To
promote the construction, reconstruction, reconditioning, or acquisition
of merchant vessels built and documented under the laws of the United
States for purposes of national defense and the development of U.S.
commerce.
TYPES
OF ASSISTANCE:
Direct Payments for Specified Use. Place Cursor Here for Definition
USES
AND USE RESTRICTIONS:
The
Construction Reserve Fund (CRF), authorized under Section 511 of
the Act, is a financial assistance program which provides tax deferral
benefits to U.S. flag operators. The CRF permits the fundholder
to deposit gains attributable to the sale of or indemnification
for loss of vessels and to defer tax on such gains provided the
gains are to be reinvested in vessels. Also the CRF allows the accumulation
of earnings from operations of vessels documented in the U.S., or
the earnings from the investment of the Fund. The ability to accumulate
funds and the tax deferral provision have enabled fundholders to
construct or reconstruct in the United States and documented under
the laws of the United States larger, better-equipped vessels, reduce
mortgage debt on the vessels and construct a greater number of vessels
than would be possible without the program.
ELIGIBILITY
REQUIREMENTS:
Applicant
Eligibility: A Construction Reserve Fund (CRF)
may be established by any citizen of the United States who owns,
in whole or in part, a vessel or vessels operating in the foreign
or domestic commerce of the U.S., or in the fisheries. Additionally,
any citizen who is operating such vessel or vessels owned by another
individual may establish a CRF.
Beneficiary
Eligibility: Any citizen of the United States
who owns, in whole or in part, a vessel or vessels operating in
the foreign or domestic commerce of the U.S. or in the fisheries.
Additionally, any citizen who is operating such vessel or vessels
owned by another individual.
Credentials/Documentation:
Be able to provide proof of requirements called for in Applicant
Eligibility section of this program. The program is excluded from
coverage under OMB Circular No. A- 87.
Pre-application
Coordination: Contact the Maritime Administration,
Office of Ship Financing. This program is excluded from coverage
under OMB Circular No. A-102. This program is excluded from coverage
under E.O. 12372.
Application
Procedure: See Federal Register Notice (46
CFR 287.4). Persons seeking to establish a Construction Reserve
Fund may make application by letter to the headquarters office
shown below. This program is excluded from coverage under OMB
Circular No. A-102 and A- 110.
Award
Procedure: Review of the application by the
Office of Ship Financing to determine citizenship of the applicant,
if applicant is owner or operator of the vessel and if the proposed
objective of construction, reconstruction or acquisition is acceptable.
Deadlines:
Applicant must execute a Construction Reserve Fund within 60 days
after the receipt of the proceeds of the sale or indemnification
for loss of a vessel. Tentative authorization to establish the
CRF and deposit the proceeds may be granted by the Maritime Administration.
Range
of Approval/Disapproval Time: From 60 to 90
days.
Appeals:
None.
Renewals:
Not applicable.
ASSISTANCE
CONSIDERATIONS:
Formula
and Matching Requirements: Within 3 years from
the date of any deposit in the Construction Reserve Fund, such deposits
must be obligated under a contract for the construction or acquisition
of a new vessel or vessels. Also deposits into the CRF must be made
within 60 days after receipt by the taxpayer of amounts representing
proceeds of the sale or indemnification for loss of a vessel.
Length
and Time Phasing of Assistance: Depends on
each individual program agreed upon between the Maritime Administration
and the applicant.
POST
ASSISTANCE REQUIREMENTS:
Reports:
With each income tax return filed for a taxable year during any
part of which a Construction Reserve Fund is in existence, the taxpayer
shall submit a statement with a detailed analysis of the fund's
transactions and balances.
Audits:
None.
Records:
See Reports section of this program.
FINANCIAL
INFORMATION:
Account
Identification: 69-1750-0-1-403.
Obligations:
(Salaries and expenses) FY 01 $9,823; FY 02 est $10,088; and FY
03 est $10,350.
Range
and Average of Financial Assistance:
Defer tax on gains by depositing the gains attributable to the
sale of or indemnification for loss of vessels in accordance with
the program.
As of September, 2002, there will be 20 construction reserve fund
contracts with deposits totaling approximately $21,300,000 for the
construction, reconstruction and acquisition of the proposed programs.
REGULATIONS,
GUIDELINES, AND LITERATURE:
Part 287, Title 46 CFR; Order and Form of Resolution which outlines
details pertaining to the establishment and maintenance of the Construction
Reserve Fund.
INFORMATION
CONTACTS:
Regional
or Local Office: See Maritime Administration
Regional Offices listed in Appendix IV of the Catalog.
Headquarters
Office: Associate Administrator for Shipbuilding,
Office of Ship Financing, Maritime Administration, Department
of Transportation, Washington, DC 20590. Telephone: (202) 366-5744.
Web
Site Address: http://www.marad.dot.gov
EXAMPLES
OF FUNDED PROJECTS:
Vessels such as coastwise tankers, ocean tugs, chemical barges,
and crewboats are particular programs that have been or will be
constructed, reconstructed or acquired through the Construction
Reserve Fund. These vessels must be constructed in the United States
and documented under the laws of the United States. If the vessel
is less than 12 knots speed and 2,000 gross tons, it must be determined
as useful to the United States in case of war or national emergency.
CRITERIA
FOR SELECTING PROPOSALS:
Review of the application by the Office of Ship Financing to determine
citizenship of the applicant, if applicant is owner or operator
of the vessel and if the proposed objective of construction, reconstruction
or acquisition is acceptable.
