[§ 601(a)] 46 U.S.C. 1171. 49 Stat. 2001. Applicants to be U.S. citizens. 75 Stat. 90. P.L. 87-45. 75 Stat. 91. Requirementsapproval of application. Statement under oath to accompany applicationcontents of. TITLE VI-OPERATING-DIFFERENTIAL SUBSIDY SEC. 601. (a) The Commission is authorized and directed to consider the application of any citizen of the United States for financial aid in the operation of a vessel or vessels, which are to be used in an essential service in the foreign commerce of the United States or in such service and in cruises authorized under section 613 of this title. No such application shall be approved by the Commission unless it determines that (1) the operation of such vessel or vessels in such service, route, or line is required to meet foreign-flag competition and to promote the foreign commerce of the United States except to the extent such vessels are to be operated on cruises authorized under section 613 of this title, and that such vessel or vessels were built in the United States, or have been documented under the laws of the United States not later than February 1, 1928, or actually ordered and under construction for the account of citizens of the United States prior to such date; (2) the applicant owns, or can and will build or purchase, a vessel or vessels of the size, type, speed, and number, and with the proper equipment required to enable him to operate and maintain the service, route, or line, in such manner as may be necessary to meet competitive conditions, and to promote foreign commerce; (3) the applicant possesses the ability, experience, financial resources, and other qualifications necessary to enable him to conduct the proposed operations of the vessel or vessels as to meet competitive conditions and promote foreign commerce; (4) the granting of the aid applied for is necessary to place the proposed operations of the vessel or vessels on a parity with those of foreign competitors, and is reasonably calculated to carry out effectively the purposes and policy of this Act. To the extent the application covers cruises, as authorized under section 613 of this title, the Board may make the portion of this last determination relating to parity on the basis that any foreign flag cruise from the United States competes with any American flag cruise from the United States. (b) Every application for an operating-differential subsidy under the provisions of this title shall be accompanied by statements disclosing the names of all persons having any pecuniary interest, direct or indirect, in such application, or in the ownership or use of the vessel or vessels, routes, or lines covered thereby, and the nature and extent of any such interest, together with such financial and other statements as may be required by the Commission. All such statements shall be under oath or affirmation and in such form as the Commission shall prescribe. Any person who, in an application for finan cial aid under this title or in any statement required to be filed therewith, willfully makes any untrue statement of a material fact, shall be guilty of a misdemeanor. SEC. 602. Except with respect to cruises authorized under section 613 of this title, no contract for an operating-differential subsidy shall be made by the Commission for the operation of a vessel or vessels to meet foreign competition, except direct foreign-flag competition, until and unless the Commission, after a full and complete investigation and hearing, shall determine that an operating subsidy is necessary to meet competition of foreign-flag ships. SEC. 603.18 (a) If the Commission approves the application, it may enter into a contract with the applicant for the payment of an operating-differential subsidy determined in accordance with the provisions of subsection (b) of this section, for the operation of such vessel or vessels in such service, route, or line, and in cruises authorized under section 613 of this title for a period not exceeding twenty years, and subject to such reasonable terms and conditions, consistent with this Act, as the Commission shall require to effectuate the purposes and policy of this Act, including a performance bond with approved sureties, if such bond is required by the Commission. differential (b) Such contract shall provide that the amount of the operating-differential subsidy for the operation of vessels Operating on a service, route, or line shall not exceed the excess subsidy. of the fair and reasonable cost of insurance, maintenance, repairs not compensated by insurance, wages and subsistence of officers and crews, and any other items of expense 18 See the proviso in the Supplemental Independent Offices Appropriation Act, 1949 (Public Law 862, 80th Cong.; 62 Stat. 1196) which reads as follows: "Provided, That nothing contained herein and in the Independent Offices Appropriation Act, 1948, shall be construed to affect the authority of the Commission pursuant to the provisions of section 603 (a) of the Merchant Marine Act, 1936, as amended, (1) to grant operating differential subsidies on a long-term basis and (2) to obligate the United States to make future payments in accordance with the terms of such operatingdifferential subsidy contracts, and all receipts which otherwise would be deposited to the credit of said fund shall be covered into the Treasury as miscellaneous receipts". See also similar provisions in the Independent Offices Appropriation Act, 1950 (Public Law 266, 81st Cong.; 63 Stat. 652), the General Appropriation Act, 1951 (Public Law 759, 81st Cong.; 64 Stat. 715), the Independent Offices Appropriation Act, 1952 (Public Law 137, 82d Cong.; 65 Stat. 284), the Independent Offices Appropriation Act, 1953 (Public Law 455, 82d Cong.; 66 Stat. 412), the Departments of State, Justice and Commerce Appropriation Act, 1954 (Public Law 195, 83d Cong.; 67 Stat. 379) and the Departments of State, Justice and Commerce and the United States Information Agency Appropriation Act, 1955 (Public Law 471, 83d Cong.; 68 Stat. 425). See also, under the subheading "Operating-differential subsidies", the Department of Commerce and Related Agencies Appropriation Act, 1956 (Public Law 121, 84th Cong.; 69 Stat. 229), 1957 (Public Law 604, 84th Cong.; 70 Stat. 317), 1958 (Public Law 85-52; 71 Stat. 70), 1959 (Public Law 85-469; 72 Stat. 226), 1960 (Public Law 86-88; 73 Stat. 201), 1961 (Public Law 86-451; 74 Stat. 96), 1962 (Public Law 87-125; 75 Stat. 268), 1963 (Public Law 87-843; 76 Stat. 1080), 1964 (Public Law 88-245; 77 Stat. 776), 1965 (Public Law 88-527; 78 Stat. 711), 1966 (Public Law 89-164). [§ 603(b)] Determination-amount of subsidy when payable-payments on account. 75 Stat. 513. Merchant Act, 1936, 49 Stat. 2002; 53 Stat. 1185. P.L. 87-243 Payment of wages a condition precedent. 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, in the operation under United States registry of the vessel or vessels covered by the contract, over the estimated fair and reasonable cost of the same items of expense (after deducting therefrom any estimated increase in such items necessitated by features incorporated pursuant to the provisions of section 501 (b)) if such vessel or vessels were operated under the registry of a foreign country whose vessels are substantial competitors of the vessel or vessels covered by the contract. For any period during which a vessel cruises as authorized by section 613 of this Act, operating-differential subsidy shall be computed as though the vessel were operating on the essential service to which the vessel is assigned: Provided, however, That if the cruise vessel calls at a port or ports outside of its assigned service, but which is served with passenger vessels (as defined in section 613 of this Act) by another subsidized operator at an operat ing-differential subsidy rate for wages lower than the cruise vessel has on its assigned essential service, the operating-differential subsidy rates for each of the subsídizable items for each day (a fraction of a day to count as a day) that the vessel stops at such port shall be at the respective rates applicable to the subsidized operator regularly serving the area. (c) The amount of such subsidy shall be determined and payable on the basis of a final accounting made as soon as practicable after the end of each year or other period fixed in the contract. The Commission may provide for in the contract, or otherwise approve, the payment from time to time during any such period of such amounts on account as it deems proper. Effective on and after July 1, 1962, such payments on account shall in no case exceed 90 per centum of the amount estimated to have accrued on account of such subsidy, except that, with respect to that part of the subsidy relating to any particular voyage, an additional 5 per centum may be paid to the contractor after such contractor's audit of the voyage account for such voyage has been completed and the Secretary of Commerce has verified the correctness of the same. Any such payments shall be made only after there has been furnished to the Commission such security as it deems to be reasonable and necessary to insure refund of any overpayment. No such operating-differential subsidy shall be paid until the contractor shall have furnished evidence satisfactory to the Commission that the wages prescribed in accordance with subsection 301 (a) of this Act have been paid to the ship's personnel. SEC. 604. If in the case of any particular foreign trade route the Commission shall find after consultation with the Secretary of State, that the subsidy provided for in this title is in any respect inadequate to offset the effect of governmental aid paid to foreign competitors, it may grant such additional subsidy as it determines to be necessary for that purpose: Provided, That no such additional subsidy shall be granted except upon an affirmative vote of four of the members of the Commission. U.S.C. Title 49 Stat. 2003. 73 Stat. 12. No subsidy 46, sec. 1175. P.L. 86-3. for coastwise, intercoastal trade. Exception -round voyages. subsidies. SEC. 605. (a) 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 inter- Reduction of coastal 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 Great Lakes or on the inland waterways of the United States shall be considered for the purposes of this Act to be operating in foreign trade. (b) No operating-differential subsidy shall be paid for the operation of a vessel that is more than twenty-five 19 years of age except one whose life expectancy has been determined as provided in section 607 (b) for a period in no case to exceed the life expectancy determined thereunder, unless the Commission 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. Great Lakes, inland-water ways excluded vessels over 25 years. 66 Stat. 764. 74 Stat. 216. P.L. 86-518. Report eliminated. P.L. 89-348. 79 Stat. 1310. Additional subsidy for. Exception (c) No contract shall be made under this title with respect to a vessel to be operated on a service, route, service, no or line served by citizens of the United States which would be in addition to the existing service, or services, unless the Commission shall determine after proper hearing of all parties that the service already provided by vessels of United States registry in such service, route, inadequacy or line is inadequate, and that in the accomplishment of the purposes and policy of this Act additional vessels should be operated thereon; and no contract shall be made with respect to a vessel operated or to be operated in a service, route, or line served by two or more citizens of the United States with vessels of United States registry, if the Commission shall determine the effect of such 19 See footnote 3, p. 24, supra. of existing service. No subsidy giv ing undue advantage betive services. tween compett [8 605(c)] Exception 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 competitive services, routes, or notice, hearing. lines, unless following public hearing, due notice of which shall be given to each line serving the route, the Commission shall find that it is necessary to enter into such contract in order to provide adequate service by vessels of United States registry. The Commission, in determining for the purposes of this section whether servConsiderations, ices 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 it may deem proper. determination of competitive services. 46 U.S.C. 1776, Basis decision Reduction of compensation. Changes, service, route, line. SEC. 606. Every contract for an operating-differential subsidy under this title shall provide (1) that the amount of the future payments to the contractor shall be subject to review and readjustment from time to time, but not more frequently than once a year, at the instance of the Commission or of the contractor. If any such readjustment cannot be reached by mutual agreement, the Commission, on its own motion or on the application of the contractor, shall, after a proper hearing, determine the facts and make such readjustment in the amount of such future payments as it may determine to be fair and reasonable and in the public interest. The testimony in every such proceeding shall be reduced to writing and filed in the office of the Commission. Its decision shall be based upon and governed by the changes which may have occurred since the date of the said contract, with respect to the items theretofore considered and on which such contract was based, and other conditions affecting shipping, and shall be promulgated in a formal order, which shall be accompanied by a report in writing in which the Commission shall state its findings of fact; (2) that the compensation to be paid under it shall be reduced, under such terms and in such amounts as the Commission shall determine, for any periods in which the vessel or vessels are laid up; (3) that if the Commission shall determine that a change in the service, route, or line, which is receiving an operating-differential subsidy under this title, is necessary in the accomplishment of the purposes of this Act, it may make such change upon such readjustment of payments to the contractor as shall be arrived at by the method prescribed in clause (1) of these conditions; (4) that if at any time the contractor receiving an operating-differential subsidy claims that he cannot maintain and operate his vessels on such service, route, or line, with a reasonable profit upon his investment, and applies to the Commission for a modifica |