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Grant Community.com Catalog of Federal Domestic Assistance Program Descriptions |
CATALOG OF FEDERAL DOMESTIC
ASSISTANCE
20.812: Construction Reserve Fund
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| PROGRAM AND AWARD | FINANCIAL AND INFORMATION CONTACTS |
| ELIGIBILITY REQUIREMENTS | FINANCIAL AND ADMINISTRATIVE INFO. |
| APPLICATION AND AWARD PROCESS | INFORMATION CONTACTS |
| RELATED PROGRAMS | ASSISTANCE CONSIDERATIONS |
| PROGRAM ACCOMPLISHMENTS | POST ASSISTANCE 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.
Preapplication 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.
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.
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.
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 30, 1999, there were 18 to 21 construction reserve fund contracts with deposits totaling about $80,000,000 for the construction, reconstruction and acquisition of the proposed programs.
Federal Agency: MARITIME ADMINISTRATION, DEPARTMENT OF TRANSPORTATION
Type of Assistance: Direct Payments for Specified Use.
Obligations: (Salaries and expenses) FY 99 $8,920; FY 00 est $9,631; and FY 01 est $9,823.
Budget Account Number: 69-1750-0-1-403.
Authorization: Merchant Marine Act of 1936, Section 511, as amended, Public Law 74-835, 46 U.S.C. 1161.
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.
Regional or Local Office: See Maritime Administration Regional Offices listed in Appendix IV of the Catalog.
Headquarters Office: Associate Administrator for Shipbuilding and Technology Development, Office of Ship Financing, Aritime Administration, Department of Transportation, Washington, DC 20590. Phone: (202) 366-5744.
(See Appendix IV for more contact info.)
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.
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.
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.
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Last Updated, November, 2000
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