46 USC 12119 - Owners engaged primarily in leasing or financing transactions

U.S Code last checked for updates: Nov 22, 2024

§ 12119.

Owners engaged primarily in leasing or financing transactions

(a)

Definitions.—

In this section:

(1)

Affiliate.—

The term “affiliate” means, with respect to any person, any other person that is—

(i)

directly or indirectly controlled by, under common control with, or controlling that person; or

(ii)

named as being part of the same consolidated group in any report or other document submitted to the United States Securities and Exchange Commission or the Internal Revenue Service.

(2)

Cargo.—

The term “cargo” does not include cargo to which title is held for non-commercial reasons and primarily for the purpose of evading the requirements of subsection (c)(3).

(3)

Oil.—

The term “oil” has the meaning given that term in section 2101(26) of this title.

(4)

Passive investment.—

The term “passive investment” means an investment in which neither the investor nor any affiliate of the investor is involved in, or has the power to be involved in, the formulation, determination, or direction of any activity or function concerning the management, use, or operation of the asset that is the subject of the investment.

(5)

Qualified proprietary cargo.—

The term “qualified proprietary cargo” means—

(A)

oil, petroleum products, petrochemicals, or liquefied natural gas cargo that is beneficially owned by the person that submits to the Secretary an application or annual certification under subsection (c)(3), or by an affiliate of that person, immediately before, during, or immediately after the cargo is carried in coastwise trade on a vessel owned by that person;

(B)

oil, petroleum products, petrochemicals, or liquefied natural gas cargo not beneficially owned by the person that submits to the Secretary an application or an annual certification under subsection (c)(3), or by an affiliate of that person, but which is carried in coastwise trade by a vessel owned by that person and which is part of an arrangement in which vessels owned by that person and at least one other person are operated collectively as one fleet, to the extent that an equal amount of oil, petroleum products, petrochemicals, or liquefied natural gas cargo beneficially owned by that person, or by an affiliate of that person, is carried in coastwise trade on one or more other vessels, not owned by that person, or by an affiliate of that person, if the other vessel or vessels are also part of the same arrangement;

(C)

in the case of a towing vessel associated with a non-self-propelled tank vessel where both vessels function as a single self-propelled vessel, oil, petroleum products, petrochemicals, or liquefied natural gas cargo that is beneficially owned by the person that owns both the towing vessel and the non-self-propelled tank vessel, or any United States affiliate of that person, immediately before, during, or immediately after the cargo is carried in coastwise trade on either of those vessels; or

(D)

any oil, petroleum products, petrochemicals, or liquefied natural gas cargo carried on any vessel that is either a self-propelled tank vessel having a length of at least 210 meters or a tank vessel that is a liquefied natural gas carrier that—

(i)

was delivered by the builder of the vessel to the owner of the vessel after December 31, 1999; and

(ii)

was purchased by a person for the purpose, and with the reasonable expectation, of transporting on the vessel liquefied natural gas or unrefined petroleum beneficially owned by the owner of the vessel, or an affiliate of the owner, from Alaska to the continental United States.

(6)

United states affiliate.—

The term “United States affiliate” means, with respect to any person, an affiliate the principal place of business of which is located in the United States.

(b)

Requirements.—

A coastwise endorsement may be issued for a vessel if—

(1)

the vessel satisfies the requirements for a coastwise endorsement, except for the ownership requirement otherwise applicable without regard to this section;

(2)

the person that owns the vessel (or, if the vessel is owned by a trust or similar arrangement, the beneficiary of the trust or similar arrangement) meets the requirements of subsection (c);

(3)

the vessel is under a demise charter to a person that certifies to the Secretary that the person is a citizen of the United States under section 50501 of this title for engaging in the coastwise trade; and

(4)

the demise charter is for a period of at least 3 years or a shorter period as may be prescribed by the Secretary.

(c)

Ownership Certification.—

(1)

In general.—

A person meets the requirements of this subsection if the person transmits to the Secretary each year the certification required by paragraph (2) or (3) with respect to a vessel.

(2)

Investment certification.—

To meet the certification requirement of this paragraph, a person shall certify that it—

(A)

is a leasing company, bank, or financial institution;

(B)

owns, or holds the beneficial interest in, the vessel solely as a passive investment;

(C)

does not operate any vessel for hire and is not an affiliate of any person that operates any vessel for hire; and

(D)

is independent from, and not an affiliate of, any charterer of the vessel or any other person that has the right, directly or indirectly, to control or direct the movement or use of the vessel.

(3)

Certain tank vessels.—

(A)

In general.—

To meet the certification requirement of this paragraph, a person shall certify that—

(i)

the aggregate book value of the vessels owned by the person and United States affiliates of the person does not exceed 10 percent of the aggregate book value of all assets owned by the person and its United States affiliates;

(ii)

not more than 10 percent of the aggregate revenues of the person and its United States affiliates is derived from the ownership, operation, or management of vessels;

(iii)

at least 70 percent of the aggregate tonnage of all cargo carried by all vessels owned by the person and its United States affiliates and documented with a coastwise endorsement is qualified proprietary cargo;

(iv)

any cargo other than qualified proprietary cargo carried by all vessels owned by the person and its United States affiliates and documented with a coastwise endorsement consists of oil, petroleum products, petrochemicals, or liquified natural gas;

(v)

no vessel owned by the person or any of its United States affiliates and documented with a coastwise endorsement carries molten sulphur; and

(vi)

the person owned one or more vessels documented under this section as of August 9, 2004.

(B)

Application only to certain vessels.—

A person may make a certification under this paragraph only with respect to—

(i)

a tank vessel having a tonnage of at least 6,000 gross tons, as measured under section 14502 of this title (or an alternative tonnage measured under section 14302 of this title as prescribed by the Secretary under section 14104 of this title); or

(ii)

a towing vessel associated with a non-self-propelled tank vessel that meets the requirements of clause (i), where both vessels function as a single self-propelled vessel.

(d)

Filing of Demise Charter.—

The demise charter and any amendments to the charter shall be filed with the certification required by subsection (b)(3) or within 10 days after filing an amendment to the charter. The charter and amendments shall be made available to the public.

(e)

Continuation of Endorsement After Termination of Charter.—

When a charter required by subsection (b)(3) is terminated for default by the charterer, the Secretary may continue the coastwise endorsement for not more than 6 months on terms and conditions the Secretary may prescribe.

(f)

Deemed Owned by Citizens.—

A vessel satisfying the requirements of this section is deemed to be owned only by citizens of the United States under sections 12103 and 50501 of this title.

(Pub. L. 109–304, § 5, Oct. 6, 2006, 120 Stat. 1501; Pub. L. 115–232, div. C, title XXXV, § 3541(b)(15), Aug. 13, 2018, 132 Stat. 2324.)

cite as: 46 USC 12119