At the date of this Supplemental Report, the proposed Tax Equity and Fiscal Responsibility Act of 1982 (H. R. 4961) had been agreed to in House-Senate conference but had not yet been enacted.

This proposed legislation would affect, in some respects, the results of our analysis. Specifically, the basic assumptions would be changed as follows:

Table 8 presents a comparison, for the ITC case, of the present value cost analysis under the existing law and the proposed law. The comparison indicates that, while the charter cost to the Navy would increase under the proposed legislation, the cost to the Total Government would in fact decrease slightly, because of the offsetting beneficial effect on Treasury revenues.* These results thus support the conclusion that there are significant economic advantages to the charter alternative.

Our analysis was undertaken to compare the costs of chartering the TAKX ships, under the commercial leasing arrangements contemplated by the Navy's Request for Proposals, with the costs that would be incurred to purchase them.

Based on the parameters described above, the Navy's cost of chartering a TAKX ship will be approximately $43.45 million less than the purchase cost of the same vessel delivered at the same time. This represents a discount of 24% from the purchase price, and amounts to an aggregate savings of $564.85 million for the 13 selected vessels.

Viewed another way, the charter program is equiv

sets Appendix D forth the annual charter cash flows which would be produced (for the ITC case) under the proposed legislation.