CHAPTER 573 —VESSEL TRADE-IN PROGRAM
§57301. Definitions
In this chapter:
(1)
(A) constructed under this subtitle and acquired within 2 years after the date of completion; or
(B) constructed in a domestic shipyard on private account and not under this subtitle, and documented under the laws of the United States.
(2)
(A) is of at least 1,350 gross tons;
(B) the Secretary of Transportation believes should, because of its age, obsolescence, or other reasons, be replaced in the public interest; and
(C) has been owned by a citizen of the United States for at least 3 years immediately before its acquisition under this chapter.
(
| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 57301 | 46 App.:1160(a). | June 29, 1936, ch. 858, title V, §510(a), as added Aug. 4, 1939, ch. 417, §7, |
In paragraph (1)(A), the words "or is purchased under section 1204 of this Appendix, as amended, by the person turning in an obsolete vessel under this section" are omitted because the purchase authority under 46 App. U.S.C. 1204 was impliedly repealed by section 14 of the Merchant Ship Sales Act of 1946 (50 App. U.S.C. 1735 note).
§57302. Authority to acquire vessels
To promote the construction of new, safe, and efficient vessels to carry the domestic and foreign waterborne commerce of the United States, the Secretary of Transportation may acquire an obsolete vessel in exchange for an allowance of credit toward the cost of construction or purchase of a new vessel as provided in this chapter.
(
| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 57302 | 46 App.:1160(b) (1st, last sentences). | June 29, 1936, ch. 858, title V, §510(b) (1st, last sentences), as added Aug. 4, 1939, ch. 417, §7, |
The words "toward the cost of construction or purchase of a new vessel" are added for clarity. The text of 46 App. U.S.C. 1160(b) (last sentence) is omitted as obsolete.
§57303. Utility value and tonnage requirements
(a)
(b)
(
| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 57303 | 46 App.:1160(c). | June 29, 1936, ch. 858, title V, §510(c), as added Aug. 4, 1939, ch. 417, §7, |
§57304. Eligible acquisition dates
At the option of the owner, the acquisition of an obsolete vessel under this chapter shall occur—
(1) when the owner contracts for the construction or purchase of a new vessel; or
(2) within 5 days of the actual date of delivery of the new vessel to the owner.
(
| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 57304 | 46 App.:1160(b) (2d sentence). | June 29, 1936, ch. 858, title V, §510(b) (2d sentence), as added Aug. 4, 1939, ch. 417, §7, |
The words "At the option of the owner" are substituted for "if the owner so requests" for clarity.
§57305. Determination of trade-in allowance
(a)
(1) the scrap value of the obsolete vessel in American and foreign markets;
(2) the depreciated value based on a 20-year or 25-year life, whichever applies to the obsolete vessel; and
(3) the market value of the obsolete vessel for operation in world commerce or in the domestic or foreign commerce of the United States.
(b)
(
| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 57305(a) | 46 App.:1160(b) (3d sentence), (d) (1st, 2d sentences). | June 29, 1936, ch. 858, title V, §510(b) (3d sentence), (d), as added Aug. 4, 1939, ch. 417, §7, |
| 57305(b) | 46 App.:1160(d) (3d, last sentences). |
In subsection (a), the words "fair value" are substituted for "fair and reasonable value" to eliminate unnecessary words. In paragraph (3), the word "commerce" is substituted for "trade" for consistency in the chapter.
In subsection (b), the words "for the entire period of such use" are omitted as unnecessary.
§57306. Payment of trade-in allowance
(a)
(b)
(
| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 57306 | 46 App.:1160(b) (4th–7th sentences). | June 29, 1936, ch. 858, title V, §510(b) (4th–7th sentences), as added Aug. 4, 1939, ch. 417, §7, |
In subsection (b), the words "acquisition of the obsolete vessel occurs" are substituted for "title to the obsolete vessel is acquired" for consistency in the chapter.
§57307. Recognition of gain for tax purposes
The owner of an obsolete vessel does not recognize a gain under the Federal income tax laws when the vessel is transferred to the Secretary of Transportation in exchange for a trade-in allowance under this chapter. The basis of the new vessel acquired with the allowance is the same as the basis of the obsolete vessel—
(1) increased by the difference between the cost of the new vessel and the trade-in allowance of the obsolete vessel; and
(2) decreased by the amount of loss recognized on the transfer.
(
| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 57307 | 46 App.:1160(e). | June 29, 1936, ch. 858, title V, §510(e), as added Aug. 4, 1939, ch. 417, §7, |
The words "for gain or loss upon a sale or exchange and for depreciation under the applicable Federal income-tax laws" and "or vessels exchanged for credit upon the acquisition of such new vessel" are omitted as unnecessary. In paragraph (1), the words "the difference between the cost of the new vessel and the trade-in allowance of the obsolete vessel" are substituted for "the amount of the cost of such vessel (other than the cost represented by such obsolete vessel or vessels)" for clarity.
§57308. Use of vessels at least 25 years old
An obsolete vessel acquired under this chapter that is or becomes at least 25 years old may not be used for commercial operation. However, the vessel may be used—
(1) during a period in which vessels may be requisitioned under
(2) except as otherwise provided in this subtitle, on trade routes serving only the foreign trade of the United States.
(
| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 57308 | 46 App.:1160(g). | June 29, 1936, ch. 858, title V, §510(g), as added Aug. 4, 1939, ch. 417, §7, |
The words "and vessels presently in the Secretary's laid-up fleet which are or become twenty-five years old or more" and "or any such vessel in the laid-up fleet" are omitted as obsolete. In paragraph (2), the words "for the employment of the Secretary's vessels in steamship lines" are omitted as unnecessary.