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or other chief executive officer and the chairman of its board of directors shall be citizens of the United States and unless no more of its directors than a minority of the number necessary to constitute a quorum are noncitizens and the corporation itself is organized under the laws of the United States or of a State, [Territory] territory, District, or possession thereof, or of the Commonwealth of Puerto Rico. [but in the case of a corporation, association, or partnership operating any vessel in the coastwise trade the amount of interest required to be owned by citizens of the United States shall be 75 per centum.] (c) Seventy-five per centum of the interest in a corporation shall not be deemed to be owned by citizens of the United States [(a)] (1) if the title to 75 per centum of its stock is not vested in such citizens free from any trust or fiduciary obligation in favor of any person not a citizen of the United States; or (b)] (2) if 75 per centum of the voting power in such corporation is not vested in citizens of the United States; or [(c)] (3) if, through any contract or understanding, it is so arranged that more than 25 per centum of the voting power in such corporation may be exercised, directly or indirectly, in behalf of any person who is not a citizen of the United States; or [(d)] (4) if by any other means whatsoever control of any interest in the corporation in excess of 25 per centum is conferred upon or permitted to be exercised by any person who is not a citizen of the United States.

NOTE

This section is based on title 46, U.S.C., 1964 ed., § 883 (June 5, 1920, c. 250, $27, 41 Stat. 998; July 2, 1935, c. 355, § 1, 49 Stat. 442; title 46, U.S.C., 1964 ed., $802 (Sept. 7, 1916, c. 451, § 2, 39 Stat. 729; July 15, 1918, c. 152, §§ 1, 2, 40 Stat. 900; June 5, 1920, c. 250, § 38, 41 Stat. 1008; Public Law 86-327, Sept. 21, 1959, 3, 73 Stat. 597)).

Subsection (a) of this section is based on act June 5, 1920, c. 250, § 27, 41 Stat. 998; July 2, 1935, c. 355, § 1, 49 Stat. 442 (46 U.S.C. 883). Subsections (b) and (c) are based on act Sept. 7, 1916, c. 451, § 2, 39 Stat. 729; July 15, 1918, c. 152, 2, 40 Stat. 900; June 5, 1920, c. 250, § 38, 41 Stat. 1008; Sept. 21, 1959, Public Law 86-327, § 3, 73 Stat. 597 (46 U.S.C. 802).

References to "the Commonwealth of Puerto Rico" have been inserted in subsections (a) and (b) of this section to reflect the present status of this former possession. See act July 3, 1950, c. 446, §§ 1-6, 64 Stat. 319; § 1 of the Constitution of Puerto Rico (48 U.S.C. 731b-e, 737).

The word "territories" has been substituted for "Territories" in subsection (a), and the word "territory" for "Territory" in subsection (b), because, with the admission of Alaska and Hawaii as States, there are no more incorporated Territories to which the terms "Territory" or "Territories" are applicable.

The clause "except that foreign-built vessels admitted to registry under the provisions of paragraph (6) of subsection (a) of section 205 of this Act may engage in trade with the islands of Guam, Wake, Midway, and Kingman Reef" has been added at the end of subsection (a) of this section to eliminate the inconsistency between R.S. § 4132, as amended, 46 U.S.C. 11 (sec. 205(a) (6) of this act), which permits seagoing vessels wherever built (including foreign-built vessels) to be admitted to registry to engage in trade with the islands of Guam, Tutuila, Wake, Midway, and Kingman Reef; and act June 5, 1920, c. 250, § 27, 41 Stat. 998, as amended, 46 U.S.Č. 883 (this section), as made applicable to the island territories and possessions of the United States by act June 5, 1920, c. 250, 21, 41 Stat. 997 (sec. 517 of this act), which prohibits the transportation of merchandise between points in the United States, including its territories and possessions embraced within the coastwise laws, in any other vessel than a vessel built in and documented under the laws of the United States and owned by persons who are U.S. citizens. That foreign-built vessels are permitted to engage in trade with the named islands notwithstanding the provisions of 46 U.S.C. 883 as presently constituted is the settled interpretation of the statutes involved by the Bureau of Customs and its predecessor agencies in the administration of the navigation laws. The reference to Tutuila found in R.S. § 4132, as amended,

has been omitted here, because the coastwise laws are made inapplicable to American Samoa, of which Tutuila is the principal island, by act June 14, 1934 c. 523, 48 Stat. 963, 48 U.S.C. 1664 (sec. 517 of this act).

Changes have been made in arrangement and phraseology as required in the context of this act.

SEC. 507. SAME: TRANSPORTATION OVER CERTAIN THROUGH ROUTES EXCEPTED [Provided further, That this section] Section 506 of this Act shall not apply to merchandise transported between points within the continental United States, including Alaska, over through routes heretofore or hereafter recognized by the Interstate Commerce Commission for which routes rate tariffs have been or shall hereafter be filed with said Commission when such routes are in part over Canadian rail lines and their own or other connecting water facilities.

NOTE

This section is based on title 46, U.S.C., 1964 ed., § 883 (June 5, 1920, c. 250, § 27, 41 Stat. 998; July 2, 1935, c. 355, § 1, 49 Stat. 442; July 7, 1958, Public Law 85-508, § 27(a), 72 Stat. 351).

Changes have been made in phraseology as required in the context of this act.

SEC. 508. SAME: TRANSPORTATION ON YUKON RIVER EXCEPTED. [Provided further, That this section] Section 506 of this Act shall not become effective upon the Yukon River until the Alaska Railroad shall be completed and the Secretary of Commerce shall find that proper facilities will be furnished for transportation by persons citizens of the United States for properly handling the traffic[:].

NOTE

This section is based on title 46, U.S.C., 1964 ed., § 883 (June 5, 1920, c. 250, § 27, 41 Stat. 998, amended Ex. Ord. No. 6166, § 12, June 10, 1933; July 2, 1935, c. 355, § 1, 49 Stat. 442; June 29, 1936, c. 858, §§ 204, 904, 49 Stat. 1987, 2016; 1950 Reorganization Plan No. 21, §§ 204, 306, eff. May 24, 1950, 15 F.R. 3178, 64 Stat. 1276-1277).

Changes have been made in phraseology as required in the context of this act.

SEC. 509. SAME: TRANSPORTATION ON CERTAIN GREAT LAKES CAR FERRIES EXCEPTED. [Provided further, That this section] Section 506 of this Act shall not apply to the transportation of merchandise loaded on railway cars or to motor vehicles with or without trailers, and with their passengers or contents when accompanied by the operator thereof, when such railroad cars or motor vehicles are transported in any railroad car ferry operated between fixed termini on the Great Lakes as a part of a rail route, if such car ferry is owned by a common carrier by water and operated as part of a rail route with the approval of the Interstate Commerce Commission, and if the stock of such common carrier by water, or its predecessor, was owned or controlled by a common carrier by rail prior to June 5, 1920, and if the stock of the common carrier owning such car ferry is, with the approval of the Interstate Commerce Commission, now owned or controlled by any common carrier by rail and if such car ferry is built and documented under the laws of the United States.

NOTE

This section is based on title 46, U.S.C. 1964 ed., § 883 (Apr. 11, 1935, c. 58, 49 Stat. 154).

Changes have been made in phraseology as required in the context of this act.

SEC. 510. SAME: TRANSPORTATION OF CERTAIN EMPTY CARGO VANS, LIFT VANS, AND SHIPPING TANKS EXCEPTED. [Provided further, That upon] Upon such terms and conditions as the Secretary [of the Treasury] by regulation may prescribe, and, if the transporting vessel if of foreign registry, upon a finding by the Secretary [of the Treasury], pursuant to information obtained and furnished by the Secretary of State, that the government of the nation of registry extends reciprocal privileges to vessels of the United States, [this] section 506 of this Act shall not apply to the transportation of empty cargo vans, empty lift vans, and empty shipping tanks by vessels of the United States not qualified to engage in the coastwise trade, or by vessels of foreign registry, so long as such vans or tanks are owned or leased by the owner or operator of the transporting vessels and are being transported for use in the carriage of cargo in foreign trade.

NOTE

This section is based on title 46, U.S.C., 1964 ed., § 883 (Sept. 21, 1965, Public Law 89-194, 79 Stat. 823).

The words "of the Treasury" following "Secretary" have been deleted as surplusage because "Secretary" is defined as "Secretary of the Treasury" in section 101 of this act.

Changes have been made in phraseology as required in the context of this act.

SEC. 511. TRANSPORTATION OF MERCHANDISE BETWEEN UNITED STATES POINTS VIA FOREIGN PORTS IN FOREIGN VESSELS WITH INTENT TO EVADE COASTWISE LAWS PROHIBITED; PENALTIES.-If any merchandise is laden at any port or place in the United States upon any vessel belonging wholly or in part to a subject of a foreign country, and is taken thence to a foreign port or place to be reladen and reshipped to any other port or place in the United States, either by the same or by another vessel, foreign or American, with intent to evade the provisions of this Act relating to the transportation of merchandise from one port or place of the United States to another port or place of the United States in a vessel belonging wholly or in part to a subject of any foreign power, the merchandise shall, on its arrival at such last-named port or place, be seized and forfeited to the United States, and the vessel shall pay a tonnage duty of 50 cents per net ton.

NOTE

This section is based on title 19, U.S.C., 1964 ed., § 1588 (June 17, 1930, c. 497, title IV, § 588, 46 Stat. 749). The words

"or place" have been inserted between "port" and "in the United States" where that expression appears in the second instance as consistent with the terminology "port or place in the United States" in the first line; and

"of this Act" have been inserted after "provisions" as required in the context of this act.

SEC. 512. TRANSPORTATION OF PASSENGERS AND MERCHANDISE IN CANADIAN VESSELS BETWEEN SOUTHEASTERN ALASKA AND OTHER UNITED STATES POINTS PERMITTED CONDITIONALLY.-Notwithstanding [the] any [provisions] provision of law [of the United States] restricting to vessels of the United States the transportation of passengers and merchandise directly or indirectly from any port in the United States to another port of the United States, passengers may be transported on Canadian vessels between ports in southeastern Alaska, and passengers and merchandise may be transported on Canadian vessels between Hyder, Alaska, and other points in southeastern Alaska, and between Hyder, Alaska, and other points in the United States outside Alaska, either directly or via a foreign port, or for any part of the transportation until the Secretary of Commerce determines that United States-flag service is available to provide such transportation.

NOTE

This section is based on title 46, U.S.C., 1964 ed., § 289b (Public Law 87-77, June 30, 1961, 75 Stat. 196). Changes have been made in phraseology as required in the context of this act.

SEC. 513. CORPORATION AS CITIZEN; TRANSPORTATION OF MERCHANDISE OR PASSENGERS BETWEEN UNITED STATES POINTS; PARENT AND SUBSIDIARY CORPORATIONS; DOCUMENTATION; CERTIFICATE; SURRENDER OF DOCUMENT ON CHANGE OF STATUS.-(a) Notwithstanding any other provision of law, a corporation incorporated under the laws of the United States or any State, [Territory] territory, District, or possession thereof, or the Commonwealth of Puerto Rico, shall be deemed to be a citizen of the United States for the purposes of and within the meaning of that term as used in sections 9 and 37 of the Shipping Act, 1916, as amended (46 U.S.C. 808, 835), [section 27 of the Merchant Marine Act of 1920, as amended (46 U.S.C. 883), Revised Statutes, section 4370 (46 U.S.C. 316),] sections 506, 520, and 523 of this Act, and the laws relating to the documentation of vessels, if it is established by a certificate filed with the Secretary [of the Treasury] as hereinafter provided, that—

[(a)] (1) a majority of the officers and directors of such corporation are citizens of the United States;

[(b)] (2) not less than 90 per centum of the employees of such corporation are residents of the United States;

[(c)(3) such corporation is engaged primarily in a manufacturing or mineral industry in the United States or any [Territory] territory, District, or possession thereof, or the Commonwealth of Puerto Rico;

[(d)] (4) the aggregate book value of the vessels owned by such corporation does not exceed 10 per centum of the aggregate book value of the assets of such corporation; and

[(e)] (5) such corporation purchases or produces in the United States, its [Territories] territories, Districts, or possessions, or the Commonwealth of Puerto Rico, not less than 75 per centum of the raw materials used or sold in its operations;

but no vessel owned by any such corporation shall engage in the fisheries, or in the transportation of merchandise or passengers for hire between points in the United States, including [Territories]

territories, Districts, and possessions thereof, embraced within the coastwise laws, and the Commonwealth of Puerto Rico, except as a service for a parent or subsidiary corporation and except when such vessel is under demise or bareboat charter at prevailing rates for use otherwise than in the domestic noncontiguous trades from any such corporation to a common or contract carrier subject to part 3 of the Interstate Commerce Act as amended, which otherwise qualifies as a citizen_under_ section [2 of the Shipping Act, 1916, as amended (46 U.S.C. 802)] 506 of this Act, and which is not connected, directly or indirectly, by way of ownership or control with such corporation. (b) As used herein (1), the term "parent" means a corporation which controls, directly or indirectly, at least 50 per centum of the voting stock of such corporation, and (2), the term "subsidiary" means a corporation not less than 50 per centum of the voting stock of which is controlled, directly or indirectly, by such corporation or its parent but no corporation shall be deemed to be a "parent" or "subsidiary" hereunder unless it is incorporated under the laws of the United States, or any State, [Territory] territory, District, or possession thereof, or the Commonwealth of Puerto Rico, and there has been filed with the Secretary [of the Treasury] a certificate as hereinafter provided.

(c) Vessels built in the United States and owned by a corporation meeting the conditions hereof which are non-self-propelled or which, if self-propelled, are of less than five hundred gross tons shall be entitled to documentation under the laws of the United States, and except as restricted by this section, shall be entitled to engage in the coastwise trade and, together with their owners or masters, shall be entitled to all the other benefits and privileges and shall be subject to the same requirements, penalties, and forfeitures as may be applicable in the case of vessels built in the United States and otherwise documented or exempt from documentation under the laws of the United States.

(d) A corporation seeking hereunder to document a vessel under the laws of the United States shall file with the Secretary [of the Treasury] a certificate under oath, in such form and at such times as may be prescribed by him, executed by its duly authorized officer or agent, establishing that such corporation complies with the conditions of this section above set forth. A "parent" or "subsidiary" of such corporation shall likewise file with the Secretary of the Treasury] a certificate under oath, in such form and at such times as may be prescribed by him, executed by its duly authorized officer or agent, establishing that such "parent" or "subsidiary" complies with the conditions of this section above set forth, before such corporation may transport any merchandise or passengers for such parent or subsidiary. If any material matter of fact is alleged in any such certificate which, within the knowledge of the party so swearing is not true, there shall be a forfeiture of the vessel (or the value thereof) documented or operated hereunder in respect to which the oath shall have been made. If any vessel shall transport merchandise for hire in violation of this section, such merchandise shall be forfeited to the United States. If any vessel shall transport passengers for hire in violation of this section, such vessel shall be subject to a penalty of $200 for each passenger so transported. [Any penalty or forfeiture incurred under this section may be remitted or mitigated by the Secretary of the Treasury under the provisions of section 7 of title 46, United States Code.]

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