73 S T A T. ]
PUBLIC LAW 86-127-JULY 31, 1959
273
of bonds to the general public, the Secretary of Commerce is authorized to accept a deposit in escrow in an amount which at the time of such deposit is equal to (i) the excess of the principal of such loan or mortgage over 75 per centum, or 871/^ per centum, as the case may be, of the amount paid by or for the account of the mortgagor or borrower for the construction, reconstruction, or reconditioning (including designing, inspection, outfitting, and equipping) of the vessel, (ii) with interest thereon for the period of the escrow agreement. " (b) DISBURSEMENT PRIOR TO TERMINATION OF THE ESCROW AGREE-
MENT.—The Secretary of Commerce shall, as specified in the escrow agreement, disburse the escrow fund to pay amounts the mortgagor or borrower is obligated to pay as interest on such loan or mortgage or for the construction, reconstruction, or reconditioning (including designing, inspecting, outfitting, and equipping) of the vessel, except that if insurance becomes payable under the insurance contract prior to the termination of the escrow agreement, all amounts in the escrow fund at the time such insurance becomes payable (including realized income which has not yet been paid to the borrower or mortgagor) shall, subject in the case of insurance on a mortgage to the application of mortgage provisions contemplated by section 1104(a) (10) of this Act, be paid into the Federal Ship Mortgage Insurance Fund and (i) be credited against any amounts due or to become due to the Secretary of Commerce from the borrower or mortgagor with respect to the insured loan or mortgage and (ii) to the extent not so required, be paid to the borrower or mortgagor. "(c)
DISBURSEMENT U P O N TERMINATION or THE ESCROW AGREE-
MENT.—If insurance has not become payable under the insurance contract prior to the termination of the escrow agreement, any balance of the escrow fund at the time of such termination shall be disbursed by the Secretary of Commerce to prepay the excess of the principal of the loan or mortgage over 75 per centum, or 87i/^ per centum, as the case may be, of the actual cost of the vessel to the extent paid, and to pay interest on such prepaid amount of principal, and the remainder of such balance of the escrow fund shall be paid to the borrower or mortgagor. " (d) INVESTMENT OF THE ESCROW FUND.—The Secretary of Commerce may invest and reinvest all or any part of the escrow fund in obligations of the United States with such maturities that such fund will be available as required for purposes of the escrow agreement. "(e) INCOME ON THE ESCROW FUND.—Any income realized on the
escrow fund shall, upon receipt by the Secretary of Commerce, be paid to the borrower or mortgagor. "(f) OTHER TERMS.—The escrow agreement shall contain such other terms as the Secretary of Commerce may consider jiecessary to fully protect the interests of the United States." (3) By inserting before the periods at the end of both the second and third sentences of section 1104(d) a comma and the following: "excluding the average amount (except interest) on deposit in an escrow fund created under section 1111 of this Act." (4) By inserting in section 1104(e), after the word "commitments," the words "for services in connection with the escrow fund authorized by section 1111." Approved July 31, 1959.
46 USC 1274. ^^ "^c 1274.
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