Construction Reserve Fund
commerce.
Related Programs
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.
The Department of Transportation's mission is to ensure fast, safe, efficient, accessible and convenient transportation that meets vital national interests and enhances the quality of life of the American people, today and into the future.
Program Accomplishments
As of March 2008, there were 26 construction reserve fund contracts with deposits totaling approximately $100,000,000 for the construction, reconstruction and acquisition of the proposed programs.
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.
Aplication and Award Process
Preapplication Coordination
Contact the Maritime Administration, Office of Shipyards and Marine Financing.
This program is excluded from coverage under OMB Circular No.
A-102.
This program is excluded from coverage under E.O.
12372.
Application Procedures
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 Procedures
Review of the application by the Office of Shipyards and Marine 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 (CRF) 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.
Authorization
Merchant Marine Act of 1936, Section 511, as amended, Public Law 74-835, 46 U.S.C. 1161.
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
None.
Audits
None.
Records
See Reports section of this program.
Financial Information
Account Identification
69-1750-0-1-403.
Obigations
(Salaries and expenses) FY 07 $0; FY 08 est not available; FY 09 est not reported.
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.
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 Business and Workforce Development, Office of Shipyards and Marine Financing, Maritime Administration, 1200 New Jersey Avenue, SE, Department of Transportation, Washington, DC 20590. Telephone: (202) 366-5737.
Criteria for Selecting Proposals
Review of the application by the Office of Shipyards and Marine 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.
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