PUBLIC LAWS-CH. 600-JUNE 23, 1938 49 Stat. 1996. Construction-differ- ential subsidy. Limitation. 49 Stat. 1985. 46 U. S. C., Supp. III, § 1111. Collusive bidding. 49 Stat. 1996. Terms of sale of vessel to applicant. Cash payments. Interest. Balance of purchase price; installments. Interest. SEC. 10. Section 502 (b) of such Act is amended to read as follows: "(b) The amount of the reduction in selling price which is herein termed the 'construction-differential subsidy' may equal, but not exceed, the excess of the bid of the shipbuilder constructing the pro- posed vessel (excluding the cost of any features incorporated in the vessel for national-defense uses, which shall be paid by the Commis- sion in addition to the subsidy), over the fair and reasonable estimate of cost, as determined by the Commission, of the construction of the proposed vessel if it were constructed under similar plans and speci- fications (excluding national-defense features as above provided) in a principal foreign shipbuilding center which may reasonably be availed of by the principal foreign competitors in the service in which the vessel is to be operated, and which is deemed by the Commission to furnish a fair and representative example for the determination of the estimated cost of construction in foreign countries of vessels of the type proposed to be constructed. The construction differential approved by the Commission shall not exceed 331/3 per centum of the construction cost of the vessel paid by the Commission (excluding the cost of national-defense features as above provided), except that in cases where the Commission possesses convincing evidence that the actual differential is greater than that percentage, the Commission may approve an allowance not to exceed 50 per centum of such cost, upon the affirmative vote of four members, except as otherwise pro- vided in subsection 201 (a). In any case where the Commission finds that the construction differential exceeds 331/3 per centum of such cost and that the lowest bid of a responsible domestic shipbuilder is unreasonable, excessive, or collusive, the Commission may negotiate and contract with the view to construction in a domestic shipyard that is not unreasonable or excessive in cost or collusive in character. Where the Commission finds that the construction differential exceeds 50 per centum of such cost, the Commission may negotiate and con- tract on behalf of the applicant to build such vessel in a domestic shipyard at a cost which will reduce the construction differential to 50 per centum or less. In the event that the Commission have reason to believe that the bidding in any instance is collusive, it shall report all of the evidence on which the Commission acted (1) to the Attor- ney General of the United States, and (2) to the President of the Senate and to the Speaker of the House of Representatives if the Congress shall be in session or if the Congress shall not be in session, then to the Clerk of the Senate and the Clerk of the House respectively." SEC. 11. Section 502 (c) of such Act is amended to read as follows: "(c) In such contract between the applicant and the Commission, the applicant shall be required to make cash payments to the Com- mission of not less than 25 per centum of the price at which the ves- sel is sold to the applicant. The cash payments shall be made at the time and in the same proportion as provided for the payments on account of the construction cost in the contract between the ship- builder and the Commission. The applicant shall pay, not less fre- quently than annually, interest at the rate of 31/2 per centum per annum on those portions of the Commission's payments as made to the shipbuilder which are chargeable to the applicant's purchase price of the vessel (after deduction of the applicant's cash payments). The balance of such purchase price shall be paid by the applicant, within twenty years after delivery of the vessel and in not to exceed twenty equal annual installments, the first of which shall be payable one year after the delivery of the vessel by the Commission to the applicant. Interest at the rate of 31/2 per centum per annum shall be paid on all such installments of the purchase price remaining unpaid." 956 [52 STAT.
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