---
kind: "section"
citation: "46 U.S.C. § 56503"
title: "46"
title_heading: "Shipping"
number: "56503"
heading: "Types of adjustments and arrangements"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/46/56503"
units:
  - "Subtitle V — Merchant Marine"
  - "Part E — Control of Merchant Marine Capabilities"
  - "Chapter 565 — Essential Vessels Affected by Neutrality Act"
---

# §56503. Types of adjustments and arrangements

- (a) **Suspension Requirements.—** An adjustment or arrangement under this chapter shall include suspension of—
  - (1) the requirement to operate the [vessel](/usc/46/53501.md?p=9) in foreign trade under the applicable operating-differential or [construction](/usc/46/53701.md?p=3)-differential subsidy contract or [mortgage](/usc/46/53701.md?p=8) or other [agreement](/usc/46/53201.md?p=8); and
  - (2) the right to operating-differential subsidy for the [vessel](/usc/46/53501.md?p=9).
- (b) **Discretionary Adjustments and Arrangements.—** To the extent the [Secretary](/usc/46/53101.md?p=8) of Transportation considers appropriate to carry out the purposes of this subtitle, an adjustment or arrangement under this chapter may include any of the following:
  - (1) Lay-up of the [vessel](/usc/46/53501.md?p=9) by the owner or in the custody of the [Secretary](/usc/46/53101.md?p=8), with payment or reimbursement by the [Secretary](/usc/46/53101.md?p=8) of necessary and proper expenses (including reasonable overhead and insurance) or a fixed periodic allowance instead of payment or reimbursement.
  - (2) Postponement, for not more than the total period of the lay-up, of the maturity date of each installment of the principal of [obligations](/usc/46/53701.md?p=9) to the [United States](/usc/46/53101.md?p=10) Government for the [vessel](/usc/46/53501.md?p=9) (regardless of whether the maturity date is during a lay-up period), or rearrangement of those maturities.
  - (3) Postponement or cancellation of interest accruing on the [obligations](/usc/46/53701.md?p=9) during a lay-up period.
  - (4) Extension, for not more than the total period of the lay-up, of the 20-year life limitation for the [vessel](/usc/46/53501.md?p=9) and other limitations and provisions of this subtitle based on a 20-year life.
  - (5) Provision for temporary or emergency employment of the [vessel](/usc/46/53501.md?p=9) (instead of lay-up) as may be practicable, with such arrangements for management of the [vessel](/usc/46/53501.md?p=9), payment of expenses, and application of the proceeds of the employment, as the [Secretary](/usc/46/53101.md?p=8) may approve, with any period of operation being included as part of the lay-up period.
  - (6) Payment to the [Secretary](/usc/46/53101.md?p=8), on termination of the arrangements with the applicant, of the applicant’s net profits (earned while the arrangements were in effect) in excess of 10 percent a year on the capital necessarily employed in the applicant’s business, as reimbursement for [obligations](/usc/46/53701.md?p=9) postponed or canceled and expenses incurred or paid by the [Secretary](/usc/46/53101.md?p=8) under this section.
- (c) **Laid-Up Vessels.—** Under [subsection (b)(6)](#b-6), capital of the applicant represented by a [vessel](/usc/46/53501.md?p=9) of the applicant laid-up or operated under this section shall be included in capital necessarily employed in the applicant’s business. The [Secretary](/usc/46/53101.md?p=8) may require a [vessel](/usc/46/53501.md?p=9) laid-up or operated under this section to be security for reimbursement.

## Source credit

(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1657.)

## Notes

| Historical and Revision Notes |  |  |
| --- | --- | --- |
| Revised<br>Section | Source (U.S. Code) | Source (Statutes at Large) |
| 56503 | 46 App.:1242a(c). | June 29, 1940, ch. 442, subdiv. (c), 54 Stat. 685; Pub. L. 97–31, § 12(132), Aug. 6, 1981, 95 Stat. 165. |