§1175. Vessels excluded from subsidy

(a) Vessels engaged in coastwise or intercoastal trade; vessels on inland waterways

No operating-differential subsidy shall be paid for the operation of any vessel on a voyage on which it engages in coastwise or intercoastal trade: Provided, however, That such subsidy may be paid on a round-the-world voyage or a round voyage from the west coast of the United States to a European port or ports or a round voyage from the Atlantic coast to the Orient which includes intercoastal ports of the United States or a voyage in foreign trade on which the vessel may stop at the State of Hawaii, or an island possession or island territory of the United States, and if the subsidized vessel earns any gross revenue on the carriage of mail, passengers, or cargo by reason of such coastal or intercoastal trade the subsidy payment for the entire voyage shall be reduced by an amount which bears the same ratio to the subsidy otherwise payable as such gross revenue bears to the gross revenue derived from the entire voyage. No vessel operating on the inland waterways of the United States shall be considered for the purposes of this chapter to be operating in foreign trade.

(b) Vessels more than 25 years old

No operating-differential subsidy shall be paid for the operation of a vessel after the calendar year the vessel becomes 25 years of age, unless the Secretary of Transportation has determined, before October 8, 1996, that it is in the public interest to grant such financial aid for the operation of such vessel.

(c) Vessels to be operated in an essential service served by citizens of United States

No contract shall be made under this subchapter with respect to a vessel to be operated in an essential service served by citizens of the United States which would be in addition to the existing service, or services, unless the Secretary of Transportation shall determine after proper hearing of all parties that the service already provided by vessels of United States registry is inadequate, and that in the accomplishment of the purposes and policy of this chapter additional vessels should be operated thereon; and no contract shall be made with respect to a vessel operated or to be operated in an essential service served by two or more citizens of the United States with vessels of United States registry, if the Secretary of Transportation shall determine the effect of such a contract would be to give undue advantage or be unduly prejudicial, as between citizens of the United States, in the operation of vessels in such essential service unless following public hearing, due notice of which shall be given to each operator serving such essential service, the Secretary of Transportation shall find that it is necessary to enter into such contract in order to provide adequate service by vessels of United States registry. The Secretary of Transportation in determining for the purposes of this section whether services are competitive, shall take into consideration the type, size, and speed of the vessels employed, whether passenger or cargo, or combination passenger and cargo, vessels, the ports or ranges between which they run, the character of cargo carried, and such other facts as he may deem proper.

(June 29, 1936, ch. 858, title VI, §605, 49 Stat. 2003 ; July 17, 1952, ch. 939, §15, 66 Stat. 764 ; Pub. L. 86–3, §18(b)(2), Mar. 18, 1959, 73 Stat. 12 ; Pub. L. 86–518, §1, June 12, 1960, 74 Stat. 216 ; Pub. L. 89–348, §1(9), Nov. 8, 1965, 79 Stat. 1310 ; Pub. L. 91–469, §§18, 19, 26(b), 35(a), (j), Oct. 21, 1970, 84 Stat. 1025 , 1026, 1034-1036; Pub. L. 97–31, §12(96), Aug. 6, 1981, 95 Stat. 162 ; Pub. L. 104–239, §3(a), Oct. 8, 1996, 110 Stat. 3126 .)

Amendments

1996-Subsec. (b). Pub. L. 104–239 amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: "No operating-differential subsidy shall be paid for the operation of a vessel that is more than twenty-five years of age unless the Secretary of Transportation finds that it is to the public interest to grant such financial aid for the operation of such vessel and enters a formal order thereon."

1981-Subsecs. (b), (c). Pub. L. 97–31 substituted "Secretary of Transportation" for "Secretary of Commerce" wherever appearing.

1970-Subsec. (a). Pub. L. 91–469, §26(b), struck out "on the Great Lakes or" after "No vessel operating" in last sentence.

Subsec. (b). Pub. L. 91–469, §18, substituted "unless the Secretary of Commerce" for "unless the Commission" and deleted preceding such words "except one whose life expectancy has been determined as provided in section 1177(b) of this Appendix for a period in no case to exceed the life expectancy determined thereunder,".

Subsec. (c). Pub. L. 91–469, §§19, 35(a), (j), substituted "in an essential service" for "on a service, route, or line", "an essential service" for "a service, route, or line", and "such essential service" for "competitive services, routes, or lines," and struck out "in such service, route, or line" before "is inadequate" in first sentence; substituted "Secretary of Commerce" for "Commission" in four places; and substituted "he" for "it" before "may deem" in last sentence, respectively.

1965-Subsec. (b). Pub. L. 89–348 struck out provisions which required an annual report covering each case and the reasons therefor in which an exception is made to the prohibition against payment of an operating-differential subsidy for the operation of a vessel beyond its economic life.

1960-Subsec. (b). Pub. L. 86–518 substituted "twenty-five years" for "twenty years".

1959-Subsec. (a). Pub. L. 86–3 included stops at the State of Hawaii.

1952-Subsec. (b). Act July 17, 1952, permitted the recomputation of the life-expectancy of a reconstructed or reconditioned vessel in use under an operating differential-subsidy contract, and provided for recomputation of depreciation changes.

Effective Date of 1960 Amendment

Amendment by Pub. L. 86–518 applicable only to vessels delivered by the shipbuilder on or after Jan. 1, 1946, and with respect to such vessels shall become effective on Jan. 1, 1960, and with respect to vessels delivered by the shipbuilder before Jan. 1, 1946, the provisions of this chapter existing immediately before June 12, 1960, shall continue in effect, see section 8(a) of Pub. L. 86–518, set out as a note under section 1125 of this Appendix.

Revision of Contract, Commitments To Insure Mortgages, Mortgages, and Mortgage Insurance Contracts Entered Into Prior to June 12, 1960

For provisions authorizing revision, see section 8(c) of Pub. L. 86–518, set out as a note under section 1125 of this Appendix.

Commercial Expectancy or Period of Depreciation of Tankers and Other Liquid Bulk Carriers

Nothing in any amendment made by Pub. L. 86–518 to operate or be interpreted to change from 20 to 25 years the provisions of this chapter relating to the commercial expectancy or period of depreciation of any tanker or other liquid bulk carrier, see section 9 of Pub. L. 86–518, set out as a note under section 1125 of this Appendix.

Section Referred to in Other Sections

This section is referred to in sections 1183, 1185a, 1213 of this Appendix.