Volume 79 · 1306
Public Law 89–346
To amend sections 9 and 37 of the Shipping’ Act, 1916, and subsection O of the Ship Mortgage Act, 1920.
Approved November 8, 1965
Statutory text
AN ACT
To amend sections 9 and 37 of the Shipping’ Act, 1916, and subsection O of the Ship Mortgage Act, 1920.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
That section 9 of the
Merchant vessels.
Mortgage bonds, sale and validity.
Shipping Act, 1916 (46 U.S.C. 808), is amended by inserting a new paragraph between the existing third and fourth paragraphs thereof as follows:
“The issuance, transfer, or assignment of a bond, note, or other evidence of indebtedness which is secured by a mortgage of a vessel to a trustee or by an assignment to a trustee of the owner’s right, title, or interest, in a vessel under construction, to a person not a citizen of the United States, without the approval of the Secretary of Commerce, is unlawful unless the trustee or a substitute trustee of such mortgage or assignment is approved by the Secretary of Commerce. The Secretary of Commerce shall grant his approval if such trustee or a substitute trustee is a bank or trust, company which (1) is organized as a corporation, and is doing business, under the laws of the United States or any State thereof, (2) is authorized under such laws to exercise corporate trust powers, (3) is a citizen of the United States, (4) is subject to supervision or examination by Federal or State authority, and (5) has a combined capital and surplus (as set forth in its most recent published report of condition) of at least $3,000,000. If such trustee or a substitute trustee at any time ceases to meet, the foregoing qualifications, the Secretary of Commerce shall disapprove such trustee, or substitute trustee, and after such disapproval the transfer or assignment of such bond, note, or other evidence of indebtedness to a person not a citizen of the United States, without the approval of the Secretary of Commerce, shall be unlawful. The trustee or substitute trustee approved by the Secretary of Commerce shall not operate the vessel under the mortgage or assignment without the approval of the Secretary of Commerce. If a bond, note, or other evidence of indebtedness which is secured by a mortgage of a vessel to a trustee or by an assignment to a trustee of the owner’s right, title, or interest in a vessel under construction, is issued, transferred, or assigned to a person not a citizen of the United States in violation of this section, the issuance, transfer, or assignment shall be void.”
Sec. 2.
Section 37 of the Shipping Act, 1916 (46 U.S.C. 835), is amended as follows:
By relettering the existing subsections (c), (d), and (e) as (d), (e), and (f) and by inserting a new subsection (c) as follows:
“(c) To issue, transfer, or assign a bond, note, or other evidence of indebtedness which is secured by a mortgage of a vessel to a trustee or by an assignment to a trustee of the owner’s right, title, or interest in a vessel under construction, or by a mortgage to a trustee on a shipyard, drydock, or ship-building or ship-repairing plant or facilities, to a person not a citizen of the United States, unless the trustee or a substitute trustee of such mortgage or assignment is approved by the Secretary of Commerce: Provided, however, That the Secretary of Commerce shall grant his approval if such trustee or a substitute trustee is a bank or trust company which (1) is organized as a corporation, and is doing business, under the laws of the United States or any State thereof, (2) is authorized under such laws to exercise corporate trust powers, (3) is a citizen of the United States, (4) is subject to supervision or examination by Federal or State authority, and (5) has a combined capital and surplus (as set forth in its most recent published report of condition) of at least $3,000,000; or for the trustee or substitute trustee approved by the Secretary of Commerce to operate said vessel under the mortgage or assignment: Provided further, That if such trustee or a substitute trustee at any time ceases to meet the foregoing qualifications, the Secretary of Commerce shall disapprove such trustee or substitute trustee, and after such disapproval the transfer or assignment of such bond, note, or other evidence of indebtedness to a person not a citizen of the United States, without the approval of the Secretary of Commerce, shall be unlawful; or”.
By inserting a new paragraph between the existing second and third paragraphs thereof as follows:
“If a bond, note, or other evidence of indebtedness which is secured by a mortgage of a vessel to a trustee or by an assignment to a trustee of the owner’s right, title, or interest in a vessel under construction, or by a mortgage to a trustee on a shipyard, dry dock or ship-building or ship-repairing plant or facilities, is issued, transferred, or assigned to a person not. a citizen of the United States in violation of subsection c of this section, the issuance, transfer or assignment shall be void.”
Sec. 3.
Subsection O of the Ship Mortgage Act, 1920 (46 U.S.C. 961), is amended by relettering the existing paragraph (e) as paragraph (f) and by inserting anew paragraph (e) as follows:
“(e) No bond, note, or other evidence of indebtedness which is secured by a mortgage of a vessel to a trustee may be issued, transferred, or assigned to a person not a citizen of the United States, without the approval of the Secretary of Commerce, unless the trustee or substitute trustee of such mortgage is approved by the Secretary of Commerce. The Secretary of Commerce shall grant his approval if such trustee or substitute trustee is a bank or trust company which (1) is organized as a corporation, and is doing business, under the laws of the United States or any State thereof, (2) is authorized under such laws to exercise corporate trust powers, (3) is a citizen of the United States, (4) is subject to supervision or examination by Federal or State authority, and (5) has a combined capital and surplus (as set forth in its most recent published report of condition) of at least $3,000,000. If such trustee or a substitute trustee at any time ceases to meet the foregoing qualifications, the Secretary of Commerce shall disapprove such trustee or substitute trustee, and after such disapproval the transfer or assignment of such bond, note, or other evidence of indebtedness to a person not a citizen of the United States, without the approval of the Secretary of Commerce, shall be unlawful. If a bond, note, or other evidence of indebtedness which is secured by a mortgage of a vessel to a trustee is issued, transferred, or assigned to a person not a citizen of the United States in violation of this paragraph, the issuance, transfer, or assignment shall be void.”
Sec. 4.
Bonds, notes, and other evidence of indebtedness which are
Validity of bonds held by noncitizens.
secured by a mortgage of a vessel to a trustee or by an assignment to a trustee of the owner’s right, title, or interest in a vessel under construction which have heretofore been issued, transferred, or assigned, or are issued, transferred, or assigned within one year after the enactment of this Act, to a person not a citizen of the United States without I he approval of the Secretary of Commerce are valid in the hands of such person and the validity and preferred status of such mortgage and the validity and lawfulness of such issuance, transfer, or assignment shall not be affected by such issuance, transfer, or assignment if the trustee or a substitute trustee is approved by the Secretary of Commerce within one year after enactment of this Act, under the standards for trustees specified in the amendments made by this Act to sections 9 and 37 of the Shipping Act, 1916, and to subsection O of the Ship Mortgage Act, 1920.
Nothing in this section shall be construed to alter retroactively any
Pending litigation.
rights which were the subject matter of litigation pending on the date of enactment of this Act.
Approved November 8, 1965.