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46 U.S.C. § 53310 — Obligation of deposits and period for construction of certain vessels
Federal law — U.S. Code and appendices · legal_authorities
**(a) Application of Sections 53306 and 53309.—** Sections 53306 and 53309 of this title apply to a deposit in a construction reserve fund only if, within 3 years after the date of the deposit (and any extension under subsection (c))—
(1)
(A) a contract is made for the construction or acquisition of a new vessel or, with the approval of the Secretary of Transportation, for a part interest in a new vessel or for the reconstruction or reconditioning of a new vessel;
(B) the deposit is expended or obligated for expenditure under that contract;
(C) at least 12.5 percent of the construction or contract price of the vessel is paid or irrevocably committed for payment; and
(D) the plans and specifications for the vessel are approved by the Secretary to the extent the Secretary considers necessary; or
(2) the deposit is expended or obligated for expenditure for the liquidation of existing or subsequently incurred purchase-money indebtedness to a person not a parent company of, or a company affiliated or associated with, the mortgagor on a new vessel.
**(b) Additional Requirements for Certain Vessels.—** In addition to the requirements of subsection (a)(1), for a vessel not constructed under a construction-differential subsidy contract or not bought from the Secretary of Transportation—
(1) at least 5 percent of the construction (or, if the contract covers more than one vessel, at least 5 percent of the construction of the first vessel) must be completed within 6 months after the date of the construction contract (or within the period of an extension under subsection (c)), as estimated by the Secretary and certified by the Secretary to the Secretary of the Treasury; and
(2) construction under the contract must be completed with reasonable dispatch thereafter.
*
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Source file: Laws/federal/codes/united-states-code/title-46/section-53310-obligation-of-deposits-and-period-for-construction-of-certain-vessels--24b747aded.md
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Source location: Title 46, Chapter 533, § 53310; chapter-533-construction-reserve-funds.md
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**(a) Application of Sections 53306 and 53309.—** Sections 53306 and 53309 of this title apply to a deposit in a construction reserve fund only if, within 3 years after the date of the deposit (and any extension under subsection (c))—
(1)
(A) a contract is made for the construction or acquisition of a new vessel or, with the approval of the Secretary of Transportation, for a part interest in a new vessel or for the reconstruction or reconditioning of a new vessel;
(B) the deposit is expended or obligated for expenditure under that contract;
(C) at least 12.5 percent of the construction or contract price of the vessel is paid or irrevocably committed for payment; and
(D) the plans and specifications for the vessel are approved by the Secretary to the extent the Secretary considers necessary; or
(2) the deposit is expended or obligated for expenditure for the liquidation of existing or subsequently incurred purchase-money indebtedness to a person not a parent company of, or a company affiliated or associated with, the mortgagor on a new vessel.
**(b) Additional Requirements for Certain Vessels.—** In addition to the requirements of subsection (a)(1), for a vessel not constructed under a construction-differential subsidy contract or not bought from the Secretary of Transportation—
(1) at least 5 percent of the construction (or, if the contract covers more than one vessel, at least 5 percent of the construction of the first vessel) must be completed within 6 months after the date of the construction contract (or within the period of an extension under subsection (c)), as estimated by the Secretary and certified by the Secretary to the Secretary of the Treasury; and
(2) construction under the contract must be completed with reasonable dispatch thereafter.
**(c) Extensions.—** The Secretary of Transportation may grant extensions of the period within which the deposits must be expended or obligated or within which the construction must have progressed to the extent of 5 percent completion under this section. However, the extensions may not be for a total of more than 2 years for the expenditure or obligation of deposits or one year for the progress of construction.
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Federal law — U.S. Code and appendices · legal_authorities
Under the income or excess profits tax laws of the United States, the basis for determining a gain or loss and for depreciation of a new vessel constructed, reconstructed, reconditioned, or acquired by the taxpayer, or for which purchase-money indebtedness is liquidated as provided in [section 53310 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53310&num=0&edition=prelim), with amounts from a construction reserve fund, shall be reduced by that part of the deposits in the fund expended in the construction, reconstruction, reconditioning, acquisition, or liquidation of purchase-money indebtedness of the new vessel that represents a gain not recognized for tax purposes under [section 53306 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53306&num=0&edition=prelim).
Source: Supplied U.S. Code snapshot — release unconfirmed · 46 U.S.C. § 53307
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
For any taxable year, amounts on deposit in a construction reserve fund on the last day of the taxable year, for which the requirements of [section 53310 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53310&num=0&edition=prelim) have been satisfied (to the extent they apply on the last day of the taxable year), are deemed to have been retained for the reasonable needs of the business within the meaning of section 537(a) of the Internal Revenue Code of 1986 ([26 U.S.C. 537(a)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section537/a&num=0&edition=prelim)).
Source: Supplied U.S. Code snapshot — release unconfirmed · 46 U.S.C. § 53309
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Federal law — U.S. Code and appendices · legal_authorities
A deposited gain, if otherwise taxable income under the law applicable to the taxable year in which the gain was realized, shall be included in gross income for that taxable year, except for purposes of the declared value excess profits tax and the capital stock tax, if—
(1) the deposited gain is not expended or obligated within the appropriate period under [section 53310 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53310&num=0&edition=prelim);
(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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53310&num=0&edition=prelim); 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.
Source: Supplied U.S. Code snapshot — release unconfirmed · 46 U.S.C. § 53311
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Federal law — U.S. Code and appendices · legal_authorities
Page 417
TITLE 46—SHIPPING
§ 53310
§ 53308. Order and proportions of deposits and
withdrawals
In this chapter—
(1) if the net proceeds of a sale or the net in-
demnity for a loss is deposited in more than
one deposit, the amount consisting of the gain
shall be deemed to be deposited first;
(2) amounts expended, obligated, or other-
wise withdrawn shall be applied against the
amounts deposited in the fund in the order of
deposit; and
(3) if a deposit consists in part of a gain not
recognized under section 53306 of this title,
any expenditure, obligation, or withdrawal ap-
plied against that deposit shall be deemed to
be a gain in the proportion that the part of the
deposit consisting of a gain bears to the total
amount of the deposit.
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1589.)
HISTORICAL AND REVISION NOTES
Revised
Section
Source (U.S. Code)
Source (Statutes at Large)
53308 ..........
46 App.:1161(e).
June 29, 1936, ch. 858, title
V, § 511(e), as added Oct.
10, 1940, ch. 849, 54 Stat.
1107.
§ 53309. Accumulation of deposits
For any taxable year, amounts on deposit in a
construction reserve fund on the last day of the
taxable year, for which the requirements of sec-
tion 53310 of this title have been satisfied (to the
extent they apply on the last day of the taxable
year), are deemed to have been retained for the
reasonable needs of the business within the
meaning of section 537(a) of the Internal Rev-
enue Code of 1986 (26 U.S.C. 537(a)).
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1589.)
HISTORICAL AND REVISION NOTES
Revised
Section
Source (U.S. Code)
Source (Statutes at Large)
53309 ..........
46 App.:1161(f).
June 29, 1936, ch. 858, title
V, § 511(f), as added Oct.
10, 1940, ch. 849, 54 Stat.
1107.
The words ‘
Source: Supplied 2024 U.S. Code historical extraction · 46 U.S.C. § 53310
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.