An Act to amend the Merchant Marine Act, 1936
PL 91-469 (H.R.15424), enacted 10/21/1970

1018 
PUBLIC LAW 91-469-OCT. 21, 1970 
[84 STAT. 
October 21, 1970 
[H. R. 15424] 
Public Law 91-469 
AN ACT 
To amend the Merchant Marine Act, 1936. 
Merchant 
Marine Act of 
1970. 
49 Stat. 1985. 
Appropriations. 
81 Stat. 193. 
Supra, 
49 Stat. 1989. 
Studies, 
records. 
Bulk cargo 
carrying services. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That section 101 of 
the Merchant Marine Act, 1936 (46 U.S.C. 1101), is amended as 
follows: 
(1) by striking out of subdivision (a) the words "on all routes". 
(2) by striking out the final "and" in subdivision (c) and 
changing the period at the end of subdivision (d) to a comma 
and inserting "and (e) supplemented by efficient facilities for 
shipbuilding and ship repair." 
SEC. 2. Section 209 (b) of the Merchant Marine Act, 1936 (46 U.S.C. 
1119(b)), is amended by striking out the period at the end thereof 
and inserting a colon and the following: ^'Provided, hoioever^ That 
the Congress hereby finds and declares that the national policy set forth 
in section 101 of this Act requires that there should be authorized 
and appropriated for fiscal years 1971 through 1980 such sums as may 
be necessary to construct 300 ships of such sizes, types and designs 
as the Secretary of Commerce may consider best suited to carry out 
the purposes and policy of this Act." 
SEC. 3. Section 210 of the Merchant Marine Act, 1936 (46 U.S.C. 
1120), is amended as follows: 
(1) by striking out of the second paragraph the words "on all 
routes". 
(2) by inserting a new fifth paragraph as follows: 
"Fourth, the creation and maintenance of efficient shipbuilding and 
repair capacity in the United States with adequate numbers of skilled 
[personnel to provide an adequate mobilization base." 
SEC. 4. Section 211 of the Merchant Marine Act, 1936 (46 U.S.C. 
1121), is amended as follows: 
(1) By striking the final "and" in subsection (a) and inserting a 
comma in lieu thereof and changing the semicolon to a comma and 
inserting the words "and to other national requirements;". 
(2) By redesignating subsections (b), (c), (d), (e), (f), (g), (h), 
and (i), as subsections (c), (d), (e), (f), (g), (h), (i), and (j), 
respectively. 
(3) By inserting a new subsection (b) to read as follows: 
"(b) The bulk cargo carrying services that should, for the promo-
tion, development, expansion, and maintenance of the foreign com-
merce of the United States and for the national defense or other 
national requirements be provided by United States-flag vessels 
whether or not operating on particular services, routes, or lines;" 
(4) Redesignated subsection (c) is amended by inserting after 
the word "speed," the words "method of propulsion,". 
(5) Redesignated subsection (c) is amended by inserting at the 
end thereof, immediately before the semicolon, a comma and the words 
"or which should be employed to provide the bulk cargo carrying 
services necessary to the promotion, maintenance, and expansion of 
the foreign commerce of the United States and its national defense 
or other national requirements whether or not such vessels operate 
on a particular service, route, or line". 
SEC. 5. Redesignated subsection (e) of section 211 of the Merchant 
Marine Act, 1936, is amended as follows: 
(a) By striking out the words "in particular services, routes, and 
lines". 
84 STAT. ] 
PUBLIC LAW 91-469-OCT. 21, 1970 
1019 
(b) By striking out the words "service, route, or line" and inserting 
in lieu thereof the word "vessel''. 
SEC. 6. Section 501 of the Merchant Marine Act, 1936 (46 U.S.C. diSer"enua"s°uTsidy. 
1151), is amended as follows: 
49 stat. 199s; 
(1) Subsection (a) is amended as follows: 
ee stat. 76o. 
(a) By striking out the words "Any citizen of the United States" 
and inserting in lieu thereof the words "Any proposed ship purchaser 
who is a citizen of the United States or any shipyard of the United 
States". 
(b) By inserting in subdivision (2) after the designation (2) the 
words "if the applicant is the proposed ship purchaser" and a comma. 
(c) By striking out of subdivision (3) the words "to replace worn-
out or obsolete tonnage with new and modern ships, or otherwise". 
(d) By the insertion of a new sentence at the end of subdivision 
(3) to read as follows: "The Secretary of Commerce may give pre-
ferred consideration to applications that will tend to reduce construc-
tion-differential subsidies and that propose the construction of ships 
of high transport capability and productivity." 
(2) Subsection (c) is amended by inserting in the first sentence after 
the words "Any citizen of the United States" the words "or any ship-
yard of the United States". 
SEC. 7. Section 502 of the Merchant Marine Act, 1936 (46 U.S.C. 
1152), is amended as follows: 
(1) Subsection (a) is amended as follows: 
(a) By striking out of the first sentence the words ", on behalf of the 
applicant,". 
(b) By striking out of the second sentence the words "applicant, the 
Commission" and inserting in lieu thereof the words "proposed ship 
purchaser, the Secretary of Commerce". 
(c) By inserting after the second sentence the following new sen-
tence : "Notwithstanding the provisions of the first sentence of section 
505 of this Act with respect to competitive bidding, the Secretary of 
P°^^> P- 1022. 
Commerce is authorized, at any time prior to June 30, 1973, to accept 
a price for the construction of the ship which has been negotiated 
between a shipyard and a proposed ship purchaser if (i) the negotiated 
price will result in a construction-differential subsidy that is equal to or 
less than 45 per centum in fiscal 1971,43 per centum in fiscal 1972, and 
41 per centum in fiscal 1973; (ii) the proposed ship purchaser and the 
shipyard submit backup cost details and evidence that the negotiated 
price is fair and reasonable; (iii) the Secretary of Commerce finds that 
the negotiated price is fair and reasonable; and (iv) the shipyard abmr"^*^^ ^'^^'^' 
agrees that the Comptroller General of the United States or any of his ^ * ^'^' 
duly authorized representatives shall, until the expiration of three 
years after final payment have access to and the right to examine any 
pertinent books, documents, papers, and records of the shipyard or any 
of its subcontractors related to the negotiation or performance of any 
contract or subcontract negotiated under this subsection and will 
include in its subcontracts a provision to that effect." 
(d) By striking out of the last sentence the words "with the appli-
cant for the purchase by him" and inserting in lieu thereof the words 
"for the sale" immediately prior to the words "of such vessel" and 
by inserting after the words "upon its completion," the words "to the 
applicant if he is the proposed ship purchaser and if not to another 
citizen of the United States, if the Secretary of Commerce determines 
that such citizen possesses the ability, experience, financial resources, 
and other qualifications necessary to enable it to operate and maintain 
the vessel". 
1020 
PUBLIC LAW 91-469-OCT. 21, 1970 
[84 STAT. 
76 Stat. 1200; 
83 Stat. 44. 
46 u s e 1152. 
Foreign cost, 
annual computa-
tion, publication. 
Post, p. 1022. 
Construction-
differential, 
limitation. 
52 Stat. 956. 
46 u s e 1152. 
(2) Subsection (b) is amended as follows: 
(a) By striking out of the first sentence the word "may" and 
inserting in lieu thereof the word "shall". 
(b) By striking out of the first sentence the words "the construc-
tion of the proposed vessel", and inserting in lieu thereof the words 
"the construction of that type vessel". 
(c) By inserting after the first sentence of subsection (b) the fol-
lowing : "The Secretary of Commerce shall recompute such estimated 
foreign cost annually unless, in the opinion of the Secretary, there 
has been a significant change in shipbuilding market conditions. The 
Secretary shall publish notice of his intention to compute or recom-
pute such estimated foreign cost and shall give interested persons, 
including but not limited to shipyards and shipowners and associa-
tions thereof, an opportunity to file written statements. The Secretary's 
consideration shall include, but not be limited to, all relevant matter 
so filed, and his determination shall include or be accompanied by a 
concise explanation of the basis of his determination." 
(d) By striking out of the next to the last sentence the words "in 
any case exceeds the foregoing applicable percentage of such cost" 
and inserting in lieu thereof the words "exceeds the following per-
centages: in fiscal year 19Y1, 45 per centum; in fiscal year 1972, 43 
per centum; in fiscal year 1973, 41 per centum; in fiscal year 1974, 
39 per centum; in fiscal year 1975, 37 per centum; in fiscal year 1976 
and thereafter, 35 per centum,". 
(e) By inserting in the next to the last sentence after the words 
"the Secretary may negotiate" the words "with any bidder, whether 
or not such bidder is the lowest bidder" and a comma; by striking 
out the words "on behalf of the applicant" and inserting in lieu thereof 
the words "with such bidder, notwithstanding the provisions of the 
first sentence of section 505 with respect to competitive bidding,"; and 
by inserting before the words "or less" at the end of the sentence a 
comma and the words "or as close thereto as possible,". 
(f) By inserting after the next to the last sentence the following new 
sentence: "Commencing with the fiscal year 1972 no construction con-
tract requiring a construction-differential in excess of the applicable 
percentages set forth in the preceding sentence shall be entered into 
unless the Secretary shall have given due consideration to the likeli-
hood that the above percentages will not be attained and that the 
commitment to the ship construction program may not be continued. 
If the Secretary of Commerce enters into such a contract, he shall 
notify the Commission on American Shipbuilding of such contract 
and the Commission on American Shipbuilding shall, not later than 
six months after such notification, submit its report on the American 
sliipbuilding industry." 
(3) Subsection (c) is amended as follows: 
(a) By inserting after the third word the words "of sale". 
(b) By striking out the word "applicant" wherever it appears, and 
inserting in lieu thereof the word "purchaser". 
(c) By striking out of the third sentence the words "at the rate 
of 314 per centum per annum". 
(d) By striking out of the third sentence the words "applicant's 
purchase" and inserting in lieu thereof the words "purchaser's portion 
of the". 
(e) By striking out of the third sentence the word "applicant's" and 
inserting in lieu thereof the word "purchaser's". 
(f) By inserting in the third sentence, immediately before the 
period at the end thereof, the words "at a rate not less than (i) a rate 
determined by the Secretary of the Treasury, taking into considera-
84 STAT. ] 
PUBLIC LAW 91-469-OCT. 21, 1970 
1021 
tion the current average market yield on outstanding marketable 
obligations of the United States with remaining periods to maturity 
comparable to the average maturities of such loans, adjusted to the 
nearest one-eighth of 1 per centum, plus (ii) an allowance adecjuate 
in the judgment of the Secretary of Commerce to cover administra-
tive costs". 
(g) By striking out of the last sentence the words "of 3I/2 per 
centum per annunr' and inserting in lieu thereof the words "per annum 
applicable to payments that are chargeable to the purchaser's portion 
of the price of the vessel". 
(4) Subsection (e) is amended as follows: 
49 stat. 1997. 
(a) By striking out of the first sentence the words "the applicant" 
"
^
^ "^^ ^^^^' 
and inserting in lieu thereof the words "a citizen of the United States". 
(b) By striking out of the third sentence the words "an applicant" 
and inserting in lieu thereof the words "a citizen of the United States". 
(5) Subsection (f) is amended as follows: 
70 stat. es?; 
(a) By striking out the words "title VII and section 509, and the ^^4rusc ^ngi 
Federal Maritime Board, in connection with ship construction, recon- 1159. 
struction, or reconditioning under title V (except section 509)," in the 
second sentence and insertmg in lieu thereof "titles V and VII,". 
'^^ "^^ ^ ^^i* 
(b) By striking out the words "in such manner as it may be deter-
mined" in the second sentence and inserting in lieu thereof "in such 
manner as he may determine". 
(c) By striking out the word "applicant" wherever it appears and 
inserting in lieu thereof the word "purchaser." 
(d) By striking out of the fourth sentence of the second paragraph 
the words "on any" and inserting in lieu thereof the words "in an". 
(e) By striking out of the fourth sentence of the second paragraph 
the words "of the operator". 
(6) Subsection (g) is amended as follows: 
52 stat. 957; 
(a) By striking out of the first sentence the word "agreement" ^
"
^ ^*'**' ^^^' 
and inserting in lieu thereof the word "application". 
(b) By striking out of the first sentence the words "an applicant 
under this title" and inserting in lieu thereof the words "any citizen 
of the United States". 
SEC. 8. Section 603 of the Merchant Marine Act, 1936 (46 U.S.C. 
1153), is amended as follows: 
ee stat. 761. 
(1) By striking out the word "applicant" wherever it appears and 
inserting in lieu thereof the word "purchaser". 
(2) By striking out of the first sentence the words "purchase be-
tween the applicant and the Commission" and inserting in lieu thereof 
the words "sale between the purchaser and the Secretary of 
Commerce". 
SEC. 9. Section 504 of the Merchant Marine Act, 1936 (46 U.S.C. 
1154), is amended as follows: 
52 stat. 958. 
(1) By striking out the first three sentences. 
(2) By inserting, after the section number, a new sentence to read 
as follows: 
"If a qualified purchaser under the terms of this title desires to 
purchase a vessel to be constructed in accordance with an application 
for construction-differential subsidy under this title, the Secretary 
of Commerce may, in lieu of contracting to pay the entire cost of the 
vessel under section 502, contract to pay only construction-differential 
^"'^' P* ^O^^" 
subsidy and the cost of national defense features to the shipyard con-
structing such vessel. The construction-differential subsidy and pay-
ments for the cost of national defense features shall be based upon 
the lowest responsible domestic bid unless the vessel is constructed at 
a negotiated price as provided by section 502(a) or under a contract 
negotiated by the Secretary of Commerce as provided in section 
1022 
PUBLIC LAW 91-469-OCT. 21, 1970 
[84 STAT. 
Ante, p. 1020. 
502(b) ill whicli event the construction-differential subsidy and pay-
ments for the cost of national defense features shall be based upon 
such negotiated price." 
SEC. 10. Section 505 of the Merchant Marine Act, 1936 (46 U.S.C. 
49 Stat. 1998. 
1155), is amended as follows: 
(1) Subsection (a) is amended as follows: 
(a) By striking out the designation "(a)". 
(b) By striking out of the first sentence the words "within the con-
tinental limits". 
(c) By striking out of the first sentence the words "the applicant 
to reject, and in". 
Use o
f American 
(d) By inserting immediately before the period at the end of the 
materials, waiver, Q^^^^^ 
seutcuce the foUowiug: "; Provided, however, That with 
respect to other than major components of the hull, superstructure, 
and any material used in the construction thereof, (1) if the Secretary 
of Commerce determines that the requirements of this sentence will 
unreasonably delay completion of any vessel beyond its contract 
delivery date, and (2) if such determination includes or is accom-
panied by a concise explanation of the basis therefor, then the Secre-
tary of Commerce may waive such requirements to the extent necessary 
to prevent such delay." 
(e) By striking out the last sentence and inserting in lieu thereof 
46 use 1151. 
the following sentence: "For the purposes of this title V, the term 
"Shipyard of 
'sMpyard of the United States' means shipyards within any of the 
*^^ ^•^•' 
United States and the Commonwealth of Puerto Kico." 
(2) By striking out subsections (b), (c), (d), and (e). 
si^ltaueeo?' 
SEC. 11. Section 509 of the Merchant Marine Act, 1936 is amended 
46 use 1159 
as follows: 
and note. 
^g^^ gy striking out the word "Commission" wherever it 
appears and inserting in lieu thereof the words "Secretary of 
Commerce". 
(b) By striking out the word "applicant" wherever it appears 
and inserting in lieu thereof the word "purchaser". 
(c) By striking out the words "at 3i/^ per centum per annum," 
and inserting in lieu thereof, the words "at a rate not less than (i) 
a rate determined by the Secretary of the Treasury, taking into 
consideration the current average market yield on outstanding 
marketable obligations of the United States with remaining 
periods to maturity comparable to the average maturities of such 
loans, adjusted to the nearest one-eighth of 1 per centum, plus (ii) 
an allowance adequate in the judgment of the Secretary of Com-
merce to cover administrative costs, the balance of such purchase 
price being". 
SEC. 12. (a) Section 510(a) of the Merchant Marine Act, 1936 (46 
53 Stat. 1183. 
U.S.C. 1160(a)), is amended as follows: 
(1) By striking out of paragraph (^1) all of subdivision (B) other 
than the final word "and", and inserting in lieu thereof the words "in 
the judgment of the Secretary of Commerce, should, by reason of age, 
obsolescence, or otherwise, be replaced in the public interest". 
(2) By striking out of subdivision (C) of paragraph (1) the words 
"is owned" and inserting in lieu thereof the words "has been owned". 
(3) By striking out of subdivision (C) of paragraph (1) the words 
"and has been owned by such citizen or citizens". 
(4) By striking out of paragraph (1) the proviso in its entirety, 
(b) Section 510(b) of the Merchant Marine Act, 1936 (46 U.S.C. 
75 Stat. 833. 
1160(b)), is amended by striking out of the next to the last sentence 
the words "capital reserve fund" and inserting in lieu thereof the 
words "capital construction fund". 
SEC. 13. Section 510(i) of the Merchant Marine Act, 1936 (46 
79'stlt'.^98o!'' 
U.S.C. 1160(i)), is amended as follows: 
84 STAT. ] 
PUBLIC LAW 91-469-OCT. 21, 1970 
1023 
(1) By striking out of the first paragraph the year "1970" and 
inserting in lieu thereof the year "1972". 
(2) By striking out of the first paragraph the words "which were 
constructed or contracted for by the United States shipyards before 
September 3, 1945," and inserting in lieu thereof the words "which 
were constructed in the United States,". 
(3) By striking out of the first paragraph the words "war-built 
vessels (which are defined for purposes of this subsection as". 
(4) By striking out of the first paragraph the words "which were 
constructed or contracted for by the United States shipyards during 
the period beginning September 3, 1939, and ending September 2, 
1945)". 
SEC. 14. Section 601(a) of the Merchant Marine Act, 1936 • (46 
U.S.C. 1171 (a)), is amended as follows: 
75^^a!^90^°°^' 
(1) By inserting after the first sentence a new sentence to read as 
^ ° ' 
follows: "In this title VI the term 'essential service' means the opera- 
"Essential 
tion of a vessel on a service, route, or line described in section 211(a) ^^49^stat'. i989. 
or in bulk cargo carrying service described in section 211(b).". 
Ante, p. 1018. 
(2) By striking out of subdivision (1) the words "such service, 
route, or line" and inserting in lieu thereof the words "an essential 
service". 
(3) By striking from subdivision (2) the words "and maintain the 
service, route, or line" and inserting in lieu thereof the words "in an 
essential service". 
SEC. 15. Section 603 (a) of the Merchant Marine Act, 1936 (46 U.S.C. 
1173(a)), is amended by striking out the words "such service, route, 
or line," and inserting in lieu thereof the words "an essential service". 
SEC. 16. Section 603 (b) of the Merchant Marine Act, 1936 (46 U.S.C. 
1173 (b)), is amended as follows: 
(1) By striking out the words "Such contract shall provide that 
the amount of the operating-differential subsidy for the operation of 
vessels on a service, route, or line shall not exceed the excess of" and 
inserting in lieu thereof the words "Such contract shall provide, 
except as the parties should agree upon a lesser amount, that the 
amount of the operating-differential subsidy for the operation of 
vessels in an essential service shall equal the excess of the subsidizable 
wage costs of the United States officers and crews,". 
(2) By inserting in the first sentence after the words "cost of insur-
ance," the words "subsistence of officers and crews on passenger 
vessels, as defined in section 613 of this Act,". 
7 5 stat. s 9. 
(3) By striking out of the first sentence the words "maintenance, 
^^ "^^ ^^*^* 
repairs not compensated by insurance," and inserting in lieu thereof 
"maintenance, and repairs not compensated by insurance". 
(4) By striking out of the first sentence the words "wages and sub-
sistence of officers and crews, and any other items of expense in which 
the Commission shall find and determine that the applicant is at a 
substantial disadvantage in competition with vessels of the foreign 
country hereinafter referred to," and inserting in lieu thereof "in-
curred". 
(5) By inserting before the period at the end of the first sentence 
a colon and a proviso to read as follows: '•'•Provided^ however^ That the 
Secretary of Commerce may, with respect to any vessel in an essential 
bulk cargo carrying service as described in section 211(b), pay, in 
lieu of the operating-differential subsidy provided by this subsec-
tion (b), such sums as he shall determine to be necessary to make the 
cost of operating such vessel competitive with the cost of operating 
similar vessels under the registry of a foreign country". 
1024 
PUBLIC LAW 91-469-OCT. 21, 1970 
[84 STAT. 
49 Stat. 2002; 
75 Stat. 513. 
"Collective 
bargaining 
75 Stat. 89. 
46 u s e 1183. 
"Basd period 
costs." 
Post, p. 1025. 
"Base period. 
"Subsidizable 
wage costs of 
U.S. officers 
and crews." 
SEC. 17. Section 603(c) of the Merchant Marine Act, 1936 (46 
U.S.C. 1173 (c)), is amended £is follows: 
(1) By redesignating the subsection as subsection (f) and inserting 
new subsections (c), (d),and (e) as follows: 
"(c)(1) When used in this section— 
"(A) The term 'collective bargaining costs' means the annual cost, 
calculated on the basis of the per diem rate of expense as of any date, 
of all items of expense required of the applicant through collective 
bargaining or other agreement, covering the employment of United 
States officers and crew of a vessel, including payments required by 
law to assure old-age pensions, unemployment benefits, or similar 
benefits and taxes or other governmental assessments on crew pay-
rolls, but excluding subsistence of officers and crews on vessels other 
than passenger vessels as defined in section 613 of this Act and costs 
relating to: 
"(i) the officers or members of the crew that the Secretary of 
Commerce has found, prior to the award of a contract for the con-
struction or reconstruction of a vessel, to be unnecessary for the 
efficient and economical operation of such vessel: Provided, That 
the Secretary of Commerce shall afford representatives of the 
collective-bargaining unit or units responsible for the manning of 
the vessel an opportunity to comment on such finding prior to the 
effective date of such finding: And provided further, That in deter-
mining whether officers or members of the crew are necessary for 
the efficient and economical operation of such vessel, the Secretary 
of Commerce shall give due consideration to, but shall not be 
bound by, wage and manning scales and working conditions 
required by a bona fide collective-bargaining agreement, or 
"(ii) those officers or members of the crew that the Secretary 
of Commerce has found, prior to ninety days following the date 
of enactment of this subsection, to be unnecessary for the efficient 
and economical operation of the vessel. 
"(B) The term 'base period costs' means for the base period begin-
ning July 1,1970, and ending June 30,1971, the collective-bargaining 
costs as of January 1, 1971, less all other items of cost that have been 
disallowed by the Secretary of Commerce prior to ninety days follow-
ing the date of enactment of this subsection, and not alreadjr excluded 
from collective-bargaining costs under subparagraph (A)(i) or (A) 
(ii) of this subsection. In any subsequent base period the term 'base 
period costs' means the average of the subsidizable wage cost of United 
States officers and crews for the preceding annual period ending 
June 30 (calculated without regard to the limitation of the last sen-
tence of paragraph (D) of this subdivision but increased or decreased 
by the increase or decrease in the index described in subdivision (3) 
of this subsection from January 1 of such annual period to January 1 
of the base period), and the collective-bargaining costs as of January 
1 of the base period: Provided, That in no event shall the base period 
cost be such that the difference between the base period cost and the 
collective-bargaining costs as of January 1 of any base period subse-
quent to the first base period exceeds five-fourths of 1 per centum of the 
collective-bargaining costs as of such January 1 multiplied by the 
number of years that have elapsed since the most recent base period. 
"(C) The term 'base period' means any annual period beginning 
July 1, and ending June 30 with respect to which a base period cost 
is established. 
"(D) The term 'subsidizable wage costs of United States officers and 
crews' in any period other than a base period means the most recent 
base period costs Increased or decreased by the increase or decrease 
84 STAT. ] 
PUBLIC LAW 91-469-OCT. 21, 1970 
1025 
from January 1 of such base period to January 1 of such period in the 
index described in subdivision (3) hereof, and with respect to a base 
period means the base period cost. The subsidizable wage costs of 
United States officers and crews in any period other than a base 
period shall not be less than 90 per centum of the collective-bargaining 
costs as of January 1 of such period nor greater than 110 per centum 
of such collective-bargaining costs. 
"(2) The Secretary of G)mmerce shall detei-mine the collective-
bargaining costs on ships in subsidized operation as of January 1,1971, 
and as of each January 1 thereafter, and shall as of intervals of not 
less than two years nor more than four years, establish a new base 
period cost, except that the Secretary shall not establish a new base 
period unless he announces his intention to do so prior to the December 
31 that would be included in the new base period. 
"(3) The Bureau of Labor Statistics shall compile the index referred 
wage change 
to in subdivision (1). Such index shall consist of the average annual "''^*''" 
change in wages and benefits placed into effect for employees covered 
by collective-bargaining agreements with equal weight to be given to 
changes affecting employees in the transportation industry (exclud-
ing the offshore maritime industry) and to changes affecting employees 
in private nonagricultural industries other than transportation. Such 
index shall be based on the materials regularly used by the Bureau 
of Labor Statistics in compiling its regularly published statistical 
series on wage and benefit changes arrived at through collective bar-
gaining. Such materials shall remain confidential ajid not he subject 
to disclosure. 
"(d) Each foreign wage cost computation shall be made after an 
Foreign wage 
opportunity is given to the contractor to submit in writing and in '=°'"P"*^*'°"-
timely fashion all relevant data within his possession. In making the 
computation, the Secretary shall consider all relevant matter so pre-
sented and all foreign wage cost data collected at his request or on his 
behalf. Such foreign cost data shall be made available to an interested 
contractor, unless the Secretary shall find that disclosure of the data 
will prevent him from obtaining such data in the future. In deter-
mining foreign manning for purposes of this section, the foreign man-
ning determined for any ship type with respect to any base period 
shall not be redetermined until the beginning of a new base period. 
"(e) The wage subsidy shall be payable monthly for the voyages 
completed during the month, upon the contractor's certification that 
the subsidized vessels were in authorized service during the month. 
The Secretary of Commerce shall prescribe procedures for the calcu-
lation and payment of subsidy on items of expense which are included 
in 'collective-bargaining costs' but are not included in the daily rate 
because they are unpredictably timed." 
(2) Eedesignated subsection (f) is amended to read as follows: 
"(f) Ninety percent of the amount of the insurance and maintenance 
and repair and subsistence of officers and crews subsidy shall be 
pay^able monthly for the voyages completed during the month on the 
basis of the subsidy estimated to have accrued with respect to such 
voyages. Any such payment shall be made only after there has been 
furnished to the Secretary of Commerce such security as he deems to 
be reasonable and necessary to assure refund of any overpayment. 
The contractor and the Secretary of Commerce shall audit the voyage 
accounts as soon as practicable after such payment. The remaining 10 
percent of such subsidy shall be payable after such audit." 
SEC. 18. Section 605(b) is amended by striking out the words 
66 stat. 764; 
"except one whose life exj^ectancy has been determined as provided 
^\Tvsc\\7'5. 
in section 607(b) for a period in no case to exceed the life expectancy 
Post, p. 1027. 
1026 
PUBLIC LAW 91-469-OCT. 21, 1970 
[84 STAT. 
49 Stat. 2003. 
70 Stat. 148; 
75 Stat. 9 1 . 
46 u s e 1131, 
1132. 
49 Stat. 2005; 
52 Stat. 960. 
determined thereunder, unless the Commission" and inserting in lieu 
thereof ", unless the Secretary of Commerce". 
SEO. 19. Section 605 (c) of the Merchant Marine Act, 1936 (46 U.S.C. 
1175 (c)), is amended as follows: 
(1) By striking out of the first sentence the words "on a service, 
route, or line" and inserting in lieu thereof the words "in an essential 
service". 
(2) By striking out of the first sentence the words "in such service, 
route, or line". 
(3) By striking out of the first sentence the words "a service, route, 
or line" and inserting in lieu thereof the words "an essential service". 
(4) By striking out of the first sentence the words "competitive 
services, routes, or lines," and inserting in lieu thereof the words "such 
essential service". 
(5) By striking in the first sentence the words "line serving the 
route," and inserting in lieu thereof the words "operator serving such 
essential service,". 
SEC. 20. Section 606 of the Merchant Marine Act, 1936 (46 U.S.C. 
1176), is amended as follows: 
(1) By striking out of subdivision (3) the words "the service, route, 
or line" and inserting in lieu thereof the words "an essential service". 
(2) By striking out of subdivision (4) the words "on such service, 
route, or line" and inserting in lieu thereof the words, "in such an 
essential service^". 
(3) By striking out of subdivision (4) the words "service, route, 
or line", wherever they appear, and inserting in lieu thereof the words 
"essential service". 
(4) By striking out subdivision (5) in its entirety. 
(5) By redesignating subdivision (6) as subdivision (5). 
(6) By striking out of redesignated subdivision (5) the words "the 
vessel's services, routes, and lines" and inserting in lieu thereof the 
words "essential services". 
(7) By striking out of redesignated subdivision (5) the word 
"cruises" and inserting in lieu thereof the word "services". 
(8) By striking out of redesignated subdivision (5) the words "thfe 
most" and inserting in lieu thereof the word "an". 
(9) By striking out of redesignated subdivision (5) the words 
"but with due regard to the wage and manning scales and working 
conditions prescribed by the Commission as provided in title III". 
(10) By redesignating subdivision (7) as subdivision (6). 
(11) By striking out of redesignated subdivision (6) the words 
"the operator shall use" and inserting in lieu thereof the words "an 
operator who receives subsidy with resj)eot to subsistence of officers 
and crews shall use as such subsistence items"; by striking out "505 
(a)" and inserting in lieu thereof "505"; by striking out of that 
subdivision the words "and equipment"; by striking out of that 
subdivision the words "and the operator shall perform repairs to 
subsidized vessels within the continental limits of the United States," 
and inserting in lieu thereof the words "and an operator who receives 
subsidy with respect to repairs shall perform such repairs within any 
of the United States or the Commonwealth of Puerto Rico,"; and by 
striking the last sentence thereof. 
SEC. 21. (a) Section 607 of the Merchant Marine Act, 1936 (46 
U.S.C. 1177), is amended to read as follows: 
"SEC. 607. (a) Agreement Rules. 
"Any citizen of the United States owning or leasing one or more 
eligible vessels (as defined in subsection ( k ) ( l ) ) may enter into an 
84 STAT. ] 
PUBLIC LAW 91-469-OCT. 21, 1970 
1027 
agreement with the Secretary of Commerce under, and as provided 
in, this section to establish a capital construction fund (hereinafter st?ucao?fun'd. 
in this section referred to as the 'fund') with respect to any or all 
of such vessels. Any agreement entered into under this section shall be 
for the purpose of providing replacement vessels, additional vessels, 
or reconstructed vessels, built in the United States and documented 
under the laws of the United States for operation in the United 
States foreign, Great Lakes, or noncontiguous domestic trade or 
in the fisheries of the United States and shall provide for the deposit 
in the fund of the amounts agreed upon as necessary or appropriate 
to provide for qualified withdrawals under subsection (f). The 
deposits in the fund, and all withdrawals from the fund, whether 
qualified or nonqualified, shall be subject to such conditions and 
requirements as the Secretary of Commerce may by regulations pre-
scribe or are set forth in such agreement; except that the Secretary 
of Commerce may not require any person to deposit in the fund for 
any taxable year more than 50 percent of that portion of such per-
son's taxable income for such year (computed in the manner pro-
vided in subsection (b) (1) (A)) which is attributable to the operation 
of the agreement vessels. 
"(b) Ceiling on Deposits. 
"(1) The amount deposited under subsection (a) in the fund for 
any taxable year shall not exceed the sum of: 
"(A) that portion of the taxable income of the owner or lessee 
for such year (computed as provided in chapter 1 of the Internal 
Revenue Code of 1954 but without regard to the carryback of 
26 use i et seq. 
any net operating loss or net capital loss and without regard to 
this section) which is attributable to the operation of the agree-
ment vessels in the foreign or domestic commerce of the United 
States or in the fisheries of the United States, 
"(B) the amount allowable as a deduction under section 167 of 
the Internal Revenue Code of 1954 for such year with respect to 83^st^t!'625^ 649 
the agreement vessels, 
26 use leV. 
"(C) if the transaction is not taken into account for purposes 
of subparagraph (A), the net proceeds (as defined in joint regu-
lations) from (i) the sale or other disposition of any agreement 
vessel, or (ii) insurance or indemnity attributable to any agree-
ment vessel, and 
"(D) the receipts from the investment or reinvestment of 
amounts held in such fund, 
"(2) In the case of a lessee, the maximum amount which may be 
deposited with respect to an agreement vessel by reason of paragraph 
(1) (B) for any period shall be reduced by any amount which, under 
an agreement entered into under this section, the owner is required or 
permitted to deposit for such period with respect to such vessel by 
reason of paragraph (1) (B). 
"(8) For purposes of paragraph (1), the term 'agreement vessel' „^l'^f^*!'"^'^* 
includes barges and containers which are part of the complement of "'^"°° 
such vessel and which are provided for in the agreement. 
"(c) Requirements as to Investments. 
"Amounts in any fund established under this section shall be kept 
in the depository or depositories specified in the agreement and shall 
be subject to such trustee and other fiduciary requirements as may be 
specified by the Secretary of Commerce. They may be invested only in 
interest-bearing securities approved by the Secretary of Commerce; 
except that, if the Secretary of Commerce consents thereto, an agreed 
percentage (not in excess of 60 percent) of the assets of the fund may 
be invested in the stock of domestic corporations. Such stock must be 
vessel.' 
26 u s e 1 
et seq. 
1028 
PUBLIC LAW 91-469-OCT. 21, 1970 
[84 STAT. 
currently fully listed and registered on an exchange registered with 
the Securities and Exchange Commission as a national securities 
exchange, and must be stock which would be acquired by prudent men 
of discretion and intelligence in such matters who are seeking a reason-
able income and the preservation of their capital. If at any time the 
fair market value of the stock in the fund is more than the agreed per-
centage of the assets in the fund, any subsequent investment of amounts 
deposited in the fund, and any subsequent withdrawal from the fund, 
shall be made in such a way as to tend to restore the fund to a situation 
in which the fair market value of the stock does not exceed such agreed 
percentage. For purposes of this subsection, if the common stock of 
a corporation meets the requirements of this subsection and if the pre-
ferred stock of such corporation would meet such requirements but for 
the fact that it cannot be listed and registered as required because it is 
nonvoting stock, such preferred stock shall be treated as meeting the 
requirements of this subsection. 
"(d) Nontaxability for Deposits. 
"(1) For purposes of the Internal Revenue Code of 1954— 
"(A) taxable income (determined without regard to this sec-
tion) for the taxable year shall be reduced by an amount equal 
to the amount deposited for the taxable year out of amounts 
referred to in subsection (b)(1)(A), 
"(B) gain from a transaction referred to in subsection (b) (1) 
(C) shall not be taken into account if an amount equal to the 
net proceeds (as defined in joint regulations) from such trans-
action is deposited in the fund, 
"(C) the earnings (including gains and losses) from the 
investment and reinvestment of amounts held in the fund shall 
not be taken into account, 
"(D) the earnings and profits of any corporation (within the 
26'usc^ 316^* 
meaning of section 316 of such Code) shall be determined without 
regard to this section, and 
^^A Stat. 179. 
(E) in applying the tax imposed by section 531 of such Code 
(relating to the accumulated earnings tax), amounts while held 
in the fund shall not be taken into account. 
"(2) Paragraph (1) shall apply with respect to any amount only 
if such amount is deposited in the fund pursuant to the agreement 
and not later than the time provided in joint regulations. 
"(e) Establishment of Accounts. 
"For purposes of this section— 
"(1) Within the fund established pursuant to this section three 
accounts shall be maintained: 
" (A) the capital account, 
"(B) the capital gain account, and 
"(C) the ordinary income account. 
" (2) The capital account shall consist of— 
"(A) amounts referred to in subsection (b)(1)(B), 
"(B) amounts referred to in subsection (b) (1) (C) other than 
that portion thereof which represents gain not taken into 
account by reason of subsection (d)(1)(B), 
"(C) 85 percent of any dividend received by the fund with 
ri.f. respect to which theperson maintaining the fund would (but for 
subsection (d) (1) (C)) be allowed a deduction under section 243 
ll^sc24i. 
of the Internal Revenue Code of 1954, and 
"(D) interest income exempt from taxation under section 103 
26 use 103. 
of such Code. 
"(3) The capital gain account shall consist of— 
84 STAT. ] 
PUBLIC LAW 91-469-OCT. 21, 1970 
1029 
"(A) amounts representing capital gains on assets held for 
more than 6 months and referred to in subsection (b)(1)(C) or 
(b)(1)(D) reduced by 
"(B) amounts representing capital losses on assets held in the 
fund for more than 6 months. 
" (4) The ordinary income account shall consist of— 
"(A) amounts referred to in subsection (b)(1)(A), 
"(B) (i) amounts representing capital gains on assets held for 
6 months or less and referred to in subsection (b)(1)(C) or (b) 
(1)(D), reduced by— 
"(ii) amounts representmg capital losses on assets held m 
the fund for 6 months or less, 
"(C) interest (not including any tax-exempt interest referred 
to in paragraph (2) (D)) and other ordinary income (not includ-
ing any dividend referred to in subparagraph (E)) received on 
assets held in the fund, 
"(D) ordinary income from a transaction described in subsec-
tion (b) (1) (C), and 
"(E) 15 percent of any dividend referred to in paragraph 
(2) (C). 
"(5) Except on termination of a fund, capital losses referred to m 
paragraph (3) (B) or in paragraph (4) (B) (ii) shall be allowed 
only as an offset to gains referred to in paragraph (3) (A) or (4) (B) 
(i), respectively. 
"(f) Purposes of Qualified Withdrawals. 
"(1) A qualified withdrawal from the fund is one made in accord-
ance with the terms of the agreement but only if it is for: 
"(A) the acquisition, construction, or reconstruction of a 
qualified vessel, 
"(B) the acquisition, construction, or reconstruction of barges 
and containers which are part of the complement of a qualified 
vessel, or 
"(C) the payment of the principal on indebtedness incurred in 
connection with the acquisition, construction or reconstruction 
of a qualified vessel or a barge or container which is part of the 
complement of a qualified vessel. 
Except to the extent provided in regulations prescribed by the Secre-
tary of Commerce, suoparagraph (B),^nd so much of subparagraph 
(C) as relates only to barges and containers, shall apply only with 
respect to barges and containers constructed in the United States. 
"(2) Under joint regulations, if the Secretary of Commerce deter-
mines that any substantial obligation under any agreement is not 
being fulfilled, he may, after notice and opportunity for hearing to the 
person maintaining the fund, treat the entire fund or any portion 
thereof as an amount withdrawn from the fund in a nonqualified 
withdrawal. 
"(g) Tax Treatment of Qualified Withdrawals. 
" (1) Any qualified withdrawal from a fimd shall be treated— 
"(A) first as made out of the capital account, 
"(B) second as made out of the capital gain account, and 
"(C) third as made out of the ordinary income account. 
"(2) If any portion of a qualified withdrawal for a vessel, barge, 
or container is made out of the ordinary income account, the basis of 
such vessel, barge, or container shall be reduced by an amount equal 
to such portion. 
"(3) If any portion of a qualified withdrawal for a vessel, barge, 
or container is made out of the capital gain account, the basis of such 
1030 
PUBLIC L
A
W 91-469-OCT. 21, 1970 
[84 STAT, 
vessel, barge, or container shall be reduced by an amount equal to— 
"(A) Five-eighths of such portion, in the case of a corpora-
tion (other than an electing small business corporation, as 
2
6 use m 1
°
* 
defined in section 1371 of the Internal Revenue Code of 1954), or 
"(B) One-half of such portion, in the case of any other person. 
" (4) If any portion of a qualified withdrawal to pay the principal 
on any indebtedness is made out of the ordinary income account or 
the capital gain account, then an amount equal to the aggregate reduc-
tion which would be required by paragraphs (2) and (3) if this were 
a qualified withdrawal for a purpose described in such paragraphs 
shall be applied, in the order provided in joint regulations, to reduce 
the basis of vessels, barges, and containers owned by the person main-
taining the fund. Any amount of a withdrawal remaining after the 
application of the preceding sentence shall be treated as a nonqualified 
withdrawal. 
"(5) If any property the basis of which was reduced under para-
graph (2), (3), or (4) IS disposed of, any gain realized on such disposi-
tion, to the extent it does not exceed the aggregate reduction in the 
basis of such property under such paragraphs, shall be treated as an 
amount referred to in subsection (h) (3) (A) which was withdrawn on 
the date of such disposition. Subject to such conditions and require-
ments as may be provided in joint regulations, the preceding sentence 
shall not apply to a disposition where there is a redeposit in an amount 
determined under joint regulations which will, insofar as practicable, 
restore the fund to the position it was in before the withdrawal. 
" (h) Tax Treatment of Nonc[ualified Withdrawals. 
"(1) Except as provided in subsection (i), any withdrawal from a 
fund which is not a qualified withdrawal shall be treated as a nonquali-
fied withdrawal. 
"(2) Any nonqualified withdrawal from a fund shall be treated— 
" (A) first as made out of the ordinary income account, 
"(B) second as made out of the capital gain account, and 
"(C) third as made out of the capital account. 
For purposes of this section, items withdrawn from any account shall 
be treated as withdrawn on a first-in-first-out basis; except that (i) 
any nonqualified withdrawal for research, development, and design 
expenses incident to new and advanced ship design, machinery and 
equipment, and (ii) any amount treated as a nonqualified withdrawal 
under the secona sentence of subsection (g) (4), shall be treated as 
withdrawn on a last-in-first-out basis. 
" (3) For purposes of the Internal Revenue Code of 1954— 
"(A) any amount referred to in paragraph (2) (A) shall be 
included in income as an item of ordinary income for the taxable 
year in which the withdrawal is made, 
"(B) any amount referred to in paragraph (2) (B) shall be 
includeld in income for the taxable year in which the withdrawal is 
made as an item of gain realized during such year from the dis-
position of an asset held for more than 6 months, and 
"(C) for the period on or before the last date prescribed for 
payment of tax for the taxable year in which this withdrawal is 
made— 
6
8
A Stat. 817. 
" (i) no iiitcrest shall be payable under section 6601 of such 
2
6 use 6601. 
Q^g ^^^ j^Q addition to the tax shall be payable under section 
83 Stat. 727. 
6651 of such Code, 
2
6 use 6651. 
cc^jjj interest on the amount of the additional tax attrib-
utable to any item referred to in subparagraph (A) or (B) 
shall be paid at the applicable rate (as defined in paragraph 
84 STAT. ] 
PUBLIC LAW 91-469-OCT. 21, 1970 
1031 
(4)) from the last date prescribed for payment of the tax 
for the taxable year for which such item was deposited in the 
fund, and 
" (iii) no interest shall be payable on amounts referred to in 
clauses (i) and (ii) of paraj^raph (2) or in the case of any 
nonqualified withdrawal arising from the application of the 
recapture provision of section 606(5) of the Merchant 
Marine Act of 1936 as in effect on December 31, 1969. 
"(4) For purposes of paragraph (3) (C) (ii), the applicable rate of 
interest for any nonqualified withdrawal— 
"(A) made in a taxable year beginning in 1970 or 1971 is 8 
percent, or 
"(B) made in a taxable year beginning after 1971, shall be de-
termined and published jointly by the Secretary of the Treasury 
and the Secretary of Commerce and shall bear a relationship to 
8 percent which the Secretaries determine under joint regula-
tions to be comparable to the relationship which the money rates 
and investment yields for the calendar year immediately pre-
ceding the beginning of the taxable year bear to the money rates 
and investment yields for the calendar year 1970. 
"(i) Certain Corporate Reorganizations and Changes in Partner-
ships. 
"Under joint regulations— 
"(1) a transfer of a fund from one person to another person 
in a transaction to which section 381 of the Internal Revenue 
Code of 1954 applies may be treated as if such transaction did 
SSA stat. 124. 
not constitute a nonqualified withdrawal, and 
^
® ^^^ ^^^• 
"(2) a similar rule shall be applied in the case of a con-
tinuation of a partnership (within the meaning of subchapter 
K of such Code). 
26 use 701. 
" (j) Treatment of Existing Funds. 
"(1) Any person who was maintaining a fund or funds (herein-
after in this subsection referred to as 'old fund') under this section 
(as in effect before the enactment of this subsection) may elect to 
continue such old fund but— 
"(A) may not hold moneys in the old fund beyond the expira-
tion date provided in the agreement under which such old fund 
is maintained (determined without regard to any extension or 
renewal entered into after April 14,1970), 
"(B) may not simultaneously maintain such old fund and a 
new fund established under this section, and 
"(C) if he enters into an agreement under this section to estab-
lish a new fund, may agree to the extension of such agreement 
to some or all of the amounts in the old fund. 
" (2) In the case of any extension of an agreement pursuant to para-
graph (1) (C), each item in the old fund to be transferred shall be 
transferred in a nontaxable transaction to the appropriate account 
in the new fund established under this section. For purposes of sub-
section (h) (3) (C), the date of the deposit of any item so transferred 
shall be July 1, 1971, or the date of the deposit in the old fund, 
whichever is the later. 
"(k) Definitions. 
"For purposes of this section— 
" (1) The term 'eligible vessel' means aiiy A^essel— 
"Eiigi^bie 
"(A) constructed in the United States and, if reconstructed, 
reconstructed in the United States, 
"(B) documented under the laws of the United States, and 
"(C) operated in the foreign or domestic commerce of the 
United States or in the fisheries of the United States. 
v e s s e l . " 
47-348 O - 72 - 69 (Pt. 1) 
1032 
PUBLIC LAW 91-469-OCT. 21, 1970 
[84 STAT. 
"Qualified 
vessel." 
"Agreement 
vessel." 
"United States." 
"United States 
foreign trade." 
52 Stat. 958. 
46 u s e 1156. 
"Joint regula-
tions." 
"Vessel." 
"Noncontiguous 
trade," 
Effective date. 
53 Stat. 1186. 
46 u s e 1204. 
Any vessel which (i) was constructed outside of the United States 
but documented under the laws of the United States on April 15,1970, 
or (ii) constructed outside the United States for use in the United 
States foreign trade pursuant to a contract entered into before 
April 15, 1970, shall be treated as satisfying the requirements of sub-
l)aragraph (A) of this paragraph and the requirements of subpara-
graph (A) of paragraph (2). 
" (2) The term 'qualified vessel' means any vessel— 
"(A) constructed in the United States and, if reconstructed, 
reconstructed in the United States, 
"(B) documented under the laws of the United States, and 
"(C) which the person maintaining the fund agrees with the 
Secretary of Commerce will be operated in the United States 
foreign. Great Lakes, or noncontiguous domestic trade or in the 
fisheries of the United States. 
" (S) The term 'agreement vessel' means any eligible vessel or qual-
ified vessel which is subject to an agreement entered into under this 
section. 
" (4) The term 'United States', when used in a geographical sense, 
means the continental United States including Alaska, Hawaii, and 
Puerto Rico. 
"(5) The term 'United States foreign trade' includes (but is not 
limited to) those areas in domestic trade in which a vessel built with 
construction-differential subsidy is permitted to operate under the first 
sentence of section 506 of this Act. 
"(6) The term 'joint regulations' means regulations prescribed 
under subsection (1). 
"(7) The term 'vessel' includes cargo handling equipment which 
the Secretary of Commerce determines is intended for use primarily 
on the vessel. The term 'vessel' also includes an ocean-going towing 
vessel or an ocean-going barge or comparable towing vessel or barge 
operated on the Great Lakes. 
"(8) The term 'noncontiguous trade' means (i) trade between the 
contiguous forty-eight States on the one hand and Alaska, Hawaii, 
Puerto Rico and the insular territories and possessions of the United 
States on the other hand, and (ii) trade between Alaska, Hawaii, and 
Puerto Rico and such territories and possessions and (iii) trade 
between the islands of Hawaii. 
"(1) Records; Reports; Changes in Regulations. 
"Each person maintaining a fund under this section shall keep such 
records and shall make such reports as the Secretary of Commerce 
or the Secretary of the Treasury shall require. The Secretary of the 
Treasury and the Secretary of Commerce shall jointly prescribe all 
rules and regulations, not inconsistent with the foregoing provisions 
of this section, as may be necessary or appropriate to the determina-
tion of tax liability under this section. If, after an agreement has been 
entered into under this section, a change is made either in the joint 
regulations or in the regulations prescribed by the Secretan^ of Com-
merce under this section which could have a substantial effect on the 
rights or obligations of any person maintaining a fund under this 
section, such person may terminate such agreement." 
(b) The amendment made by subsection (a) shall apply to taxable 
years beginning after December 31,1969. 
SEC. 22. Section 714 of the Merchant Marine Act, 1936 is amended 
as follows: 
(a) By striking out the words "Commission" and "Commis-
sion's" wherever they appear and inserting in lieu thereof the 
words "Secretary of Commerce" and "Secretary of Commerce's" 
respectively. 
84 STAT. ] 
PUBLIC LAW 91-469-OCT. 21, 1970 
1033 
(b) By striking out in the first sentence the words "31/^ per 
centum of the depreciated f o r e i ^ cost computed annually upon 
the basis of a twenty-five year life of the vessel." and inserting 
in lieu thereof "an amount equal to (i) the sum of a percenta^ 
of the depreciated foreign cost computed annually upon the basis 
of a twenty-five year life of the vessel determined by the Secretary 
of the Treasury, taking into consideration the current average 
market yield on outstanding marketable obligations of the United 
States with remaining periods to maturity comparable to the term 
of the charter, adjusted to the nearest one-eighth of 1 per centum, 
plus (ii) an allowance adequate in the judgment of the Secretary 
of Commerce to cover administrative costs." 
(c) By striking out of the last sentence of the first paragraph 
thereof the words "of 31/^ per centum per annum from the date of 
purchase." and inserting in lieu thereof, "from the date of pur-
chase, at a rate not less than (i) a rate determined by the Secretary 
of the Treasury, taking into consideration the current average 
market yield on outstanding marketable obligations of the United 
States with remaining periods to maturity comparable to the 
average maturities of such loans, adjusted to the nearest one-
eighth of 1 per centum, plus (ii) an allowance adequate in the 
judgment of the Secretary of Commerce to cover administrative 
costs " 
SBO. 23. Section 803 of the Merchant Marine Act, 1936 (46 U.S.C. 
49 stat. 2012; 
1221), is amended by striking out the section in its entirety. 
^^ ^*^*' ^^^' 
SEC. 24. Section 804 of the Merchant Marine Act, 1936 (46 U.S.C. 
1222), is amended to read as follows: 
"SEC. 804. (a) Except as provided in subsections (b) and (c) of this 
section, it shall be unlawful for any contractor receiving an operating-
differential subsidy under title VI or for any charterer of vessels 
46 use 1171. 
under title "VII of this Act, or any holding company, subsidiary, 
46 use 1191. 
affiliate, or associate of such contractor or such charterer, or any officer, 
director, agent, or executive thereof, directly or indirectly to own, 
charter, act as agent or broker for, or operate any foreign-nag vessel 
which competes with any American-flag service determined by the 
Secretary of Commerce to be essential as provided in section 211 of 
this A c t . 
^ 
^ 
Ante, p. 1018. 
"(b) Under special circumstances and for good cause shown, the 
Secretary of Commerce may, in his discretion, waive the provisions 
of subsection (a) of this section as to any contractor, for a specific 
period of time. 
"(c) Ui)on application to the Secretary of Commerce the provisions 
of subsection (a) of this section shall not apply to the following 
specified activities of any contractor under title VI, or those in the 
foregoing specified relationship to him, who was not such a contractor 
on April 15, 1970, and who shall have complied with the require-
ment set forth in subsection (d) of this section: 
"(1) Until April 15,1990— 
--''• • •' 
" (A) the continued ownership, charter, or operation of a 
foreign-flag vessel engaged in the carriage of dry or liquid 
cargoes in bulk which was owned, chartered, or operated by 
such contractor, or those in the foregoing specified relation-
ship to him, on April 15,1970; 
(B) the continued acting as agent or broker for a vessel 
described in subsection (c)(1)(A) of this section which is 
owned, chartered, or operate by such contractor, or those in 
the foregoing specified relationship to him, and for which 
1034 
PUBLIC LAW 91-469-OCT. 21, 1970 
[84 STAT. 
such contractor, or those in the foregoing specified relation-
ship to him, were acting as agent or broker on April 15,1970; 
"(2) Until April 15, 1972, the continued acting as agent or 
broker for a foreign-flag vessel engaged in the carriage of dry 
or liquid cargoes in bulk (other than one described in subsection 
(c) (1) (A)), for which the contractor, or those in the foregoing 
specified relationship to him, were acting as agent or broker on 
April 15, 1970. 
46 use 1171. 
"(d) No contractor under title VI, whether he shall have become 
such a contractor before or after the date of enactment of this section, 
shall avail himself of the provisions of subsection (c) of this section 
unless not later than ninety days after the enactment of this section 
there shall have been filed with the Secretary of Commerce a full and 
complete statement, satisfactory in form and substance to the Secre-
tary, of all foreign-flag vessels which he, or those in the foregoing 
specified relationship to him, directly or indirectly owned, chartered, 
acted as agent or broker for, or operated on April 15, 1970. 
"(e) During the period of time provided for in subsection (c) of 
this section, the Secretary of Commerce shall, at the beginning of 
each regular session, make a report to the Congress on the activities 
of contractors under such subsection, including but not limited to, 
the nature and extent of such activities; its effect, if any, upon carry-
^6 us** ^^0^' 
"^^ forward the national policy declared in section 101 of this Act; 
and the Secretary's recommendations for legislation, if such is deemed 
to be necessary." 
SEC. 25. Section 805 of the Merchant Marine Act, 1936 (46 U.S.C. 
66 Stat. 765. 
1223), is amcudcd by striking out subsection (c) thereof. 
SEC. 26. (a) Section 809 of the Merchant Marine Act, 1936 (46 
U.S.C. 1213) is amended by inserting after the comma following the 
word "Gulf" the words "Great Lakes" and a comma. 
(b) Section 605(a) of the Merchant Marine Act, 1936 (46 U.S.C. 
1175), is amended by deleting from the last sentence thereof the words 
"on the Great Lakes or". 
SEC. 27. Section 901 of the Merchant Marine Act, 1936 (46 U.S.C. 
75^stat? 565!^' 
^ ^^1) ^^ amended as follows: 
(a) By redesignating subsection (b) as subsection (b)(1). 
(b) By striking the words "section 901 (b)" in redesignated sub-
section (b)(1) and inserting in lieu thereof the words "section 
901(b)(1)". 
(c) By adding a new subsection (b)(2) to read as follows: 
"(2) Every department or agency having responsibility under 
tliis subsection shall administer its programs with respect to this 
subsection under regulations issued by the Secretary of Com-
merce. The Secretary of Commerce shall review such adminis-
tration and sliall annually report to the Congress with respect 
thereto," 
SEC. 28. Section 905(a) of the Merchant Marine Act, 1936 (46 
52 Stat. 964. 
JT.S.C. 1244(a)), is amended by striking the period at the end thereof, 
substituting a comma therefor, and adding the words "except that 
46 use 1151. 
in the context of title V of this Act concerning construction-differ-
ential subsidy, the said words 'foreign commerce' or 'foreign trade' 
shall to the extent provided in uniform regulations promulgated 
by the Secretary of Commerce also include, in the case of liquid and 
dry bulk cargo carrying services, trading between foreign ports in 
accordance with normal commercial bulk shipping practices in such 
manner as will permit U.S.-flag bulk vessels freely to compete with 
foreign-flag bulk carrying vessels." 
* •! 
• 
49 Stat. 2015. 
84 STAT. ] 
PUBLIC LAW 91-469-OCT. 21, 1970 
1035 
SEC. 29. Section 1101(c) of the Merchant Marine Act, 1936 (46 
U.S.C. 1271(c)), is amended as follows: 
es stat. i267; 
(1) By striking out the word "and" immediately before the words '^^ ^*^*- ''^^• 
"floating drydocks". 
(2) By inserting after the word "walls" and before the word 
"owned" a comma and the words "and oceanographic research or 
instruction vessels,". 
SEC. 30. Section 1103(e) of the Merchant Marine Act, 1936 (46 
U.S.C. 1273(e)), is amended by striking the figure "$1,000,000,000" 
68 stat. ues., 
and inserting in lieu thereof the figure "$3,000,000,000". 
SEC. 31. Section 1104(a) of the Merchant Marine Act, 1936 (46 
U.S.C. 1274(a)), is amended by inserting in paragraph (8) immedi-
ately before the words "commercial use" the words "research, or for". 
SEC. 32. Section 1104(b) of the Merchant Marine Act, 1936 (46 
U.S.C. 1274(b)), is amended as follows: 
(1) By inserting in paragraph (2) immediately before the words 
"commercial use" the words "research or for". 
(2) By striking from paragraph (4) the words "be less than" and 
inserting in lieu thereof the words "not exceed". 
(3) By inserting at the end of {paragraph (4), immediately before 
the semicolon, a colon and a proviso to read as follows: '"'•Provided^ 
however^ That in the case of a vessel, the size and speed of which are 
approved by the Secretary of Commerce, and which is eligible for 
mortgage aid for construction under section 509 of this Act and in 
^"'^' P- ^°2^'-
respect of which the minimum downpayment by the mortgagor 
required by that section would be 12^^ per centum of the cost of such 
vessel, the advance and the principal amount of all other advances 
under insured loans outstanding at the time of said advance shall not 
exceed 87i^ per centum of such actual cost". 
SEC. 33. Section 1105(d) of the Merchant Marine Act, 1936 (46 
U.S.C. 1275(d)) is amended by striking the last sentence thereof and 
inserting a new sentence to read as follows: "Such installments shall 
include interest on the purchase price remaining unpaid at a rate not 
less than (i) a rate determined by the Secretary of the Treasury, taking 
into consideration the current average market yield on outstanding 
marketable obligations of the United States with remaining periods 
to maturity comparable to the average maturities of such installments, 
adjusted to the nearest one-eighth of 1 per centum, plus (ii) an allow-
ance adequate in the judgment of the Secretary of Commerce to cover 
administrative costs." 
SEC. 34. Section 1214 of the Merchant Marine Act, 1936 (46 U.S.C. 
1294), is amended by striking out the words "20 years from the date 
79 stat. 264. 
of enactment of this title" and inserting in lieu thereof the date 
"September 7,1975". 
SEC. 35. (a) The word "Commission" is stricken out of sections 
210, 211, 501, 502, 503, 504, 505, 510(b), 601(a), 602, 603, 605(c), and 
606 of the Merchant Marine Act, 1936, wherever it appears, and the 
^^ use 1120, 
words "Secretary of Commerce" are inserted in lieu thereof. 
WVo, 1171-1173', 
(b) Subsection (a) of section 211 of the Merchant Marine Act, 1936, 1175^ ii76. 
is amended by striking out the word "its" and inserting in lieu thereof 
the word "his". 
(c) The second sentence of section 501(a) of the Merchant Marine 
Act, 1936, is amended by striking out the word "it" and inserting the 
word "he" in lieu thereof. 
(d) The second sentence of section 501(c) of the Merchant Marine 
Act, 1936, is amended by striking out the word "its" and inserting 
the word "his" in lieu thereof. 
(e) The first sentence of section 502(a) of the Merchant Marine 
Act, 1936, is amended by striking out the word "it" and inserting the 
word "he" in lieu thereof. 
1036 
PUBLIC LAW 91-469-OCT. 21, 1970 
[84 STAT. 
52 
S
t
a
t
. 
956. 
46 
use 
1152. 
49 
S
t
a
t
. 1997. 
46 
use 1171. 
46 
use 
1173. 
46 
use 1175. 
46, 
use 
1176. 
49 Stat. 1985. 
46 use nil 
note. 
46 use nil 
note. 
69 Stat. 83. 
40 u s e 270a-
270d. 
56 Stat. 661. 
31 u s e 686. 
60 Stat. 41. 
50 u s e app. 
1735 note. 
Applicability 
to existing con-
tracts. 
(f) The third sentence of section 502(c) of the Merchant Marine 
Act, 1936, is amended by striking out the word "Commission's" and 
inserting the words "Secretary of Commerce's" in lieu thereof. 
(g) The next to the last sentence of section 502(e) of the Merchant 
Marine Act, 1936, is amended by striking out the word "its" and 
inserting in lieu thereof the word "his". 
(h) The third sentence of section 601(a) of the Merchant Marine 
Act, 1936, is amended by striking out the word "it" and inserting the 
word "he" in lieu thereof. 
(i) The first sentence of section 603(a) of the Merchant Marine 
Act, 1936, is amended by striking out the word "it" and inserting the 
Avord "he" in lieu thereof. 
(j) The last sentence of section 605(c) of the Merchant Marine 
Act, 1936, is amended by striking out the word "it" and inserting the 
word "he" in lieu thereof. 
(k) Section 606 of the Merchant Marine Act, 1936, is amended as 
follows: 
(1) By striking out of subdivision (1) the word "its" wherever it 
appears and inserting in lieu thereof the word "his". 
(2) By striking out of subdivision (1) and (3) the word "it" and 
inserting in lieu thereof the word "he". 
(3) By striking out of subdivision (1) the word "Its" and inserting 
in lieu thereof the word "His". 
SEC. 36. Section 201 (b) of the Merchant Marine Act, 1936 (46 U.S.C. 
1111 (b)), is amended by striking out the word "Commission" wherever 
it appears in the last sentence thereof and inserting in lieu thereof the 
words "Federal Maritime Commission". 
SEC. 37. Section 303 of Reorganization Plan Numbered 21 of 1950 
(64 Stat. 1273) is amended by striking out the words at the end thereof 
"or of the Maritime Administration". 
SEC. 38. Reorganization Plan Numbered 7 of 1961 (75 Stat. 840) is 
amended as follows: 
(a) By striking out section 201 and inserting in lieu thereof a 
new section 201 to read as follows: 
"SEC. 201. MARITIME ADMINISTRATOR.—There shall be at the head of 
the Maritime Administration (established by the provisions of part 
I I of Reorganization Plan 21 of 1950) a Maritime Administrator, 
hereinafter referred to as the Administrator. The Assistant Secretary 
of Commerce for Maritime Affairs shall, ex officio, be the Adminis-
trator. The Administrator shall perform such duties as the Secretary 
of Commerce shall prescribe." 
(b) By striking out of section 301 the words at the end thereof 
"and to the Maritime Administrator and all other officers and 
employees of the Maritime Administration". 
SEC. 39. The Act of April 29, 1941 (40 U,S.C. 270e), is hereby 
amended by adding a new section 2 to read as follows: 
"SEC. 2. The Secretary of Commerce may waive the Act of August 
24,1935 (49 Stat. 793-794), with respect to contracts for the construc-
tion, alteration, or repair, of vessels of any kind or nature, entered 
into pursuant to the Act of June 30, 1932 (47 Stat. 382, 417-418), as 
amended, the Merchant Marine Act, 1936, or the Merchant Ship Sales 
Act of 1946, regardless of the terms of such contracts as to payment 
or title." 
SEC. 40. (^a) The amendments made by this Act shall not affect any 
contract with the Secretary of Commerce or his delegates that is in 
effect on the date of enactment of this Act. At the request of the 
other party to such operating-differential subsidy contract, the Secre-
tary of Commerce shall amend such contract so as to be in accord-
ance with all of the amendments made by this Act. No amendment 
84 STAT. ] 
PUBLIC LAW 91-469-OCT. 21, 1970 
1037 
made by this Act shall be incorporated in such contract unless all such 
amendments are incorporated in such contract, except that if the 
other party elects to continue under the "old fund" as provided in 
section 607 as amended by section 21 of this Act, such amendment 
need not be incorporated in such contract. Until such contract is 
amended or if such contract is not amended, it shall be administered 
in accordance with the provisions of the Merchant Marine Act, 1936, 
as they existed immediately prior to enactment of this Act. Nothing 
in section 16 of this Act amending section 603 of the Merchant Marine 
Act, 1936 or in the contracts made thereunder, shall be deemed to 
affect or to change existing law or contracts with respect to the pro-
ceedings now pending before the Secretary of Commerce relating to 
the payment of subsidy in respect of cargoes covered by section 901 
(b) (1) of the Merchant Marine Act, 19S6, section 616(a) of title 15, 
United States Code, or section 2631 of title 10, United States Code. 
(b) If any operating-differential subsidy contract in existence on 
the date of enactment of this Act is amended by including all of the 
amendments made by this Act or all of the amendments made by this 
Act other than those made by section 21, the operator may elect to ter-
minate his recapture period as of the date of such contract amendment 
and have his recapture computed on the basis of the shortened period, 
or he may elect to continue his recapture period until the end of its ten-
year term and continue his recapture obligations as provided by the 
Merchant Marine Act, 1936, prior to the enactment of this Act until 
the end of such ten-year period. The amendments in either event shall 
provide that, with respect to seafaring personnel, in determining the 
rights and obligations of the contractor under such contract, the limi-
tation of section 805 (c) of the Merchant Marine Act, 1936, as it existed 
immediately before the enactment of this Act shall not apply. 
SEC. 41. (1) There is hereby established a commission tol)e known 
as the (commission on American Shipbuilding (hereinafter referred to 
as the "Commission"). The Commission shall be composed of seven 
members appointed by the President. Members of the Commission 
shall be appointed for the life of the Commission. The President shall 
designate one of the members of the Commission as Chairman. 
(2) Members of the Commission who are not full-time employees of 
the United States Government shall each be entitled to receive the per 
diem equivalent of the rate authorized for GS-18 of the Greneral 
Schedule under section 5332 of title 5 of the United States Code when 
engaged in the actual performance of duties vested in the Commission, 
including traveltime, and while away from their homes or regular 
places of business may be allowed travel expenses, including per diem 
in lieu of subsistence, as authorized by section 5703 of title 5 of the 
United States Code for persons in the Government service employed 
intermittently. 
(3) The Commission shall meet at the call of the Chairman or at the 
call of a majority of the members thereof. 
(4) The Commission may appoint an Executive Director without 
regard to the provisions of title 5 of the United States Code governing 
appointments in the competitive service and shall fix his compensation 
without regard to the provisions of chapter 51 and subtitle I I I of 
chapter 53 of such title relating to classification and General Schedule 
pay rates. 
(5) The Commission shall have the power to appoint and fix the 
compensation of such personnel, as it deems advisable, subject (except 
as provided in paragraph (4) hereof) to the civil service laws and 
classification laws. 
Ante, p. 1026, 
46 u s e 1245. 
Ante, p. 1023. 
Ante, p. 1034. 
48 Stat. 500. 
70A Stat, 146. 
Operating-
differential 
subsidy contracts, 
amendment provi-
sions. 
66 Stat. 765. 
46 u s e 1223. 
eommission on 
American Ship-
building, estab-
lishment. 
eompensation, 
travel expenses. 
Ante, p. 198-1. 
80 Stat. 499; 
83 Stat. 190. 
Executive 
Director. 
80 Stat. 443, 
467. 
S u s e 5101, 
5331. 
1038 
PUBLIC LAW 91-469-OCT. 21, 1970 
[84 STAT. 
Experts and 
consultants. 
80 Stat. 416. 
Ante, p. 198-1. 
80 Stat. 499; 
83 Stat. 190. 
American ship-
building indus-
try, status re-
view. 
46 u s e 1151. 
Recommenda-
tions. 
Report to 
President and 
Congress. 
Ante, p. 1020. 
Appropriation. 
Assistant Sec-
retary of Com-
merce for Mari-
time Affairs, 
appointment by 
President. 
Compensation. 
83 Stat. 863. 
St, Lawrence 
Seaway Develop-
ment Corp. 
68 Stat. 94; 
71 Stat. 307. 
(6) The Commission may procure, in accordance Avith the provi-
sions of section 3109 of title 5 of the United States Code, the temporary 
or intermittent services of experts or consultants; individuals so 
employed shall receive compensation at the rate to be fixed by the 
Commission, but not in excess of the per diem equivalent of the rate 
authorized for GS-18 of the General Schedule under section 5332 of 
title 5 of the United States Code, including traveltime, and while away 
from their homes or regular places of business may be allowed travel 
expenses, including per diem in lieu of subsistence, as authorized by 
section 5703 of title 5 of the United States Code for persons in the 
Government service employed intermittently. 
(7) The Commission shall review the status of the American ship-
building industry, its problems and its progress toward increasing its 
P
roductivity and reducing j>roduction costs. The Commission shall 
etermine whether the American shipbuilding industry can achieve a 
level of productivity by the fiscal year 1976 such that the construction-
differential subsidy payable under title V of the Merchant Marine Act, 
1936, will not exceed 35 per centum of the United States construction 
cost. The Commission shall recommend a course of action which should 
be taken on the j)art of Government and industry to improve the 
competitive situation of the United States shipbuilding industry in 
world shipbuilding markets and if the Commission shall determine 
that the construction-differential subsidy cannot be reduced to 35 per 
centum of the United States cost it shall recommend alternatives to 
the ship construction program then in effect. 
(8) The Commission shall not later than three years after the date 
of enactment of this Act or such earlier dates as shall be required by 
section 502(b) of the Merchant Marine Act, 1936, submit a compre-
hensive report of its findings and recommendations to the President 
and to the Congress, and sixty days thereafter shall cease to exist. 
(9) There are hereby authorized to be appropriated such amounts 
as may be necessary to permit the Commission to carry out its respon-
sibilities under this Act. 
SEC. 42. (a) There shall be in the Department of Commerce, in 
addition to the Assistant Secretaries now provided by law, one addi-
tional Assistant Secretary of Commerce who shall be known as the 
Assistant Secretary of Commerce for Maritime Affairs, shall be 
appointed by the President by and with the advice and consent of 
the Senate, shall receive compensation at the rate prescribed by law 
for Assistant Secretaries of Commerce, and shall perform such duties 
as the Secretary of Commerce shall prescribe. 
(b) Section 5315 of title 5, United States Code, is amended by strik-
ing "(5)" at the end of item (12) and substituting "(6)". 
SEC. 43. (a) (1) Section 5 of the Act of May 13, 1954, as amended 
(33 U.S.C. 985), is further amended by inserting " ( a ) " immediately 
after "SEC. 5.", and by striking out the fourth, fifth, and eighth sen-
tences thereof. 
(2) Such section is further amended by adding at the end thereof 
the following new subsection: 
"(b) Effective as of the date of enactment of this subsection the 
obligations of the Corporation incurred under subsection (a) of this 
section shall bear no interest, and the obligation of the Corporation 
to pay the unpaid interest which has accrued on such obligations is 
(b) (1) Subsection (a) of section 12 of such Act (33 U.S.C. 988(a)) 
is amended by inserting after the first sentence the following: "Any 
formula for a division of revenues which takes into consideration 
annual debt charges shall include the total cost, including both inter-
84 STAT. ] 
PUBLIC LAW 91-471-OCT. 21, 1970 
1039 
est and debt principal, incurred by the United States in financing 
activities authorized by this Act, whether or not reimbursable by the 
Corporation." 
(2) Subsection (b) (4) of such section 12 is amended by striking 
es stat. 96. 
out the words ", payment of interest on the obligations of the 
^^ "^^ ^*** 
Corporation,". 
SEC. 44. This Act may be cited as the "Merchant Marine Act of 
short titie. 
1970". 
Approved October 21, 1970. 
Public Law 91-470 
A N A C T 
October 2 1 , 1970 
To permit the use for any public purpose of certain real property in the State 
[H. R. 9164] 
of Greorgia. 
Be it BTiacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That the United 
Reai^p^opert -
States hereby consents to the use of the land described as the "Rocky public use. 
Face Ridge Site" in the quitclaim deed to the State of Georgia exe-
cuted by me Secretary of the Interior pursuant to the Act of Septem-
ber 21, 1950 (64 Stat. 896), for any public purpose, notwithstanding 
the provisions of said Act and deed limiting tne use of the land to 
use as a part of the park system of the State. Said deed shall be 
deemed to be corrected accordingly, and an appropriate reference to 
this Act shall be noted on the records of the county in which said 
deed is recorded. 
Approved October 21, 1970. 
Public Law 91-471 
A N A C T 
October 21, 1970 
To declare that the United States holds 19.57 acres of laud, more or less, in trust 
[H.R. 13519] 
for the Yankton Sioux Tribe. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of Aonerica in Congress assembled. That all right, title, 
Yankton sioux 
and interest of the United States in and to the following described 
Lands held *
i
n 
federally owned land situated in the southwest quarter southwest trust. 
quarter, section 26, township 94 north, range 64 west, fifth principal 
meridian, South Dakota, are hereby declared to be held by the United 
States in trust for the Yankton Sioux Tribe: 
Beginning at a point 4 chains and 36 links east of the southwest 
corner of said section 26; running thence north 31 degrees 30 
minutes east 6 chains and 52 links; thence north 58 degrees 30 
minutes west 541/^ links; thence north 31 degrees 31 minutes east 
16 chains and 83 links; thence east 3 chains and 87 links to the 
northeast corner of the southwest quarter of the southwest quarter 
of said section 26; thence south 19 chains and 93 links to the 
southeast corner of said 40-acre tract; thence west 15 chains and 
44 links to place of beginning; containing 19.57 acres, more or less. 
SEC. 2. The Indian Claims Commission is directed to determine in 
claims offset 
accordance with the provisions of the Act of A u ^ s t 13,1946 (60 Stat. ^^^'"^* "' ^• 
1050), the extent to which the value of the title conveyed by this 
^^ "^^ ^°^' 
Act should or should not be set off against any claim against the 
United States determined by the Commission. 
Approved October 21, 1970.