
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 46USC31329]

 
                           TITLE 46--SHIPPING
 
                    Subtitle III--Maritime Liability
 
         CHAPTER 313--COMMERCIAL INSTRUMENTS AND MARITIME LIENS
 
                  SUBCHAPTER II--COMMERCIAL INSTRUMENTS
 
Sec. 31329. Court sales of documented vessels

    (a) A documented vessel may be sold by order of a district court 
only to--
        (1) a person eligible to own a documented vessel under section 
    12102 of this title; or
        (2) a mortgagee of that vessel.

    (b) When a vessel is sold to a mortgagee not eligible to own a 
documented vessel--
        (1) the vessel must be held by the mortgagee for resale;
        (2) the vessel held by the mortgagee is subject to section 902 
    of the Merchant Marine Act, 1936 (46 App. U.S.C. 1242); and
        (3) the sale of the vessel to the mortgagee is not a sale 
    foreign within the terms of the first proviso of section 27 of the 
    Merchant Marine Act, 1920 (46 App. U.S.C. 883).

    (c) Unless waived by the Secretary of Transportation, a person 
purchasing a vessel by court order under subsection (a)(1) of this 
section or from a mortgagee under subsection (a)(2) of this section must 
document the vessel under chapter 121 of this title.
    (d) The vessel may be operated by the mortgagee not eligible to own 
a documented vessel only with the approval of the Secretary.
    (e) A sale of a vessel contrary to this section is void.
    (f) This section does not apply to a documented vessel that has been 
operated only for pleasure.

(Pub. L. 100-710, title I, Sec. 102(c), Nov. 23, 1988, 102 Stat. 4747; 
Pub. L. 104-324, title XI, Sec. 1118, Oct. 19, 1996, 110 Stat. 3973.)

                      Historical and Revision Notes
------------------------------------------------------------------------
          Revised section                Source section (U.S. Code)
------------------------------------------------------------------------
31329.............................  46:961(f)
------------------------------------------------------------------------

    Section 31329 sets out certain restrictions on the court sale of a 
documented vessel.
    Section 31329(a) restricts the sale only to a person eligible to own 
a documented vessel under section 12102 of title 46 or to the mortgagee, 
which may be a trustee acting as a holder of a preferred mortgage on a 
documented vessel for the benefit of a person not eligible to be the 
holder of a preferred mortgage on that vessel.
    Section 31329(b) sets out conditions on the sale to a trustee acting 
as a holder of a preferred mortgage on a documented vessel for the 
benefit of a person not eligible to be the holder of a preferred 
mortgage on that vessel. First, the vessel must be held by the trustee 
for resale. Second, while being held for resale, the vessel is subject 
to requisition or purchase during a national emergency under section 902 
of the Merchant Marine Act, 1936 (46 App. U.S.C. 1242). And third, the 
sale of the vessel to the trustee is not a sale foreign within the terms 
of the First Proviso of section 27 of the Merchant Marine Act, 1920 (46 
App. U.S.C. 883).
    Section 31329(c) requires a person that is eligible to document the 
vessel that purchases a vessel from the court to document the vessel. 
This subsection also requires the person purchasing the vessel from the 
trustee to document it, thereby restricting to whom the trustee can sell 
the vessel. Many documented vessels have no national defense utility, 
such as recreational vessels and fishing vessels. Therefore, both of 
these restrictions can be waived by the Secretary. As previously 
discussed, these waivers can be on a case-by-case basis or with a 
blanket waiver.
    Section 31329(d) prohibits a trustee from operating the vessel 
without the approval of the Secretary.
    Section 31329(e) voids any sale that is done contrary to this 
section.


                          house floor statement

    Under section 31329(d) a vessel may be operated by the trustee only 
with the approval of the Secretary. Under current law a vessel may be 
documented by a trust if all of the members of the trust are citizens of 
the United States. If the trust buying the vessel at the court sale 
includes foreign investors, the vessel cannot be documented. The 
Committee intends in this section that the vessel will only be 
``operated'' in a maintenance manner, but not in a commercial service.


                               Amendments

    1996--Subsec. (f). Pub. L. 104-324 added subsec. (f).

                  Section Referred to in Other Sections

    This section is referred to in section 31330 of this title.
