Proposed Rule2026-19367
Capital Construction Fund Revision
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 22, 2026
Issuing agencies
Transportation DepartmentMaritime Administration
Abstract
MARAD proposes to revise its regulations governing the filing of applications and administration of Capital Construction Fund (CCF) Program accounts. The proposed rule would (i) conform the regulations to recent statutory amendments extending CCF Program application to all U.S. built vessels engaged in United States domestic or foreign commerce, (ii) eliminate limitations on CCF Program availability to certain geographic trades, (iii) clarify the maximum allowable completion time for reconstruction projects, and (iv) provide for funds to be used for acquisitions under certain circumstances. In addition, the NPRM proposes a mechanism to terminate inactive accounts, accounts with a zero balance, and accounts where a CCF Program objective has failed to commence within a 10-year period. The proposed rule would also correct numerous citations, modernize text, update agency contact information, and remove obsolete references.
Full Text
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[Federal Register Volume 91, Number 182 (Tuesday, September 22, 2026)]
[Proposed Rules]
[Pages 60054-60063]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19367]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
46 CFR Part 390
[Docket Number MARAD-2026-1552]
RIN 2133-AC06
Capital Construction Fund Revision
AGENCY: Maritime Administration (MARAD), U.S. Department of
Transportation (DOT).
ACTION: Notice of proposed rulemaking (NPRM), request for comments.
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SUMMARY: MARAD proposes to revise its regulations governing the filing
of applications and administration of Capital Construction Fund (CCF)
Program accounts. The proposed rule would (i) conform the regulations
to recent statutory amendments extending CCF Program application to all
U.S. built vessels engaged in United States domestic or foreign
commerce, (ii) eliminate limitations on CCF Program availability to
certain geographic trades, (iii) clarify the maximum allowable
completion time for reconstruction projects, and (iv) provide for funds
to be used for acquisitions under certain circumstances. In addition,
the NPRM proposes a mechanism to terminate inactive accounts, accounts
with a zero balance, and accounts where a CCF Program objective has
failed to commence within a 10-year period. The proposed rule would
also correct numerous citations, modernize text, update agency contact
information, and remove obsolete references.
DATES: MARAD invites the public to comment on this proposed rule and
[[Page 60055]]
information collection. Comments should be filed on or before November
23, 2026. Late-filed comments will be considered to the extent
practicable.
ADDRESSES: You may submit comments identified by DOT Docket Number
listed above by any of the following methods:
<bullet> Federal eRulemaking Portal: <a href="http://www.regulations.gov">www.regulations.gov</a>. Search
using the DOT Docket Number provided above and follow the instructions
for submitting comments.
<bullet> Mail/Hand-Delivery/Courier: Docket Management Facility:
U.S. Department of Transportation, 1200 New Jersey Avenue SE, Room W12-
140, Washington, DC 20590. If you would like to know that your comments
reached the facility, please enclose a stamped, self-addressed postcard
or envelope. The Docket Management Facility is open 9:00 a.m. to 5:00
p.m., Monday through Friday, except on Federal holidays.
Note: We recommend that you include your name and mailing
address, an email address, or a telephone number in the body of your
document so that we can contact you if we have questions regarding
your submission. If you submit your inputs by mail or hand-delivery,
they must be submitted in an unbound format, no larger than 8\1/2\
by 11 inches, single-sided, suitable for copying and electronic
filing. All submissions received should include the agency name and
docket number or Regulation Identifier Number (RIN) for this
rulemaking.
Instructions: All comments received will be posted without making
any changes to the DOT Docket at <a href="http://www.regulations.gov">www.regulations.gov</a>, including any
personal information provided. For detailed instructions on submitting
comments and additional information on the rulemaking process, see the
section entitled Public Participation.
FOR FURTHER INFORMATION CONTACT: David M. Gilmore, Director, Office of
Marine Financing, (202) 366-5737 or via email at
<a href="/cdn-cgi/l/email-protection#a9c4c8dbc0c7cccfc0c7c8c7cac0c7cee9cdc6dd87cec6df"><span class="__cf_email__" data-cfemail="771a16051e1912111e191619141e19103713180359101801">[email protected]</span></a>. Persons who use a telecommunications device
for the deaf (TDD) may call the Federal Information Relay Service
(FIRS) at 1-800-877-8339 to contact the above individual during
business hours. The FIRS is available twenty-four hours a day, seven
days a week, to leave a message or question. You will receive a reply
during normal business hours. You may send mail to Mr. Gilmore at the
following address: U.S. Department of Transportation, Maritime
Administration, Office of Marine Financing, 1200 New Jersey Avenue SE,
Washington, DC 20590. If you have questions about viewing the Docket,
call Docket Operations, telephone: (800) 647-5527.
SUPPLEMENTARY INFORMATION:
Electronic Access and Filing
This document, including a summary of the rule as required by 5
U.S.C. 553(b)(4), and all comments may be viewed online through the
Federal eRulemaking portal at <a href="http://www.regulations.gov">www.regulations.gov</a>. An electronic copy
of this document may also be downloaded by accessing the Office of the
Federal Register's home page at: <a href="http://www.federalregister.gov">www.federalregister.gov</a>.
Privacy Act: Anyone can search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, or other entity). For
information on DOT's compliance with the Privacy Act, please visit
<a href="https://www.transportation.gov/privacy">https://www.transportation.gov/privacy</a>.
Background
Regulatory Review
Improvement of regulations is a continuous focus for DOT and MARAD.
For that reason, DOT and MARAD regularly and deliberately review their
rules in accordance with Executive Order (E.O.) 12866, Regulatory
Planning and Review (October 4, 1993), and section 610 of the
Regulatory Flexibility Act, 5 U.S.C. 601, et seq. That process is
summarized in Appendix D of DOT's semi-annual regulatory agenda. In
addition, E.O. 14192, Unleashing Prosperity Through Deregulation
(February 6, 2025), and E.O. 14219, Ensuring Lawful Governance and
Implementing the President's ``Department of Government Efficiency''
Deregulatory Initiative (February 19, 2025), directed agencies to
further scrutinize their regulations to reduce unnecessary costs, clear
barriers to emerging technology, and alleviate unnecessary regulatory
burdens.
Accordingly, MARAD has identified its CCF regulations governing
applications and administrative procedures for consideration. In this
proposed rule, MARAD seeks comment to ensure that the program remains
current and is the least burdensome to the public. MARAD welcomes your
comments to ensure that agency programs reflect current and
comprehensive best practices.
This rule proposes revision of the CCF regulations found at 46 CFR
part 390. The program was established by the Merchant Marine Act of
1936 (MMA) and is codified at 46 U.S.C. chapter 535.
The CCF Program
The purpose of the program is to assist owners and operators of
United States flagged vessels in accumulating the large amount of
capital necessary for the modernization of their commercial fleets. The
CCF Program was expanded significantly in December 2022 with the
passage of the National Defense Authorization Act for Fiscal Year 2023
(2023 NDAA). Section 3544 of the 2023 NDAA extended the use of the
program to all U.S. built vessels engaged in the domestic or foreign
commerce of the United States, removing limitations on the availability
of the CCF Program to certain geographic trades. The requirements in
the current regulations have been superseded by these statutory
updates.
The program encourages construction, reconstruction, or acquisition
of vessels through deferment of Federal income taxes. Owners and
operators of vessels deposit income from operations of eligible vessels
into CCF accounts prior to paying income taxes. All deferred taxes are
eventually recovered upon the sale of the vessel because the cost basis
of the vessel is reduced by the dollar amount of CCF funds used for its
acquisition or reconstruction.
To participate in the program, a vessel owner applies to MARAD's
Office of Marine Financing in advance of the relevant Federal tax
filing due date. The application identifies the income earning
vessel(s), the type of project(s) anticipated, and the financial
institution that will hold the CCF deposits. Once MARAD determines that
an application complies with the CCF statute and regulations, a CCF
Agreement is executed between the United States and the vessel owner or
operator.
Currently, there are 129 CCF Agreements with a total of
approximately $2.56 billion on deposit. Many of these CCF Agreements
were established years ago and identify scheduled projects that are no
longer viable. Consequently, CCF participants are faced with either
having funds languish on deposit for nonviable scheduled projects or
making non-qualified withdrawals of funds and paying deferred taxes at
the highest marginal rate. The number of CCF Agreements has been
increasing since the expansion of the program to all U.S. built vessels
engaged in the domestic or foreign commerce of the United States.
Without an update to the regulations to address this issue, it is
expected to become more acute. MARAD's proposed regulatory revisions
establish a mechanism to amend obsolete agreements to avoid non-
qualified withdrawals or top-rate deferred tax penalties and to direct
participants to invest idle capital into viable modern projects.
[[Page 60056]]
The authority to issue regulations to implement the program is
granted under 46 U.S.C. 53502(a), which permits the Secretary of
Transportation (delegated to MARAD) to prescribe regulations (except
for the determination of tax liability) to carry out the program.
Although the CCF Program regulations have been amended over the years,
the current requirements and limitations remain substantially the same
as when MARAD introduced them in 1976. The proposed rule would (i)
conform the regulations to recent statutory amendments extending the
application of the CCF Program to all U.S. built vessels engaged in the
domestic or foreign commerce of the United States, (ii) eliminate
certain geographic trade limitations, (iii) clarify the maximum
allowable completion time for reconstruction projects, and (iv) provide
for funds to be used for acquisitions under certain circumstances
pursuant to 46 U.S.C. 53509. Revisions would also correct numerous
citations in accordance with the codification of title 46 of the United
States Code, improve accessibility by modernizing text, update agency
contact information, remove obsolete references, and provide a
mechanism to terminate inactive accounts, accounts with a zero balance,
and accounts where a CCF Program objective has failed to commence
within a 10-year period.
The proposed changes to the CCF regulations are deregulatory and
intended to ease current restrictions on the allowable uses of CCF
accounts while remaining consistent with current agency priorities of
incentivizing private investment in the construction of commercial
vessels. For example, currently, when establishing a CCF, unless there
is new construction of at least one vessel as a program goal, there
must be a reconstruction program goal of at least $1,000,000 for each
vessel. This limitation is without regard for the number of vessels
being reconstructed. This minimum threshold for reconstruction
restricts the number of participants in the program. The intent of the
revision to the reconstruction program goal is to allow for
participation by applicants with smaller vessels that would otherwise
be excluded by permitting the reconstruction costs of multiple vessels
to be aggregated to meet minimum program requirements.
Public Participation
How long do I have to submit comments?
We are providing a 60-day comment period.
How do I prepare and submit comments?
To ensure that your comments are correctly filed in the Docket,
please include the Docket Number shown at the beginning of this
document in your comments.
Comments may be submitted to the docket electronically by logging
onto the Docket Management System website at <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Search using the docket number and follow the
online instructions for submitting comments. Please submit your
comments, including the attachments, following the instructions
provided under the above-entitled heading ADDRESSES.
Please note that pursuant to the Data Quality Act, for substantive
data to be relied upon and used by the agency, it must meet the
information quality standards set forth in the Office of Management and
Budget (OMB) and DOT Data Quality Act guidelines. Accordingly, we
encourage commenters to consult the guidelines in preparing your
comments. OMB's guidelines may be accessed at <a href="https://www.opm.gov/information-management/information-quality-guidelines/">https://www.opm.gov/information-management/information-quality-guidelines/</a>. DOT's
guidelines may be accessed at <a href="https://www.transportation.gov/sites/dot.gov/files/docs/regulations/513/dot-information-quality-guidelines-2019.pdf">https://www.transportation.gov/sites/dot.gov/files/docs/regulations/513/dot-information-quality-guidelines-2019.pdf</a>.
How can I be sure that my comments were received?
If you wish Docket Management to notify you upon its receipt of
your comments, enclose a self-addressed, stamped postcard in the
envelope containing your comments. Upon receiving your comments, Docket
Management will return the postcard by mail.
Will the Agency consider late comments?
MARAD will consider all comments that the Docket Management Office
receives before the close of business on the comment closing date
indicated above under the DATES section of this proposed rule. To the
extent possible, MARAD will also consider comments received after that
date. If the Docket Management Office receives a comment too late for
MARAD to consider in developing this action, MARAD will consider that
comment as an informal suggestion in future rulemaking actions.
How can I read the comments submitted by other people?
You may read the comments received by the Docket Management Office
at the address given above under ADDRESSES. The hours of the Docket
Management Office are indicated above in the same location. You may
also see the comments on the internet. To read the comments on the
internet, go to <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the online
instructions for accessing the dockets.
Please note that, even after the comment closing date, MARAD will
continue to file relevant information to the Docket as it becomes
available. Further, some people may submit late comments. Accordingly,
we recommend that you periodically check the Docket for new material.
Summary of Revisions
MARAD proposes to redesignate the sections and to amend the program
regulations for purposes of clarity and brevity.
Section 390.1 Purpose (formerly Scope of the regulations).
Specifies clearly the purpose of the regulation.
Section 390.3 Definitions (formerly Application for an agreement).
Groups all definitions into one section to improve overall
readability.
Section 390.5 Applying for a Capital Construction Fund Agreement
(``Agreement'') (formerly Policy considerations).
Identifies the eligibility requirements and summarizes the
application process in one section for clarity and improved
accessibility.
Section 390.7 Acquisition, construction, or reconstruction
(formerly Description of the agreement).
Highlights the acceptable objectives of the program to clarify the
requirements of the statutory provision governing qualified withdrawals
at 46 U.S.C. 53509.
Section 390.9 Non-qualified and permissible operations (formerly
Agreement vessels).
Proposes edits to this section to reflect the updates to 46 U.S.C.
53501, which was amended by the 2023 NDAA to substitute ``foreign or
domestic trade of the United States'' for ``United States foreign,
Great Lakes, noncontiguous domestic, or short sea transportation
trade.''
Section 390.11 Constructive deposits, constructive withdrawals, and
ratification of withdrawals without consent (formerly Administration of
the agreement).
Outlines the constructive deposit and withdrawal process and makes
other non-substantive edits to this section for clarity.
Section 390.13 First Tax Year for which an agreement is effective
(formerly Deposits into the fund).
[[Page 60057]]
Proposes minor, non-substantive edits to this section for clarity
and improved accessibility.
Section 390.15 Annual reporting and modification of agreement
(formerly Investment in the fund).
Clarifies the reporting requirements and process to modify the
agreement.
Section 390.17 Automatic termination of agreement (formerly
Qualified withdrawals).
Proposes revisions to provide for termination of inactive CCF
agreements and agreements with zero balances on deposit.
Section 390.19 Maximum deposit amounts and time to deposit
(formerly Non-qualified withdrawals).
Sets forth the maximum annual ceiling established by 46 U.S.C.
53505 and other non-substantive edits to this section for clarity.
Section 390.21 CCF Accounts (formerly Sale or other disposition of
agreement vessels).
MARAD is proposing to make minor, non-substantive edits to this
section for clarity.
Section 390.23 Conditional consent to withdrawal qualification
(formerly Liquidated damages).
Proposes to update the items needed for a withdrawal determination.
Section 390.25 Sale or other disposition of agreement vessels
(formerly Failure to fulfill a substantial obligation under the
agreement).
Updates the citations for accuracy.
Section 390.27 Failure to fulfill a substantial obligation under
the agreement (formerly Departmental reports and certification).
MARAD is proposing to update contact information.
Section 390.29 Miscellaneous.
Section added to provide for confidentiality and timing of filings.
Rulemaking Analysis and Notices
Executive Order 12866
This NPRM is not a significant regulatory action under E.O. 12866;
therefore, it was not reviewed by OMB. It is also not considered a
major rule for purposes of congressional review under the Congressional
Review Act. This NPRM is limited to (i) conforming the regulations to
recent statutory amendments extending the application of the CCF
Program to all U.S. built vessels engaged in the domestic or foreign
commerce of the United States, (ii) eliminating limitations on the
availability of the CCF Program to certain geographic trades, (iii)
clarifying the maximum allowable completion time for reconstruction
projects, and (iv) providing for funds to be used for acquisitions
under certain circumstances as specified in section 53509.
Need for the Regulation
A complete revision of the regulations is necessary to address the
effects of time for an implementing regulation that has remained
substantially unchanged for 40 years. Through this proposed revision,
MARAD incorporates changes to reflect statutory changes from the
National Defense Authorization Act for fiscal year 2022 (NDAA 2022).
Specifically, the NDAA 2022 modified the definition of qualified
vessels (46 U.S.C. 53501(5)) and removed trading restrictions on
vessels eligible to participate in the program (46 U.S.C. 53503(b)) to
expand the program to include almost any commercial vessel owner and
operator in the U.S. registry. In addition, the proposed revision
reorganizes the regulation and modernizes the language for clarity and
ease of use.
Baseline
Under this baseline, existing account holders in the CCF Program
are assumed to comply with the statutory expansion enacted by Section
3544 of the NDAA 2022. This update extended CCF eligibility to all
vessels operating in foreign and domestic commerce of the U.S. as long
as they were built in the U.S. and are registered with the U.S. Coast
Guard. Affected entities follow the statutory program, but face
uncertainty and unnecessary delay because of the regulation, which does
not conform to the statute. Vessel operators experience administrative
burden and uncertainty regarding outdated criteria, such as the
requirement to pay liquidated damages when operating in an unauthorized
geographic trade. In addition, applicants may overlook the CCF Program
as an option to assist with construction of new vessels or
reconstruction of their existing vessels because the regulation would
lead many to believe incorrectly that they are ineligible to
participate in the program or that any vessels constructed or
reconstructed utilizing the program are subject to geographic trading
restrictions.
Costs
The revised rule does not impose any new or additional compliance
requirements or costs. Many of the revisions are intended to conform
with statutory updates, and others are simply incorporating current
practices in evaluating eligibility. The revised rule will apply
current policy practices and use modern regulatory language intended
for simplicity, clarity, and brevity. Improvements are expected to
result in administrative efficiencies and clarity in applicant and
vessel eligibility requirements.
Benefits
Improved administrative efficiency and clarification of practices
will make the rule and the program more accessible and attractive to
industry. As a result, the CCF Program should garner better prepared
program participants that can best use the program for the benefit of
the maritime sector. In addition, expanding the reconstruction
threshold to $3,000,000 across multiple vessels provides access to
smaller operators who were previously excluded by per-vessel minimums,
deleting the geographic trading restrictions opens additional markets
to owners for sale of vessels, and clarifying obligations of account
holders to maintain accounts with active objectives. According to the
latest available data from the U.S. Army Corps of Engineers, there were
over 1,800 operators operating about 37,000 vessels (tugs, barges, push
boats, etc.) on the inland waterways. Over 80 percent of these
operators operate 10 or fewer vessels. provides a clear path for the
deployment of capital into active and useful projects. Together, these
updates should build applicant confidence in the program.
Executive Order 14192 (Deregulation)
E.O. 14192 requires that for ``each new [E.O. 14192 regulatory
action] issued, at least ten prior regulations be identified for
elimination.'' Implementation guidance for E.O. 14192, issued by OMB
(Memorandum M-25-20, March 26, 2025), defines an E.O. 14192
deregulatory action as ``an action that has been finalized and has
total costs less than zero.'' This rule would, if adopted, have total
costs less than zero and therefore be an E.O. 14192 deregulatory
action.
Executive Order 13132 (Federalism)
MARAD analyzed this rulemaking in accordance with the principles
and criteria contained in E.O. 13132, Federalism, and has determined
that it has no substantial effect on the States, on the current
Federal-State relationship, or on the current distribution of power and
responsibilities among local officials. Nothing in this document
preempts any State law or regulation. Therefore, MARAD did not consult
with State and local officials on this rulemaking and did not prepare a
Federalism summary impact statement.
[[Page 60058]]
Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601, et seq.,
as amended by the Small Business Regulatory Enforcement Fairness Act
(SBREFA) of 1996), Public Law 104-121, whenever an agency is required
to publish a notice of proposed rulemaking, the agency must prepare and
make available for public comment a regulatory flexibility analysis
that describes the effect of the rule on small entities (i.e., small
businesses, small organizations and small governmental jurisdictions),
unless the head of the agency certifies the rule will not have a
significant economic impact on a substantial number of small entities.
Agencies must also provide a statement of the factual basis for this
certification.
For the following reasons, the MARAD Administrator certifies that
this rulemaking action would not have a significant economic impact on
a substantial number of small entities. The revisions to the
regulations update administrative criteria, conform to statutory
requirements, update citations and addresses, and modernize text. The
revisions will also allow for easier submission of applications due to
the elimination of obsolete requirements and clarifications in
requirements for vessel owners and projects eligible to participate.
Privacy Impact Assessment
Section 522(a)(5) of the Transportation, Treasury, Independent
Agencies, and General Government Appropriations Act, 2005 (Pub. L. 108-
447, div. H, 118 Stat. 2809 at 3268) requires DOT and certain other
Federal agencies to conduct a privacy impact assessment of each
proposed rule that will affect the privacy of individuals. This
rulemaking, which (i) conforms the regulations to statutory amendments
extending the application of the CCF Program to all U.S. built vessels
engaged in the domestic or foreign commerce of the United States, (ii)
eliminates limitations on the availability of the CCF Program to
certain geographic trades, (iii) clarifies the maximum allowable
completion time for reconstruction projects, and (iv) provides for
funds to be used for acquisitions under certain circumstances, does not
result in personally identifiable information (PII) being collected or
maintained in a Government-run website or IT system. Therefore, MARAD
did not conduct a Privacy Impact Assessment.
Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4,
requires agencies to evaluate whether an agency action would result in
the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector, of $212 million or more (as
adjusted for inflation in 2026) in any one year, and if so, to take
steps to minimize these unfunded mandates. This rulemaking will not
impose unfunded mandates under the UMRA. It will not result in costs of
$212 million or more to either State, local, or Tribal governments, in
the aggregate, or to the private sector, so the analytical requirements
of the UMRA do not apply. The rule is the least burdensome alternative
that achieves MARAD's stated objectives for the rule.
National Environmental Policy Act (NEPA)
Pursuant to 49 CFR 1.81, the Secretary has delegated the
``functions'' under NEPA to the DOT Administrators ``as they relate to
the matters within the primary responsibility of each Operating
Administration.'' MARAD has determined that this rule is categorically
excluded pursuant to DOT Order 5610.1D, subpart C, section (e)(3). A
categorical exclusion (CE) is an action identified in an agency's NEPA
procedures that does not normally have a significant impact on the
environment and therefore does not require either an environmental
assessment (EA) or environmental impact statement (EIS). See DOT Order
5610.1D, section 9. In analyzing the applicability of a CE, the agency
must also consider whether extraordinary circumstances are present that
would warrant the preparation of an EA or EIS. Id. at section 9(b).
MARAD may utilize its own CEs, in addition to CEs listed in DOT Order
5610.1D Appendix A or another Operating Administration's CEs, using the
procedures described in DOT Order 5610.1D, section 9, and subpart C,
section (e). This proposed rulemaking, Capital Construction Fund
Revision, is categorically excluded pursuant to DOT Order 5610.1D,
subpart C, section (e)(3): ``Internal orders and procedures not
required to be published in the Federal Register, promulgation of
rules, regulations, directives, and amendments thereto that do not
require a regulatory impact analysis under section 3 or do not have a
potential to cause a significant impact on the environment . . .''
MARAD does not anticipate any environmental impacts, and there are no
extraordinary circumstances present in connection with this rulemaking.
Regulation Identifier Number
A regulation identifier number (RIN) is assigned to each regulatory
action listed in the Unified Agenda of Federal Regulations. The
Regulatory Information Service Center publishes the Unified Agenda in
April and October of each year. The RIN number contained in the heading
of this document can be used to cross-reference this action with the
Unified Agenda.
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et
seq.), a person is not required to respond to a collection of
information by a Federal agency unless the collection displays a valid
OMB control number. This proposed rule would establish a new
requirement for the collection of information for all CCF applicants.
MARAD has requested that OMB review and approve the information
collection requirements under the PRA.
In accordance with the PRA, MARAD invites public comments regarding
the collection of information arising under this proposed rule.
--Copies of this notice and information collection may be found by
going to <a href="https://www.reginfo.gov/public/do/PRAMain">https://www.reginfo.gov/public/do/PRAMain</a>.
--Title of Information Collection: Information Collection to Apply for
and Maintain a Capital Construction Fund.
--OMB Control Number: Pending.
--Form Number: None.
--Expiration Date of Approval: Three years following approval by the
Office of Management and Budget.
--Abstract: Persons or Entities applying for MARAD approval to open and
maintain Capital Construction Fund (CCF) accounts. Persons or Entities
applying must submit certain information described in 46 CFR part 390
and agree to certain conditions. MARAD is proposing the use of three
separate instruments to apply for and maintain a CCF--the form of
application, agreement, and annual report form. All information
described in part 390 will be required to be submitted and is necessary
for proper review of the applicant's qualifications and the maintenance
of their account over time. The information collected will be used by
MARAD to (1) ensure MARAD's action to open a CCF account is consistent
with pertinent IRS regulations; (2) monitor relevant financial and
vessel construction and reconstruction information to assess account
holder compliance with the agreement terms and activities within
[[Page 60059]]
the CCF program; (3) evaluate the applicant's U.S. citizenship status
and eligibility; and (4) demonstrate to MARAD that the applicant has
the financial capabilities to accomplish its proposed program, by
submitting audited balance sheets and income statements (unaudited
statements are accepted from smaller companies that do not have audited
statements).
--Respondents: Individuals, partnerships, companies, or corporations
seeking or maintaining accounts.
--Estimated number of respondents: 243 respondents annually.
--Annual estimated total annual burden hours: 3037.5 hours.
--Frequency of response: Annually.
List of Subjects in 46 CFR Part 390
Income taxes, Investments, Maritime carriers, Reporting and
recordkeeping requirements, Vessels.
For the reasons described in the preamble, MARAD proposes to revise
46 CFR part 390 as set forth below:
SUBCHAPTER K--REGULATIONS UNDER PUBLIC LAW 91-469
PART 390--CAPITAL CONSTRUCTION FUND FOR VESSELS
Sec.
390.1 Purpose.
390.3 Definitions
390.5 Applying for a Capital Construction Fund Agreement.
390.7 Acquisition, construction, or reconstruction.
390.9 Non-qualified operations.
390.11 Constructive deposits, constructive withdrawals, and
ratification of withdrawals without consent.
390.13 First tax year for which an agreement is effective.
390.15 Annual reporting and modification of agreement.
390.17 Automatic termination of agreement.
390.19 Maximum deposit amounts and time to deposit.
390.21 CCF Accounts.
390.23 Conditional consent to withdrawal qualification.
390.25 Sale or other disposition of agreement vessels.
390.27 Failure to fulfill a substantial obligation under the
agreement.
390.29 Miscellaneous.
Authority: 46 U.S.C. ch. 535, 49 CFR 1.93(a)
Sec. 390.1 Purpose.
This part prescribes rules and regulations pertaining to the filing
of Capital Construction Fund Program applications and the
administration of funds subject to a Capital Construction Fund
Agreement, for the purpose of providing replacement vessels, additional
vessels, or the reconstruction of vessels to be built and documented in
the United States and operated in the United States Foreign and
Domestic Trade.
Sec. 390.3 Definitions.
Agreement means the contract to participate in the program between
the approved CCF applicant (party) and the Maritime Administration
(MARAD).
Act means ch. 535 of title 46 of the U.S. Code (46 U.S.C. 53501-
53517), amended from time to time.
Agreement Vessel means any Eligible Vessel or Qualified Vessel that
is subject to an Agreement. For purposes of generating ceilings and
making Qualified Withdrawals, the term agreement vessel includes
containers, trailers or barges that are part of the complement of an
agreement vessel. The complement is limited to three times the
container, trailer, or barge capacity of the vessel, unless MARAD
agrees to a different complement.
CCF means Capital Construction Fund for Vessels.
Citizen of the United States or U.S. Citizen means any individual
who is a United States citizen, and any corporation, partnership,
association, or company organized under the laws of any State that
meets the requirements of 46 U.S.C. 50501, as amended.
Constructed in the United States means a Vessel that:
(a) Is built entirely in a shipyard or shipyards within any of the
United States and its territories;
(b) Has all the major components of its hull and superstructure
fabricated in the United States; and
(c) Is assembled entirely in the United States.
Depository or Depositories means the designated bank or brokerage
account(s) listed in Schedule D where the CCF funds will be physically
held.
Domestic Trade means:
(a) Commerce or trade between two points in the contiguous United
States; and
(b) Noncontiguous commerce or trade as defined in 46 U.S.C.
53501(4).
Eligible Vessel means a Vessel as defined in 46 U.S.C. 53501(2).
Extension Period means the period beginning the first day following
the end of the Filing Period and ending on the last day of the party's
last filing extension.
Filing Period means the period beginning the first day following
the end of the Tax Year and ending on the party's last day to file
their tax return absent a filing extension.
Foreign Trade means foreign commerce or trade as defined in 46
U.S.C. 109.
Joint Regulations mean regulations prescribed jointly by MARAD and
Treasury under section 53502(b) of title 46.
MARAD means the Maritime Administration, an agency within the U.S.
Department of Transportation.
Non-qualified Withdrawal means any withdrawal from an account that
is not a Qualified Withdrawal.
Qualified Withdrawal means any withdrawal as defined in 46 U.S.C.
53509.
Qualified Vessel means a Vessel as defined in 46 U.S.C. 53501(5).
Schedule A means the section of the Agreement that designates the
income producing vessel(s) from which deposits are made into a
Depository.
Schedule B means the section of the Agreement that designates the
qualified project(s) for which the CCF funds are to be expended.
Schedule C means the section of the Agreement that designates the
Depository or Depositories for the CCF.
Schedule D means the section of the Agreement that indicates the
deposits into the CCF.
Share Interest in a Vessel means the right to use the Vessel to
generate income or a right to the proceeds or a portion of the proceeds
from the Vessel's use (i.e., proceeds that may result from a joint
venture or partnership) even if the applicant does not have a
proprietary interest in the Vessel for purposes of State or Federal
law.
Tax Due Date means the date the party's Federal tax return must be
filed, including extensions, with the Internal Revenue Service.
Tax Year means the period between January 1 and December 31 for
calendar year filers or the designated fiscal year for fiscal year
filers.
United States means the States of the United States of America, the
District of Columbia, and, for citizenship purposes, includes the
Commonwealth of Puerto Rico, American Samoa, Guam, the U.S. Virgin
Islands, the Northern Mariana Islands, and any other territory, or
possession of the United States.
Vessel means a vessel as defined at 1 U.S.C. 3 and 46 U.S.C. 53701
and includes the following:
(a) Non-loading equipment (i.e., cargo handling equipment)
ordinarily carried from port to port and not typically subject to
frequent replacement due to normal wear and tear;
(b) Share Interest in a Vessel; and
(c) An Eligible Vessel under construction or has been contracted
for, but construction has not yet begun.
[[Page 60060]]
Sec. 390.5 Applying for a Capital Construction Fund Agreement.
(a) General eligibility requirements. To be eligible to enter into
an Agreement an applicant must:
(1) Be a Citizen of the United States;
(2) Own or lease one or more Eligible Vessels or share thereof (as
defined in the Act), be party to a contract for the construction of one
or more Eligible Vessels or share thereof operating in the Foreign or
Domestic Trade of the United States;
(3) Have an acceptable plan to acquire, construct, or reconstruct
one or more Qualified Vessels. The plan must be a firm representation
of the applicant's actual intentions. Qualified Vessels must be
operated in Foreign or Domestic Trade of the United States; and
(4) Demonstrate the financial capabilities to accomplish the
program objective.
(b) Application. Applicants seeking an Agreement must submit a
completed application form. The form of application and submission
guidance may be found on the program web page of MARAD's website at
<a href="http://www.maritime.dot.gov">http://www.maritime.dot.gov</a>. The application must be received on or
prior to the Tax Due Date for the Filing Period of the Federal tax
return to be effective for the Tax Year to which that return relates.
The applicant should file at least 45 days in advance of such date.
(c) Additional information may be required. An applicant must
provide such facts, documents, and materials as MARAD may require in
considering whether to enter into an Agreement. An applicant should be
ready to make available such applicable materials, including but not
limited to design plans, data concerning the reasonableness of the cost
of the program objective, construction contracts, financial statements,
certificates of incorporation, bylaws, articles of partnership, stock
ownership data, and other information including judgments and pending
litigation that would affect the proposed program objective. The
specific information required to be submitted is set forth in MARAD
submission guidance.
Sec. 390.7 Acquisition, construction, or reconstruction.
(a) Acceptable objective. Generally, CCF funds may only be used for
the acquisition, construction, or reconstruction of vessels documented
in the United States and manned with United States Citizens in support
of maintaining and increasing the Foreign and Domestic Trade of the
United States.
(b) Acquisition. CCF funds may be used for the:
(1) Purchase of a new vessel from the constructing shipyard;
(2) Purchase of a vessel that is more than one year old for which
there will be substantial reconstruction completed within 18 months of
withdrawing CCF funds;
(3) Acquisition of a contract to construct a new Qualified Vessel;
(4) Acquisition of interest in a partnership or limited liability
company; and
(5) Acquisition of existing vessels as part of the purchase of a
corporation, limited liability company, partnership, or association.
(c) Construction. CCF funds may be used to construct a new
Qualified Vessel.
(d) Reconstruction. The following applies to reconstruction:
(1) CCF funds may be used for the reconstruction of a vessel that
can include rebuilding, replacing, reconditioning, refurbishing,
converting, or improving any portion of a vessel;
(2) Reconstruction must substantially prolong the useful life of
the vessel, increase its value, materially increase its safety,
reliability, or energy efficiency, or adapt it to a different
commercial use in the industry;
(3) Reconstruction must increase a vessel's competitiveness,
efficiency, and productivity with an economically useful life for a
substantial period of time beyond the date reconstruction is completed;
and
(4) Repairs necessary to meet any regulatory standards or any
applicable classification standards, or for previous inadequate
maintenance and repair do not constitute reconstruction for purposes of
this rule.
(e) Indebtedness. CCF funds may be used for new indebtedness
incurred for one of the acceptable program objectives set forth in this
section.
(f) Time permitted for construction or reconstruction. Construction
or reconstruction must be completed within 36 months from the date
construction or reconstruction first commences, unless otherwise
consented to by MARAD.
(g) Unacceptable objectives. MARAD will not enter into an Agreement
where the application:
(1) Fails to provide for one or more replacement, additional, or
reconstructed vessel for operation in the Foreign or Domestic Trade of
the United States;
(2) Proposes reconstruction of existing vessel(s) with no
additional program objective, unless such reconstruction will:
(i) Collectively exceed $3,000,000 in cost;
(ii) Will be capitalized under the Internal Revenue Code of 1986,
as amended, implementing regulations; and
(iii) Will result in (a) significantly more competitive vessel(s).
(3) Proposes reconstruction of an existing vessel that is more than
25 years old at the time of withdrawal;
(4) Proposes acquisition of an existing vessel (except as provided
for in paragraph (b) of this section); or
(5) Proposes payment of the principal on existing indebtedness.
Sec. 390.9 Non-qualified operations.
Non-qualified operations for Qualified Vessels include:
(a) The use of barges as docks and ramps;
(b) The use of a vessel as housing, restaurant, public space, or
other similar primary use in a fixed location;
(c) The foreign-to-foreign trade, consisting of voyages originating
and ending in foreign ports, with no intermediate domestic cargo
operation;
(d) Trade from foreign ports to and from U.S. oil rigs in
international waters; and
(e) Bunkering in support of non-qualified trade operations.
Sec. 390.11 Constructive deposits, constructive withdrawals, and
ratification of withdrawals without consent.
(a) Constructive deposits and withdrawals before Agreement executed
date. Constructive deposits and withdrawals are deemed to have been
deposited to and withdrawn from a designated CCF account even if the
funds are not physically deposited.
(1) Constructive deposits and withdrawals are permissible only
during the tax year for which a written application for an Agreement is
submitted to MARAD.
(2) Once MARAD executes the Agreement, the constructive deposit and
withdrawal period ends, and all deposits must be physically deposited
into a designated CCF account.
(b) Consent for constructive deposits and withdrawals. All
qualified deposits and withdrawals occurring within the period
specified in paragraph (a) of this section may be consented to by MARAD
as constructive deposits and withdrawals so long as the following
criteria are met:
(1) The amount deposited into the account for a taxable year does
not exceed the sum of--
(i) That portion of the taxable income of the owner or lessee for
the taxable year (computed under chapter 1 of the
[[Page 60061]]
Internal Revenue Code of 1986 (26 U.S.C. ch. 1) but without regard to
the carryback of net operating loss or net capital loss or this
chapter) attributable to the operation of Agreement Vessels in the
foreign or domestic trade of the United States or in the fisheries of
the United States;
(ii) The amount allowable as a deduction under section 167 of such
Code (26 U.S.C. 167) for the taxable year for Agreement Vessels;
(iii) If the transaction is not taken into account for purposes of
paragraph (i), the net proceeds (as defined in Joint Regulations) from
the disposition of an Agreement Vessel or from insurance or indemnity
attributable to an Agreement Vessel;
(iv) The receipts from the investment or reinvestment of amounts
held in the account; and
(v) For a lessee, the maximum amount that may be deposited for an
Agreement Vessel under subsection (b)(1)(ii) for any period must be
reduced by any amount the owner is required or permitted, under the
Agreement, to deposit for that period for the Vessel under subsection
(b)(1)(ii).
(2) For MARAD to consent to constructive deposit and withdrawal
treatment, the applicant must include a written request with the
application and provide sufficient supporting data to enable MARAD to
evaluate the request; and
(3) The written request must be submitted no later than the
extension period for that party's initial tax year.
(c) Constructive deposits and withdrawals after the Agreement
effective date. Constructive deposits or withdrawals are not permitted
after the effective date of an Agreement. Deposits made after the
effective date of an Agreement must be physically deposited into a
dedicated CCF account.
Sec. 390.13 First tax year for which an agreement is effective.
(a) First tax year for which an Agreement is effective. For an
Agreement to be effective for any applicant's tax year, the written
application must be submitted to MARAD before the end of the `Filing
Period' or `Extension Period' for that tax year, whichever applies.
(1) If the written application is received by MARAD after the end
of the `Filing Period' or `Extension Period,' whichever applies, then
the Agreement will be first effective for the next succeeding tax year.
(2) An applicant must submit a written application at least 45 days
in advance of the end of the applicant's tax due date. If the written
application is submitted too close to the tax due date, and MARAD does
not execute the Agreement prior to the tax due date, the applicant
bears the burden of negotiating with the Internal Revenue Service for
relief.
(3) Penalties related to a denied application will be considered
due to the applicant's failure to apply for an Agreement in a timely
manner.
(b) Ratification of withdrawals.
(1) Any withdrawals that require MARAD's consent made after the
effective date of an Agreement and without MARAD's consent are
automatically Non-qualified Withdrawals, unless MARAD subsequently
consents to them by ratification;
(2) MARAD may ratify, as qualified, any withdrawal made under
paragraph (1), provided the withdrawal would have resulted in MARAD's
consent had it been requested before withdrawal;
(3) MARAD may issue retroactive consent, if appropriate. However,
if MARAD does not issue retroactive consent for withdrawals made
without consent, those withdrawals and any associated penalties will be
deemed due to the party's failure to apply in a timely manner;
(4) A party must submit a request for withdrawal at least 45 days
in advance of the expected withdrawal date;
(5) Withdrawals made without MARAD's consent or in reliance on
obtaining MARAD's consent are made purely at a party's own risk;
(6) Should any withdrawal be made without MARAD's consent prove,
for any reason, to be one that MARAD will not or cannot consent to
ratify, then the result will be a Non-qualified Withdrawal or an
involuntary termination of the Agreement or both;
(7) Should a party withdraw CCF funds for a project not previously
deemed an eligible Schedule B objective without having first obtained
MARAD's consent, MARAD may entertain an application to amend the
Agreement's Schedule B objectives as the prerequisite to consenting by
ratification to the withdrawal; and
(8) Redeposit of any withdrawals made without MARAD's consent, and
for which such consent is not subsequently given (either by
ratification or otherwise), is not permitted. If the Non-qualified
Withdrawal adversely affects the Agreement's general status, MARAD may
terminate the Agreement.
Sec. 390.15 Annual reporting and modification of agreement.
(a) Annual reporting requirements.
(1) Every party to an Agreement must file a final deposit and
withdrawal report annually for each Depository at the end of the tax
year. Each report must be--
(i) Filed no later than 30 days after expiration of the due date
for filing the party's Federal income tax return;
(ii) Made using a MARAD form (including all exhibits and, if
applicable, a copy of the applicant's extension of time to file the tax
return) using a separate form for each Depository; and
(iii) Include the certification of an independent certified public
accountant to the effect that the report and supporting exhibits
include all deposit and withdrawal activity and are prepared in
accordance with all published orders, rules, regulations, and
instructions issued by MARAD. Where there is no deposit or withdrawal
activity with respect to a Depository during the party's tax year, a
report must be submitted showing the lack of activity.
(2) Failure to submit the report will be cause for involuntary
termination of the associated Agreement.
(3) MARAD may, at its discretion, after due notice, disqualify
withdrawals and involuntarily terminate the Agreement of any
participant that fails to submit the required annual report(s).
(b) Modification of Agreement.
(1) The Agreement is subject to modification and amendment by
mutual consent. MARAD will normally agree to modification or amendment
of the schedules unless such modification or amendment delays
imposition of Federal income tax in a manner not contemplated or
authorized by the Act, or if the proposed modification or amendment
would not be in consonance with the policies of the Act, this part, or
the Joint Regulations.
(2) MARAD may require a Non-qualified Withdrawal if the
modification or amendment results in an amount held in the account in
excess of an amount determined to be necessary to meet the Agreement's
objectives.
Sec. 390.17 Automatic termination of agreement.
(a) If a Schedule B objective has not commenced within 10 years
from the date the Agreement was established and the Agreement has not
been extended by written approval of MARAD, the Agreement will be
considered inactive and subject to termination; and
(b) If the account balance of all depositories of an Agreement is
zero dollars 10 years after the date it was established, and the
Agreement has not been extended through amendment, the Agreement will
be considered inactive
[[Page 60062]]
and subject to termination unless a Schedule B objective has commenced.
Sec. 390.19 Maximum deposit amounts and time to deposit.
(a) Deposits cannot be made once a party has deposited 100 percent
of the anticipated cost of all Schedule B objectives unless the
Agreement is then amended to establish additional Schedule B
objectives.
(b) MARAD will permit deposits of any given Schedule B objective to
accumulate for a maximum of 25 years.
Sec. 390.21 CCF Accounts.
(a) General. Each CCF account in a scheduled depository will have
an account number that must be reflected in the reports required in
section 390.15. All CCF accounts must be reserved only for CCF
transactions. Intermingling of CCF and non-CCF transactions is
prohibited.
(1) CCF accounts may not be pooled without the prior consent of
MARAD; and
(2) Safe deposit boxes, safes, or the like are not eligible as CCF
depositories without MARAD's consent, which may be granted solely at
MARAD's discretion.
(b) Assignment. The use of funds held in a CCF depository for
transactions structured as a countervailing balance, compensating
balance, pledge, assignment, or similar security arrangement without
the prior written consent of MARAD will constitute a material breach of
the Agreement.
(c) Depositories. Amounts in a CCF account must be kept in the
depository or depositories specified in the Agreement and be subject to
such trustee or other fiduciary requirements as MARAD may require.
Unless otherwise specified in the Agreement, the party may select the
type or types of accounts in which assets may be deposited.
(d) Dual use account. A CCF account may, with MARAD approval, serve
in lieu of a restricted or reserve fund account required in connection
with a financing through the Federal Ship Financing Program in
accordance with 46 U.S.C. ch. 537 and MARAD implementing regulations.
Approval will be conditioned upon the execution by the party of an
Agreement, satisfactory in form and substance to MARAD, governing the
dual use of the CCF account. Requests for permission to use a CCF
account in this dual capacity must be made in writing to MARAD.
(e) Timing of deposits.
(1) All amounts deposited in the CCF account are presumed to have
been deposited pursuant to an Agreement unless, after an examination of
the facts upon the request of the Commissioner of Internal Revenue or
the Commissioner's delegate, MARAD determines otherwise. The
Commissioner or the Commissioner's delegate will request such a
determination where MARAD determines there is a substantial question as
to whether a deposit is made in accordance with an Agreement;
(2) Deposits are not taxable for the applicable taxable year only
when made in accordance with the Agreement and not later than the time
provided in the Joint Regulations;
(3) A party may make deposits for any taxable year prior to the
time provided in the Joint Regulations in accordance with the
following:
(i) Amounts representing taxable income attributable to the
operation of Agreement Vessels for a taxable year may be deposited at
any time during such taxable year, and thereafter within the time
provided for in the Joint Regulations, based upon the party's estimated
Federal taxable income for such vessels for the entire taxable year;
(ii) Amounts representing net proceeds from the sale or other
disposition (including mortgaging) with respect to Agreement Vessels
may be deposited when received or accrued and thereafter within the
time provided for in the Joint Regulations;
(iii) Amounts representing receipts from the investment or
reinvestment of amounts held in a CCF account may be deposited when
received or accrued and thereafter within the time provided for in the
Joint Regulations; and
(iv) Amounts representing depreciation with respect to Agreement
Vessels for a taxable year may be deposited at any time during such
taxable year, and thereafter within the time provided for in the Joint
Regulations.
(4) MARAD may require that deposits be made earlier than the latest
time provided for in the Joint Regulations; and
(5) MARAD will require early deposits only when necessary for the
party to meet its agreed upon obligations.
Sec. 390.23 Conditional consent to withdrawal qualification.
(a) MARAD may conditionally consent to the classification of a
withdrawal that would otherwise be considered a Non-qualified
Withdrawal as a Qualified Withdrawal. Such consent will be conditioned
upon the timely submission to MARAD of the items requested in the
conditional approval letter. Failure to provide these items in a timely
manner will result in the withdrawal being determined to be a Non-
qualified Withdrawal, involuntary termination of the Agreement, or
both.
(b) MARAD will administer a withdrawal subject to this section as
follows:
(1) Any withdrawal from a CCF account that has not received
conditional consent from MARAD or if the requestor does not timely
provide the items required by the conditional approval letter is a Non-
qualified Withdrawal.
(2) For the tax implications of a Qualified and Non-qualified
Withdrawal, see the Act and the Joint Regulations.
(c) Prior written consent of MARAD is required before a withdrawal
requested pursuant to this section may be made and not considered a
Non-qualified Withdrawal.
Sec. 390.25 Sale or other disposition of agreement vessels.
(a) Eligible Vessels. Prior MARAD approval is not required for a
party to an Agreement to sell or otherwise dispose (including the
mortgage) of an Eligible Vessel but the party must provide written
notification within 30 days after the sale or other disposition to
include a description of the transaction, the identity of the
transferee, the proceeds to be realized, the date of the transaction,
and whether the proceeds will be deposited into the CCF account.
(b) Qualified vessels. (1) MARAD approval is required prior to the
sale or other disposition (including the mortgage) of a Qualified
Vessel.
(2) The sale or other disposition (including the mortgage) of a
Qualified Vessel that has had its cost basis reduced within the last
year using Qualified Withdrawals is prohibited.
(3) If MARAD determines that the sale or other disposition of a
Qualified Vessel is in violation of this section, MARAD will require
the following from the party to the Agreement:
(i) Payment of interest on the amount of the gain on the Qualified
Vessel attributable to the basis reduction; and
(ii) The deposit into the CCF account of the net proceeds from the
sale of the Qualified Vessel or deposit of the net proceeds from the
mortgage of the Qualified Vessel for which Qualified Withdrawals from
the CCF account have been made.
(4) For purposes of this section, last year is 365 calendar days
from the date of final delivery or redelivery from the shipyard for new
construction or reconstruction, respectively, or from the
[[Page 60063]]
date of first loading of the vessel for acquisition.
(c) Sale or other disposition of Agreement Vessels to related
persons.
(1) Net proceeds from the sale or other disposition of an Agreement
Vessel will be the fair market value of the vessel when the party and
the purchaser are owned or controlled directly or indirectly by the
same interests within the meaning of section 482 of the Internal
Revenue Code of 1986, as amended, and implementing regulations. In such
case, the party must furnish data to establish that the amount realized
or to be realized is the fair market value; and
(2) Sufficient data must be submitted to support a MARAD
determination of the fair market value including the original cost of
the vessel, dates of original delivery, acquisition, and reconstruction
(as applicable), cost of improvements, sales price, costs of sale, and
any other information that would assist in making such determination.
Sec. 390.27 Failure to fulfill a substantial obligation under the
agreement.
If MARAD determines that a party to an Agreement holder fails to
fulfill a substantial obligation under the Agreement, MARAD will send a
certified letter informing the party that the Agreement will terminate
60 days after the date of the letter unless the deficiencies identified
in the letter are addressed to MARAD's satisfaction.
Sec. 390.19 Miscellaneous.
Wherever MARAD prescribes time constraints, the postmark date will
control if mailed. If a courier service is used the date listed on the
label will control.
By order of the Maritime Administrator.
T. Mitchell Hudson, Jr.,
Secretary, Maritime Administration.
[FR Doc. 2026-19367 Filed 9-21-26; 8:45 am]
BILLING CODE 4910-81-P
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</html>Indexed from Federal Register on September 22, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.