§53310 — Title 46 Shipping | U.S. Code

Summary

A deposit into a construction reserve fund only counts if, within 3 years after the deposit (plus any allowed extension), one of two things happens. First option: a contract is made to build, buy, rebuild, or buy a part interest in a new vessel (with the Secretary of Transportation’s approval when needed); the deposit is used or promised to be used under that contract; at least 12.5 percent of the vessel’s construction or contract price is paid or firmly committed; and the Secretary approves the vessel’s plans and specs as needed. Second option: the deposit is used or promised to be used to pay off a purchase loan for a new vessel to someone who is not the mortgagor’s parent or an affiliated/related company. If the vessel is not built under a construction‑differential subsidy contract or not bought from the Secretary of Transportation, at least 5 percent of the first vessel’s construction must be done within 6 months after the construction contract (as the Secretary estimates and certifies to the Secretary of the Treasury), and construction must continue with reasonable speed. The Secretary of Transportation can extend the time limits, but extensions cannot total more than 2 years for spending or obligating the deposit or more than 1 year for reaching 5 percent construction.

Title 46, §53310

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(a)section 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)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)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.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 53310(a)46 App.:1161(g) (less (1)(B)).June 29, 1936, ch. 858, title V, § 511(g), (h), as added Oct. 10, 1940, ch. 849, 54 Stat. 1107; June 17, 1943, ch. 130, subdivs. (c), (d), 57 Stat. 158; July 17, 1952, ch. 939, §§ 12, 13(a), 66 Stat. 763; Pub. L. 86–237, § 1, Sept. 8, 1959, 73 Stat. 471; Pub. L. 87–303, § 3, Sept. 26, 1961, 75 Stat. 661; Pub. L. 87–782, § 1, Oct. 10, 1962, 76 Stat. 796; Pub. L. 88–227, § 1, Dec. 23, 1963, 77 Stat. 470; Pub. L. 88–595, § 1, Sept. 12, 1964, 78 Stat. 943; Pub. L. 97–31, § 12(92), Aug. 6, 1981, 95 Stat. 161. 53310(b)46 App.:1161(g)(1)(B). 53310(c)46 App.:1161(h). In this section, the language about joint

Regulations

in 46 App. U.S.C. 1161(g) and (h) is omitted as unnecessary because of section 53302(b) of the revised title. In subsection (a), the words “(i) two years from the date of deposit or the date of any extension thereof which may be granted by the Secretary of Transportation pursuant to the provisions of subsection (h) of this section, in the case of deposits made prior to the date on which these amendatory provisions become effective, or” in 46 App. U.S.C. 1161(g)(1) and (2) are omitted as obsolete. In paragraph (1)(A), the words “or, with the approval of the Secretary of Transportation, for a part interest in a new vessel or for the re

Construction

or reconditioning of a new vessel” are substituted for “(or in the discretion of the Secretary of Transportation, for a part interest therein), or, with the approval of the Secretary of Transportation, for the re

Construction

or reconditioning of a new vessel or vessels” to eliminate unnecessary words. In subsection (c), the proviso in 46 App. U.S.C. 1161(h) is omitted as obsolete.

§53310 Obligation of Deposits and Period for Construction of Certain Vessels

Summary

Title 46, §53310

Notes & Related Subsidiaries

Historical and Revision Notes

Regulations

Construction

Construction

Citations & Metadata