[8 709(b)] Charters 46 U.S.C. 1200. 49 Stat. 2010. Bond of charterer. 46 U.S.C. 1201. 49 Stat. 2010. Usual conditions in bareboat charters applicable, lengths of terms of charters. 46 U.S.C. 1202. 49 Stat. 2010. 53 Stat. 1254. Charterer Repair of vessel. Inspection. Termination of charternational emergency. (b) Every charter shall contain a definition of the terms "net voyage profit" and "fair and reasonable overhead expenses", and "capital necessarily employed", as said terms are used in subsection (a) of this section, setting forth the formula for determining such profit and overhead expense and capital necessarily employed, which definitions shall have been previously approved by the Commission and published in the advertisement for bids for such charter. SEC. 710. Every charterer of the Commission's vessels shall be required to deposit with the Commission an undertaking with approved sureties as security for the faithful performance of all of the conditions of the charter including indemnity against liens on the chartered vessels, in such amount as the Commission shall require. SEC. 711. The charters to be made by the Commission pursuant to the provisions of this title shall demise the vessels to the charterer subject to all usual conditions contained in bare-boat charters, and until January 1, 1940, shall be for terms of three years or less as the Commission may decide: Provided, That after January 1, 1940, charters may be executed by the Commission for such terms as the experience gained by the Commission shall indicate are to be the best interests of the United States and the merchant marine. SEC. 712. Every charter shall provide (a) That the charter shall carry on the chartered vessels at his own expense, policies of insurance covering all marine and port risks, protection and indemnity risks, and all other hazards and liabilities, in such amounts, in such form, and in such insurance companies as the Commission shall require and approve, adequate to cover all damages claimed against and losses sustained by the chartered vessels arising during the life of the charter: Provided, That in accordance with existing law, some or all of such insurance risks may be underwritten by the Commission itself as in its discretion it may determine. (b) That the charterer shall at its own expense keep the chartered vessel in good state of repair and in efficient operating condition and shall at its own expense make any and all repairs as may be required by the Commission. (c) That the Commission shall have the right to inspect the vessel at any and all times to ascertain its condition. (d) That whenever the President shall proclaim that the security of the national defense makes it advisable, or during any national emergency declared by proclamation of the President, the Commission may terminate the charter without cost to the United States, upon such notice to the charterers as the President shall determine. SEC. 713. In the awarding of charters, the Commission shall take into consideration the charterer's financial resources and credit standing, practical experience in the operation of vessels, and any other factors that would be considered by a prudent businessman in entering into a transaction involving a large investment of his capital; and the Commission is directed to refrain from chartering its vessels to any person appearing to lack sufficient capital, credit, and experience to operate successfully the vessel over the period covered by the charter. SEC. 714.26 If the Commission shall find that any trade route (determined by the Commission to be an essential trade route as provided in section 211 of this Act) cannot be successfully developed and maintained and the Commission's replacement program cannot be achieved under private operation of such trade route by a citizen of the United States with vessels registered under the laws thereof, without further Government aid in addition to the financial aids authorized under titles V and VI of this Act, the Commission is authorized to have constructed, in private shipyards or in navy yards, the vessel or vessels of the types deemed necessary for such trade route, and to demise such new vessel or vessels on bare-boat charter to the American-flag operator established on such trade route, without advertisement or competition, upon an annual charter hire of not less than 4 per centum of the price (herein referred to as the "foreign cost") at which such vessel or vessels would be sold if constructed under title V plus 32 per centum of the depreciated foreign cost computed annually upon the basis of a twenty-five year life of the vessel. Such charter may contain an option to the charterer to purchase such vessel or vessels from the Commission within five years after delivery thereof under the charter, upon the same terms and conditions as are provided in title V for the purchase of new vessels from the Commission, except that (a) the purchase price shall be the foreign cost less depreciation to the date of purchase based upon a twenty-five year life; (b) the required cash payment payable at the time of such purchase shall be 25 per centum of the purchase price as so determined; (e) the charter may provide that all or any part of the charter hire paid in excess of the minimum charter hire provided for in this section may be credited against the cash payment payable at the time of such purchase; (d) the balance of the purchase price shall be paid within the years remaining of the twenty-five years after the date of delivery of the vessel under the charter and in approximately equal annual installments, except that the first of 28 See footnote 3, p. 24. supra. [714] Vessels. Operation and testing. 49 Stat. 20082011. 70 Stat. 531. said installments, which shall be payable upon the next ensuing anniversary date of such delivery under the charter, shall be a proportionate part of the annual installment, interest to be payable upon the unpaid balances of 32 per centum per annum from the date of purchase. Such charter shall provide for operation of the vessel exclusively in foreign trade, or on a round-the-world voyage, or on a round voyage from the west coast of the United States to a European port or ports which includes intercoastal ports of the United States, or a round voyage from the Atlantic coast of the United States to the Orient which includes intercoastal ports of the United States, or on 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 vessel is operated in the domestic trade on any of the above-enumerated services the charterer will pay annually to the Commission that proportion of one-twenty-fifth of the difference between the domestic and foreign cost of such vessel as the gross revenue derived from the domestic trade bears to the gross revenue derived from the entire voyages completed during the preceding year. SEC. 715. The Secretary of Commerce, for the purpose of practical development, trial, and testing, is authorized without regard to other provisions of this title or other laws relating to chartering and general agency opera46 U.S.C. 1205. tions, to operate, under general agency agreements or bareboat charter, vessels owned by the United States (including any national defense reserve vessel) which have been constructed, reconditioned, or remodeled for experimental or testing purposes, in the foreign or domestic trade of the United States or for use for the account of any agency or department of the United States, under such reasonable terms or conditions as the Secretary of Commerce determines to be necessary to carry out the objects of this Act: Provided, however, That not in excess of ten such vessels shall be operated and tested under the authority of this section in any one year. Bareboat charters entered into under this section shall be made at reasonable rates of charter and shall include such restrictions and conditions as the Secretary of Commerce determines to be necessary or appropriate to protect the public interest, including provisions for recapture of profits as provided for in section 709 of this Act, as amended. Charters and general agency agreements entered into under this section shall be reviewed annually for the purpose of determining whether conditions exist which would justify continuance of the charter or agreement. Those provisions of law prescribed or incorporated under the heading "VESSEL OPERATIONS REVOLVING FUND" in chapter VIII of the Third Supple 46 U.S.C. 1199. mental Appropriation Act, 1951 (Public Law 45, Eightysecond Congress; 65 Stat. 52, 59), which relate to vessel operating activities of the Secretary of Commerce and to employment of seamen through general agents, shall be applicable in connection with charters and agreements entered into under this section. [§ 801] 46 U.S.C. powered SEC. 716.27 There is hereby authorized to be appropriated to the Department of Commerce, Maritime Admin- Nuclearistration, and the Atomic Energy Commission, such sums ship. as may be necessary, to remain available until expended, Appropriatio for the construction, outfitting, and preparation for operation, including training of qualified personnel, of a nuclear-powered merchant ship capable of providing shipping services on routes essential for maintaining the flow of the foreign commerce of the United States. The Maritime Administration, and the Atomic Energy Commission, in carrying on activities and functions under this paragraph, may collaborate with and employ persons, firms, and corporations on a contract or fee basis for the performance of special services deemed necessary by such agencies in carrying on such activities and functions. The Administration may, for the same purposes, with the approval of the Secretary of Commerce and where appropriate the Atomic Energy Commission, avail itself of the use of licenses, information, services, facilities, offices, and employees of any executive department, independent establishment, or other agency of the Government, including any field service thereof. TITLE VIII-CONTRACT PROVISIONS SEC. 801. Every contract executed by the Commission under the provision of titles VI or VII of this Act shall contain provisions requiring (1) that the contractor and every affiliate, domestic agent, subsidiary, or holding company connected with, or directly or indirectly controlling or controlled by, the contractor, to keep its books, records, and accounts, relating to the maintenance, operation, and servicing of the vessels, services, routes, and lines covered by the contract, in such form and under such regulations as may be prescribed by the Commission: Provided, That the provisions of this paragraph shall not require the duplication of books, records, and accounts required to be kept in some other form by the Interstate Commerce Commission; (2) that the contractor and every affiliate, domestic agent, subsidiary, or holding company connected with, or directly or indirectly controlling or controlled by the contractor, to file, upon notice from the Commission, balance sheets, profit and 27 See also sec. 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) concerning indemnification and limitation of liability for the nuclear ship. 46 U.S.C. 1211. 49 Stat. 2011. tractor and Books of conaffiliates to be to Commission's regulaplication of by I.C.C. kept according tions-no du books required Contractor and financial state [§ 801] loss statements, and such other statements of financial operations, special report, memoranda of any facts and transactions, which in the opinion of the Commission affect the financial results in, the performance of, or transactions or operations under, such contract; (3) that the Commission shall be authorized to examine and audit the books, records, and accounts of all persons referred to in this section whenever it deem it necessary or desirmay able; and (4) that upon the willful failure or refusal of any person described in this section to comply with the contract provisions required by this section, the CommisRight of rescis- sion shall have the right to rescind the contract, and upon such rescission the United States shall be relieved of all further liability on such contract. Commission's right to examine and audit books. sion upon failure to comply. 46 U.S.C. 1212. Payment by U.S. acquisition, construction subsidized vessels-computation of value. 46 U.S.C. 1221. 49 Stat. 2012. 52 Stat. 963. Unlawful for contractor or charterer to employ persons in whom they have pecuniary interest to stevedore, re SEC. 802. Every contract executed by the Commission under authority of title V of this Act shall provide that— In the event the United States shall, through purchase or requisition, acquire ownership of the vessel or vessels on which a construction-differential subsidy was paid, the owner shall be paid therefor the value thereof, but in no event shall such payment exceed the actual depreciated construction cost thereof (together with the actual depreciated cost of capital improvements thereon, but excluding the cost of national-defense features) less the depreciated amount of construction-differential subsidy theretofore paid incident to the construction or reconditioning of such vessel or vessels, or the fair and reasonable scrap value of such vessel as determined by the Commission, whichever is the greater. Such determination shall be final. In computing the depreciated value of such vessel, depreciation shall be computed on each vessel on the schedule adopted by the Bureau of Internal Revenue for income-tax purposes. The foregoing provision respecting the requisition or the acquisition of ownership by the United States shall run with the title to such vessel or vessels and be binding on all owners thereof. any SEC. 803. It shall be unlawful for any contractor receiving an operating-differential subsidy under title VI or for charterer under title VII of this Act to employ any person or concern performing or supplying stevedoring, ship-repair, ship-chandler, towboat, or kindred services to supply such services to the operator's subsidized or chartered vessels if such contractor, or any sidized or char- subsidiary company, holding company, affiliate company, or associate company of such contractor, or any officer, director, or employee of such contractor, or any member of the immediate family of any such contractor, officer, director, or employee, or any member of the immediate family of any officer, director, or employee, or such subsidiary company, holding company, affiliate company, or pair, etc., sub tered vessels. |