Private Law 84–361

the Secretary of Commerce is hereby authorized during a period of six months after the enactment of this Act, to sell the steamship La Guardia and the materials and equipment heretofore removed from the vessel and held in storage by the Maritime Administration, on an “as is, where is” basis to the Hawaiian Steamship Company, Limited, subject to the provisions of this Act and such terms and conditions not contrary hereto as the Secretary may prescribe. The sales price of the vessel (including all its furnishings, furniture, equipment, and spare parts whether held aboard or on shore), shall be $3,950,000. The sales price shall be subject to depreciation computed at. the rate of 5 per centum per annum for the period commencing with the date of enactment of this Act and ending with the date of execution of the contract of sale of the steamship La Guardia hereunder. Such sale shall be made upon a condition and agreement that the purchaser recondition the vessel satisfactory to the Secretary of Commerce in a domestic shipyard for passenger service.

The Secretary of Commerce, upon application by the Hawaiian Steamship Company, Limited, purchaser of the steamship La Guardia hereunder, upon determination that such action may be taken without prejudice to the Department of Commerce, Maritime Administration operations, is authorized to release to such purchaser such additional furnishings, furniture, and equipment now held by the Maritime Administration, as he may determine are necessary to equip the steamship La Guardia for the. passenger trade, with payment by the purchaser of an amount equal to 25 per centum of the estimated original acquisition cost of such furnishings, furniture, and equipment as determined by the Secretary of Commerce.

The, purchaser hereunder may be permitted, entirely at his own expense and risk, to inspect the steamship La Guardia and to move such vessel, upon conditions approved by the Secretary of Commerce, to drydock and inspect the underwater surfaces.

Such sale shall be on the basis of the payment of not less than 25 per centum of the sales price of the vessel at the date of the execution of such sales contract, with balance payable in approximately equal annual installments, the first of which shall be due and payable one year from the date of execution of the contract, over the remainder of the twenty-year economic life of the vessel, with interest on the unpaid balance at the rate of 3½ per centum per annum; with right of prepayment from time to time of any or all of the sales price remaining unpaid. The obligation of the purchaser with respect to payment of such unpaid balance, with interest, shall be secured by a first preferred mortgage on the vessel sold, which mortgage may provide that the sole recourse against the purchaser of the vessel under such mortgage, and any of the notes secured thereby shall be limited to repossession of the vessel by the United States, and the assignment of insurance claims, if the purchaser shall have complied with all provisions of the mortgage other than those relating to the payment of principal and interest when due, and the obligation of the purchaser shall be satisfied and discharged by the surrender of the vessel, and all right, title, and interest therein to the United States. Such vessel upon surrender shall be (1) free and clear of all liens and encumbrances whatsoever, except the lien of the above-mentioned preferred mortgage and any other mortgage held by the Secretary of Commerce pursuant to an assignment under title XI of the Merchant Marine Act, 1936, as amended, (2) in class, and (3) equipped and in as good order and condition, ordinary wear and tear excepted, as when reconditioned as a passenger vessel by the purchaser except that any deficiencies with respect to freedom from encumbrances, condition, and class, may, to the extent covered by valid policies of insurance, be satisfied by the assignment to the United States of claims of the purchaser under such policies of insurance.

Any contract of sale executed under authority of this Act shall provide that in the event the United States shall, through purchase or requisition, acquire ownership of such vessel, the owner shall be paid therefor the value thereof, but in no event shall such payment exceed the actual depreciated sales price under such contract (together with the actual depreciated cost of capital improvements thereon), or the fair and reasonable scrap value of such vessel, as determined by the Maritime Administrator, whichever is the greater; that such determination shall be final; that in computing the depreciated acquisition cost of such vessel, the depreciation shall be computed on the vessel on the schedule adopted or accepted by the Internal Revenue Service for income tax purposes as applicable to such vessel; that such vessel shall remain documented under the laws of the United States for a period of ten years after completion as a passenger vessel or as long as there remains due the United States any principal or interest on account of the sales price, whichever is the longer period; and that the foregoing provisions respecting the requisition or the acquisition of ownership by the United States and documentation shall run with the title to such vessel and be binding on all owners thereof.