46 Usc 535

Page 325

TITLE 46—SHIPPING

(2) the deposited gain is withdrawn before
the end of that period;
(3) the construction related to that deposited gain has not progressed to the extent of 5
percent of completion within the appropriate
period under section 53310 of this title; or
(4) the Secretary of Transportation finds and
certifies to the Secretary of the Treasury
that, for causes within the control of the taxpayer, the entire construction related to that
deposited gain is not completed with reasonable dispatch.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1590.)
HISTORICAL AND REVISION NOTES
Revised
Section

Source (U.S. Code)

53311 ..........

46 App.:1161(i).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
V, § 511(i), as added Oct.
10, 1940, ch. 849, 54 Stat.
1107; July 17, 1952, ch. 939,
§ 13(b), 66 Stat. 764; Pub. L.
97–31, § 12(92)(A), Aug. 6,
1981, 95 Stat. 161.

The last sentence of 46 App. U.S.C. 1161(i) is omitted
as obsolete.

§ 53312. Assessment and collection of deficiency
tax
Notwithstanding any other provision of law, a
deficiency in tax for a taxable year resulting
from the inclusion of an amount in gross income
as provided by section 53311 of this title, and the
amount to be treated as a deficiency under section 53311 instead of as an adjustment for the declared value excess profits tax, may be assessed
or a civil action may be brought to collect the
deficiency without assessment, at any time. Interest on a deficiency or amount to be treated as
a deficiency does not begin until the date the deposited gain or part of the deposited gain in
question is required to be included in gross income under section 51111.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1590.)
HISTORICAL AND REVISION NOTES
Revised
Section

Source (U.S. Code)

53312 ..........

46 App.:1161(j).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
V, § 511(j), as added Oct.
10, 1940, ch. 849, 54 Stat.
1108.

CHAPTER 535—CAPITAL CONSTRUCTION
FUNDS
Sec.

53501.
53502.
53503.
53504.
53505.
53506.
53507.
53508.
53509.
53510.
53511.
53512.
53513.
53514.
53515.

Definitions.
Regulations.
Establishing a capital construction fund.
Deposits and withdrawals.
Ceiling on deposits.
Investment and fiduciary requirements.
Nontaxation of deposits.
Separate accounts within a fund.
Qualified withdrawals.
Tax treatment of qualified withdrawals and
basis of property.
Tax treatment of nonqualified withdrawals.
FIFO and LIFO withdrawals.
Corporate reorganizations and partnership
changes.
Relationship of old fund to new fund.
Records and reports.

§ 53501

Sec.

53516.
53517.

Termination of agreement after change in
regulations.
Reports.

§ 53501. Definitions
In this chapter:
(1) AGREEMENT VESSEL.—The term ‘‘agreement vessel’’ means—
(A) an eligible vessel or a qualified vessel
that is subject to an agreement under this
chapter; and
(B) a barge or container that is part of the
complement of a vessel described in subparagraph (A) if provided for in the agreement.
(2) ELIGIBLE VESSEL.—The term ‘‘eligible
vessel’’ means—
(A) a vessel—
(i) constructed in the United States (and,
if reconstructed, reconstructed in the
United States), constructed outside the
United States but documented under the
laws of the United States on April 15, 1970,
or constructed outside the United States
for use in the United States foreign trade
pursuant to a contract made before April
15, 1970;
(ii) documented under the laws of the
United States; and
(iii) operated in the foreign or domestic
trade of the United States or in the fisheries of the United States; and
(B) a commercial fishing vessel—
(i) constructed in the United States and,
if reconstructed, reconstructed in the
United States;
(ii) of at least 2 net tons but less than 5
net tons;
(iii) owned by a citizen of the United
States;
(iv) having its home port in the United
States; and
(v) operated in the commercial fisheries
of the United States.
(3) JOINT REGULATIONS.—The term ‘‘joint
regulations’’ means regulations prescribed
jointly by the Secretary and the Secretary of
the Treasury under section 53502(b) of this
title.
(4) NONCONTIGUOUS TRADE.—The term ‘‘noncontiguous trade’’ means—
(A) trade between—
(i) one of the contiguous 48 States; and
(ii) Alaska, Hawaii, Puerto Rico, or an
insular territory or possession of the
United States; and
(B) trade between—
(i) a place in Alaska, Hawaii, Puerto
Rico, or an insular territory or possession
of the United States; and
(ii) another place in Alaska, Hawaii,
Puerto Rico, or an insular territory or possession of the United States.
(5) QUALIFIED VESSEL.—The term ‘‘qualified
vessel’’ means—
(A) a vessel—
(i) constructed in the United States (and,
if reconstructed, reconstructed in the
United States), constructed outside the

§ 53502

TITLE 46—SHIPPING

United States but documented under the
laws of the United States on April 15, 1970,
or constructed outside the United States
for use in the United States foreign trade
pursuant to a contract made before April
15, 1970;
(ii) documented under the laws of the
United States; and
(iii) agreed, between the Secretary and
the person maintaining the capital construction fund established under section
53503 of this title, to be operated in the
United States foreign, Great Lakes, noncontiguous domestic, or short sea transportation trade trade 1 or in the fisheries of
the United States; and
(B) a commercial fishing vessel—
(i) constructed in the United States and,
if reconstructed, reconstructed in the
United States;
(ii) of at least 2 net tons but less than 5
net tons;
(iii) owned by a citizen of the United
States;
(iv) having its home port in the United
States; and
(v) operated in the commercial fisheries
of the United States.
(6) SECRETARY.—The term ‘‘Secretary’’
means—
(A) the Secretary of Commerce with respect to an eligible vessel or a qualified vessel operated or to be operated in the fisheries of the United States; and
(B) the Secretary of Transportation with
respect to other vessels.
(7) 2 SHORT SEA TRANSPORTATION TRADE.—The
term ‘‘short sea transportation trade’’ means
the carriage by vessel of cargo—
(A) that is—
(i) contained in intermodal cargo containers and loaded by crane on the vessel;
or
(ii) loaded on the vessel by means of
wheeled technology; and
(B) that is—
(i) loaded at a port in the United States
and unloaded either at another port in the
United States or at a port in Canada located in the Great Lakes Saint Lawrence
Seaway System; or
(ii) loaded at a port in Canada located in
the Great Lakes Saint Lawrence Seaway
System and unloaded at a port in the
United States.
(7) 2 UNITED STATES FOREIGN TRADE.—The
term ‘‘United States foreign trade’’ includes
those areas in domestic trade in which a vessel
built with a construction-differential subsidy
is allowed to operate under the first sentence
of section 506 of the Merchant Marine Act,
1936.
(8) VESSEL.—The term ‘‘vessel’’ includes—
(A) cargo handling equipment that the
Secretary determines is intended for use primarily on the vessel; and
1 So
2 So

in original.
in original. Two pars. (7) have been enacted.

Page 326

(B) an ocean-going towing vessel, an
ocean-going barge, or a comparable towing
vessel or barge operated on the Great Lakes.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1591;
Pub. L. 110–140, title XI, § 1122(a), Dec. 19, 2007,
121 Stat. 1762.)
HISTORICAL AND REVISION NOTES
Revised
Section

Source (U.S. Code)

53501(1) ......

46 App.:1177(b)(3),
(k)(3).

53501(2) ......

46 App.:1177(k)(1).
46 App.:1177–1.

53501(3) ......
53501(4) ......
53501(5) ......

53501(6) ......
53501(7) ......
53501(8) ......

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(b)(3), (k)(1)–(3),
(5)–(9), 49 Stat. 2005; June
23, 1938, ch. 600, §§ 23–28, 52
Stat. 960; Aug. 4, 1939, ch.
417, § 10, 53 Stat. 1185; July
17, 1952, ch. 939, §§ 17–19, 66
Stat. 764; Pub. L. 85–637,
Aug. 14, 1958, 72 Stat. 216;
Pub. L. 86–518, § 1, June 12,
1960, 74 Stat. 216; Pub. L.
87–45, § 6, May 27, 1961, 75
Stat. 91; Pub. L. 87–271,
Sept. 21, 1961, 75 Stat. 570;
restated Pub. L. 91–469,
§ 21(a), Oct. 21, 1970, 84
Stat. 1027, 1031, 1032; Pub.
L. 93–116, Oct. 1, 1973, 87
Stat. 421; Pub. L. 97–31,
§ 12(97), Aug. 6, 1981, 95
Stat. 162.
Pub. L. 94–455, title VIII,
§ 807, Oct. 4, 1976, 90 Stat.
1606.

46 App.:1177(k)(6).
46 App.:1177(k)(8).
46 App.:1177(k)(1)
(last sentence),
(2).
46 App.:1177–1.
46 App.:1177(k)(9).
46 App.:1177(k)(5).
46 App.:1177(k)(7).

The codification of the laws in this chapter is not intended to alter the existing jurisdictional relationship
of the Secretaries who administer those laws.
In paragraph (2)(A)(iii), the word ‘‘trade’’ is substituted for ‘‘commerce’’ for consistency in the chapter.
REFERENCES IN TEXT
Section 506 of the Merchant Marine Act, 1936, referred
to in par. (7), is section 506 of act June 29, 1936, ch. 858,
49 Stat. 1985, which is set out as a note under section
53101 of this title.
AMENDMENTS
2007—Par. (5)(A)(iii). Pub. L. 110–140, § 1122(a)(1), substituted ‘‘noncontiguous domestic, or short sea transportation trade’’ for ‘‘or noncontiguous domestic’’.
Par. (7). Pub. L. 110–140, § 1122(a)(2), added par. (7) relating to short sea transportation trade.
EFFECTIVE DATE OF 2007 AMENDMENT
Amendment by Pub. L. 110–140 effective on the date
that is 1 day after Dec. 19, 2007, see section 1601 of Pub.
L. 110–140, set out as an Effective Date note under section 1824 of Title 2, The Congress.

§ 53502. Regulations
(a) IN GENERAL.—Except as provided in subsection (b), the Secretary shall prescribe regulations to carry out this chapter.
(b) TAX LIABILITY.—The Secretary and the
Secretary of the Treasury shall prescribe joint
regulations for the determination of tax liability under this chapter.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1593.)

Page 327
HISTORICAL AND REVISION NOTES
Revised
Section
53502 ..........

Source (U.S. Code)
46 App.:1177(l) (2d
sentence).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(l) (2d sentence), 49
Stat. 2005; June 23, 1938,
ch. 600, §§ 23–28, 52 Stat.
960; Aug. 4, 1939, ch. 417,
§ 10, 53 Stat. 1185; July 17,
1952, ch. 939, §§ 17–19, 66
Stat. 764; Pub. L. 85–637,
Aug. 14, 1958, 72 Stat. 216;
Pub. L. 86–518, § 1, June 12,
1960, 74 Stat. 216; Pub. L.
87–45, § 6, May 27, 1961, 75
Stat. 91; Pub. L. 87–271,
Sept. 21, 1961, 75 Stat. 570;
restated Pub. L. 91–469,
§ 21(a), Oct. 21, 1970, 84
Stat. 1032; Pub. L. 97–31,
§ 12(97)(A), Aug. 6, 1981, 95
Stat. 162.

Subsection (a) is added for clarity because various
provisions of the source language for this chapter
imply that the Secretary is to prescribe regulations individually (except for regulations affecting a determination of tax liability). See, e.g., 46 App. U.S.C.
1177(a) (last sentence), (f)(1) (last sentence), and (l) (last
sentence).
In subsection (b), the words ‘‘not inconsistent with
the foregoing provisions of this section, as may be necessary or appropriate’’ are omitted as surplus.

§ 53503. Establishing a capital construction fund
(a) IN GENERAL.—A citizen of the United
States owning or leasing an eligible vessel may
make an agreement with the Secretary under
this chapter to establish a capital construction
fund for the vessel.
(b) ALLOWABLE PURPOSE.—The purpose of the
agreement shall be to provide replacement vessels, additional vessels, or reconstructed vessels,
built in the United States and documented
under the laws of the United States, for operation in the United States foreign, Great Lakes,
noncontiguous domestic, or short sea transportation trade or in the fisheries of the United
States.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1593;
Pub. L. 110–140, title XI, § 1122(b), Dec. 19, 2007,
121 Stat. 1762.)
HISTORICAL AND REVISION NOTES
Revised
Section

§ 53505

TITLE 46—SHIPPING

Source (U.S. Code)

53503(a) ......

46 App.:1177(a) (1st
sentence).

53503(b) ......

46 App.:1177(a) (2d
sentence related
to purpose).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(a) (1st sentence),
(2d sentence related to
purpose), 49 Stat. 2005;
June 23, 1938, ch. 600,
§§ 23–28, 52 Stat. 960; Aug.
4, 1939, ch. 417, § 10, 53
Stat. 1185; July 17, 1952,
ch. 939, §§ 17–19, 66 Stat.
764; Pub. L. 85–637, Aug.
14, 1958, 72 Stat. 216; Pub.
L. 86–518, § 1, June 12, 1960,
74 Stat. 216; Pub. L. 87–45,
§ 6, May 27, 1961, 75 Stat.
91; Pub. L. 87–271, Sept. 21,
1961, 75 Stat. 570; restated
Pub. L. 91–469, § 21(a), Oct.
21, 1970, 84 Stat. 1026; Pub.
L. 97–31, § 12(97)(A), Aug. 6,
1981, 95 Stat. 162.

AMENDMENTS
2007—Subsec. (b). Pub. L. 110–140 substituted ‘‘noncontiguous domestic, or short sea transportation
trade’’ for ‘‘or noncontiguous domestic trade’’.

EFFECTIVE DATE OF 2007 AMENDMENT
Amendment by Pub. L. 110–140 effective on the date
that is 1 day after Dec. 19, 2007, see section 1601 of Pub.
L. 110–140, set out as an Effective Date note under section 1824 of Title 2, The Congress.

§ 53504. Deposits and withdrawals
(a) REQUIRED DEPOSITS.—An agreement to establish a capital construction fund shall provide
for the deposit in the fund of the amounts
agreed to be appropriate to provide for qualified
withdrawals under section 53509 of this title.
(b) APPLICABLE REQUIREMENTS.—Deposits in
and withdrawals from the fund are subject to
the requirements included in the agreement or
prescribed by the Secretary by regulation. However, the Secretary may not require a person to
deposit in the fund for a taxable year more than
50 percent of that portion of the person’s taxable
income for that year (as determined under section 53505(a)(1) of this title) that is attributable
to the operation of an agreement vessel.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1593.)
HISTORICAL AND REVISION NOTES
Revised
Section

Source (U.S. Code)

53504(a) ......

46 App.:1177(a) (2d
sentence related
to deposits).

53504(b) ......

46 App.:1177(a) (last
sentence).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(a) (2d sentence related to deposits), (last
sentence), 49 Stat. 2005;
June 23, 1938, ch. 600,
§§ 23–28, 52 Stat. 960; Aug.
4, 1939, ch. 417, § 10, 53
Stat. 1185; July 17, 1952,
ch. 939, §§ 17–19, 66 Stat.
764; Pub. L. 85–637, Aug.
14, 1958, 72 Stat. 216; Pub.
L. 86–518, § 1, June 12, 1960,
74 Stat. 216; Pub. L. 87–45,
§ 6, May 27, 1961, 75 Stat.
91; Pub. L. 87–271, Sept. 21,
1961, 75 Stat. 570; restated
Pub. L. 91–469, § 21(a), Oct.
21, 1970, 84 Stat. 1026; Pub.
L. 97–31, § 12(97)(A), Aug. 6,
1981, 95 Stat. 162.

In subsection (a), the words ‘‘agreed to be appropriate’’ are substituted for ‘‘agreed upon as necessary
or appropriate’’ to eliminate unnecessary words.

§ 53505. Ceiling on deposits
(a) MAXIMUM DEPOSITS.—The amount deposited in a capital construction fund for a taxable
year may not exceed the sum of—
(1) that portion of the taxable income of the
owner or lessee for the taxable year (computed
under chapter 1 of the Internal Revenue Code
of 1986 (26 U.S.C. ch. 1) but without regard to
the carryback of net operating loss or net capital loss or this chapter) that is attributable
to the operation of agreement vessels in the
foreign or domestic trade of the United States
or in the fisheries of the United States;
(2) the amount allowable as a deduction
under section 167 of such Code (26 U.S.C. 167)
for the taxable year for agreement vessels;
(3) if the transaction is not taken into account for purposes of paragraph (1), the net
proceeds (as defined in joint regulations) from
the disposition of an agreement vessel or from
insurance or indemnity attributable to an
agreement vessel; and
(4) the receipts from the investment or reinvestment of amounts held in the fund.

§ 53506

TITLE 46—SHIPPING

(b) REDUCTIONS FOR LESSEES.—For a lessee,
the maximum amount that may be deposited for
an agreement vessel under subsection (a)(2) for
any period shall be reduced by any amount the
owner is required or permitted, under the capital construction fund agreement, to deposit for
that period for the vessel under subsection
(a)(2).

Page 328
HISTORICAL AND REVISION NOTES

Revised
Section
53506 ..........

Source (U.S. Code)
46 App.:1177(c).

(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1593.)
HISTORICAL AND REVISION NOTES
Revised
Section
53505 ..........

Source (U.S. Code)
46 App.:1177(b)(1),
(2).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(b)(1), (2), 49 Stat.
2005; June 23, 1938, ch. 600,
§§ 23–28, 52 Stat. 960; Aug.
4, 1939, ch. 417, § 10, 53
Stat. 1185; July 17, 1952,
ch. 939, §§ 17–19, 66 Stat.
764; Pub. L. 85–637, Aug.
14, 1958, 72 Stat. 216; Pub.
L. 86–518, § 1, June 12, 1960,
74 Stat. 216; Pub. L. 87–45,
§ 6, May 27, 1961, 75 Stat.
91; Pub. L. 87–271, Sept. 21,
1961, 75 Stat. 570; restated
Pub. L. 91–469, § 21(a), Oct.
21, 1970, 84 Stat. 1027.

In subsection (a)(1), the word ‘‘trade’’ is substituted
for ‘‘commerce’’ for consistency in the chapter.

§ 53506. Investment and fiduciary requirements
(a) IN GENERAL.—Amounts in a capital construction fund shall be kept in the depository
specified in the agreement and shall be subject
to trustee and other fiduciary requirements prescribed by the Secretary. Except as provided in
subsection (b), amounts in the fund may be invested only in interest-bearing securities approved by the Secretary.
(b) STOCK INVESTMENTS.—
(1) IN GENERAL.—With the approval of the
Secretary, an agreed percentage (but not more
than 60 percent) of the assets of the fund may
be invested in the stock of domestic corporations that—
(A) is fully listed and registered on an exchange registered with the Securities and
Exchange Commission as a national securities exchange; and
(B) would be acquired by a prudent investor seeking a reasonable income and the
preservation of capital.
(2) PREFERRED STOCK.—The preferred stock
of a corporation is deemed to satisfy the requirements of this subsection, even though it
may not be registered and listed because it is
nonvoting stock, if the common stock of the
corporation satisfies the requirements and the
preferred stock otherwise would satisfy the requirements.
(c) MAINTAINING AGREED PERCENTAGE.—If at
any time the fair market value of the stock in
the fund is more than the agreed percentage of
the assets in the fund, any subsequent investment of amounts deposited in the fund, and any
subsequent withdrawal from the fund, shall be
made in a way that tends to restore the fair
market value of the stock to not more than the
agreed percentage.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1594.)

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(c), 49 Stat. 2005;
June 23, 1938, ch. 600,
§§ 23–28, 52 Stat. 960; Aug.
4, 1939, ch. 417, § 10, 53
Stat. 1185; July 17, 1952,
ch. 939, §§ 17–19, 66 Stat.
764; Pub. L. 85–637, Aug.
14, 1958, 72 Stat. 216; Pub.
L. 86–518, § 1, June 12, 1960,
74 Stat. 216; Pub. L. 87–45,
§ 6, May 27, 1961, 75 Stat.
91; Pub. L. 87–271, Sept. 21,
1961, 75 Stat. 570; restated
Pub. L. 91–469, § 21(a), Oct.
21, 1970, 84 Stat. 1027; Pub.
L. 97–31, § 12(97)(A), Aug. 6,
1981, 95 Stat. 162.

In subsection (b)(1)(B), the words ‘‘prudent investor’’
are substituted for ‘‘prudent men of discretion and intelligence in such matters’’ to eliminate unnecessary
words.

§ 53507. Nontaxation of deposits
(a) TAX TREATMENT.—Subject to subsection
(b), under the Internal Revenue Code of 1986 (26
U.S.C. 1 et seq.)—
(1) taxable income (determined without regard to this chapter and section 7518 of such
Code (26 U.S.C. 7518)) for the taxable year shall
be reduced by the amount deposited for the
taxable year out of amounts referred to in section 53505(a)(1) of this title;
(2) a gain from a transaction referred to in
section 53505(a)(3) of this title shall not be
taken into account if an amount equal to the
net proceeds (as defined in joint regulations)
from the transaction is deposited in the fund;
(3) the earnings (including gains and losses)
from the investment and reinvestment of
amounts held in the fund shall not be taken
into account;
(4) the earnings and profits of a corporation
(within the meaning of section 316 of such
Code (26 U.S.C. 316)) shall be determined without regard to this chapter and section 7518 of
such Code (26 U.S.C. 7518); and
(5) in applying the tax imposed by section
531 of such Code (26 U.S.C. 531), amounts held
in the fund shall not be taken into account.
(b) CONDITION.—This section applies to an
amount only if the amount is deposited in the
fund under the agreement within the time provided in joint regulations.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1594.)
HISTORICAL AND REVISION NOTES
Revised
Section
53507 ..........

Source (U.S. Code)
46 App.:1177(d).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(d), 49 Stat. 2005;
June 23, 1938, ch. 600,
§§ 23–28, 52 Stat. 960; Aug.
4, 1939, ch. 417, § 10, 53
Stat. 1185; July 17, 1952,
ch. 939, §§ 17–19, 66 Stat.
764; Pub. L. 85–637, Aug.
14, 1958, 72 Stat. 216; Pub.
L. 86–518, § 1, June 12, 1960,
74 Stat. 216; Pub. L. 87–45,
§ 6, May 27, 1961, 75 Stat.
91; Pub. L. 87–271, Sept. 21,
1961, 75 Stat. 570; restated
Pub. L. 91–469, § 21(a), Oct.
21, 1970, 84 Stat. 1028; Pub.
L.
99–514,
title
II,
§ 261(e)(1), (2), Oct. 22, 1986,
100 Stat. 2215.

Page 329

§ 53509

TITLE 46—SHIPPING
HISTORICAL AND REVISION NOTES

§ 53508. Separate accounts within a fund
(a) IN GENERAL.—A capital construction fund
shall have three accounts:

Revised
Section
53508 ..........

Source (U.S. Code)
46 App.:1177(e).

(1) The capital account.
(2) The capital gain account.
(3) The ordinary income account.
(b) CAPITAL ACCOUNT.—The capital account
shall consist of—
(1) amounts referred to in section 53505(a)(2)
of this title;
(2) amounts referred to in section 53505(a)(3)
of this title, except that portion representing
a gain not taken into account because of section 53507(a)(2) of this title;
(3) the percentage applicable under section
243(a)(1) of the Internal Revenue Code of 1986
(26 U.S.C. 243(a)(1)) of any dividend received by
the fund for which the person maintaining the
fund would be allowed (were it not for section
53507(a)(3) of this title) a deduction under section 243 of such Code (26 U.S.C. 243); and
(4) interest income exempt from taxation
under section 103 of such Code (26 U.S.C. 103).
(c) CAPITAL GAIN ACCOUNT.—The capital gain
account shall consist of—
(1) amounts representing capital gains on assets held for more than 6 months and referred
to in section 53505(a)(3) or (4) of this title;
minus

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(e), 49 Stat. 2005;
June 23, 1938, ch. 600,
§§ 23–28, 52 Stat. 960; Aug.
4, 1939, ch. 417, § 10, 53
Stat. 1185; July 17, 1952,
ch. 939, §§ 17–19, 66 Stat.
764; Pub. L. 85–637, Aug.
14, 1958, 72 Stat. 216; Pub.
L. 86–518, § 1, June 12, 1960,
74 Stat. 216; Pub. L. 87–45,
§ 6, May 27, 1961, 75 Stat.
91; Pub. L. 87–271, Sept. 21,
1961, 75 Stat. 570; restated
Pub. L. 91–469, § 21(a), Oct.
21, 1970, 84 Stat. 1028; Pub.
L.
99–514,
title
II,
§ 261(e)(3), (4), Oct. 22, 1986,
100 Stat. 2215.

§ 53509. Qualified withdrawals
(a) IN GENERAL.—Subject to subsection (b), a
withdrawal from a capital construction fund is a
qualified withdrawal if it is made under the
terms of the agreement and is for—
(1) the acquisition, construction, or reconstruction of a qualified vessel or a barge or
container that is part of the complement of a
qualified vessel; or
(2) the payment of the principal on indebtedness incurred in the acquisition, construction,
or reconstruction of a qualified vessel or a
barge or container that is part of the complement of a qualified vessel.

(2) amounts representing capital losses on
assets held in the fund for more than 6
months.

(b) BARGES AND CONTAINERS.—Except as provided in regulations prescribed by the Secretary,
subsection (a) applies to a barge or container
only if it is constructed in the United States.

(d) ORDINARY INCOME ACCOUNT.—The ordinary
income account shall consist of—

(c) TREATMENT AS NONQUALIFIED WITHDRAWAL.—Under joint regulations, if the Sec-

(1) amounts referred to in section 53505(a)(1)
of this title;

retary determines that a substantial obligation
under an agreement is not being fulfilled, the
Secretary, after notice and opportunity for a
hearing to the person maintaining the fund,
may treat any amount in the fund as an amount
withdrawn from the fund in a nonqualified withdrawal.

(2)(A) amounts representing capital gains on
assets held for not more than 6 months and referred to in section 53505(a)(3) or (4) of this
title; minus
(B) amounts representing capital losses on
assets held in the fund for not more than 6
months;
(3) interest (except tax-exempt interest referred to in subsection (b)(4)) and other ordinary income (except any dividend referred to
in paragraph (5)) received on assets held in the
fund;
(4) ordinary income from a transaction described in section 53505(a)(3) of this title; and
(5) that portion of any dividend referred to
in subsection (b)(3) not taken into account
under subsection (b)(3).
(e) WHEN LOSSES ALLOWED.—Except on termination of a fund, capital losses referred to in
subsection (c) or (d)(2) shall be allowed only as
an offset to gains referred to in subsection (c) or
(d)(2), respectively.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1595.)

(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1596.)
HISTORICAL AND REVISION NOTES
Revised
Section
53509 ..........

Source (U.S. Code)
46 App.:1177(f).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(f), 49 Stat. 2005;
June 23, 1938, ch. 600,
§§ 23–28, 52 Stat. 960; Aug.
4, 1939, ch. 417, § 10, 53
Stat. 1185; July 17, 1952,
ch. 939, §§ 17–19, 66 Stat.
764; Pub. L. 85–637, Aug.
14, 1958, 72 Stat. 216; Pub.
L. 86–518, § 1, June 12, 1960,
74 Stat. 216; Pub. L. 87–45,
§ 6, May 27, 1961, 75 Stat.
91; Pub. L. 87–271, Sept. 21,
1961, 75 Stat. 570; restated
Pub. L. 91–469, § 21(a), Oct.
21, 1970, 84 Stat. 1029; Pub.
L. 97–31, § 12(97)(A), Aug. 6,
1981, 95 Stat. 162.

In subsection (c), the words ‘‘any amount in the
fund’’ are substituted for ‘‘the entire fund or any portion thereof’’ to eliminate unnecessary words.

§ 53510

TITLE 46—SHIPPING

Page 330

§ 53510. Tax treatment of qualified withdrawals
and basis of property

§ 53511. Tax treatment of nonqualified withdrawals

(a) ORDER OF WITHDRAWALS.—A qualified withdrawal from a capital construction fund shall be
treated as made—
(1) first from the capital account;
(2) second from the capital gain account; and
(3) third from the ordinary income account.

(a) IN GENERAL.—Except as provided in section
53513 of this title, a withdrawal from a fund that
is not a qualified withdrawal shall be treated as
a nonqualified withdrawal.
(b) ORDER OF WITHDRAWALS.—A nonqualified
withdrawal shall be treated as made—
(1) first from the ordinary income account;
(2) second from the capital gain account; and
(3) third from the capital account.

(b) ORDINARY INCOME ACCOUNT WITHDRAWALS.—
If a portion of a qualified withdrawal for a vessel, barge, or container is made from the ordinary income account, the basis of the vessel,
barge, or container shall be reduced by an
amount equal to that portion.
(c) CAPITAL GAIN ACCOUNT WITHDRAWALS.—If a
portion of a qualified withdrawal for a vessel,
barge, or container is made from the capital
gain account, the basis of the vessel, barge, or
container shall be reduced by an amount equal
to that portion.
(d) WITHDRAWALS TO PAY PRINCIPAL.—If a portion of a qualified withdrawal to pay the principal on indebtedness is made from the ordinary
income account or the capital gain account, an
amount equal to the total reduction that would
be required by subsections (b) and (c) if the
withdrawal were a qualified withdrawal for a
purpose described in those subsections shall be
applied, in the order provided in joint regulations, to reduce the basis of vessels, barges, and
containers owned by the person maintaining the
fund. The remaining amount of the withdrawal
shall be treated as a nonqualified withdrawal.
(e) GAIN ON PROPERTY WITH REDUCED BASIS.—
If property, the basis of which was reduced
under subsection (b), (c), or (d), is disposed of,
any gain realized on the disposition, to the extent it does not exceed the total reduction in
the basis of the property under those subsections, shall be treated as an amount referred
to in section 53511(c)(1) of this title withdrawn
on the date of disposition of the property. Subject to conditions prescribed in joint regulations, this subsection does not apply to a disposition if there is a redeposit, in an amount determined under joint regulations, that restores
the fund as far as practicable to the position it
was in before the withdrawal.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1596.)
HISTORICAL AND REVISION NOTES
Revised
Section
53510 ..........

Source (U.S. Code)
46 App.:1177(g).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(g); 49 Stat. 2005;
June 23, 1938, ch. 600,
§§ 23–28, 52 Stat. 960; Aug.
4, 1939, ch. 417, § 10, 53
Stat. 1185; July 17, 1952,
ch. 939, §§ 17–19, 66 Stat.
764; Pub. L. 85–637, Aug.
14, 1958, 72 Stat. 216; Pub.
L. 86–518, § 1, June 12, 1960,
74 Stat. 216; Pub. L. 87–45,
§ 6, May 27, 1961, 75 Stat.
91; Pub. L. 87–271, Sept. 21,
1961, 75 Stat. 570; restated
Pub. L. 91–469, § 21(a), Oct.
21, 1970, 84 Stat. 1029; Pub.
L.
99–514,
title
II,
§ 261(e)(5), Oct. 22, 1986, 100
Stat. 2215.

(c) TAX TREATMENT.—For purposes of the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.)—
(1) a nonqualified withdrawal from the ordinary income account shall be included in income as an item of ordinary income for the
taxable year in which the withdrawal is made;
(2) a nonqualified withdrawal from the capital gain account shall be included in income
for the taxable year in which the withdrawal
is made as an item of gain realized during that
year from the disposition of an asset held for
more than 6 months; and
(3) for the period through the last date prescribed for payment of tax for the taxable year
in which the withdrawal is made—
(A) no interest shall be payable under section 6601 of such Code (26 U.S.C. 6601) and no
addition to the tax shall be payable under
section 6651 of such Code (26 U.S.C. 6651);
(B) interest on the amount of the additional tax attributable to an amount treated
as a nonqualified withdrawal from the ordinary income account or the capital gain account shall be paid at the rate determined
under subsection (d) from the last date prescribed for payment of the tax for the taxable year for which the amount was deposited in the fund; and
(C) no interest shall be payable on
amounts treated as withdrawn on a last-infirst-out basis under section 53512 of this
title.
(d) INTEREST RATE.—The rate of interest under
subsection (c)(3)(B) for a nonqualified withdrawal made in a taxable year beginning after
1971 shall be determined and published jointly
by the Secretary and the Secretary of the Treasury. The rate shall be such that its relationship
to 8 percent is comparable, as determined by the
Secretaries under joint regulations, to the relationship between—
(1) the money rates and investment yields
for the calendar year immediately before the
beginning of the taxable year; and
(2) the money rates and investment yields
for the calendar year 1970.
(e) NONQUALIFIED WITHDRAWALS.—
(1) IN GENERAL.—The following applicable
percentage of any amount that remains in a
capital construction fund at the close of the
following specified taxable year following the
taxable year for which the amount was deposited shall be treated as a nonqualified withdrawal:
If the amount remains in the fund at
the close of the—

26th taxable year .............................
27th taxable year .............................

The applicable
percentage is—

20 percent
40 percent

Page 331
If the amount remains in the fund at
the close of the—

28th taxable year .............................
29th taxable year .............................
30th taxable year .............................

§ 53511

TITLE 46—SHIPPING
The applicable
percentage is—

60 percent
80 percent
100 percent.

(2) EARNINGS.—The earnings of a capital construction fund for any taxable year (except net
gains) shall be treated under this subsection as
an amount deposited for the taxable year.
(3) CONTRACT FOR QUALIFIED WITHDRAWAL.—
Under paragraph (1), an amount shall not be
treated as remaining in a capital construction
fund at the close of a taxable year to the extent there is a binding contract at the close of
the taxable year for a qualified withdrawal of
the amount for an identified item for which
the withdrawal may be made.
(4) EXCESS EARNINGS.—If the Secretary determines that the balance in a capital construction fund exceeds the amount appropriate
to meet the vessel construction program objectives of the person that established the
fund, the amount of the excess shall be treated
as a nonqualified withdrawal under paragraph
(1) unless the person develops appropriate program objectives within 3 years to dissipate the
excess.
(5) AMOUNTS IN FUND ON JANUARY 1, 1987.—
Under this subsection, amounts in a capital
construction fund on January 1, 1987, shall be
treated as having been deposited in that fund
on that date.
(f) TAX DETERMINATIONS.—
(1) IN GENERAL.—For a taxable year for
which there is a nonqualified withdrawal (including an amount treated as a nonqualified
withdrawal under subsection (e)), the tax imposed by chapter 1 of the Internal Revenue
Code of 1986 (26 U.S.C. ch. 1) shall be determined by—
(A) excluding the withdrawal from gross
income; and
(B) increasing the tax imposed by chapter
1 of such Code by the product of the amount
of the withdrawal and the highest tax rate
specified in section 1 (or section 11 for a corporation) of such Code (26 U.S.C. 1, 11).
(2) MAXIMUM TAX RATE.—For that portion of
a nonqualified withdrawal made from the capital gain account during a taxable year to
which section 1(h) or 1201(a) of such Code (26
U.S.C. 1(h), 1201(a)) applies, the tax rate used
under paragraph (1)(B) may not exceed 15 percent (or 34 percent for a corporation).
(3) TAX BENEFIT RULE.—If any portion of a
nonqualified withdrawal is properly attributable to deposits (except earnings on deposits) made by the taxpayer in a taxable year
that did not reduce the taxpayer’s liability for
tax under chapter 1 of such Code (26 U.S.C. ch.
1) for a taxable year before the taxable year in
which the withdrawal occurs—
(A) that portion shall not be taken into account under paragraph (1); and
(B) an amount equal to that portion shall
be allowed as a deduction under section 172
of such Code (26 U.S.C. 172) for the taxable
year in which the withdrawal occurs.
(4) COORDINATION WITH DEDUCTION FOR NET
OPERATING LOSSES.—A nonqualified withdrawal

excluded from gross income under paragraph
(1) shall be excluded in determining taxable income under section 172(b)(2) of such Code (26
U.S.C. 172(b)(2)).
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1597.)
AMENDMENT OF SUBSECTION (f)(2)
Subsection (f)(2) of this section was derived
from the last paragraph of section 1177(h)(6)(A)
of the former Appendix to this title, which was
amended by section 301(a)(2)(E) of Pub. L.
108–27 by substituting ‘‘15 percent’’ for ‘‘20 percent’’. Section 303 of Pub. L. 108–27, as amended
by section 102 of Pub. L. 109–222 and section
102(a) of Pub. L. 111–312, set out as an Effective
and Termination Dates of 2003 Amendment note
under section 1 of Title 26, Internal Revenue
Code, provided that such amendment shall not
apply to taxable years beginning after December
31, 2012, and that the Internal Revenue Code of
1986 shall be applied and administered to such
years as if the amendment had never been enacted. For applicability of section 303 of Pub. L.
108–27 to subsection (f)(2) of this section, see
section 3528 of Pub. L. 110–181, set out as an
Application of Sunset Provision to Subsection
(f)(2) note below and section 18(c), (d) of Pub.
L. 109–304, set out as a Legislative Purpose and
Construction note preceding section 101 of this
title.
HISTORICAL AND REVISION NOTES
Revised
Section
53511 ..........

Source (U.S. Code)

Source (Statutes at Large)

46 App.:1177(h) (less
(2) (last sentence)).

June 29, 1936, ch. 858, title
VI, § 607(h) (less (2) (last
sentence)), 49 Stat. 2005;
June 23, 1938, ch. 600,
§§ 23–28, 52 Stat. 960; Aug.
4, 1939, ch. 417, § 10, 53
Stat. 1185; July 17, 1952,
ch. 939, §§ 17–19, 66 Stat.
764; Pub. L. 85–637, Aug.
14, 1958, 72 Stat. 216; Pub.
L. 86–518, § 1, June 12, 1960,
74 Stat. 216; Pub. L. 87–45,
§ 6, May 27, 1961, 75 Stat.
91; Pub. L. 87–271, Sept. 21,
1961, 75 Stat. 570; restated
Pub. L. 91–469, § 21(a), Oct.
21, 1970, 84 Stat. 1030; Pub.
L. 97–31, § 12(97)(A), Aug. 6,
1981, 95 Stat. 162; Pub. L.
99–514, title II, § 261(e)(6),
Oct. 22, 1986, 100 Stat. 2215;
Pub. L. 100–647, title I,
§ 1002(m)(2), Nov. 10, 1988,
102 Stat. 3382; Pub. L.
101–508,
title
XI,
§ 11101(d)(7)(B),
Nov.
5,
1990, 104 Stat. 1388–405;
Pub. L. 105–34, title III,
§ 311(c)(2), Aug. 5, 1997, 111
Stat. 835; Pub. L. 108–27,
title III, § 301(a)(2)(E), May
28, 2003, 117 Stat. 758.

In subsection (c)(3)(C), the words ‘‘or in the case of
any nonqualified withdrawal arising from the application of the recapture provision of section 1176(5) of this
Appendix as in effect on December 31, 1969’’ are omitted
as obsolete.
In subsection (d), the words ‘‘made in a taxable year
beginning in 1970 or 1971 is 8 percent’’ are omitted as
obsolete.
APPLICATION OF SUNSET PROVISION TO SUBSECTION
(f)(2)
Pub. L. 110–181, div. C, title XXXV, § 3528, Jan. 28, 2008,
122 Stat. 603, provided that: ‘‘For purposes of section 303
of the Jobs and Growth Tax Relief Reconciliation Act
of 2003 (Public Law 108–27, 26 U.S.C. 1 note), the amend-

§ 53512

TITLE 46—SHIPPING

ment made by section 301(a)(2)(E) of that Act [which
amended section 1177(h)(6)(A) of the former Appendix to
this title from which subsec. (f)(2) of this section was
derived by substituting ‘‘15 percent’’ for ‘‘20 percent’’]
shall be deemed to have been made to section 53511(f)(2)
of title 46, United States Code.’’

§ 53512. FIFO and LIFO withdrawals
(a) FIFO.—Except as provided in subsection
(b), an amount withdrawn from an account
under this chapter shall be treated as withdrawn
on a first-in-first-out basis.
(b) LIFO.—An amount withdrawn from an account under this chapter shall be treated as
withdrawn on a last-in-first-out basis if it is—
(1) a nonqualified withdrawal for research,
development, and design expenses incident to
new and advanced vessel design, machinery,
and equipment; or
(2) an amount treated as a nonqualified
withdrawal under section 53510(d) of this title.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1599.)
HISTORICAL AND REVISION NOTES
Revised
Section
53512 ..........

Source (U.S. Code)
46 App.:1177(h)(2)
(last sentence).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(h)(2) (last sentence), 49 Stat. 2005; June
23, 1938, ch. 600, §§ 23–28, 52
Stat. 960; Aug. 4, 1939, ch.
417, § 10, 53 Stat. 1185; July
17, 1952, ch. 939, §§ 17–19, 66
Stat. 764; Pub. L. 85–637,
Aug. 14, 1958, 72 Stat. 216;
Pub. L. 86–518, § 1, June 12,
1960, 74 Stat. 216; Pub. L.
87–45, § 6, May 27, 1961, 75
Stat. 91; Pub. L. 87–271,
Sept. 21, 1961, 75 Stat. 570;
restated Pub. L. 91–469,
§ 21(a), Oct. 21, 1970, 84
Stat. 1030.

Page 332

§ 53514. Relationship of old fund to new fund
(a) DEFINITION.—In this section, the term ‘‘old
fund’’ means a capital construction fund maintained before October 21, 1970.
(b) ELECTION TO MAINTAIN OLD FUND.—A person maintaining an old fund may elect to continue the old fund, but may not—
(1) hold amounts in the old fund beyond the
expiration date provided in the agreement
under which the old fund is maintained (determined without regard to an extension or renewal made after April 14, 1970); or
(2) maintain simultaneously the old fund
and a new fund established under this chapter.
(c) APPLICATION OF NEW FUND AGREEMENT TO
OLD FUND AMOUNTS.—If a person makes an
agreement under this chapter to establish a new
fund, the person may agree to extend the agreement to some or all of the amounts in an old
fund. Each item in the old fund to be transferred
shall be transferred in a nontaxable transaction
to the appropriate account in the new fund. For
purposes of section 53511(c)(3) of this title, the
date of the deposit of an item so transferred
shall be July 1, 1971, or the date of the deposit
in the old fund, whichever is later.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1599.)
HISTORICAL AND REVISION NOTES
Revised
Section
53514 ..........

Source (U.S. Code)
46 App.:1177(j).

§ 53513. Corporate reorganizations and partnership changes
Under joint regulations—
(1) a transfer of a capital construction fund
from one person to another person in a transaction to which section 381 of the Internal
Revenue Code of 1986 (26 U.S.C. 381) applies
may be treated as if the transaction is not a
nonqualified withdrawal; and
(2) a similar rule shall be applied to a continuation of a partnership (within the meaning of subchapter K of chapter 1 of such Code
(26 U.S.C. 701 et seq.)).

§ 53515. Records and reports
A person maintaining a fund under this chapter shall keep records and make reports as required by the Secretary or the Secretary of the
Treasury.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1599.)
HISTORICAL AND REVISION NOTES

(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1599.)
HISTORICAL AND REVISION NOTES
Revised
Section
53513 ..........

Source (U.S. Code)
46 App.:1177(i).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(i), 49 Stat. 2005;
June 23, 1938, ch. 600,
§§ 23–28, 52 Stat. 960; Aug.
4, 1939, ch. 417, § 10, 53
Stat. 1185; July 17, 1952,
ch. 939, §§ 17–19, 66 Stat.
764; Pub. L. 85–637, Aug.
14, 1958, 72 Stat. 216; Pub.
L. 86–518, § 1, June 12, 1960,
74 Stat. 216; Pub. L. 87–45,
§ 6, May 27, 1961, 75 Stat.
91; Pub. L. 87–271, Sept. 21,
1961, 75 Stat. 570; restated
Pub. L. 91–469, § 21(a), Oct.
21, 1970, 84 Stat. 1031.

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(j), 49 Stat. 2005;
June 23, 1938, ch. 600,
§§ 23–28, 52 Stat. 960; Aug.
4, 1939, ch. 417, § 10, 53
Stat. 1185; July 17, 1952,
ch. 939, §§ 17–19, 66 Stat.
764; Pub. L. 85–637, Aug.
14, 1958, 72 Stat. 216; Pub.
L. 86–518, § 1, June 12, 1960,
74 Stat. 216; Pub. L. 87–45,
§ 6, May 27, 1961, 75 Stat.
91; Pub. L. 87–271, Sept. 21,
1961, 75 Stat. 570; restated
Pub. L. 91–469, § 21(a), Oct.
21, 1970, 84 Stat. 1031.

Revised
Section
53515 ..........

Source (U.S. Code)
46 App.:1177(l) (1st
sentence).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(l) (1st sentence),
49 Stat. 2005; June 23, 1938,
ch. 600, §§ 23–28, 52 Stat.
960; Aug. 4, 1939, ch. 417,
§ 10, 53 Stat. 1185; July 17,
1952, ch. 939, §§ 17–19, 66
Stat. 764; Pub. L. 85–637,
Aug. 14, 1958, 72 Stat. 216;
Pub. L. 86–518, § 1, June 12,
1960, 74 Stat. 216; Pub. L.
87–45, § 6, May 27, 1961, 75
Stat. 91; Pub. L. 87–271,
Sept. 21, 1961, 75 Stat. 570;
restated Pub. L. 91–469,
§ 21(a), Oct. 21, 1970, 84
Stat. 1032; Pub. L. 97–31,
§ 12(97)(A), Aug. 6, 1981, 95
Stat. 162.

Page 333

§ 53516. Termination of agreement after change
in regulations
If, after an agreement has been made under
this chapter, a change is made either in the
joint regulations or in the regulations prescribed by the Secretary under this chapter that
could have a substantial effect on the rights or
duties of a person maintaining a fund under this
chapter, that person may terminate the agreement.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1600.)
HISTORICAL AND REVISION NOTES
Revised
Section

Source (U.S. Code)

53516 ..........

46 App.:1177(l) (last
sentence).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(l) (last sentence),
49 Stat. 2005; June 23, 1938,
ch. 600, §§ 23–28, 52 Stat.
960; Aug. 4, 1939, ch. 417,
§ 10, 53 Stat. 1185; July 17,
1952, ch. 939, §§ 17–19, 66
Stat. 764; Pub. L. 85–637,
Aug. 14, 1958, 72 Stat. 216;
Pub. L. 86–518, § 1, June 12,
1960, 74 Stat. 216; Pub. L.
87–45, § 6, May 27, 1961, 75
Stat. 91; Pub. L. 87–271,
Sept. 21, 1961, 75 Stat. 570;
restated Pub. L. 91–469,
§ 21(a), Oct. 21, 1970, 84
Stat. 1032; Pub. L. 97–31,
§ 12(97)(A), Aug. 6, 1981, 95
Stat. 162.

§ 53517. Reports

(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1600.)
HISTORICAL AND REVISION NOTES
Source (U.S. Code)

53517 ..........

46 App.:1177(m).

Source (Statutes at Large)
June 29, 1936, ch. 858, title
VI, § 607(m), as added Pub.
L. 99–514, § 261(d), Oct. 22,
1986, 100 Stat. 2214.

CHAPTER 537—LOANS AND GUARANTEES
SUBCHAPTER I—GENERAL
Sec.

53701.

Definitions.

Sec.

53702.
53703.
53704.
53705.
53706.
53707.
53708.
53709.
53710.
53711.
53712.
53713.
53714.
53715.
53716.
53717.
53718.

General authority.
Application procedures.
Funding limits.
Pledge of United States Government.
Eligible purposes of obligations.
Findings related to obligors and operators.
Findings related to economic soundness.
Amount of obligations.
Contents of obligations.
Security interest.
Monitoring financial condition and operations of obligor.
Administrative fees.
Guarantee fees.
Escrow fund.
Deposit fund.
Management of funds in the Treasury.
Annual report to Congress.
SUBCHAPTER II—DEFAULT PROVISIONS

53721.
53722.
53723.
53724.
53725.

Rights of obligee.
Actions by Secretary or Administrator.
Payments by Secretary or Administrator and
issuance of obligations.
Rights to secured property.
Actions against obligor.

SUBCHAPTER III—PARTICULAR PROJECTS
53731.
53732.
53733.
53734.
53735.

(a) IN GENERAL.—Within 120 days after the
close of each calendar year, the Secretary of
Transportation and the Secretary of Commerce
each shall provide the Secretary of the Treasury
a written report on the capital construction
funds under the particular Secretary’s jurisdiction for the calendar year.
(b) CONTENTS.—The report shall state the
name and taxpayer identification number of
each person—
(1) establishing a capital construction fund
during the calendar year;
(2) maintaining a capital construction fund
on the last day of the calendar year;
(3) terminating a capital construction fund
during the calendar year;
(4) making a deposit to or withdrawal from
a capital construction fund during the calendar year, and the amount of the deposit or
withdrawal; or
(5) having been determined during the calendar year to have failed to fulfill a substantial obligation under a capital construction
fund agreement to which the person is a party.

Revised
Section

§ 53701

TITLE 46—SHIPPING

Commercial demonstration ocean thermal energy conversion facilities and plantships.
Eligible export vessels.
Shipyard modernization and improvement.
Replacement of vessels because of changes in
operating standards.
Fisheries financing and capacity reduction.
AMENDMENTS

2008—Pub.
L.
110–181,
div.
C,
title
XXXV,
§ 3522(a)(10)(A), Jan. 28, 2008, 122 Stat. 598, inserted ‘‘or
Administrator’’ after ‘‘Secretary’’ in items 53722 and
53723.

SUBCHAPTER I—GENERAL
§ 53701. Definitions
In this chapter:
(1) ACTUAL COST.—The term ‘‘actual cost’’
means the sum of—
(A) all amounts paid by or for the account
of the obligor as of the date on which a determination is made under section 53715(d)(1)
of this title; and
(B) all amounts that the Secretary or Administrator reasonably estimates the obligor will become obligated to pay from time
to time thereafter, for the construction, reconstruction, or reconditioning of the vessel,
including guarantee fees that will become
payable under section 53714 of this title in
connection with all obligations issued for
construction, reconstruction, or reconditioning of the vessel or equipment to be delivered, and all obligations issued for the delivered vessel or equipment.
(2) ADMINISTRATOR.—The term ‘‘Administrator’’ means the Administrator of the Maritime Administration.
(3) CONSTRUCTION, RECONSTRUCTION, AND RECONDITIONING.—The terms ‘‘construction’’, ‘‘reconstruction’’, and ‘‘reconditioning’’ include
designing, inspecting, outfitting, and equipping.
(4) DEPRECIATED ACTUAL COST.—The term
‘‘depreciated actual cost’’ of a vessel means—