Public Law 83–574

That section 510 of the Merchant Marine Act, 1936, as amended, is amended by adding at the end thereof the following new subsection:

“(h)“(h)

The Secretary of Commerce is authorized until July 1, 1958

Acquisition for national defense reserve.

(subject to the provisions of this section as herein amended), to acquire a tanker or tankers, determined by him to be desirable for inclusion in the national defense reserve, in exchange for an allowance of credit to be applied upon the purchase price of a new tanker or

Limitations.

tankers: Provided, That each of the tankers to be traded in (1) is not less than one thousand three hundred and fifty gross tons; (2) is not less than ten years old; (3) is owned by a citizen or citizens of the United States; (4) and preference shall be given to those tankers which have been documented under the laws of the United States for not less than three years immediately preceding; and (5) is in class with respect to hull and machinery satisfactory to the Secretary of Commerce on the date of its physical delivery to the United States and shall be considered an ‘obsolete vessel’ for purposes of this

“New vessel.”

section: And provided further, That only a tanker which is constructed after the date of enactment of this subsection and documented under the laws of the United States shall be considered a ‘new vessel’ for purposes of this section.

“The Secretary of Commerce is authorized to pay the cost of national

Payment.

defense features incorporated in any such new tanker. In the event that the United States acquires ownership of such new tanker, the price paid therefor shall not include any amount for national defense features paid for by the United States. The foregoing provisions shall run with the title to each new tanker and be binding on all owners thereof.

“The allowance of credit for a traded-in tanker which was sold

Credit allowance.

60 Stat. 41.

50 USC app. 1735 note.

50 USC app. 1742.

under the Merchant Ship Sales Act of 1946, as amended, or which was eligible for a price adjustment under section 9 of such Act, shall be: (1) in the case of tankers sold under such Act, the depreciated net sales price paid to the United States, and (2) in the case of tankers which were eligible for price adjustment under such Act, the statutory sales price of such tanker as of March 8, 1946, depreciated: plus the depreciated cost of any additions or betterments to the tanker which were capitalized by the owner and allowed for Federal income tax purposes. Such allowance shall be determined as of the date the

Depreciation.

owner contracts for the construction of a new tanker. In each case, depreciation shall be computed on the basis of the life of the tanker adopted or accepted by the Internal Revenue Service for determining depreciation for income-tax purposes to the date the owner contracts for the construction of a new tanker.

“The allowance of credit for any other traded-in tanker shall be determined in accordance with the provisions of subsection (d) of this section.

“In no event shall the amount of credit allowed under this subsection

Restriction.

or subsection (d) for a traded-in tanker exceed the price paid by the owner for such tanker, plus the cost of any additions or betterments to the tanker capitalized by such owner and allowed for income-tax purposes.

“If an owner uses any tanker traded in pursuant to this section subsequent to the date of the contract for construction of a new tanker, the allowance determined shall be reduced by an amount equal to depreciation for the period of such use and computed in accordance with the schedule adopted or accepted by the Internal Revenue Service. Title to the traded-in tanker shall in all instances vest in the

Title.

United States, and the allowance of credit shall be applied at the time of physical delivery of such tanker to the United States, which shall be no later than ninety days after delivery of the new tanker. The traded-in tanker shall thereupon be placed in the national defense reserve subject to the provisions of section 11 of the Merchant Ship Sales Act of 1946, as amended.”

50 USC app. 1744.

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