---
kind: "section"
citation: "46 U.S.C. § 57305"
title: "46"
title_heading: "Shipping"
number: "57305"
heading: "Determination of trade-in allowance"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/46/57305"
units:
  - "Subtitle V — Merchant Marine"
  - "Part F — Government-Owned Merchant Vessels"
  - "Chapter 573 — Vessel Trade-In Program"
---

# §57305. Determination of trade-in allowance

- (a) **In General.—** The [Secretary](/usc/46/53101.md?p=8) of Transportation shall determine the trade-in allowance for an [obsolete vessel](/usc/46/57301.md?p=2) at the time of acquisition of the [vessel](/usc/46/53501.md?p=9). The allowance shall be the fair value of the [vessel](/usc/46/53501.md?p=9). In determining the value, the [Secretary](/usc/46/53101.md?p=8) shall consider—
  - (1) the scrap value of the [obsolete vessel](/usc/46/57301.md?p=2) in American and foreign markets;
  - (2) the depreciated value based on a 20-year or 25-year life, whichever applies to the [obsolete vessel](/usc/46/57301.md?p=2); and
  - (3) the market value of the [obsolete vessel](/usc/46/57301.md?p=2) for operation in world commerce or in the domestic or [foreign commerce](/usc/46/53101.md?p=4) of the [United States](/usc/46/53101.md?p=10).
- (b) **Use of Obsolete Vessels.—** If acquisition of the [obsolete vessel](/usc/46/57301.md?p=2) occurs when the owner contracts for the [construction](/usc/46/53701.md?p=3) of the [new vessel](/usc/46/53301.md?p=a-2), and the owner uses the [obsolete vessel](/usc/46/57301.md?p=2) during the period of [construction](/usc/46/53701.md?p=3) of the [new vessel](/usc/46/53301.md?p=a-2), the [Secretary](/usc/46/53101.md?p=8) shall reduce the trade-in allowance by an amount representing the fair value of that use. The [Secretary](/usc/46/53101.md?p=8) shall establish the rate for use of the [obsolete vessel](/usc/46/57301.md?p=2) when the contract for [construction](/usc/46/53701.md?p=3) of the [new vessel](/usc/46/53301.md?p=a-2) is made.

## Source credit

(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1663.)

## Notes

| Historical and Revision Notes |  |  |
| --- | --- | --- |
| Revised<br>Section | Source (U.S. Code) | Source (Statutes at Large) |
| 57305(a) | 46 App.:1160(b) (3d sentence), (d) (1st, 2d sentences). | June 29, 1936, ch. 858, title V, § 510(b) (3d sentence), (d), as added Aug. 4, 1939, ch. 417, § 7, 53 Stat. 1184; July 17, 1952, ch. 939, § 8, 66 Stat. 762; Pub. L. 86–518, § 1, June 12, 1960, 74 Stat. 216; Pub. L. 87–401, Oct. 5, 1961, 75 Stat. 833; Pub. L. 91–469, § 35(a), Oct. 21, 1970, 84 Stat. 1035; Pub. L. 97–31, § 12(91), Aug. 6, 1981, 95 Stat. 161. |
| 57305(b) | 46 App.:1160(d) (3d, last sentences). |  |

In subsection (a), the words “fair value” are substituted for “fair and reasonable value” to eliminate unnecessary words. In paragraph (3), the word “commerce” is substituted for “trade” for consistency in the chapter.

In subsection (b), the words “for the entire period of such use” are omitted as unnecessary.