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‘‘(3) SERVICE OF PROCESS.—Service of process shall be made on the 
appropriate United States Attorney, the Attorney General, and the Sec-
retary, in the manner provided by the Federal Rules of Civil Procedure 
(28 App. U.S.C.). Notice of the action shall be given to all interested per-
sons as ordered by the court. 
‘‘(4) AS BETWEEN PRIVATE PARTIES.—The action shall proceed and 
be determined according to the principles of law and the rules of practice 
applicable in like cases between private parties. 
‘‘§ 56306. Use and transfer of vessels 
‘‘(a) IN GENERAL.—The Secretary of Transportation may repair, recondi-
tion, reconstruct, operate, or charter for operation, a vessel acquired under 
this chapter. 
‘‘(b) TRANSFER TO OTHER AGENCIES.—The Secretary may transfer the 
possession or control of a vessel acquired under this chapter to another depart-
ment or agency of the United States Government on terms and conditions ap-
proved by the President. The department or agency shall promptly reimburse 
the Secretary for expenditures for just compensation, purchase price, charter 
hire, repairs, reconditioning, or reconstruction. 
‘‘§ 56307. Return of vessels 
‘‘When a vessel requisitioned for use but not ownership is returned to the 
owner, the Secretary of Transportation shall— 
‘‘(1) return the vessel in a condition at least as good as when taken, 
less ordinary wear and tear; or 
‘‘(2) pay the owner an amount sufficient to recondition the vessel to 
that condition, less ordinary wear and tear. 
‘‘CHAPTER 565—ESSENTIAL VESSELS AFFECTED BY 
NEUTRALITY ACT 
‘‘Sec. 
‘‘56501.
Definition. 
‘‘56502.
Adjusting obligations and arranging maintenance. 
‘‘56503.
Types of adjustments and arrangements. 
‘‘56504.
Changes in adjustments and arrangements. 
‘‘§ 56501. Definition 
‘‘In this chapter, the term ‘essential vessel’ means a vessel that is— 
‘‘(1)(A) security for a mortgage indebtedness to the United States Gov-
ernment; or 
‘‘(B) constructed under this subtitle or required by a contract under 
this subtitle to be operated on a certain essential foreign trade route; and 
‘‘(2) necessary in the interests of commerce and national defense to be 
maintained in condition for prompt use. 
‘‘§ 56502. Adjusting obligations and arranging maintenance 
‘‘(a) GENERAL AUTHORITY.—On written application, the Secretary of 
Transportation may adjust obligations and arrange for maintenance of an es-
202 
sential vessel as provided in this chapter if the Secretary determines, after 
any investigation or proceeding the Secretary considers desirable, that— 
‘‘(1) the operation of the vessel in the service, route, or line to which 
it is assigned under this subtitle, or in which it otherwise would be oper-
ated, is not— 
‘‘(A) lawful under the Neutrality Act of 1939 (22 U.S.C. 441 et 
seq.) or a proclamation issued under that Act; or 
‘‘(B) compatible with maintaining the availability of the vessel 
for national defense and commerce; 
‘‘(2) it is not feasible under existing law to employ the vessel in any 
other service or operation in foreign or domestic trade (except temporary 
or emergency operation under section 56503(b)(5) of this title); and 
‘‘(3) the applicant, because of the restrictions of the Neutrality Act of 
1939 (22 U.S.C. 441 et seq.) or the withdrawal of vessels for national 
defense under paragraph (1), is not earning or will not earn a reason-
able return on the capital necessarily employed in its business. 
‘‘(b) EFFECTIVE PERIOD.—Adjustments and arrangements under subsection 
(a) shall continue in effect only as long as the circumstances described in sub-
section (a) continue to exist. 
‘‘§ 56503. Types of adjustments and arrangements 
‘‘(a) SUSPENSION REQUIREMENTS.—An adjustment or arrangement under 
this chapter shall include suspension of— 
‘‘(1) the requirement to operate the vessel in foreign trade under the 
applicable operating-differential or construction-differential subsidy con-
tract or mortgage or other agreement; and 
‘‘(2) the right to operating-differential subsidy for the vessel. 
‘‘(b) DISCRETIONARY ADJUSTMENTS AND ARRANGEMENTS.—To the extent 
the Secretary of Transportation considers appropriate to carry out the pur-
poses of this subtitle, an adjustment or arrangement under this chapter may 
include any of the following: 
‘‘(1) Lay-up of the vessel by the owner or in the custody of the Sec-
retary, with payment or reimbursement by the Secretary of necessary 
and proper expenses (including reasonable overhead and insurance) or 
a fixed periodic allowance instead of payment or reimbursement. 
‘‘(2) Postponement, for not more than the total period of the lay-up, 
of the maturity date of each installment of the principal of obligations 
to the United States Government for the vessel (regardless of whether the 
maturity date is during a lay-up period), or rearrangement of those ma-
turities. 
‘‘(3) Postponement or cancellation of interest accruing on the obliga-
tions during a lay-up period.
203 
‘‘(4) Extension, for not more than the total period of the lay-up, of 
the 20-year life limitation for the vessel and other limitations and provi-
sions of this subtitle based on a 20-year life. 
‘‘(5) Provision for temporary or emergency employment of the vessel 
(instead of lay-up) as may be practicable, with such arrangements for 
management of the vessel, payment of expenses, and application of the 
proceeds of the employment, as the Secretary may approve, with any pe-
riod of operation being included as part of the lay-up period. 
‘‘(6) Payment to the Secretary, on termination of the arrangements 
with the applicant, of the applicant’s net profits (earned while the ar-
rangements were in effect) in excess of 10 percent a year on the capital 
necessarily employed in the applicant’s business, as reimbursement for 
obligations postponed or canceled and expenses incurred or paid by the 
Secretary under this section. 
‘‘(c) LAID-UP VESSELS.—Under subsection (b)(6), capital of the applicant 
represented by a vessel of the applicant laid-up or operated under this section 
shall be included in capital necessarily employed in the applicant’s business. 
The Secretary may require a vessel laid-up or operated under this section to 
be security for reimbursement. 
‘‘§ 56504. Changes in adjustments and arrangements 
‘‘The Secretary of Transportation may change an adjustment or arrange-
ment made under this chapter as the Secretary considers necessary to carry 
out this chapter. 
‘‘PART F—GOVERNMENT-OWNED MERCHANT VESSELS 
‘‘CHAPTER 571—GENERAL AUTHORITY 
‘‘Sec. 
‘‘57101.
Placement of vessels in National Defense Reserve Fleet. 
‘‘57102.
Disposition of vessels not worth preserving. 
‘‘57103.
Sale of obsolete vessels in National Defense Reserve Fleet. 
‘‘57104.
Acquisition of vessels from sale of obsolete vessels. 
‘‘57105.
Acquisition of vessels for essential services, routes, or lines. 
‘‘57106.
Maintenance, improvement, and operation of vessels. 
‘‘57107.
Vessels for other agencies. 
‘‘57108.
Consideration of ballast and equipment in determining selling price. 
‘‘57109.
Operation of vessels purchased, chartered, or leased from Secretary of Transportation. 
‘‘§ 57101. Placement of vessels in National Defense Reserve 
Fleet 
‘‘(a) IN GENERAL.—Any vessel acquired by the Maritime Administration 
shall be placed in the National Defense Reserve Fleet maintained under sec-
tion 11 of the Merchant Ship Sales Act of 1946 (50 App. U.S.C. 1744). 
‘‘(b) REMOVAL FROM FLEET.—A vessel placed in the Fleet under subsection 
(a) may not be traded out or sold from the Fleet, except as provided in section 
57102, 57103, or 57104 or chapter 533, 537, 573, or 575 of this title.
204 
‘‘§ 57102. Disposition of vessels not worth preserving 
‘‘(a) IN GENERAL.—If the Secretary of Transportation determines that a 
vessel owned by the Maritime Administration is of insufficient value for com-
mercial or military operation to warrant its further preservation, the Sec-
retary may scrap the vessel or sell the vessel for cash. 
‘‘(b) SELLING PROCEDURE.—The sale of a vessel under subsection (a) shall 
be made on the basis of competitive sealed bids, after an appraisal and due 
advertisement. The purchaser does not have to be a citizen of the United 
States. The purchaser shall provide a surety bond, with a surety approved 
by the Secretary, to ensure that the vessel will not be operated in the foreign 
trade of the United States at any time within 10 years after the sale, in com-
petition with a vessel owned by a citizen of the United States and documented 
under the laws of the United States. 
‘‘§ 57103. Sale of obsolete vessels in National Defense Reserve 
Fleet 
‘‘(a) IN GENERAL.—The Secretary of Transportation may convey the right, 
title, and interest of the United States Government in any vessel of the Na-
tional Defense Reserve Fleet that has been identified by the Secretary as an 
obsolete vessel of insufficient value to warrant its further preservation, if the 
recipient— 
‘‘(1) is a non-profit organization, a State, or a municipal corporation 
or political subdivision of a State; 
‘‘(2) agrees not to use, or allow others to use, the vessel for commercial 
transportation purposes; 
‘‘(3) agrees to make the vessel available to the Government whenever 
the Secretary indicates that it is needed by the Government; 
‘‘(4) agrees to hold the Government harmless for any claims arising 
from exposure to asbestos, polychlorinated biphenyls, lead paint, or other 
hazardous substances after conveyance of the vessel, except for claims 
arising from use of the vessel by the Government; 
‘‘(5) has a conveyance plan and a business plan that describes the in-
tended use of the vessel, each of which has been submitted to and ap-
proved by the Secretary; 
‘‘(6) has provided proof, as determined by the Secretary, of resources 
sufficient to accomplish the transfer, necessary repairs and modifica-
tions, and initiation of the intended use of the vessel; and 
‘‘(7) agrees that when the recipient no longer requires the vessel for 
use as described in the business plan required under paragraph (5)— 
‘‘(A) the recipient will, at the discretion of the Secretary, re-
convey the vessel to the Government in good condition except for or-
dinary wear and tear; or