, suspend, terminate, or set aside any such notice or order. " (k) Any director, officer, or committee member, or former director, officer, or committee member, of an insured credit union or of a credit union any of the member accounts of which are insured, or any other person against whom there is outstanding and effective any notice or order (which is an order which has become final) served upon such director, officer, committee member, or other person under subsections (g)(3), (g)(4), or (h) of this section and who (i) participates in any manner in the conduct of the affairs of the credit union involved, or directly or indirectly solicits or procures, or transfers or attempts to transfer, or votes or attempts to vote, any proxies, consents, or authorizations in respect of any voting rights in such credit union, or (ii) without the prior written approval of the Administrator votes for a director, serves or acts as a director, officer, committee member, or employee of any credit union, shall upon conviction be fined not more than $5,000 or imprisoned for not more than one year, or both. "(1) As used in this section (1) the t«rms 'cease-and-desist order which has become final' and 'order which has become final' means a cease-and-desist order, or an order issued by the Administrator with the consent of the credit union or the director, officer, committee member, or other person concerned, or with respect to which no petition for review of the action of the Administrator has been filed and perfected in a court of appeals as specified in paragraph (2) of subsection (i) of this section, or with respect to which the action of the court in which said petition is so filed is not subject to further review by the Supreme Court of the United States in proceedings provided for in said paragraph, or an order issued under subsection (h) of this section, and (2) the term 'violation' includes without limitation any action (alone or with another or others) for or toward causing, bringing about, participating in, counseling, or aiding or abetting a violation. " (m) Any service, required or authorized to be made by the Administrator under this section may be made by registered mail or in such other manner reasonably calculated to give actual notice as the Administrator may by regulation or otherwise provide. Copies of any notice or order served by the Administrator upon any State-chartered credit union or any director, officer, or committee member thereof or other person participating in the conduct of its affairs, pursuant to the provisions of this section, shall also be sent to the commission, board, or authority, if any, having supervision of such credit union. " (n) In connection with any proceeding under subsection (e), (f) (1), or (g) of this section involving an insured State-chartered credit union or any director, officer, committee member, or other person participating in the conduct of its affairs, the Administrator shall provide the commission, board, or authority, if any, having supervision of such credit union, with notice of his intent to institute such a pro-

1009

Jurisdiction.

Penalty.

Definitions.

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license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


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Page:United States Statutes at Large Volume 84 Part 1.djvu/1068

 1010

Proce edings, powers of Administrator,

PUBLIC LAW 91-468-OCT. 19, 1970

[84

STAT.

ceeding and the grounds thereof. Unless within such time as the Administrator deems appropriate in the light of the circumstances of the case (which time must be specified in the notice prescribed in the preceding sentence) satisfactory corrective action is effectuated by action of such commission, board, or authority, the Administrator may proceed as provided in this section. No credit union or other party who is the subject of any notice or order issued by the Administrator under this section shall have standing to raise the requirements of this subsection as ground for attacking the validity of any such notice or order, "(o) I n the course of or m connection with any proceeding under this section, the Administrator, or any designated representative thereof, including any person designated to conduct any hearing under this section, shall have the power to administer oaths and affirmations, to take or cause to be taken depositions, and to issue, revoke, quash, or modify subpenas and subpenas duces tecum, and the Administrator is empowered to make rules and regulations with respect to any such proceedings. The attendance of witnesses and the production of documents provided for in this subsection may be required from any place in any State or in any territory or other place subject to the jurisdiction of the United States at any designated place where such proceeding is being conducted. Any party to proceedings under this section may apply to the United States District Court for the District of Columbia, or the United States district court for the judicial district or the United States court in any territory in which such proceeding is being conducted, or where the witness resides or carries on business, for enforcement of any subpena or subpena duces tecum issued pursuant to this subsection, and such courts shall have jurisdiction and power to order and require compliance therewith. Witnesses subpenaed under this section shall be paid the same fees and mileage that are paid witnesses in the district courts of the United States. Any court having jurisdiction of any proceeding instituted under this section by an insured credit union or a director, officer, or committee member thereof may allow to any such party such reasonable expenses and attorneys' fees as it deems just and proper, and such expenses and fees shall be paid by the credit union or from its assets. "PAYMENT OF INSURANCE

Liquidation.

Claims.

"SEC. 207. (a)(1) Upon his finding that a Federal credit union insured under this title is bankrupt or insolvent, the Administrator shall close such credit union for liquidation and appoint himself liquidating agent therefor. "(2) Notwithstanding any other provision of law, it shall be the duty of the Administrator as such liquidating agent to cause notice to be given, by advertisement in such newspapers as he may direct, to all persons having claims against such closed credit union, to present their claims within four months from the date such advertisement first appeared; to realize upon the assets of such closed credit union, having due regard to the condition of credit in the locality; and to wind up the affairs of such closed credit union in conformity with the provisions of law relating to the liquidation of bankrupt or insolvent Federal credit unions, except as herein otherwise provided. The Administrator as such liquidating agent shall pay to himself for his own account such portion of the amounts realized from such liquidation as he shall be entitled to receive on account of his subrogation to the claims of members, and he shall pay to members and other creditors

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1011

the net amounts available for distribution to them. The Administrator ^^^^^'^^'^^ ^^^" as such liquidating agent, however, may, in his discretion, pay dividends on proved claims at any time after thie expiration of the period of advertisement made pursuant to the first sentence of this paragraph, and no liability shall attach to the Administrator himself for as such liquidating agent by reason of any such payment for failure to pay dividends to a claimant whose claim is not proved at the time of any such payment. "(3) Notwithstanding any other provision of law, the Administrator as liquidating agent of a closed Federal credit union insured under this title shall not be required to furnish bond and shall have the right to appoint an agent or agents to assist him in his duties as such liquidating agent. All fees, compensation, and expenses of liqui- ^^^^* dation and admmistration thereof shall be fixed by the Administrator and may be paid by him out of funds coming into his possession as such liquidating agent. " (b) Whenever any insured State-chartered credit union shall have been closed by action of its board of directors or by the commission, board, or authority having supervision of such credit union, as the case may be, or by a court of competent jurisdiction, on account of bankruptcy or insolvency, the Administrator shall accept appointment as liquidating agent therefor, if such appointment is tendered by the comjnission, board, or authority having supervision of such credit union, or by a court of competent jurisdiction, and is authorized or permitted by State law. With respect to any such State-chartered credit union, the Administrator as such liquidating agent shall possess all the rights, powers, and privileges granted by State law to a liquidating agent of a State-chartered credit union. For the purposes of a^entl'^"^'^^""^ this subsection, the term 'liquidating agent' includes a liquidating agent. agent, receiver, conservator, commission, person, or other agency charged by law with the duty of winding up the affairs of a credit union. " (c) Wlienever an insured credit union shall have been closed for Payment. liquidation on account of bankruptcy or insolvency, payment of the insured accounts in such credit union shall be made by the Administrator as soon as possible, subject to the provisions of subsection (d) of this section. For the purposes of this subsection, the term 'insured "insured account' means the total amount of the account in the member's name ''°^ * (after deducting offsets) less any part thereof which is in excess of $20,000. Such amount shall be determined according to such regulations as the Administrator may prescribe, and, in determining the amount due to any member, there shall be added together all accounts in the credit union maintained by him for his own benefit either in his own name or in the names of others. The Administrator may define, ^^°^^^^^ with such classifications and exceptions as he may prescribe, the extent of the insurance coverage provided for member accounts, including member accounts in the name of a minor, in trust, or in joint tenancy. The Administrator, in his discretion, may require proof of claims to claims, proof. be filed before paying the insured accounts, and in any case where he is not satisfied as to m e validity of a claim for an insured account, he may require the final determination of a court of competent jurisdiction before paying such claim. " (d) In the case of a closed Federal credit union, the Administrator, upon the payment to any member as provided in subsection (c) of this section, shall be subrogated to all rights of the member against such closed credit union to the extent of such payment. I n the case of any other closed insured credit union, the Administrator shall not make any payment to any member until the right of the

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Page:United States Statutes at Large Volume 84 Part 1.djvu/1070

 1012

Payment, discharge of liability.

Undisclo s e d names

A s s e t s, sale.

PUBLIC LAW 91-468-OCT. 19, 1970

[84

STAT.

Administrator to be subrogated to the rights of such member on the same basis as provided in the case of a closed Federal credit union shall have been recognized either by express provision of State law, by allowance of claims by the commission, board, or authority having supervision of such credit union, by assignment of claims by members, or by any other effective method. In the case of any closed insured credit union, such subrogation shall include the right on the part of the Administrator to receive the same dividends from the proceeds of the assets of such closed credit union as would have been payable to the member on a claim for the insured account^ but such member shall retain his claim for any uninsured portion of his account. The rights of members and other creditors of any State-chartered credit union shall be determined in accordance with the applicable provisions of State law. " (e) Payment of an insured account to any person by the Administrator shall discharge the Administrator to the same extent that payment to such person by the closed insured credit union would have discharged it from liability for the insured account. "(f) Except as otherwise prescribed by the Administrator, the Administrator shall not be required to recognize as the owner of any portion of an account appearing on the records of the closed credit union under a name other than that of the claimant any person whose name or interest as such owner is not disclosed on the records of such closed credit union as part owner of such account, if such recognition would increase the aggregate amount of the insured accounts in such closed credit union. " (g) The Administrator may withhold payment of such portion of the insured account of any member of a closed credit union as may be required to provide for the payment of any direct or indirect liability of such member to the closed credit union or its liquidaiting agent, which is not offset against a claim due from such credit union, pending the determination and payment of such liability by such member or any other person liable therefor. " (h) If, after the Administrator shall have given at least four months' notice to the member by mailing a copy thereof to his lastknown address appearing on the records of the closed credit union, any member of the closed credit union shall fail to claim his insured account from the Administrator within 18 months after the appointment of the liquidating agent for the closed credit union, all rights of the member against the Administrator with respect to the insured account shall be barred, and all rights of the member against the closed credit union, or the estate to which the Administrator may have become subrogated, shall thereupon revert to the member. " (i)(l) Liquidating agents of insured credit unions closed for liquidation on account of bankruptcy or insolvency may offer the assets of such credit unions for sale to the Administrator or as security for loans from the Administrator, upon receiving permission from the commission, board, or authority having supervision of such credit union, in the case of an insured State-chartered credit union, in accordance with express provisions of State law. The proceeds of every such sale or loan shall be utilized for the same purposes and in the same manner as other funds realized from the liquidation of the assets of such credit unions. The Administrator, in his discretion, may make loans on the security of or may purchase and liquidate or sell any part of the assets of an insured credit union closed for liquidation on account of bankruptcy or insolvency, but in any case m which the Administrator is acting as liquidating agent of a closed insured

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PUBLIC LAW 91-468-OCT. 19, 1970

credit union, no such loan or purchase shall be made without the approval of a court of competent jurisdiction. " (2) No agreement which tends to diminish or defeat the right, title, or interest of the Administrator in any asset acquired by him under this subsection, either as security for a loan or by purchase, shall be valid against the Administrator unless such agreement— " (A) shall be in writing; " (B) shall have been executed by the credit union and the person or persons claiming an adverse interest thereunder, mcluding the obligor, contemporaneously with the acquisition of the asset by the credit union; " (C) shall have been approved by the board of directors of the credit union, which approval shall be reflected in the minutes of such board; and " (D) shall have been, continuously, from the time of its execution, an official record of the credit union. "SPECIAL ASSISTANCE TO AVOID LIQUIDATION

"SEC. 208. (a)(1) In order to reopen a closed insured credit union Loans. or in order to prevent the closing of an insured credit union which the Administrator has determined is in danger of closing, the Administrator, in his discretion, is authorized to make loans to, or purchase the assets of, or establish accounts in such insured credit union upon such terms and conditions as he may prescribe. Such loans shall be made and such accounts shall be established only when, in the opinion of the Administrator, such action is necessary to protect the Fund or the interests of the members of the credit union. Such loans and accounts may be in subordination to the rights of members and creditors of the credit union. "(2) Whenever in the judgment of the Administrator such action will reduce the risk or avert a threatened loss to the fund and will facilitate a merger or consolidation of an insured credit union with another insured credit union, or will facilitate the sale of the assets of an open or closed insured credit union to and assumption of its liability by another insured credit union, the Administrator may, upon such terms and conditions as he may determine, make loans secured in whole or in part by assets of an open or closed insured credit union, which loans may be in subordination to the rights of members and creditors of such credit union, or the Administrator may purchase any of such assets or may guarantee any other insured credit union against loss by reason of its assuming the liabilities and purchasing the assets of an open or closed insured credit union. "(3) No agreement which tends to diminish or defeat the right, title, or interest of the Administrator, in any asset acquired by him under this subsection, either as security for a loan or by purchase, shall be valid against the Administrator unless such agreement— " (A) shall be in writing; " (B) shall have been executed by the credit union and the person or persons claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by the credit union; " (C) shall have been approved by the board of directors of the credit union, which approval shall be reflected in the minutes of such board; and " (D) shall have been continuously, from the time of its execution, an official record of the credit union.

1013

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PUBLIC LAW 91-468-OCT.19, 1970

[84 STAT.

" (b) For the protection of the Fund, the Administrator, without regard to the Federal Property and Administrative Services Act of 63 Stat. 377.

note.

41 USC 5.

1949, m a j —

"(1) ^®^1 with, complete, reconstruct, rent, renovate, modernize, insure, make contracts for the management of, sell for cash or credit, or lease, in his discretion, any real property acquired or held by him under this section; and " (2) assign or sell at public or private sale, or otherwise dispose of, any evidence of debt, contract, claim, personal property, or security assigned to or held by him under this section. Section 3709 of the Revised Statutes of the United States shall not apply to any purchase or contract for services or supplies made or entered into by the Administrator under this section if the amount thereof does not exceed $1,000, or to any contract for hazard insurance on any real property acquired or held by him under this section. " (c) I n connection with the liquidation of any insured credit union, the Administrator shall have the power to carry on the business of and collect all obligations to the credit union, to settle, compromise, or release claims m favor of or against the credit union, and to do all other things that may be necessary in connection therewith, subject to the regulation of the court or other public body having jurisdiction over the matter. " (d) Money received by the Administrator in carrying out this section shall be paid into the Fund. "ADMINISTRATIVE PROVISIONS

"SEC. 209. (a) I n carrying out the purposes of this title, the Administrator may— " (1) make contracts; " (2) sue and be sued, complain and defend, in any court of law or equity, State or Federal. All suits of a civil nature at common law or in equity to which the Administrator shall be a party shall be deemed to arise under the laws of the United States, and the United States district courts shall have original jurisdiction thereof, without regard to the amount in controversy. The Administrator may, without bond or security, remove any such action, suit, or proceeding from a State court to the United States district court for the district or division embracing the place where the same is pending by following any procedure for removal now or hereafter in effect, except that any such suit to which the Administrator is a party in his capacity as liquidating agent of a Statechartered credit union and which involves only the rights or obligations of members, creditors, and such State credit union under State law shall not be deemed to arise under the laws of the United States. No attachment or execution shall be issued against the Administrator or his property before final judgment in any suit, action, or proceeding in any State, county, municipal, or United States court. The Administrator shall designate an agent upon whom service of process may be made in any State, territory, or jurisdiction in which any insured credit union is located; " (3) pursue to final disposition by way of compromise or otherwise claims both for and against the United States (other than tort claims, claims involving administrative expenses, and claims in excess of $5,000 arising out of contracts for construction, repairs, and the purchase of supplies and materials) which are not in litigation and have not been referred to the Department of Justice;

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PUBLIC LAW 91-468-OCT. 19, 1970

"(4) to appoint such officers and employees as are not otherwise provided for in this Act, to define their duties, fix their compensation, require bonds of them and fix the penalty thereof, and to dismiss at pleasure such officers or employees. Nothing in this or any other Act shall be construed to prevent the appointment and compensation as an officer or employee of the Administration of any officer or employee of the United States in any board, commission, independent establishment, or executive department thereof; "(5) employ experts and consultants or organizations thereof, as authorized by section 15 of the Administrative Expenses Act of 1946(5 U.S.C.55a); "(6) prescribe the manner in which his general business may be conducted and the privileges granted to him by law may be exercised and enjoyed; "(7) exercise all powers specifically granted by the provisions of this title and such incidental powers as shall be necessary to carry out the powers so granted; " (8) make examinations of and require information and reports from insured credit unions, as provided in this title. " (9) act as liquidating agent; " (10) delegate to any officer or employee of the Administration such of his functions as he deems appropriate; and "(11) prescribe such rules and regulations as he may deem necessary or appropriate to carry out the provisions of this title. "(b) With respect to the financial operations arising by reason of this title, the Administrator shall— "(1) prepare annually and submit a business-type budget as provided for wholly owned Government corporations by the Government Corporation Control Act; and " (2) maintain an integral set of accounts, which shall be audited annually by the General Accounting Office in accordance with principles and procedures applicable to commercial corporate transactions, as provided by section 105 of the Government Corporation Control Act. "NONDISCRIMINATORY

60 Stat. 810. 5 USC 3109.

59 Stat. 597. 31 USC 841 note. GAG audit.

59 Stat. 599; 78 Stat. 698. 31 USC 850.

PROVISION

"SEC. 210. I t is not the purpose of this title to discriminate in any manner against State-chartered credit unions and in favor of Federal credit unions, but it is the purpose of this title to provide all credit unions with the same opportunity to obtain and enjoy the benefits of this title." SEC. 2. Section 101 of the Federal Credit Union Act, as redesignated by section 1 of this Act (formerly section 2 of such Act), is amended— (1) by striking out the word "and" at the end of paragraph (2) thereof; (2) by striking out the period at the end of paragraph (3) thereof and inserting "; and" in lieu thereof; and (3) by adding the following new paragraphs after paragraph (3) thereof: "(4) The terms 'member account' and 'account' (when referring to the account of a member of a credit union) mean a share, share certificate, or share deposit account of a member of a credit union of a type approved by the Administrator which evidences money or its equivalent received or held by a credit union in the usual course of business and for which it has given or is obligated to give credit to the account of the member, and, in the case of a credit union serving predominantly 47-348 O - 72 - 68 (Pt. 1)

1015

Definitions, 73 Stat. 628. 12 USC 1752.

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62 Stat. 711.

62 Stat. 7 29.

gj6 2 stat^^733;

73 Stat. 6 28. 12 USC 1751.

70 sta\^'*7H°'

PUBLIC LAW 91-468-OCT. 19, 1970

[84 STAT.

low-income members (as defined by the Administrator), such terms (when referring to the account of a nonmember served by such credit union) mean a share, share certificate, or share deposit account of such nonmember which is of a type approved by the Administrator and evidences money or its equivalent received or held by such credit union in the usual course of business and for which it has given or is obligated to give credit to the account of such nonmember; "(5) The terms 'State credit union' and 'State-chartered credit union' mean a credit union organized and operated according to the laws of any State, the District of Columbia, the several territories and possessions of the United States^ the Panama Canal Zone, or the Commonwealth of Puerto Rico, which laws provide for the organization of credit unions similar in principle and objectives to Federal credit unions; "(6) The term 'insured credit union' means any credit union the member accounts of which are insured in accordance with the provisions of title II of this Act, and the term 'noninsured credit union' means any credit union the member accounts of which are not so insured; " (7) The term 'Fund' means the National Credit Union Share Insurance F u n d; and "(8) The term 'branch' includes any branch credit union, branch office, branch agency, additional office, or any branch place of business located in any State of the United States, the District of Columbia, the several territories and possessions of the United States, the Panama Canal Zone, or the Commonwealth of Puerto Rico, at which member accounts are established or money lent." SEC. 3. Section 493 of title 18 of the United States Code (relating to bonds and obligations of certain lending agencies) is amended— (1) by inserting the words "National Credit Union Administration," following the words "Federal Deposit Insurance Corporation,"; and (2) by inserting the words "insured credit union," following the worcls "intermediate credit bank,". QEC. 4. Section 657 of title 18 of the United States Code (relating to lending, credit, and insurance institutions) is amended— (1) by inserting the words "National Credit Union Administration,'' following the words "Federal Deposit Insurance Corporation,"; and (2) by inserting the words "or by the Administrator of the National Credit Union Administration" following the words "Federal Savings and Loan Insurance Corporation". gj,c. 5. Section 709 of title 18 of the United States Code (relating to false advertising and misuses of names to indicate a Federal agency) is amended by adding after the third paragraph thereof the following paragraph: "Whoever falsely advertises or otherwise represents by any device whatsoever that his or its deposit liabilities, obligations, certificates, or ^ a r e s are insured under the Federal Credit Union Act or by the United States or any instrumentality thereof, or, being an insured credit union as defined in that Act falsely advertises or otherwise represents by any device whatsoever the extent to which or the manner in which shareholdings in such credit union are insured under such Act; or". SEC. 6. Section 1006 of title 18 of the United States Code (relating to false entries in reports and transactions of Federal credit institutions) is amended— (1) by inserting the words "National Credit Union Administration," following the words "Federal Deposit Insurance Corporation,"; and

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PUBLIC LAW 91-468-OCT. 19, 1970

1017

(2) by inserting the words "or by the Administrator of the National Credit Union Administration" following the words "Federal Savings and Loan Insurance Corporation". SEC. 7. Section 1014 of title 18 of the United States Code (relating ^^%^l[%l^^' to false statements in loan and credit applications) is amended by striking out the words "or a Federal credit union" and by inserting the words ", a Federal credit union, or an insured State-chartered credit union" in lieu thereof. SEC. 8. Section 2113 of title 18 of the United States Code (relating ^4 Stat. 394. to bank robbery and incidental crimes) is amended as follows: (1) Subsections (a^, (b), and (c) are each amended by inserting the words "credit union," following the word "bank," each place it appears therein. (2) The following new subsection is added at the end thereof: " (h) As used in this section the term 'credit union' means any "Credit union." Federal credit union and any State-chartered credit union the accounts of which are insured by the Administrator of the National Credit Union Administration." SEC. 9. Section 116 of the Federal Credit Union Act, as redesig- Reserves. nated by section 1 of this Act (formerly section 17 of such Act), is H f^^^^ ^^^^ amended to read as follows: "SEC. 116. (a) Immediately before the payment of each dividend, the gross earnings of the credit union shall be determined. From this amount, there shall be set aside, as a regular reserve against losses on loans and against such other losses as may be specified in regulations prescribed under this Act, sums in accordance with the following schedule: "10 per centum of gross income until the regular reserve shall equal fi/^ per centum of the total of outstanding loans and risk assets, then "6 per centum of gross income until the regular reserve shall equal 10 per centum of the total of outstanding loans and risk assets. Whenever the regular reserve falls below 10 per centum or 7i/^ per centum of the total of outstanding loans and risk assets, as the case may be, it shall be replenished by regular contributions in such amounts as may be needed to maintain the reserve goals of 7i/^ per centum or 10 per centum. " (b) I n addition to such regular reserve, special reserves to protect the interests of members shall be established— " (1) when required by regulation; or "(2) when found by the Administrator, in any special case, to be necessary for that purpose." SEC. 10. Section 107 of the Federal Credit Union Act, as redesignated by section 1 of this Act (formerly section 8 of such Act), is 8281 Stat. 110; Stat. 284. 12 USC 1757. amended— (1) by striking out paragraph (7) and inserting in lieu thereof the following: "(7) to receive from its members or other federally insured credit unions payments on shares, share certificates, or share deposits, and, in the case of credit unions serving predominantly low-income members (as defined by the Administrator), to receive payments on shares, share certificates, or share deposits from nonmembers;" and (2) by adding at the end of paragraph (8) the following: "and (H) in shares, share certificates, or share deposits of federally insured credit unions;". Approved October 19, 1970.

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PUBLIC LAW 91-469-OCT. 21, 1970

[84 STAT.

Public Law 91-469 October 21, 1970 [H. R. 15424]

Merchant Marine Act of 1970. 49 Stat. 1985.

Appropriations. 81 Stat. 193.

Supra,

49 Stat. 1989.

Studies, records.

Bulk cargo carrying services.

AN ACT To amend the Merchant Marine Act, 1936.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 101 of the Merchant Marine Act, 1936 (46 U.S.C. 1101), is amended as follows: (1) by striking out of subdivision (a) the words "on all routes". (2) by striking out the final "and" in subdivision (c) and changing the period at the end of subdivision (d) to a comma and inserting "and (e) supplemented by efficient facilities for shipbuilding and ship repair." SEC. 2. Section 209(b) of the Merchant Marine Act, 1936 (46 U.S.C. 1119(b)), is amended by striking out the period a t the end thereof and inserting a colon and the following: ^'Provided, however, That the Congress hereby finds and declares that the national policy set forth in section 101 of this Act requires that there should be authorized and appropriated for fiscal years 1971 through 1980 such sums as may be necessary to construct 300 ships of such sizes, types and designs as the Secretary of Commerce may consider best suited to carry out the purposes and policy of this Act." SEC. 3. Section 210 of the Merchant Marine Act, 1936 (46 U.S.C. 1120), is amended as follows: (1) by striking out of the second paragraph the words "on all routes". (2) by inserting a new fifth paragraph as follows: "Fourth, the creation and maintenance of efficient shipbuilding and repair capacity in the United States with adequate numbers of skilled [personnel to provide an adequate mobilization base." SEC. 4. Section 211 of the Merchant Marine Act, 1936 (46 U.S.C. 1121), is amended as follows: (1) By striking the final "and" in subsection (a) and inserting a comma in lieu thereof and changing the semicolon to a comma and inserting the words "and to other national requirements;". (2) By redesignating subsections (b), (c), (d), (e), (f), (g), (h), and (i), as subsections (c), (d), (e), (f), (g), (h), (i), and (j), respectively. (3) By inserting a new subsection (b) to read as follows: " (b) The bulk cargo carrying services that should, for the promotion, development, expansion, and maintenance of the foreign commerce of the United States and for the national defense or other national requirements be provided by United States-flag vessels whether or not operating on particular services, routes, or lines;" (4) Redesignated subsection (c) is amended by inserting after the word "speed," the words "method of propulsion,". (5) Redesignated subsection (c) is amended by inserting at the end thereof, immediately before the semicolon, a comma and the words "or which should be employed to provide the bulk cargo carrying services necessary to the promotion, maintenance, and expansion of the foreign commerce of the United States and its national defense or other national requirements whether or not such vessels operate on a particular service, route, or line". SEC. 5. Redesignated subsection (e) of section 211 of the Merchant Marine Act, 1936, is amended as follows: (a) By striking out the words "in particular services, routes, and lines".

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PUBLIC LAW 91-469-OCT. 21, 1970

1019

(b) By striking out the words "service, route, or line" and inserting in lieu thereof the word "vessel''. SEC. 6. Section 501 of the Merchant Marine Act, 1936 (46 U.S.C. diSer"enua"s°uTsidy. 1151), is amended as follows: 49 Stat. 199s; (1) Subsection (a) is amended as follows: ee Stat. 76o. (a) By striking out the words "Any citizen of the United States" and inserting in lieu thereof the words "Any proposed ship purchaser who is a citizen of the United States or any shipyard of the United States". (b) By inserting in subdivision (2) after the designation (2) the words "if the applicant is the proposed ship purchaser" and a comma. (c) By striking out of subdivision (3) the words "to replace wornout or obsolete tonnage with new and modern ships, or otherwise". (d) By the insertion of a new sentence at the end of subdivision (3) to read as follows: "The Secretary of Commerce may give preferred consideration to applications that will tend to reduce construction-differential subsidies and that propose the construction of ships of high transport capability and productivity." (2) Subsection (c) is amended by inserting in the first sentence after the words "Any citizen of the United States" the words "or any shipyard of the United States". SEC. 7. Section 502 of the Merchant Marine Act, 1936 (46 U.S.C. 1152), is amended as follows: (1) Subsection (a) is amended as follows: (a) By striking out of the first sentence the words ", on behalf of the applicant,". (b) By striking out of the second sentence the words "applicant, the Commission" and inserting in lieu thereof the words "proposed ship purchaser, the Secretary of Commerce". (c) By inserting after the second sentence the following new sentence: "Notwithstanding the provisions of the first sentence of section 505 of this Act with respect to competitive bidding, the Secretary of P°^^> P- 1022. Commerce is authorized, at any time prior to June 30, 1973, to accept a price for the construction of the ship which has been negotiated between a shipyard and a proposed ship purchaser if (i) the negotiated price will result in a construction-differential subsidy that is equal to or less than 45 per centum in fiscal 1971,43 per centum in fiscal 1972, and 41 per centum in fiscal 1973; (ii) the proposed ship purchaser and the shipyard submit backup cost details and evidence that the negotiated price is fair and reasonable; (iii) the Secretary of Commerce finds that the negotiated price is fair and reasonable; and (iv) the shipyard abmr"^*^^ ^'^^'^' agrees that the Comptroller General of the United States or any of his ^ * ^'^' duly authorized representatives shall, until the expiration of three years after final payment have access to and the right to examine any pertinent books, documents, papers, and records of the shipyard or any of its subcontractors related to the negotiation or performance of any contract or subcontract negotiated under this subsection and will include in its subcontracts a provision to that effect." (d) By striking out of the last sentence the words "with the applicant for the purchase by him" and inserting in lieu thereof the words "for the sale" immediately prior to the words "of such vessel" and by inserting after the words "upon its completion," the words "to the applicant if he is the proposed ship purchaser and if not to another citizen of the United States, if the Secretary of Commerce determines that such citizen possesses the ability, experience, financial resources, and other qualifications necessary to enable it to operate and maintain the vessel".

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Page:United States Statutes at Large Volume 84 Part 1.djvu/1078

 1020 76 Stat. 1200; 83 Stat. 44. 46 USC 1152.

Foreign cost, annual computation, publication.

Post, p. 1022.

Constructiondifferential, limitation.

52 Stat. 956. 46 USC 1152.

PUBLIC LAW 91-469-OCT. 21, 1970

[84 STAT.

(2) Subsection (b) is amended as follows: (a) By striking out of the first sentence the word "may" and inserting in lieu thereof the word "shall". (b) By striking out of the first sentence the words "the construction of the proposed vessel", and inserting in lieu thereof the words "the construction of that type vessel". (c) By inserting after the first sentence of subsection (b) the following: "The Secretary of Commerce shall recompute such estimated foreign cost annually unless, in the opinion of the Secretary, there has been a significant change in shipbuilding market conditions. The Secretary shall publish notice of his intention to compute or recompute such estimated foreign cost and shall give interested persons, including but not limited to shipyards and shipowners and associations thereof, an opportunity to file written statements. The Secretary's consideration shall include, but not be limited to, all relevant matter so filed, and his determination shall include or be accompanied by a concise explanation of the basis of his determination." (d) By striking out of the next to the last sentence the words "in any case exceeds the foregoing applicable percentage of such cost" and inserting in lieu thereof the words "exceeds the following percentages: in fiscal year 19Y1, 45 per centum; in fiscal year 1972, 43 per centum; in fiscal year 1973, 41 per centum; in fiscal year 1974, 39 per centum; in fiscal year 1975, 37 per centum; in fiscal year 1976 and thereafter, 35 per centum,". (e) By inserting in the next to the last sentence after the words "the Secretary may negotiate" the words "with any bidder, whether or not such bidder is the lowest bidder" and a comma; by striking out the words "on behalf of the applicant" and inserting in lieu thereof the words "with such bidder, notwithstanding the provisions of the first sentence of section 505 with respect to competitive bidding,"; and by inserting before the words "or less" at the end of the sentence a comma and the words "or as close thereto as possible,". (f) By inserting after the next to the last sentence the following new sentence: "Commencing with the fiscal year 1972 no construction contract requiring a construction-differential in excess of the applicable percentages set forth in the preceding sentence shall be entered into unless the Secretary shall have given due consideration to the likelihood that the above percentages will not be attained and that the commitment to the ship construction program may not be continued. If the Secretary of Commerce enters into such a contract, he shall notify the Commission on American Shipbuilding of such contract and the Commission on American Shipbuilding shall, not later than six months after such notification, submit its report on the American shipbuilding industry." (3) Subsection (c) is amended as follows: (a) By inserting after the third word the words "of sale". (b) By striking out the word "applicant" wherever it appears, and inserting in lieu thereof the word "purchaser". (c) By striking out of the third sentence the words "at the rate of 314 per centum per annum". (d) By striking out of the third sentence the words "applicant's purchase" and inserting in lieu thereof the words "purchaser's portion of the". (e) By striking out of the third sentence the word "applicant's" and inserting in lieu thereof the word "purchaser's". (f) By inserting in the third sentence, immediately before the period at the end thereof, the words "at a rate not less than (i) a rate determined by the Secretary of the Treasury, taking into considera-

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Page:The Eurypterida of New York Volume 1.pdf/138

 The main stem of the family Eurypteridae is formed by the genus Eurypterus, whose earliest form seems to appear in the Lower Siluric (Frankfort shale) and it persists into the Permic without materially changing. Corresponding to the vigor shown by its longevity is the great preponderance of its individuals and the number of species it has produced. Among the latter very different stages of progress are found. Some have clearly progressed but little, as shown by their terete, undifferentiated abdomen, short blunt telson and short swimming legs. Such forms are  Clarke,   Woodward and   Laurie. The form and small size of all these suggest an immature condition or an arrested development. This is emphatically true of the peculiar type for which Laurie [1899, p. 588] has proposed the genus Bembycosoma which has a semicircular carapace and a short, conical body, stout, short telson and apparently but nine abdominal segments. This form, represented by a single species, resembles nothing more than our eurypterid larvae from Otisville and it is very possible that these and some other primitive-looking small species of Eurypterus are cases analogous to those occurring among the recent crustaceans where development has been arrested by parasites which prevent molting and result in dwarfed adults retaining larval characters.

One species of Eurypterus, viz,  [ pl. 25, fig. 1] is of special phylogenetic interest as pointing the way which has led from Eurypterus to Dolichopterus, Drepanopterus and Stylonurus. These genera form a group by themselves, well defined by a number of peculiar characters, the most important of which are the great lengthening of the legs, especially of the last pair; the slender body without distinct differentiation of preabdomen and postabdomen and the slender, styliform telson. Connected with the enlargement of the cephalothoracic appendages is that of the carapace which is relatively longer than in all other eurypterids, shows a distinct tendency to become squarish, and develops a broad border. Likewise the greater development of the legs affects the metastoma which in all these genera is very long and subrectangular with deep


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Page:United States Statutes at Large Volume 84 Part 1.djvu/1079

 84 STAT. ]

PUBLIC LAW 91-469-OCT. 21, 1970

tion the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans, adjusted to the nearest one-eighth of 1 per centum, plus (ii) an allowance adecjuate in the judgment of the Secretary of Commerce to cover administrative costs". (g) By striking out of the last sentence the words "of 3I/2 per centum per annunr' and inserting in lieu thereof the words "per annum applicable to payments that are chargeable to the purchaser's portion of the price of the vessel". (4) Subsection (e) is amended as follows: (a) By striking out of the first sentence the words "the applicant" and inserting in lieu thereof the words "a citizen of the United States". (b) By striking out of the third sentence the words "an applicant" and inserting in lieu thereof the words "a citizen of the United States". (5) Subsection (f) is amended as follows: (a) By striking out the words "title VII and section 509, and the Federal Maritime Board, in connection with ship construction, reconstruction, or reconditioning under title V (except section 509)," in the second sentence and inserting in lieu thereof "titles V and VII,". (b) By striking out the words "in such manner as it may be determined" in the second sentence and inserting in lieu thereof "in such manner as he may determine". (c) By striking out the word "applicant" wherever it appears and inserting in lieu thereof the word "purchaser." (d) By striking out of the fourth sentence of the second paragraph the words "on any" and inserting in lieu thereof the words "in an". (e) By striking out of the fourth sentence of the second paragraph the words "of the operator". (6) Subsection (g) is amended as follows: (a) By striking out of the first sentence the word "agreement" and inserting in lieu thereof the word "application". (b) By striking out of the first sentence the words "an applicant under this title" and inserting in lieu thereof the words "any citizen of the United States". SEC. 8. Section 603 of the Merchant Marine Act, 1936 (46 U.S.C. 1153), is amended as follows: (1) By striking out the word "applicant" wherever it appears and inserting in lieu thereof the word "purchaser". (2) By striking out of the first sentence the words "purchase between the applicant and the Commission" and inserting in lieu thereof the words "sale between the purchaser and the Secretary of Commerce". SEC. 9. Section 504 of the Merchant Marine Act, 1936 (46 U.S.C. 1154), is amended as follows: (1) By striking out the first three sentences. (2) By inserting, after the section number, a new sentence to read as follows: "If a qualified purchaser under the terms of this title desires to purchase a vessel to be constructed in accordance with an application for construction-differential subsidy under this title, the Secretary of Commerce may, in lieu of contracting to pay the entire cost of the vessel under section 502, contract to pay only construction-differential subsidy and the cost of national defense features to the shipyard constructing such vessel. The construction-differential subsidy and payments for the cost of national defense features shall be based upon the lowest responsible domestic bid unless the vessel is constructed at a negotiated price as provided by section 502(a) or under a contract negotiated by the Secretary of Commerce as provided in section

1021

49 Stat. 1997. " ^ "^^ ^^^^' ^

70 Stat. es?; ^^4rusc ^ngi 1159. '^^ "^^ ^ ^^i*

52 Stat. 957; ^^ ^*'**' ^^^' "

ee Stat. 761.

52 Stat. 958.

^"'^' P* ^O^^"

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Page:United States Statutes at Large Volume 84 Part 1.djvu/1080

 1022 Ante, p. 1020.

PUBLIC LAW 91-469-OCT. 21, 1970

[84 STAT.

502(b) ill which event the construction-differential subsidy and payments for the cost of national defense features shall be based upon such negotiated price." SEC. 10. Section 505 of the Merchant Marine Act, 1936 (46 U.S.C. 49 Stat. 1998. 1155), is amended as follows: (1) Subsection (a) is amended as follows: (a) By striking out the designation " (a) ". (b) By striking out of the first sentence the words "within the continental limits". (c) By striking out of the first sentence the words "the applicant to reject, and in". Use of American (d) By inserting immediately before the period at the end of the materials, waiver, Q^^^^^ seutcuce the following: "; Provided, however, That with respect to other than major components of the hull, superstructure, and any material used in the construction thereof, (1) if the Secretary of Commerce determines that the requirements of this sentence will unreasonably delay completion of any vessel beyond its contract delivery date, and (2) if such determination includes or is accompanied by a concise explanation of the basis therefor, then the Secretary of Commerce may waive such requirements to the extent necessary to prevent such delay." (e) By striking out the last sentence and inserting in lieu thereof 46 USC 1151. the following sentence: "For the purposes of this title V, the term "Shipyard of 'sMpyard of the United States' means shipyards within any of the United States and the Commonwealth of Puerto Kico." (2) By striking out subsections (b), (c), (d), and (e). si^ltaueeo?' SEC. 11. Section 509 of the Merchant Marine Act, 1936 is amended 46 USC 1159 as follows: and note. ^g^^ g y striking out the word "Commission" wherever it appears and inserting in lieu thereof the words "Secretary of Commerce". (b) By striking out the word "applicant" wherever it appears and inserting in lieu thereof the word "purchaser". (c) By striking out the words "at 3i/^ per centum per annum," and inserting in lieu thereof, the words "at a rate not less than (i) a rate determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans, adjusted to the nearest one-eighth of 1 per centum, plus (ii) an allowance adequate in the judgment of the Secretary of Commerce to cover administrative costs, the balance of such purchase price being". SEC. 12. (a) Section 510(a) of the Merchant Marine Act, 1936 (46 53 Stat. 1183. U.S.C. 1160(a)), is amended as follows: (1) By striking out of paragraph (^1) all of subdivision (B) other than the final word "and", and inserting in lieu thereof the words "in the judgment of the Secretary of Commerce, should, by reason of age, obsolescence, or otherwise, be replaced in the public interest". (2) By striking out of subdivision (C) of paragraph (1) the words "is owned" and inserting in lieu thereof the words "has been owned". (3) By striking out of subdivision (C) of paragraph (1) the words "and has been owned by such citizen or citizens". (4) By striking out of paragraph (1) the proviso in its entirety, (b) Section 510(b) of the Merchant Marine Act, 1936 (46 U.S.C. 75 Stat. 833. 1160(b)), is amended by striking out of the next to the last sentence the words "capital reserve fund" and inserting in lieu thereof the words "capital construction fund". SEC. 13. Section 510(i) of the Merchant Marine Act, 1936 (46 79'stlt'.^98o!'' U.S.C. 1160(i)), is amended as follows:

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PUBLIC LAW 91-469-OCT. 21, 1970

1023

(1) By striking out of the first paragraph the year "1970" and inserting in lieu thereof the year "1972". (2) By striking out of the first paragraph the words "which were constructed or contracted for by the United States shipyards before September 3, 1945," and inserting in lieu thereof the words "which were constructed in the United States,". (3) By striking out of the first paragraph the words "war-built vessels (which are defined for purposes of this subsection as". (4) By striking out of the first paragraph the words "which were constructed or contracted for by the United States shipyards during the period beginning September 3, 1939, and ending September 2, 1945)". SEC. 14. Section 601(a) of the Merchant Marine Act, 1936 • (46 U.S.C. 1171 (a)), is amended as follows: 75^^a!^90^°°^' (1) By inserting after the first sentence a new sentence to read as ^° ' follows: " I n this title VI the term 'essential service' means the opera- "Essential tion of a vessel on a service, route, or line described in section 211(a) ^^49^stat'. 1989. or in bulk cargo carrying service described in section 211(b).". Ante, p. 1018. (2) By striking out of subdivision (1) the words "such service, route, or line" and inserting in lieu thereof the words "an essential service". (3) By striking from subdivision (2) the words "and maintain the service, route, or line" and inserting in lieu thereof the words "in an essential service". SEC. 15. Section 603(a) of the Merchant Marine Act, 1936 (46 U.S.C. 1173(a)), is amended by striking out the words "such service, route, or line," and inserting in lieu thereof the words "an essential service". SEC. 16. Section 603(b) of the Merchant Marine Act, 1936 (46 U.S.C. 1173 (b)), is amended as follows: (1) By striking out the words "Such contract shall provide that the amount of the operating-differential subsidy for the operation of vessels on a service, route, or line shall not exceed the excess of" and inserting in lieu thereof the words "Such contract shall provide, except as the parties should agree upon a lesser amount, that the amount of the operating-differential subsidy for the operation of vessels in an essential service shall equal the excess of the subsidizable wage costs of the United States officers and crews,". (2) By inserting in the first sentence after the words "cost of insurance," the words "subsistence of officers and crews on passenger vessels, as defined in section 613 of this Act,". 7 5 Stat. s 9. (3) By striking out of the first sentence the words "maintenance, ^^ "^^ ^^*^* repairs not compensated by insurance," and inserting in lieu thereof "maintenance, and repairs not compensated by insurance". (4) By striking out of the first sentence the words "wages and subsistence of officers and crews, and any other items of expense in which the Commission shall find and determine that the applicant is at a substantial disadvantage in competition with vessels of the foreign country hereinafter referred to," and inserting in lieu thereof "incurred". (5) By inserting before the period at the end of the first sentence a colon and a proviso to read as follows: '•'•Provided, however, That the Secretary of Commerce may, with respect to any vessel in an essential bulk cargo carrying service as described in section 211(b), pay, in lieu of the operating-differential subsidy provided by this subsection (b), such sums as he shall determine to be necessary to make the cost of operating such vessel competitive with the cost of operating similar vessels under the registry of a foreign country".

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Page:United States Statutes at Large Volume 84 Part 1.djvu/1082

 1024

PUBLIC LAW 91-469-OCT. 21, 1970

49 Stat. 2002; 75 Stat. 513.

"Collective bargaining

75 Stat. 89. 46 USC 1183.

"Basd period costs."

Post,

p. 1025.

" B a s e period.

"Subsidizable wage c o s t s of U.S. officers and c r e w s. "

[84 STAT.

SEC. 17. Section 603(c) of the Merchant Marine Act, 1936 (46 U.S.C. 1173 (c)), is amended as follows: (1) By redesignating the subsection as subsection (f) and inserting new subsections (c), (d), and (e) as follows: " (c)(1) When used in this section— " (A) The term 'collective bargaining costs' means the annual cost, calculated on the basis of the per diem rate of expense as of any date, of all items of expense required of the applicant through collective bargaining or other agreement, covering the employment of United States officers and crew of a vessel, including payments required by law to assure old-age pensions, unemployment benefits, or similar benefits and taxes or other governmental assessments on crew payrolls, but excluding subsistence of officers and crews on vessels other than passenger vessels as defined in section 613 of this Act and costs relating to: " (i) the officers or members of the crew that the Secretary of Commerce has found, prior to the award of a contract for the construction or reconstruction of a vessel, to be unnecessary for the efficient and economical operation of such vessel: Provided, That the Secretary of Commerce shall afford representatives of the collective-bargaining unit or units responsible for the manning of the vessel an opportunity to comment on such finding prior to the effective date of such finding: And provided further, That in determining whether officers or members of the crew are necessary for the efficient and economical operation of such vessel, the Secretary of Commerce shall give due consideration to, but shall not be bound by, wage and manning scales and working conditions required by a bona fide collective-bargaining agreement, or "(ii) those officers or members of the crew that the Secretary of Commerce has found, prior to ninety days following the date of enactment of this subsection, to be unnecessary for the efficient and economical operation of the vessel. " (B) The term 'base period costs' means for the base period beginning July 1, 1970, and ending June 30, 1971, the collective-bargaining costs as of January 1, 1971, less all other items of cost that have been disallowed by the Secretary of Commerce prior to ninety days following the date of enactment of this subsection, and not already excluded from collective-bargaining costs under subparagraph (A)(i) or (A) (ii) of this subsection. I n any subsequent base period the term 'base period costs' means the average of the subsidizable wage cost of United States officers and crews for the preceding annual period ending June 30 (calculated without regard to the limitation of the last sentence of paragraph (D) of this subdivision but increased or decreased by the increase or decrease in the index described in subdivision (3) of this subsection from January 1 of such annual period to January 1 of the base period), and the collective-bargaining costs as of January 1 of the base period: Provided, That in no event shall the base period cost be such that the difference between the base period cost and the collective-bargaining costs as of January 1 of any base period subsequent to the first base period exceeds five-fourths of 1 per centum of the collective-bargaining costs as of such January 1 multiplied by the number of years that have elapsed since the most recent base period. " (C) The term 'base period' means any annual period beginning July 1, and ending June 30 with respect to which a base period cost is established. " (D) The term 'subsidizable wage costs of United States officers and crews' in any period other than a base period means the most recent base period costs Increased or decreased by the increase or decrease

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PUBLIC LAW 91-469-OCT. 21, 1970

1025

from January 1 of such base period to January 1 of such period in the index described in subdivision (3) hereof, and with respect to a base period means the base period cost. The subsidizable wage costs of United States officers and crews in any period other than a base period shall not be less than 90 per centum of the collective-bargaining costs as of January 1 of such period nor greater than 110 per centum of such collective-bargaining costs. "(2) The Secretary of G)mmerce shall determine the collectivebargaining costs on ships in subsidized operation as of January 1, 1971, and as of each January 1 thereafter, and shall as of intervals of not less than two years nor more than four years, establish a new base period cost, except that the Secretary shall not establish a new base period unless he announces his intention to do so prior to the December 31 that would be included in the new base period. "(3) The Bureau of Labor Statistics shall compile the index referred wage change to in subdivision (1). Such index shall consist of the average annual "^*" change in wages and benefits placed into effect for employees covered by collective-bargaining agreements with equal weight to be given to changes affecting employees in the transportation industry (excluding the offshore maritime industry) and to changes affecting employees in private nonagricultural industries other than transportation. Such index shall be based on the materials regularly used by the Bureau of Labor Statistics in compiling its regularly published statistical series on wage and benefit changes arrived at through collective bargaining. Such materials shall remain confidential ajid not he subject to disclosure. " (d) Each foreign wage cost computation shall be made after an Foreign wage opportunity is given to the contractor to submit in writing and in '=°'"P"*^*'°"timely fashion all relevant data within his possession. I n making the computation, the Secretary shall consider all relevant matter so presented and all foreign wage cost data collected at his request or on his behalf. Such foreign cost data shall be made available to an interested contractor, unless the Secretary shall find that disclosure of the data will prevent him from obtaining such data in the future. I n determining foreign manning for purposes of this section, the foreign manning determined for any ship type with respect to any base period shall not be redetermined until the beginning of a new base period. "(e) The wage subsidy shall be payable monthly for the voyages completed during the month, upon the contractor's certification that the subsidized vessels were in authorized service during the month. The Secretary of Commerce shall prescribe procedures for the calculation and payment of subsidy on items of expense which are included in 'collective-bargaining costs' but are not included in the daily rate because they are unpredictably timed." (2) Eedesignated subsection (f) is amended to read as follows: " (f) Ninety percent of the amount of the insurance and maintenance and repair and subsistence of officers and crews subsidy shall be pay^able monthly for the voyages completed during the month on the basis of the subsidy estimated to have accrued with respect to such voyages. Any such payment shall be made only after there has been furnished to the Secretary of Commerce such security as he deems to be reasonable and necessary to assure refund of any overpayment. The contractor and the Secretary of Commerce shall audit the voyage accounts as soon as practicable after such payment. The remaining 10 percent of such subsidy shall be payable after such audit." SEC. 18. Section 605(b) is amended by striking out the words 66 Stat. 764; "except one whose life exj^ectancy has been determined as provided ^\Tvsc\\7'5. in section 607(b) for a period in no case to exceed the life expectancy Post, p. 1027.

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Page:United States Statutes at Large Volume 84 Part 1.djvu/1084

 1026

49 Stat. 2 0 0 3.

70 Stat. 148; 75 Stat. 9 1.

46 USC 1 1 3 1, 1132.

49 Stat. 2005; 52 Stat. 960.

PUBLIC LAW 91-469-OCT. 21, 1970

[84 STAT.

determined thereunder, unless the Commission" and inserting in lieu thereof ", unless the Secretary of Commerce". SEC. 19. Section 605(c) of the Merchant Marine Act, 1936 (46 U.S.C. 1175 (c)), is amended as follows: (1) By striking out of the first sentence the words "on a service, route, or line" and inserting in lieu thereof the words "in an essential service". (2) By striking out of the first sentence the words "in such service, route, or line". (3) By striking out of the first sentence the words "a service, route, or line" and inserting in lieu thereof the words "an essential service". (4) By striking out of the first sentence the words "competitive services, routes, or lines," and inserting in lieu thereof the words "such essential service". (5) By striking in the first sentence the words "line serving the route," and inserting in lieu thereof the words "operator serving such essential service,". SEC. 20. Section 606 of the Merchant Marine Act, 1936 (46 U.S.C. 1176), is amended as follows: (1) By striking out of subdivision (3) the words "the service, route, or line" and inserting in lieu thereof the words "an essential service". (2) By striking out of subdivision (4) the words "on such service, route, or line" and inserting in lieu thereof the words, "in such an essential service^". (3) By striking out of subdivision (4) the words "service, route, or line", wherever they appear, and inserting in lieu thereof the words "essential service". (4) By striking out subdivision (5) in its entirety. (5) By redesignating subdivision (6) as subdivision (5). (6) By striking out of redesignated subdivision (5) the words "the vessel'services, routes, and lines" and inserting in lieu thereof the words "essential services". (7) By striking out of redesignated subdivision (5) the word "cruises" and inserting in lieu thereof the word "services". (8) By striking out of redesignated subdivision (5) the words "thfe most" and inserting in lieu thereof the word "an". (9) By striking out of redesignated subdivision (5) the words "but with due regard to the wage and manning scales and working conditions prescribed by the Commission as provided in title III ". (10) By redesignating subdivision (7) as subdivision (6). (11) By striking out of redesignated subdivision (6) the words "the operator shall use" and inserting in lieu thereof the words "an operator who receives subsidy with respeot to subsistence of officers and crews shall use as such subsistence items"; by striking out "505 (a) " and inserting in lieu thereof "505"; by striking out of that subdivision the words "and equipment"; by striking out of that subdivision the words "and the operator shall perform repairs to subsidized vessels within the continental limits of the United States," and inserting in lieu thereof the words "and an operator who receives subsidy with respect to repairs shall perform such repairs within any of the United States or the Commonwealth of Puerto Rico,"; and by striking the last sentence thereof. SEC. 21. (a) Section 607 of the Merchant Marine Act, 1936 (46 U.S.C. 1177), is amended to read as follows: "SEC. 607. (a) Agreement Rules. "Any citizen of the United States owning or leasing one or more eligible vessels (as defined in subsection (k)(l)) may enter into an

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agreement with the Secretary of Commerce under, and as provided in, this section to establish a capital construction fund (hereinafter st?ucao?fun'd. in this section referred to as the 'fund') with respect to any or all of such vessels. Any agreement entered into under this section shall be for the purpose of providing replacement vessels, additional vessels, or reconstructed vessels, built in the United States and documented under the laws of the United States for operation in the United States foreign, Great Lakes, or noncontiguous domestic trade or in the fisheries of the United States and shall provide for the deposit in the fund of the amounts agreed upon as necessary or appropriate to provide for qualified withdrawals under subsection (f). The deposits in the fund, and all withdrawals from the fund, whether qualified or nonqualified, shall be subject to such conditions and requirements as the Secretary of Commerce may by regulations prescribe or are set forth in such agreement; except that the Secretary of Commerce may not require any person to deposit in the fund for any taxable year more than 50 percent of that portion of such person's taxable income for such year (computed in the manner provided in subsection (b)(1)(A)) which is attributable to the operation of the agreement vessels. " (b) Ceiling on Deposits. "(1) The amount deposited under subsection (a) in the fund for any taxable year shall not exceed the sum of: " (A) that portion of the taxable income of the owner or lessee for such year (computed as provided in chapter 1 of the Internal Revenue Code of 1954 but without regard to the carryback of 26 USC i et seq. any net operating loss or net capital loss and without regard to this section) which is attributable to the operation of the agreement vessels in the foreign or domestic commerce of the United States or in the fisheries of the United States, " (B) the amount allowable as a deduction under section 167 of the Internal Revenue Code of 1954 for such year with respect to 83^st^t!'625^ 649 the agreement vessels, 26 USC leV. " (C) if the transaction is not taken into account for purposes of subparagraph (A), the net proceeds (as defined in joint regulations) from (i) the sale or other disposition of any agreement vessel, or (ii) insurance or indemnity attributable to any agreement vessel, and " (D) the receipts from the investment or reinvestment of amounts held in such fund, "(2) I n the case of a lessee, the maximum amount which may be deposited with respect to an agreement vessel by reason of paragraph (1)(B) for any period shall be reduced by any amount which, under an agreement entered into under this section, the owner is required or permitted to deposit for such period with respect to such vessel by reason of paragraph (1)(B). "(8) For purposes of paragraph (1), the term 'agreement vessel' „^l'^f^*!'"^'^* vessel.' includes barges and containers which are part of the complement of "'^"°° such vessel and which are provided for in the agreement. " (c) Requirements as to Investments. "Amounts in any fund established under this section shall be kept in the depository or depositories specified in the agreement and shall be subject to such trustee and other fiduciary requirements as may be specified by the Secretary of Commerce. They may be invested only in interest-bearing securities approved by the Secretary of Commerce; except that, if the Secretary of Commerce consents thereto, an agreed percentage (not in excess of 60 percent) of the assets of the fund may be invested in the stock of domestic corporations. Such stock must be

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26 USC 1 et seq.

26 USC^ 316^* ^^A Stat. 179.

ll^sc24i. 26 USC 103.

PUBLIC LAW 91-469-OCT. 21, 1970

[84 STAT.

currently fully listed and registered on an exchange registered with the Securities and Exchange Commission as a national securities exchange, and must be stock which would be acquired by prudent men of discretion and intelligence in such matters who are seeking a reasonable income and the preservation of their capital. If at any time the fair market value of the stock in the fund is more than the agreed percentage of the assets in the fund, any subsequent investment of amounts deposited in the fund, and any subsequent withdrawal from the fund, shall be made in such a way as to tend to restore the fund to a situation in which the fair market value of the stock does not exceed such agreed percentage. For purposes of this subsection, if the common stock of a corporation meets the requirements of this subsection and if the preferred stock of such corporation would meet such requirements but for the fact that it cannot be listed and registered as required because it is nonvoting stock, such preferred stock shall be treated as meeting the requirements of this subsection. " (d) Nontaxability for Deposits. "(1) For purposes of the Internal Revenue Code of 1954— " (A) taxable income (determined without regard to this section) for the taxable year shall be reduced by an amount equal to the amount deposited for the taxable year out of amounts referred to in subsection (b)(1)(A), " (B) gain from a transaction referred to in subsection (b)(1) (C) shall not be taken into account if an amount equal to the net proceeds (as defined in joint regulations) from such transaction is deposited in the fund, " (C) the earnings (including gains and losses) from the investment and reinvestment of amounts held in the fund shall not be taken into account, " (D) the earnings and profits of any corporation (within the meaning of section 316 of such Code) shall be determined without regard to this section, and (E) in applying the tax imposed by section 531 of such Code (relating to the accumulated earnings tax), amounts while held in the fund shall not be taken into account. "(2) Paragraph (1) shall apply with respect to any amount only if such amount is deposited in the fund pursuant to the agreement and not later than the time provided in joint regulations. "(e) Establishment of Accounts. "For purposes of this section— "(1) Within the fund established pursuant to this section three accounts shall be maintained: " (A) the capital account, " (B) the capital gain account, and " (C) the ordinary income account. " (2) The capital account shall consist of— " (A) amounts referred to in subsection (b)(1)(B), " (B) amounts referred to in subsection (b)(1)(C) other than that portion thereof which represents gain not taken into account by reason of subsection (d)(1)(B), " (C) 85 percent of any dividend received by the fund with ri.f. respect to which theperson maintaining the fund would (but for subsection (d)(1)(C)) be allowed a deduction under section 243 of the Internal Revenue Code of 1954, and " (D) interest income exempt from taxation under section 103 of such Code. "(3) The capital gain account shall consist of—

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PUBLIC LAW 91-469-OCT. 21, 1970

" (A) amounts representing capital gains on assets held for more than 6 months and referred to in subsection (b)(1)(C) or (b)(1)(D) reduced by " (B) amounts representing capital losses on assets held in the fund for more than 6 months. " (4) The ordinary income account shall consist of— " (A) amounts referred to in subsection (b)(1)(A), " (B)(i) amounts representing capital gains on assets held for 6 months or less and referred to in subsection (b)(1)(C) or (b) (1)(D), reduced by— "(ii) amounts representing capital losses on assets held m the fund for 6 months or less, " (C) interest (not including any tax-exempt interest referred to in paragraph (2)(D)) and other ordinary income (not including any dividend referred to in subparagraph (E)) received on assets held in the fund, " (D) ordinary income from a transaction described in subsection (b)(1)(C), and " (E) 15 percent of any dividend referred to in paragraph (2)(C). "(5) Except on termination of a fund, capital losses referred to m paragraph (3)(B) or in paragraph (4)(B) (ii) shall be allowed only as an offset to gains referred to in paragraph (3)(A) or (4)(B) (i), respectively. " (f) Purposes of Qualified Withdrawals. "(1) A qualified withdrawal from the fund is one made in accordance with the terms of the agreement but only if it is for: " (A) the acquisition, construction, or reconstruction of a qualified vessel, " (B) the acquisition, construction, or reconstruction of barges and containers which are part of the complement of a qualified vessel, or " (C) the payment of the principal on indebtedness incurred in connection with the acquisition, construction or reconstruction of a qualified vessel or a barge or container which is part of the complement of a qualified vessel. Except to the extent provided in regulations prescribed by the Secretary of Commerce, subparagraph (B), ^ n d so much of subparagraph (C) as relates only to barges and containers, shall apply only with respect to barges and containers constructed in the United States. "(2) Under joint regulations, if the Secretary of Commerce determines that any substantial obligation under any agreement is not being fulfilled, he may, after notice and opportunity for hearing to the person maintaining the fund, treat the entire fund or any portion thereof as an amount withdrawn from the fund in a nonqualified withdrawal. " (g) Tax Treatment of Qualified Withdrawals. " (1) Any qualified withdrawal from a fund shall be treated— " (A) first as made out of the capital account, " (B) second as made out of the capital gain account, and " (C) third as made out of the ordinary income account. "(2) If any portion of a qualified withdrawal for a vessel, barge, or container is made out of the ordinary income account, the basis of such vessel, barge, or container shall be reduced by an amount equal to such portion. "(3) If any portion of a qualified withdrawal for a vessel, barge, or container is made out of the capital gain account, the basis of such

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26 USC m 1* °

68A Stat. 817. 26 USC 6601. 83 Stat. 727. 26 USC 6651.

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[84 STAT,

vessel, barge, or container shall be reduced by an amount equal to— "(A) Five-eighths of such portion, in the case of a corporation (other than an electing small business corporation, as defined in section 1371 of the Internal Revenue Code of 1954), or "(B) One-half of such portion, in the case of any other person. " (4) If any portion of a qualified withdrawal to pay the principal on any indebtedness is made out of the ordinary income account or the capital gain account, then an amount equal to the aggregate reduction which would be required by paragraphs (2) and (3) if this were a qualified withdrawal for a purpose described in such paragraphs shall be applied, in the order provided in joint regulations, to reduce the basis of vessels, barges, and containers owned by the person maintaining the fund. Any amount of a withdrawal remaining after the application of the preceding sentence shall be treated as a nonqualified withdrawal. "(5) If any property the basis of which was reduced under paragraph (2), (3), or (4) IS disposed of, any gain realized on such disposition, to the extent it does not exceed the aggregate reduction in the basis of such property under such paragraphs, shall be treated as an amount referred to in subsection (h)(3)(A) which was withdrawn on the date of such disposition. Subject to such conditions and requirements as may be provided in joint regulations, the preceding sentence shall not apply to a disposition where there is a redeposit in an amount determined under joint regulations which will, insofar as practicable, restore the fund to the position it was in before the withdrawal. " (h) Tax Treatment of Nonc[ualified Withdrawals. "(1) Except as provided in subsection (i), any withdrawal from a fund which is not a qualified withdrawal shall be treated as a nonqualified withdrawal. "(2) Any nonqualified withdrawal from a fund shall be treated— " (A) first as made out of the ordinary income account, "(B) second as made out of the capital gain account, and "(C) third as made out of the capital account. For purposes of this section, items withdrawn from any account shall be treated as withdrawn on a first-in-first-out basis; except that (i) any nonqualified withdrawal for research, development, and design expenses incident to new and advanced ship design, machinery and equipment, and (ii) any amount treated as a nonqualified withdrawal under the secona sentence of subsection (g)(4), shall be treated as withdrawn on a last-in-first-out basis. " (3) For purposes of the Internal Revenue Code of 1954— "(A) any amount referred to in paragraph (2)(A) shall be included in income as an item of ordinary income for the taxable year in which the withdrawal is made, "(B) any amount referred to in paragraph (2)(B) shall be includeld in income for the taxable year in which the withdrawal is made as an item of gain realized during such year from the disposition of an asset held for more than 6 months, and "(C) for the period on or before the last date prescribed for payment of tax for the taxable year in which this withdrawal is made— " (i) no iiitcrest shall be payable under section 6601 of such Q ^ g ^^^ j^Q addition to the tax shall be payable under section 6651 of such Code, cc^jjj interest on the amount of the additional tax attributable to any item referred to in subparagraph (A) or (B) shall be paid at the applicable rate (as defined in paragraph

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(4)) from the last date prescribed for payment of the tax for the taxable year for which such item was deposited in the fund, and " (iii) no interest shall be payable on amounts referred to in clauses (i) and (ii) of paragraph (2) or in the case of any nonqualified withdrawal arising from the application of the recapture provision of section 606(5) of the Merchant Marine Act of 1936 as in effect on December 31, 1969. "(4) For purposes of paragraph (3)(C) (ii), the applicable rate of interest for any nonqualified withdrawal— " (A) made in a taxable year beginning in 1970 or 1971 is 8 percent, or " (B) made in a taxable year beginning after 1971, shall be determined and published jointly by the Secretary of the Treasury and the Secretary of Commerce and shall bear a relationship to 8 percent which the Secretaries determine under joint regulations to be comparable to the relationship which the money rates and investment yields for the calendar year immediately preceding the beginning of the taxable year bear to the money rates and investment yields for the calendar year 1970. " (i) Certain Corporate Reorganizations and Changes in Partnerships. "Under joint regulations— "(1) a transfer of a fund from one person to another person in a transaction to which section 381 of the Internal Revenue Code of 1954 applies may be treated as if such transaction did SSA Stat. 124. not constitute a nonqualified withdrawal, and ^ ^^^ ^^^• ® "(2) a similar rule shall be applied in the case of a continuation of a partnership (within the meaning of subchapter K of such Code). 26 USC 701. " (j) Treatment of Existing Funds. "(1) Any person who was maintaining a fund or funds (hereinafter in this subsection referred to as 'old fund') under this section (as in effect before the enactment of this subsection) may elect to continue such old fund but— " (A) may not hold moneys in the old fund beyond the expiration date provided in the agreement under which such old fund is maintained (determined without regard to any extension or renewal entered into after April 14, 1970), " (B) may not simultaneously maintain such old fund and a new fund established under this section, and " (C) if he enters into an agreement under this section to establish a new fund, may agree to the extension of such agreement to some or all of the amounts in the old fund. " (2) I n the case of any extension of an agreement pursuant to paragraph (1)(C), each item in the old fund to be transferred shall be transferred in a nontaxable transaction to the appropriate account in the new fund established under this section. For purposes of subsection (h)(3)(C), the date of the deposit of any item so transferred shall be July 1, 1971, or the date of the deposit in the old fund, whichever is the later. " (k) Definitions. "For purposes of this section— " (1) The term 'eligible vessel' means any A^essel— "Eiigi^bie vessel." " (A) constructed in the United States and, if reconstructed, reconstructed in the United States, " (B) documented under the laws of the United States, and " (C) operated in the foreign or domestic commerce of the United States or in the fisheries of the United States. 47-348 O - 72 - 69 (Pt. 1)

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[84 STAT.

Any vessel which (i) was constructed outside of the United States but documented under the laws of the United States on April 15, 1970, or (ii) constructed outside the United States for use in the United States foreign trade pursuant to a contract entered into before April 15, 1970, shall be treated as satisfying the requirements of subl)aragraph (A) of this paragraph and the requirements of subparagraph (A) of paragraph (2). "Qualified " (2) The term 'qualified vessel' means any vessel— vessel." " (A) constructed in the United States and, if reconstructed, reconstructed in the United States, " (B) documented under the laws of the United States, and " (C) which the person maintaining the fund agrees with the Secretary of Commerce will be operated in the United States foreign. Great Lakes, or noncontiguous domestic trade or in the fisheries of the United States. "Agreement " (S) The term 'agreement vessel' means any eligible vessel or qualvessel." ified vessel which is subject to an agreement entered into under this section. "United States. " " (4) The term 'United States', when used in a geographical sense, means the continental United States including Alaska, Hawaii, and Puerto Rico. "United States "(5) The term 'United States foreign trade' includes (but is not foreign trade." limited to) those areas in domestic trade in which a vessel built with construction-differential subsidy is permitted to operate under the first 52 Stat. 958. sentence of section 506 of this Act. 46 USC 1156. "(6) The term 'joint regulations' means regulations prescribed "Joint regulations." under subsection (1). "Vessel." "(7) The term 'vessel' includes cargo handling equipment which the Secretary of Commerce determines is intended for use primarily on the vessel. The term 'vessel' also includes an ocean-going towing vessel or an ocean-going barge or comparable towing vessel or barge operated on the Great Lakes. "Noncontiguous "(8) The term 'noncontiguous trade' means (i) trade between the trade," contiguous forty-eight States on the one hand and Alaska, Hawaii, Puerto Rico and the insular territories and possessions of the United States on the other hand, and (ii) trade between Alaska, Hawaii, and Puerto Rico and such territories and possessions and (iii) trade between the islands of Hawaii. "(1) Records; Reports; Changes in Regulations. "Each person maintaining a fund under this section shall keep such records and shall make such reports as the Secretary of Commerce or the Secretary of the Treasury shall require. The Secretary of the Treasury and the Secretary of Commerce shall jointly prescribe all rules and regulations, not inconsistent with the foregoing provisions of this section, as may be necessary or appropriate to the determination of tax liability under this section. If, after an agreement has been entered into under this section, a change is made either in the joint regulations or in the regulations prescribed by the Secretan^ of Commerce under this section which could have a substantial effect on the rights or obligations of any person maintaining a fund under this section, such person may terminate such agreement." Effective date. (b) The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 1969. 53 Stat. 1186. SEC. 22. Section 714 of the Merchant Marine Act, 1936 is amended 46 USC 1204. as follows: (a) By striking out the words "Commission" and "Commission's" wherever they appear and inserting in lieu thereof the words "Secretary of Commerce" and "Secretary of Commerce's" respectively.

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(b) By striking out in the first sentence the words "31/^ per centum of the depreciated for e i ^ cost computed annually upon the basis of a twenty-five year life of the vessel." and inserting in lieu thereof "an amount equal to (i) the sum of a p e r c e n t a ^ of the depreciated foreign cost computed annually upon the basis of a twenty-five year life of the vessel determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the term of the charter, adjusted to the nearest one-eighth of 1 per centum, plus (ii) an allowance adequate in the judgment of the Secretary of Commerce to cover administrative costs." (c) By striking out of the last sentence of the first paragraph thereof the words "of 31/^ per centum per annum from the date of purchase." and inserting in lieu thereof, "from the date of purchase, at a rate not less than (i) a rate determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans, adjusted to the nearest oneeighth of 1 per centum, plus (ii) an allowance adequate in the judgment of the Secretary of Commerce to cover administrative costs " SBO. 23. Section 803 of the Merchant Marine Act, 1936 (46 U.S.C. 49 Stat. 2012; 1221), is amended by striking out the section in its entirety. ^^ ^*^*' ^^^' SEC. 24. Section 804 of the Merchant Marine Act, 1936 (46 U.S.C. 1222), is amended to read as follows: "SEC. 804. (a) Except as provided in subsections (b) and (c) of this section, it shall be unlawful for any contractor receiving an operatingdifferential subsidy under title VI or for any charterer of vessels 46 USC 1171. under title "VII of this Act, or any holding company, subsidiary, 46 USC 1191. affiliate, or associate of such contractor or such charterer, or any officer, director, agent, or executive thereof, directly or indirectly to own, charter, act as agent or broker for, or operate any foreign-nag vessel which competes with any American-flag service determined by the Secretary of Commerce to be essential as provided in section 211 of this Act.

^

^

"(b) Under special circumstances and for good cause shown, the Secretary of Commerce may, in his discretion, waive the provisions of subsection (a) of this section as to any contractor, for a specific period of time. "(c) Upon application to the Secretary of Commerce the provisions of subsection (a) of this section shall not apply to the following specified activities of any contractor under title VI, or those in the foregoing specified relationship to him, who was not such a contractor on April 15, 1970, and who shall have complied with the requirement set forth in subsection (d) of this section: "(1) Until April 15, 1990— " (A) the continued ownership, charter, or operation of a foreign-flag vessel engaged in the carriage of dry or liquid cargoes in bulk which was owned, chartered, or operated by such contractor, or those in the foregoing specified relationship to him, on April 15, 1970; (B) the continued acting as agent or broker for a vessel described in subsection (c)(1)(A) of this section which is owned, chartered, or o p e r a t e by such contractor, or those in the foregoing specified relationship to him, and for which

Ante, p. 1018.

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