PART 390—CAPITAL CONSTRUCTION FUND Authority: Secs. 53501, et seq., Source: 41 FR 4265, Jan. 29, 1976, unless otherwise noted. § 390.1 Scope of the regulations. (a) In general Scope. et seq. (2) Establishment of a fund. (3) Purpose of the fund. (4) Benefits of a fund. (i) Earnings or gains realized from the operation of an agreement vessel; (ii) Net proceeds realized from the sale or other disposition of an agreement vessel or from insurance or indemnification from the loss of an agreement vessel; and (iii) Earnings from the investment or reinvestment of amounts on deposit in the fund. (5) Delegation. (b) Act. (c) Joint regulations. joint regulations (d) Cross references. [41 FR 4265, Jan. 29, 1976, as amended at 73 FR 56740, Sept. 30, 2008] § 390.2 Application for an agreement. (a) In general Application instructions. (2) General eligibility requirements. (i) Be a citizen of the United States within the meaning of 46 U.S.C. 50501, as amended (46 U.S.C. 802, 803). See part 355 of this title for requirements for establishing United States citizenship; (ii) Own or be the lessee of one or more eligible vessels or share thereof as defined in 46 U.S.C. 53501, or be party to a contract for the construction of one or more eligible vessels, or share thereof, as defined in paragraph (b) of § 390.5; (iii) Have a program which furthers the purposes of the Act (see § 390.3 relating to policy considerations) and provides for the acquisition, construction or reconstruction of a qualified vessel, as defined in 46 U.S.C. 53501(5). Such provisions state that the vessel will be operated in the United States foreign, Great Lakes, noncontiguous domestic, or short sea transportation trade as defined in 46 U.S.C. 53501 and 46 U.S.C. 109(b); and (iv) Demonstrate the financial capabilities to accomplish the program. (b) Information which may be required in conjunction with the application. (Approved by the Office of Management and Budget under control number 2133-0027) [41 FR 4265, Jan. 29, 1976, as amended at 47 FR 25530, June 14, 1982; 68 FR 62539, Nov. 5, 2003; 69 FR 61452, Oct. 19, 2004; 73 FR 56740, Sept. 30, 2008] § 390.3 Policy considerations. (a) In general. (b) Unacceptable programs In general. (2) Specific unacceptable programs. (i) Reconstruction of an existing vessel, unless such reconstruction will exceed $1,000,000 in cost, will be capitalized under the Internal Revenue Code of 1986, as amended, and the regulations thereunder and will result in a vessel which is significantly more competitive; (ii) Acquisition of an existing vessel; or (iii) Payment of the principal on existing indebtedness. (3) Waiver. [41 FR 4265, Jan. 29, 1976, as amended at 73 FR 56740, Sept. 30, 2008] § 390.4 Description of the agreement. (a) In general. (b) Schedule A—Eligible agreement vessels. (c) Schedule B—Program In general. (2) Items in Schedule B. (i) A statement describing each qualified agreement vessel (as defined in § 390.5) to be acquired, constructed or reconstructed. In the case of reconstruction, the statement will include a general description of the work to be performed; (ii) The anticipated date on which the acquisition, construction or reconstruction of each qualified agreement vessel will commence; (iii) The anticipated total cost, including any costs which will not be paid from the fund, of the acquisition, construction or reconstruction of each qualified agreement vessel; and (iv) The amount to be withdrawn from the fund with respect to the acquisition, construction or reconstruction of each qualified agreement vessel. (3) Submission of contracts. (d) Schedule C—Depositories. (e) Schedule D—Minimum deposits. (f) Submission of proposed schedules. § 390.5 Agreement vessels. (a) In general. (b) Eligible agreement vessels Definition. (i) Constructed in the United States, and if reconstructed, reconstructed in the United States; the term constructed or reconstructed in the United States (ii) Documented under the laws of the United States; (iii) Operated in the foreign or domestic commerce of the United States; (iv) Engaged primarily in the waterborne carriage of men, materials, goods or wares; and (v) Designated in the agreement as an “eligible agreement vessel.” (2) Scope of the term “eligible agreement vessel.” eligible agreement vessel (i) Tug or barge; (ii) Vessels which have been contracted for or are in the process of construction; and (iii) Share interest in a vessel; the party is considered to have a share interest in an eligible agreement vessel if the party has the right to use the vessel to generate income or a right to the proceeds or a portion of the proceeds from its use even if the party does not have a proprietary interest in the vessel for purposes of State or Federal law. (3) Foreign or domestic commerce. foreign or domestic commerce (i) Two points in the United States; (ii) A point in the United States and a point in a foreign country; or (iii) Two points in the same foreign country or points in two different foreign countries. (c) Qualified agreement vessels Definition. (i) Constructed in the United States, and if reconstructed, reconstructed in the United States; the term constructed or reconstructed in the United States (ii) Documented under the laws of the United States; (iii) Operated in the United States foreign, Great Lakes, noncontiguous domestic, or short sea transportation trade. (iv) Engaged primarily in the water-borne carriage of men, materials, goods or wares; and (v) Designated in the agreement as a “qualified agreement vessel.” (2) Scope of the term “qualified agreement vessel.” qualified agreement vessel (i) Cargo handling equipment which the Maritime Administrator determines will be used primarily on a qualified agreement vessel. Normally any auxiliary equipment which is ordinarily carried from port to port, excluding equipment that needs frequent replacement due to normal wear and tear, and is used in conjunction with the loading or unloading of the vessel is deemed to be cargo handling equipment; (ii) Ocean-going towing vessel or barge which the Maritime Administrator determines is suitable for the trade in which the party intends to operate such vessel or barge, or any comparable vessel or barge operated on the Great Lakes which is suitable for its intended trade; and (iii) Proprietary interest in a qualified agreement vessel as, for example, that which may result from a joint venture or partnership. (3) Foreign trade. (i) A point in the United States and a point in a foreign country; (ii) Two points in the domestic trade permitted under the first sentence of 46 U.S.C. 53101 note; or (iii) Two points in the same foreign country or points in two different foreign countries in the case of liquid and dry bulk cargo carrying services provided the party demonstrates that such operating flexibility is needed to compete with foreign flag vessels in its operations or in competing for charters. (4) Great Lakes trade. (5) Noncontiguous domestic trade. (i) The contiguous 48 States on the one hand and Alaska, Hawaii, Puerto Rico and the insular territories and possessions of the United States on the other hand; and (ii) Any point in Alaska, Hawaii, Puerto Rico and the insular territories and possessions of the United States, and any other point in Alaska, Hawaii, Puerto Rico and such territories and possessions. (6) Short Sea Transportation Trade. The term short sea transportation trade means the carriage by vessel of cargo— (i) That is: (A) Contained in intermodal cargo containers and loaded by crane on the vessel; or (B) Loaded on the vessel by means of wheeled technology; and (ii) That is: (A) Loaded at a port in the United States and unloaded either at another port in the United States or at a port in Canada located in the Great Lakes Saint Lawrence Seaway System; or (B) Loaded at a port in Canada located in the Great Lakes Saint Lawrence Seaway System and unloaded at a port in the United States.” (7) Nonqualified operations. (i) Positioning vessels in support of domestic operations prohibited by Chapter 535; (ii) Use of barges as docks and ramps; (iii) Except as provided in (c)(8) (i) and (ii) of this section: (A) Foreign-to-foreign trade, consisting of voyages originating and ending in foreign ports, with no intermediate domestic cargo operation, and (B) Trade from foreign ports to and form U.S. oil rigs in international waters; and (iv) Bunkering in support of non-qualified trade operations. (8) Permissible operations. (i) Foreign-to-foreign trade in the case of vessels operating as part of U.S.-flag service and carrying cargo originating in or destined for U.S. ports, i.e., U.S.-flag feeder vessels; (ii) Foreign-to-foreign trade, including the lightering of foreign-flag vessels, in the case of vessels carrying liquid or dry bulk cargoes when the carrier has demonstrated to the Administrator: (A) The need for such foreign-to-foreign shipments (as required by 46 U.S.C. 109 and paragraph (c)(iii) of this section), and (B) That the proposed cargo would qualify as liquid or dry bulk cargo; (iii) Ship assist work, including lightering or shifting of a vessel at the end or beginning of a noncontiguous domestic, short sea transportation trade, Great Lakes or U.S. foreign trade voyage. In addition, the lightering of foreign-flag vessels in U.S. ports is permitted. (9) United States construction. (i) It is built entirely in a shipyard or shipyards within any of the United States and the Commonwealth of Puerto Rico; (ii) All components of the hull and superstructure are fabricated in the United States; and (iii) The vessel is assembled entirely in the United States. (d) Agreement vessels Definition. agreement vessel (2) Scope of the term “agreement vessel.” agreement vessel [41 FR 4265, Jan. 29, 1976, as amended at 55 FR 34928, Aug. 27, 1990; 73 FR 56740, Sept. 30, 2008; 74 FR 17097, Apr. 14, 2009] § 390.6 Administration of the agreement. (a) In general. (b) Reporting requirements In general. (2) Submission dates. (3) Cumulation. (4) Certification. (5) Format. (i) “Exhibit A”—a summary of cash, securities and stock on deposit (showing the adjusted basis for securities and stock), including a subtotal of cash, securities and stock on deposit, net amount of accrued deposits to and accrued withdrawals from the fund and the fund total at the end of the period, and if applicable, a summary of the portion of the fund which represents a “CCF: Security Amount” pursuant to an Agreement Covering the Dual Use of a Capital Construction Fund; (ii) “Exhibit A-1”—a summary of balances in all cash accounts within the fund at the end of the period; (iii) “Exhibit A-2”—a summary of the securities and stock within the fund at the end of the period (showing both the adjusted basis and fair market value of each item); (iv) “Exhibit A-3”—a summary of the accrued deposits to and accrued withdrawals from the fund at the end of the period; (v) “Exhibit B”—a transcript of transactions occurring within the fund during the period by date; (vi) “Exhibit C”—a summary showing the opening balance, additions thereto due to deposits to the fund, subtractions therefrom due to withdrawals from the fund, and the closing balance for the period for each of the three separate accounts: ordinary income account, capital gains account and capital account; and (vii) “Exhibit D”—a summary, by vessel, of the qualified withdrawals made from the fund during the period. (6) Sample report. (7) Affidavit. (8) Failure to submit reports. (c) Review in the event of changed circumstances. (d) Modification of agreement In general. (2) Limitations on modification of schedules. (e) Fund adjustment upon modification. [41 FR 4265, Jan. 29, 1976, as amended at 41 FR 39751, Sept. 16, 1976; 55 FR 34928, Aug. 27, 1990] § 390.7 Deposits into the fund. (a) In general Source of deposits. (2) Tax aspects of deposits. (b) Depositories In general. (2) Qualifications. (3) Fiduciary requirements. (4) Type and name of accounts. (5) Compensating balances. (c) Timing of deposits In general. (2) Deposits prior to the time provided in joint regulations. (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 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 fund may be deposited when 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. (3) Deposits required prior to the time provided in joint regulations. (d) Types of property which may be deposited into a fund Form of deposits. (2) Related purchaser. (i) The relationship between purchaser or transferee and the party would result in disallowance of losses under section 267 or 707 of the Code, or (ii) The purchaser or transferee and the party are members of the same controlled group of corporations (as defined in section 1563(a) of the Code, except that “more than 50 percent” shall be substituted for “at least 80 percent” each place it appears therein). (e) Level of deposits In general. (2) Maximum level of deposits. (3) Minimum level of deposits. (4) Determination of minimum deposits. (5) Waiver of minimum deposit. (6) Selection of ceiling. (f) Allocation of depreciation deposits In general. (2) Method of allocation. (g) [Reserved] (h) Funds held in trust for investment purposes. (1) The trustee meets the requirements for a depository under paragraph (b) of this section; (2) The trust instrument provides that all investment restrictions stated in 46 U.S.C. 53506 and § 390.8 of these regulations will be observed; (3) The trust instrument provides that the trustee will give consideration to the party's withdrawal requirements under the agreement when investing the fund; (4) The trustee agrees to be bound by all rules and regulations which have been or will be promulgated governing the investment or management of the fund. (i) Federal ship mortgage guarantee or insurance. [41 FR 4265, Jan. 29, 1976, as amended at 73 FR 56740, Sept. 30, 2008] § 390.8 Investment of the fund. (a) In general. (b) Permissible investments In general. (2) Interest bearing securities. (i) Any obligation of a state or local government, including any agency or instrumentality thereof, or any domestic obligation, which is rated by Moody's Investors Service, Inc., as “Baa” or better or by Standard and Poor's Corporations as “BBB” or better; (ii) Bankers' acceptances, certificates of deposit, repurchase agreements, and short-term commercial obligations, provided that the latter must be readily marketable and rated not lower than “Prime” by Moody's Investors Services, Inc. or “B” by Standard & Poor's Corp.; and (iii) Any unsubordinated obligation of an issuer that has any unsecured securities with a credit rating of “Baa” or better if rated by Moddy's Investors Services, Inc., or “BBB” or better if rated by Standard and Poor's Corporation, or by an issuer that has a commercial paper rating not lower than “Prime” by Moody's Investors Service, Inc. or “B” by Standard and Poor's Corporation. (3) Guaranteed interest bearing securities. Provided, (i) The types of interest bearing securities and their terms and conditions are acceptable to the Maritime Administration; (ii) All principal and interest of the interest bearing securities are unconditionally guaranteed in a form satisfactory to the Maritime Administration and neither the securities nor the obligation to pay interest on the securities is that of a party or a company related to the party within the meaning of section 482 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder; and (iii) The guarantor, which may be an affiliate of the party, must be either a person that has any unsecured securities with a credit rating of “Baa” or better if rated by Moody's Investors Services, Inc., or “BBB” or better if rated by Standard & Poor's Corporations, or a person whose commercial paper rated not lower than “Prime” by Moody's Investors Services, Inc. or “B” junior securities are rated in the highest grade by Moody's Commercial Paper Service or in one of the two highest grades by Standard & Poor's Corporations, and is otherwise acceptable to the Maritime Administration. (4) Common and preferred stocks. (i) Stock of domestic corporations which is fully listed and registered at the time of purchase on an exchange registered with the Securities and Exchange Commission as a national securities exchange and which would be acquired by prudent men of discretion and intelligence in such matters who are seeking a reasonable income and the preservation of their capital; and (ii) Preferred stock of a corporation if the common stock of that corporation meets the requirements of this paragraph and if the preferred stock of such corporation would meet such requirements but for the fact that such preferred stock cannot be listed and registered as required because it is nonvoting stock. (c) Limitations on investments Interest bearing securities. (2) Common and preferred stock. (3) Margin or short sale. (4) Related company investments. (5) Subsequent investments. [41 FR 4265, Jan. 29, 1976, as amended at 42 FR 34882, July 7, 1977; 43 FR 51636, Nov. 6, 1978; 55 FR 34928, Aug. 27, 1990; 73 FR 56740, Sept. 30, 2008] § 390.9 Qualified withdrawals. (a) In general Defined. (i) The acquisition, construction or reconstruction of a qualified agreement vessel; (ii) The acquisition, construction or reconstruction of barges or containers which are part of the complement of a qualified agreement vessel; or (iii) The payment of the principal on indebtedness incurred in connection with the acquisition, construction or reconstruction of a qualified agreement vessel or a barge or container which is part of the complement of a qualified agreement vessel. (2) Tax aspects of a qualified withdrawal. (b) Purpose of qualified withdrawals Acquisition of qualified agreement vessels. acquisition of a qualified agreement vessel (ii) Qualified withdrawals for the acquisition of a qualified agreement vessel shall only be allowed for amounts determined by independent appraisal to be the fair market value of the vessel, at the time of the acquisition, or the actual cost directly allocable to acquiring only the vessel, whichever is less. (2) Construction of qualified agreement vessels. construction of a qualified agreement vessel (3) Reconstruction of qualified agreement vessels. reconstruction of a qualified agreement vessel (4) Payment of principal on indebtedness. (c) Limitations on qualified withdrawals Capitalized costs requirement. (2) Executed contract requirement and reimbursement of general funds. (i) Qualified withdrawals may not be made until a construction, reconstruction or acquisition contract is executed. However, the party may reimburse its general funds for expenditures applicable to the construction, reconstruction or acquisition contract which occurred prior to the date of contracting if such reimbursements are made within 120 days from the date of such contracting. (ii) The party may also reimburse its general funds for expenditures which could have been paid initially by a qualified withdrawal, if such reimbursements are made within 120 days of such expenditure. (iii) The party may reimburse its general funds for expenditures made prior to the time an agreement or amendment is entered into, but after the party has made application therefor, if such expenditures would otherwise qualify for reimbursement pursuant to paragraphs (c)(3) (i) and (ii) of this section but for the fact that an agreement or amendment has not been executed, and if such reimbursement is effected within 120 days of the execution of an agreement or amendment. (3) Prepayment of indebtedness. (4) Qualified withdrawals paid to related persons. (d) Permission to make qualified withdrawals. [41 FR 4265, Jan. 29, 1976, as amended at 55 FR 34929, Aug. 27, 1990; 73 FR 56740, Sept. 30, 2008] § 390.10 Nonqualified withdrawals. (a) In general Defined. (2) Tax aspects of a nonqualified withdrawal. (b) Permission required In general. (2) Failure to secure permission. (3) Types of nonqualified withdrawals which will be permitted. (i) The party has incurred operating losses from the operations of agreement vessels which have impaired his working capital and it becomes necessary to reimburse its general funds to the extent of such losses; (ii) The party desires to make an expenditure for research, development or design and such an expenditure is incident to new and advanced ship design, machinery and equipment; (iii) The withdrawal would be a qualified withdrawal except for the fact that there is no tax basis left that can be reduced; or (iv) The party demonstrates, to the satisfaction of the Maritime Administrator, that it cannot fulfill its program due to circumstances beyond its control or due to a change in circumstances which makes the completion of its program economically unfeasible. [41 FR 4265, Jan. 29, 1976, as amended at 73 FR 56740, Sept. 30, 2008] § 390.11 Sale or other disposition of agreement vessels. (a) Eligible agreement vessels. (b) Qualified agreement vessels In general. (2) Period of one year defined. (3) Prior approval. (4) Deposit requirement. (c) Sale or other disposition of agreement vessels to related persons In general. (2) Data to be submitted. [41 FR 4265, Jan. 29, 1976, as amended at 73 FR 56740, Sept. 30, 2008] § 390.12 Liquidated damages. (a) Liquidated damages In general. (2) Calculation of liquidated damages. (i) With respect to each vessel operated in violation of the applicable trading restrictions, add (A) the sum of qualified withdrawals for the vessel which have been made from the ordinary income and capital gain accounts to the date of breach, and (B) the amount of any unpaid principal on indebtedness for the vessel which may be paid from the fund less any portion of such amount which by operation of law must be withdrawn from the capital account balance on deposit in the fund on the date of the breach. (ii) Multiply the total derived in paragraph (a)(2)(i) of this section by an assumed effective Federal Income Tax rate of 30 percent; (iii) Compound the product derived in paragraph (a)(2)(ii) of this section at 8 percent annually (A) for 20 years, if the duration of the trading restrictions applicable to the vessel is 20 years in accordance with paragraph (b)(1)(i) of this section; (B) for 10 years, if the duration of the trading restrictions applicable to the vessel is 10 years in accordance with paragraphs (b)(1) (ii), (iii) or (iv) of this section; or (C) for 5 years, if the duration of the trading restrictions applicable to the vessel is 5 years in accordance with paragraph (b)(1)(iv) of this section. (iv) Subtract the amount calculated in paragraph (a)(2)(ii) of this section from the product derived in paragraph (a)(2)(iii) of this section; (v) Divide the result derived in paragraph (a)(2)(iv) of this section by 2; and (vi) Divide the result derived in paragraph (a)(2)(v) of this section (A) by 7300 (days) if the duration of the trading restrictions applicable to the vessel is 20 years; (B) by 3650 (days) if the duration of the trading restrictions applicable to the vessel is 10 years; or (C) by 1825 (days) if the duration of the trading restrictions applicable to the vessel is 5 years. (3) Formula. X I QT S D Where: X Q T S Q T I D The formula may be further reduced to: X Q for vessels subject to 20 year trading restriction, X Q for vessels subject to 10 year trading restriction, X Q for vessels subject to 5 year trading restriction. (4) Example. Assume that a qualified agreement vessel has been constructed with qualified withdrawals from a fund. The total cost was $20 million of which $6 million was withdrawn from the fund for a downpayment. Pursuant to the agreement, an additional $4 million may be withdrawn from the fund to pay principal on indebtedness. Thus, $10 million has been or may be withdrawn from the fund with respect to this vessel. The daily rate of liquidated damages would be: X X (5) Payment of liquidated damages. (6) Other remedies. (b) Duration of restrictions In general. (i) 20 years from the date of final delivery on qualified agreement vessels constructed or acquired within one year of final delivery from the shipyard with the aid of qualified withdrawals; (ii) 10 years from the date of completion of reconstruction for qualified agreement vessels reconstructed with the aid of qualified withdrawals; (iii) 10 years from the date of acquisition of qualified agreement vessels acquired with the aid of qualified withdrawals more than one year after final delivery of the vessel from the shipyard; (iv) 10 years from the date of the first qualified withdrawal from the fund to pay the existing indebtedness on a qualified agreement vessel which was included in Schedule B for that purpose unless the qualified vessel was more than fifteen years old on the date of the first qualified withdrawal in which case the period shall be five years. (2) Transfer of qualified agreement vessel. [41 FR 4265, Jan. 29, 1976, as amended at 42 FR 34283, July 5, 1977; 73 FR 56740, Sept. 30, 2008] § 390.13 Failure to fulfill a substantial obligation under the agreement. (a) In general. (b) Contracting Officer's tentative conclusion Notice. (i) A statement of the grounds upon which the tentative conclusion is based; (ii) The amount the Contracting Officer tentatively concludes should be withdrawn as a nonqualified withdrawal; and (iii) A statement that the tentative conclusion shall become a final decision unless the party requests, within 30 days, an opportunity either to cure its breach or to be heard and offer evidence in opposition to the tentative conclusion. (2) Effect of notice. (c) Basis for Contracting Officer's tentative conclusion. (1) The effect of the party's action or omission upon its ability to either carry out the purpose of the fund, accomplish its Schedule B program (see § 390.4(c)) or satisfy its minimum level of deposits in Schedule D (see § 390.4(e)). (2) Whether the party has made material misrepresentations in connection with its application, agreement or any modification or amendment thereto or has failed to disclose material information that may affect its agreement or the purpose of the fund. (d) Contracting Officer's decision and appeals to the Maritime Administrator Where there has not been a request to cure or to be heard. (2) Where there has been a request to cure or to be heard. (e) Appeals to the Maritime Administrator. [41 FR 4265, Jan. 29, 1976, as amended at 73 FR 56740, Sept. 30, 2008] § 390.14 Departmental reports and certification. (a) In general. (b) Content of reports. (1) Establishing a capital construction fund during such calendar year; (2) Maintaining a capital construction fund as of the last day of such calendar year; (3) Terminating a capital construction fund during such calendar year; (4) Making any withdrawal from or deposit into (and the amounts thereof) a capital construction fund during such calendar year; or (5) With respect to which a determination has been made during such calendar year that such person has failed to fulfill a substantial obligation under any capital construction fund agreement to which such person is a party. [55 FR 34929, Aug. 27, 1990] Appendix I to Part 390—U.S. Department of Transportation, Maritime Administration—Application Instructions instruction regarding application for a capital construction fund An application for a capital construction fund under 46 U.S.C. 53501 et seq., The application must be legible and shall be submitted in six (6) complete sets, including the required Schedules and Exhibits. The application shall be filed with the Secretary, Maritime Administration, Washington, DC 20590. Three of these sets must be duly executed and certified by the Applicant. The name of the Applicant shall be shown on all accompanying papers for identification. All questions contained in the application must be responded to; if a question is not applicable the respondent should so state. Additional information may be requested if such information is necessary to aid the Contracting Officer in making a determination to enter into a Capital Construction Fund Agreement. U.S. Department of Transportation, Maritime Administration application for establishment of a capital construction fund under section 607, merchant marine act, 1936, as amended The undersigned ______ (“Applicant”), a citizen of the United States within the meaning of 46 U.S.C. 50501, as amended, hereby applies under section 607 of the Merchant Marine Act, 1936, as amended (“Act”), the Rules and Regulations jointly prescribed by the Secretary of the Treasury and the Secretary of Transportation (“Joint Regulations”) and individually by the Secretary of Transportation (“SOC Regulations”) to establish a Capital Construction Fund to aid in the acquisition, construction or reconstruction of a qualified vessel, the acquisition, construction or reconstruction of barges, containers or trailers which are part of the complement of a qualified vessel and the payment of the principal on indebtedness incurred in connection with the acquisition, construction or reconstruction of a qualified vessel or a barge, container or trailer which is part of the complement of a qualified vessel. The fund hereby applied for will be effective for deposits relating to the taxable year beginning __________________, 20____ and ending ________________, 20____, and for subsequent taxable years. In support of this application, the Applicant submits the following information: I. As to the identity of and other General Information of the Applicant A. Natural Persons. 1. Name. 2. Address. 3. Date of birth. 4. Place of birth. 5. Citizenship. 6. Principal place of business. 7. Trade name under which business is conducted. B. Partnerships, Associations, Unincorporated Companies. 1. Name of partnership, association, or unincorporated company. 2. Business address. 3. Date and place of organization. 4. Name of all partners (general, limited and special) of the partnership or trustees and holders of beneficial interests in the association or company. 5. Share owned by each partner, trustee, or beneficial owner. 6. Date of birth of each. 7. Place of birth of each. 8. Citizenship of each. C. Incorporated Companies. 1. Exact name of Applicant. 2. State in which incorporated and date of incorporation. 3. Address of principal executive offices, and of important branch offices, if any. 4. The following information with respect to each officer and director of the corporation: a. Name and address. b. Office. c. Citizenship. d. Capital shares owned (specify type, whether voting or non-voting and percentage of total of each type issued if five percent (5%) or more). 5. The name, address and citizenship of and number of capital shares owned by each person not named in answer to item 4, owning of record, or beneficially if known, five percent (5%) or more of the issued capital shares of any class stock of the Applicant. 6. A brief statement of the general effect of each voting agreement, voting trust, or other arrangement whereby the voting rights in any shares of the Applicant are owned, controlled, or exercised, or whereby the control of the Applicant is in any way held or exercised by any person not the holder of legal title to such shares. (Give the name, address, citizenship, and business of any such person, and, if not an individual, include the form of organization.) II. As to the Business and Affiliations of the Applicant. B. A list of all companies or persons that are related within the meaning of section 482 of the Internal Revenue Code of 1954, as amended, and the regulations thereunder (“related companies”) or that directly or indirectly through one or more intermediaries, control, are controlled by, or are under common control with the Applicant, together with an indication of the nature of the business transacted by each, the relationships between the companies named, and the nature and extent of the control. This information may be furnished in the form of a chart. C. A statement whether during the past 5 years the Applicant or any predecessor or related company has been in bankruptcy or in reorganization under II-B of the Bankruptcy Act or in any other insolvency or reorganization proceedings, and whether any substantial property of the Applicant or any predecessor or related company has been acquired in any such proceeding or has been subject to foreclosure or receivership during such period. If so, give details. D. A statement of whether the Applicant or any predecessor or related company is now or during the past 5 years was involved in any litigation or subject to any outstanding judgments. If so, give details. E. Describe any contemplated plan of reorganization or recapitalization involving new capital, the consolidation or mergers of the Applicant with related or other companies, debt elimination, or other changes or modifications in the corporate or individual structure, and indicate by appropriate financial statements the anticipated results thereof. III. As to the Management of the Applicant. B. The name and address of each other organization engaged in business activities related to those carried on or to be carried on by the Applicant with which any person named in the answer to the preceding item has any present business connection; the name of each such person, and briefly the nature of such connection. IV. Description of Vessels, Barges, Containers or Trailers which Applicant Proposes to be Incorporated in Capital Construction Fund Agreement for the Purpose of Making Deposits. A. Vessels. et seq a. Name and official number. b. Specific type. c. Capacity (tons of cargo, number of containers, barges, etc.). d. Whether owned or leased, and if leased the owner and the owner's address. e. Date and place of construction. f. If reconstructed, date of redelivery and place of reconstruction. g. Date documented under laws of the United States. h. Area of operation. i. Full details concerning the service in which the Applicant operates or will operate each vessel; if the vessel is used for multiple purposes indicate the percentage of time in which the vessel is engaged in each service. B. Barges, Containers, and Trailers. et seq a. Number of barges, containers or trailers which are part of the complement of an eligible vessel; name and official number of barges which are not a part of the complement of an eligible vessel. b. Specific type. c. Size or capacity. d. Whether owned or leased, and if leased the owner and the owner's address. e. Date and place of construction. f. If reconstructed, date of redelivery and place of reconstruction. g. Date documented under the laws of the United States. h. Area of operation. i. The vessel or vessels for which the barges, containers and trailers are part of the complement; full details concerning the service in which the Applicant operates or will operate each barge which is not a part of a complement. V. Purposes for which Qualified Withdrawals are Proposed. et seq. A. Acquisition or Construction of Vessels. a. Number, type and commercial characteristics of vessels to be acquired or constructed. b. Whether vessels will be replacements or additions, and if replacements identify vessels to be replaced. c. Projected date of acquisition or award of construction contract. d. Projected date of commencing operations. e. Estimated total cost. f. Method by which estimated total cost of project was determined. g. Estimated amount of Capital Construction Fund monies to be used as down payment by the Applicant. h. Estimated amount of borrowings and the amount of such borrowings to be retired by qualified withdrawals from the Capital Construction Fund, including anticipated terms of such financing. i. Intended area of operation. j. Full details concerning the use of the proposed vessel; if the vessel is to be used for multiple purposes indicate the approximate percentage of time in which the vessel will be engaged in each service. B. Acquisition or Construction of Barges, Containers and Trailers. a. Number, type and size of barges, containers and trailers. b. Whether barges, containers and trailers will be replacements or additions, if replacements, identify barges, containers or trailers to be replaced. c. Projected date of acquisition or award of construction contract. d. Projected date of introduction into service. e. Estimated total cost. f. Method by which estimated total cost of project was determined. g. Estimated amount of Capital Construction Fund monies to be used as down payment by the Applicant. h. Estimated amount of borrowings and the amount of such borrowings to be retired by qualified withdrawals from the Capital Construction Fund including anticipated terms of such financing. i. Identification of vessels for which the barges, containers and trailers will be part of the complement, and the vessel's area of operation. In the case of barges which are not a part of the complement of a vessel provide the barges' intended area of operation. j. Full details concerning the use of the proposed barge; if the barge is to be used for multiple purposes indicate the approximate percentage of time in which the barge will be engaged in each service. C. Reconstruction of Vessels. a. Identification of vessels to be reconstructed. b. Nature and extent of proposed reconstruction. c. Projected date of award of reconstruction contract. d. Projected date of commencing operations with reconstructed vessels. e. Estimated total cost. f. Method by which estimated total cost of project was determined. g. Estimated amount of Capital Construction Fund monies to be used as down payment by the Applicant. h. Estimated amount of borrowings and amount of such borrowings to be retired by qualified withdrawals from the Capital Construction Fund, including anticipated terms of such financing. i. Intended area of operation. j. Full details concerning the use of the proposed vessel; if the vessel is to be used for multiple purposes indicate the approximate percentage of time in which the vessel will be engaged in each service. D. Reconstruction of Barges, Containers and Trailers. a. Number, type and size of barges, containers and trailers. b. Nature and extent of proposed reconstruction work. c. Projected date of award of reconstruction contract. d. Projected date of completion of reconstruction work. e. Estimated total cost. f. Method by which estimated total cost of project was determined. g. Estimated amount of Capital Construction Fund monies to be used as down payment by the Applicant. h. Estimated amount of borrowings and amount of such borrowings to be retired by qualified withdrawal from the Capital Construction Fund including anticipated terms of such financing. i. Identification of vessels for which the barges, containers, and trailers will be part of the complement, and the vessel's area of operations. In the case of barges which are not a part of the complement of a vessel provide the barges' area of operation. j. Full details concerning the use of the proposed barge; if the barge is to be used for multiple purposes indicate approximate percentage of time in which the barge will be engaged in each service. E. Payment of Principal on Existing Indebtedness Incurred in Connection with the Acquisition, Construction or Reconstruction of a Qualified Vessel or a Barge, Container or Trailer which is Part of the Complement of a Qualified Vessel. a. Name, official number or other identifying information for the vessel, barge, container, or trailer. b. Whether the debt was incurred for acquisition, construction or reconstruction, demonstrating evidence of a direct connection between the qualified vessel and the debt which was incurred. c. The aggregate principal balance of such indebtedness as of the date of this application. d. The dates and amounts of payments of principal to liquidate the outstanding debt in accordance with the applicable loan agreements or other documents. VI. As to the Depository to be Used for the Capital Construction Fund. VII. Proposed Schedule of Minimum Amounts Available for Deposit into the Capital Construction Fund. a. Ordinary income attributable to the operation of agreement vessels. b. Net proceeds from the sale or other disposition of agreement vessels. c. Receipts from the investment or reinvestment of amounts held in the fund. d. Earned depreciation on agreement vessels. VIII. Financial Statements and Reports of the Applicant Including Predecessors. Financial Statements. 1. Statements of Financial Conditions. 2. Statements of Operations. 3. Statements of Retained Earnings. B. Reports. IX. As to Exhibits Furnished. Exhibit I—A copy of the Certificate of Incorporation of the Applicant or other organization papers including all amendments thereto presently in effect. Exhibit II—A copy of the By-Laws or other governing instruments of the Applicant, including all amendments thereto presently in effect. Exhibit III—Such other financial statements, copies of contracts, schedules and other required data which the Applicant desires to incorporate by reference. X. A statement of any additional information which, in the opinion of the Applicant, is necessary to make the application and attached exhibits true and complete. XI. A specific written request, pursuant to 5 U.S.C. 552(b)(4), must accompany the application if the Applicant wishes certain trade secrets, financial and commercial information contained in this application to be withheld from disclosure. The Maritime Administrator, Department of Transportation will endeavor to respect such a request, acting within the limits of the applicable provisions of the Freedom of Information Act. State of __________________ County of __________________ ss.: Dated ________________________, 20____ Name of Applicant __________________________________ By ______ Name and Title I, ______, do certify that I am the (Title of Office) of (Exact Name of Applicant), the Applicant on whose behalf I have executed the foregoing application; that the Applicant is a citizen of the United States within the meaning of 46 U.S.C. 50501; that this application is made for the purpose of inducing the United States of America to permit the Applicant, pursuant to section 607 of the Merchant Marine Act, 1936, as amended, the Joint Regulations and the SOC Regulations to establish a Capital Construction Fund for the purposes set forth in 46 U.S.C. 53501; that I have carefully examined the application and all documents submitted in connection therewith and, to the best of my knowledge, information and belief, the statements and representations contained in said application and related documents are full, complete, accurate, and true. Subscribed and sworn to before me, a ______________ in and for the State and County above named, this ____________ day of ________________, 20____. My Commission expires ______________________. Note: The United States Criminal Code makes it a criminal offense to knowingly and willfully falsify, conceal or cover up by any trick, scheme, or device, a material fact from, or make any false, fictitious or fraudulent statements or representations or make or use any false writing or document knowing the same to contain any false, fictitious or fraudulent statement to, any department or government agency of the United States as to any matter within its jurisdiction (18 U.S.C. 1001). [41 FR 4265, Jan. 29, 1976, as amended at 73 FR 56740, Sept. 30, 2008; 74 FR 17097, Apr. 14, 2009] Appendix II to Part 390—Sample Capital Construction Fund Agreement [Contract No. MA/CCF—] capital construction fund agreement with This Capital Construction Fund Agreement (“Agreement”), made on the date hereinafter set forth, by and between the United States of America, represented by the Maritime Administrator, Department of Transportation (“Maritime Administrator”), and ______, a corporation organized and existing under the laws of the State of ______ (“Party”), a citizen of the United States of America. Whereas: 2. The Party is the owner or lessee or has contracted for the construction of one or more eligible vessels as defined in 46 U.S.C. 53501, which vessels are listed in Schedule A hereof; 3. The Party has a program for the construction or acquisition of qualified agreement vessels as defined in 46 U.S.C. 53501, which program is described in Schedule B hereof; 4. The Maritime Administrator and the Party desire to enter into an Agreement for the purpose of providing replacement vessels, additional vessels, or reconstruction vessels, built in the United States and documented under the laws of the United States for operation in the United States foreign, Great Lakes, or noncontiguous domestic trade; 5. The Maritime Administrator has determined that the Party qualifies for an Agreement under the Act; and 6. The Maritime Administrator has authorized the award of an Agreement upon the terms and conditions set forth herein subject to the Act, as it may be amended from time to time, and such rules and regulations as shall be prescribed by the Secretary of Transportation or his delegate, either alone or jointly with the Secretary of the Treasury, as necessary to carry out the powers, duties, and functions vested in them by the Act (“rules and regulations”). Now, therefore in consideration of the premises the Maritime Administrator and the Party hereby agree as follows: 1. Establishment of a Fund: (B) The Fund shall be established in the depositories listed in Schedule C hereof. 2. Purpose of the Fund: 3. Term of the Agreement: 4. Termination of Agreement: (1) Upon written mutual agreement by the parties; (2) Upon written notice by the Party that a change has been made in the rules and regulations which would have a substantial effect upon the rights or obligations of the Party. (B) This Agreement shall terminate upon completion of the program as set forth in Schedule B hereof. (C) Upon termination of this Agreement pursuant to paragraphs (A) and/or (B) hereof all amounts remaining in the Fund shall be treated as if withdrawn in a nonqualified withdrawal (as that term is defined in the Act and the rules and regulations) on the date of termination of this Agreement. 5. Deposits to be made into the Fund: (1) Taxable income attributable to the operation of the vessels listed in Schedule A or B hereof; (2) The depreciation allowable under section 167 of the Internal Revenue Code of 1986, on the vessels listed in Schedule A or B hereof; (3) The net proceeds from the sale or other disposition of any of the vessels listed in Schedule A or B hereof; and (4) The net proceeds from insurance or indemnity attributable to the vessels listed in Schedule A or B hereof. (B) The Party shall deposit for each taxable year to which this Agreement applies: (1) All receipts from the investment or reinvestment of amounts held in the Fund, except that the Party shall not be permitted to deposit more than is necessary to complete its program set out in Schedule B hereof; and (2) The net proceeds from the mortgage of any vessel listed in Schedule B hereof for which qualified withdrawals from the Fund have been made. (C) Notwithstanding anything in paragraph (A) or (B) hereof to the contrary, the Party shall make the minimum deposits set forth in Schedule D hereof at the time and in such amounts as may be set forth therein. The Party specifically agrees to deposit up to one hundred percent of allowable taxable income attributable to the operation of agreement vessels in order to meet its obligations under this paragraph. (D) In the event that any leased vessel listed in Schedule A hereof is included in another capital construction fund agreement, the maximum amount of depreciation which the Party may deposit in respect to that vessel shall be calculated by using the allowable percentage of the depreciation ceiling listed for that vessel in Schedule A hereof. 6. Withdrawals from the Fund: (B) Any other withdrawal from the Fund shall be made only upon the prior written consent of the Maritime Administrator, as required by the rules and regulations. 7. Investment of the Fund: (B) The Party agrees that when investing assets held in the Fund to make such investments as will insure that sufficient cash is available at the time qualified withdrawals are required in accordance with the program described in Schedule B hereof. 8. Pledges, Assignments and Transfers: Provided, however, (B) The Party shall not obligate any assets in the Fund as a compensating balance. (C) The Party may not sell, transfer or otherwise dispose of any vessel, or part thereof, described in Schedule B hereof without the prior written consent of the Maritime Administrator. 9. Records and Reports: (B) The Maritime Administrator agrees not to require the duplication of books, records and accounts required to be kept in some other form by the Interstate Commerce Commission or the Secretary of the Treasury, so long as the information required in paragraph (A) hereof is made available to the Maritime Administrator. (C) The Party agrees to file, upon notice from the Maritime Administrator, balance sheets, profit and loss statements, and such other statements of financial operations, special reports, charters, ships' logs, memoranda of facts and transactions, as in the opinion of the Maritime Administrator may affect the Party's performance under this Agreement. (D) The Maritime Administrator may require by regulation that any of such statements, reports and memoranda shall be certified by independent certified public accountants acceptable to the Maritime Administrator. (E) The Maritime Administrator may require the Party to establish and maintain systems of control of expenses and revenues in connection with the operation of the agreement vessel(s). (F) The Party agrees to submit promptly to the Maritime Administrator any contract executed in connection with the program described in Schedule B hereof. (G) The Maritime Administrator is hereby authorized to examine and audit the books, records, and accounts of all persons referred to in this Article whenever he may deem it necessary or desirable. 10. Modification and Amendment: 11. Incorporation of Schedules: 12. Liquidated Damages: et seq (B) The Party agrees to pay the daily rate of liquidated damages to the Maritime Administrator, for deposit in the Treasury of the United States, within the time limits provided for in the rules and regulations. (C) Nothing in this Article shall in any way be construed to diminish or waive any of the Maritime Administrator's other remedies for breach under the Act, the Agreement, or the rules and regulations. (D) Notwithstanding the fact that the Agreement may be terminated pursuant to the provisions of Article 4 hereof, or otherwise, the provisions of this Article 12 shall continue in effect as follows: (1) In the case of a vessel constructed or acquired within one year of final delivery from the shipyard after construction with the aid of qualified withdrawals, for a period of twenty (20) years from the date of such vessel's final delivery; (2) In the case of a vessel reconstructed or acquired more than one year after final delivery from the shipyard after construction with the aid of qualified withdrawals, for a period of ten (10) years from the date of such vessel's final delivery from the shipyard after reconstruction or the date of such vessel's acquisition; and (3) In the case of a vessel included in Schedule B hereof as a qualified agreement vessel in regard to which qualified withdrawals from the Fund have been made to pay existing indebtedness, for a period of ten (10) years from the date of the first qualified withdrawal in regard to such vessel, Provided, however, 13. Warranties and Representations by the Party: (A) The Party is a citizen of the United States within the meaning of section 2 of the Shipping Act, 1916, as amended, and will continue to be so for the term of this Agreement. The Party agrees that, each year, within thirty (30) days after the annual meeting of its stockholders, it shall file a supplemental affidavit as evidence of its continuing United States citizenship, provided that any changes in data last furnished with respect to officers, directors, and stockholders holding five percent or more of the issued and outstanding stock of each class or series which would result in a loss of the Party's status as a United States citizen shall be promptly reported to the Maritime Administrator. (B) The Party owns, is the lessee, or has contracted for the construction of one or more eligible vessels (within the meaning of 46 U.S.C. 53501) as listed in Schedule A hereof. (C) The qualified vessels described in Schedule B hereof: (1) Were or will be constructed or reconstructed in the United States, except as provided in the Act and the rules and regulations; (2) Are or will be documented under the laws of the United States and will continue to remain so documented; and (3) Will be operated in the foreign, Great Lakes or noncontiguous domestic trade of the United States within the meaning of the Act and the rules and regulations (D) The Party will meet its deposit obligations as agreed upon in Article 5 of this Agreement. (E) The Party will promptly inform the Maritime Administrator, in writing, of any change in circumstances which would tend to adversely affect the ability of the Party to carry out its obligations under the Agreement. (F) The Party will faithfully conform to all rules and regulations governing the Agreement and the Fund. (G) Nothing of monetary value has been improperly given, promised, or implied for entering into this Agreement. The Party further warrants that no improper personal, political or other activities have been used or attempted in an effort to influence the outcome of the discussions or negotiations leading to the award of this Agreement. Breach of this warranty shall constitute an event of default for which the Maritime Administrator shall have the right, notwithstanding Article 4, to terminate this Agreement without liability to the United States. 14. Default in Obligations: (B) The Maritime Administrator shall provide an opportunity for the Party to cure a breach declared pursuant to Paragraph (A) of this Article 14. (C) Events of breach by the Party shall include, but shall not be limited to: (1) Failure in any respect to use due diligence in performing the program set forth in Schedule B hereof; (2) Obligating the assets in the Fund as a compensating balance; (3) Failure to make deposits required in Schedule D hereof; (4) Failure to secure written permission from the Maritime Administrator when such permission is required by the rules and regulations; (5) Failure to submit reports and/or records on a timely basis as provided in Article 9 hereof; (6) Any material misrepresentation made by the Party or any failure by the Party to disclose material information in connection with this Agreement whether before or after execution hereof and whether made in an application, report, affidavit, or otherwise; or (7) Failure by the Party to comply with any provisions of 46 U.S.C. 53501 et seq 15. Extension of Federal Income Tax Benefits: United States of America, Maritime Administrator, Department of Transportation ( Seal Attest: By __________ (Secretary) ( Seal By __________ (Secretary) Attest: By (Contracting Officer) (Secretary) Approved as to form: (Date of Execution) ______ By ______ (Assistant General (President) Counsel, Maritime Administration) XYZ Co—Schedule A—Eligible Agreement Vessels (a) (b) (c) (d) (e) Name of vessel Specific type Capacity Owned or leased and owner is leased Date and place constructed SS Smith, Tanker 56,000 dwt Leased: ABC Ships, Inc., San Diego, Calif., 50 percent of depreciation ceiling 1962, American Steel, San Francisco, Calif. SS Brown, ......do 265,000 dwt Owned 1974, Southern Shipyards, Mobile, Ala. SS Jones, Container ship 30,000 dwt, 500 400-ft containers ......do 1954, Bond Shipyard, New York, N.Y. Hercules, Oceangoing tugboat 105 ft 2,000 hp ......do 1968, Washington Iron Works, Seattle, Wash. XYZ-1, Roll-on, roll-off barge 1,200 gr ton, 45 40-ft containers ......do 1968, Washington Iron Works, Seattle, Wash. XYZ-2, ......do ......do ......do 1969, Washington Iron Works, Seattle, Wash. OTC-35, ......do 1,500 gr ton, 60 40-ft containers Leased; Oregon Towing Co., Portland, Oreg., 100 percent of depreciation ceiling 1969, J. & J. Shipyard, Portland, Oreg. 200 trailers, Nos. 111032-A-10677B-1M through 11032-A-10877B-1M Dry cargo 40 ft Leased; International Leasing Co., New York, N.Y. 0 percent of depreciation ceiling 1968, Acme Container Corp., New York, N.Y. 1,500 containers, Nos. 312 A through 1312 A. Refrigerated dry cargo. ......do Owned 1969, Aluminum Products, Inc., Dallas, Tex. XYZ Co—Schedule A—Eligible Agreement Vessels (Continued) (f) (g) (h) (i) Date and place reconstructed Date documented Area of operation Details of service SS Smith, Not available 1962 Noncontiguous domestic trade Carriage of crude oil from Valdez, Alaska, to west coast of the continental United States. SS Brown, ......do 1974 U.S. foreign trade Worldwide carriage of crude oil. SS Jones, 1970, Litton Systems, Mississippi 1954 U.S. foreign and noncontiguous trade Container service between Japan and California via Hawaii. Hercules, Not available 1968 Domestic Towing roll-on, roll-off barges from Puget Sound to San Francisco. XYZ-1, ......do 1968 ......do Carriage of trailer type containers between Puget Sound and San Francisco. XYZ-2, ......do 1969 ......do Do. OTC-35, ......do 1969 ......do Do. 200 trailers, Nos. 111032-A-10677B-1M through 11032-A-10877B-1M ......do NA ......do For use on Barges XYZ-1, XYZ-2, OTC-35. 1,500 containers, Nos. 312 A through 1312 A. ......do NA U.S. foreign noncontiguous domestic trade For use as complement of SS Jones. XYZ Co., Program Objectives—I. Acquisition or Construction of Vessels Vessel name, and official number General characteristics Approximate cost Amount to be withdrawn from fund Approximate date of— Anticipated area of operation Contract Delivery XYZ Co., Program Objectives—II. Reconstruction of Vessels Vessel name, and official number General characteristics Approximate cost Amount to be withdrawn from fund Approximate date of— Anticipated area of operation Contract Delivery XYZ Co., Program Objectives—III. Payment of Principal on Existing Indebtedness Vessel name and official number Purpose of indebtedness Amount to be paid from fund XYZ Co., Schedule C—Depositories for Capital Construction Fund Name Address 1. First American Bank checking account 2001 Park Ave., San Francisco, Calif. 94109. 2. Southern California National Bank investment trustee established pursuant to sec. 390.7 of the SOC regulations 1 Waterfront Place, San Francisco, Calif. 94101. XYZ Co. Schedule D—Minimum Deposits [In thousands] Taxable year Ordinary income Net proceeds Fund interest Depreciation Total 1973 to 1975 $3,150 1 $250 $5,800 1976 to 1978 2,900 2 325 4,725 1979 to 1981 3,000 350 85 3,435 1982 to 1984 2,800 74 125 3,000 1985 to 1987 2,850 90 60 3,000 1988 to 1990 2,900 100 3,000 1991 to 1993 3,000 100 3,100 1994 to 1996 3,100 110 3,210 1997 to 1999 3,250 120 3,370 2000 3,200 120 3,320 Total 35,960 1 XYZ-1 XYZ-2 2 Hercules. [41 FR 4265, Jan. 29, 1976, as amended at 42 FR 43632, Aug. 30, 1977; 74 FR 17097, Apr. 14, 2009] Appendix III to Part 390—U.S. Department of Transportation, Maritime Administration—Sample Semiannual Report [Illustrative sample of the report required by the Maritime Administration pursuant to 46 CFR part 390 prescribing the capital construction fund reporting requirements to be followed by those companies which are party to a capital construction fund agreement] Exhibit A—XYZ Co., Summary of cash, securities, and stock on deposit and net accrued deposits to and accrued withdrawals from the capital construction fund as of june 30, 19____ Thousands Cash (exhibit A-1 and B) $1,025 Securities and stock—adjusted basis (exhibit A-2 and B) 2,560 Fund total for tax purposes on deposit (exhibit C) 3,585 Net accrued deposits and withdrawals (exhibit A-3) 450 Fund total (agrees with balance sheet submitted at this date) on deposit for book purposes—June 30, 19____ 4,035 Portion of fund total for tax purposes as of June 30, 19____, which represents a “CCF: Security amount” pursuant to an agreement covering the dual use of a capital construction fund Thousands Balance brought forward $403 Deposits 82 Total “CCF: Security Amount” 485 Exhibit A-1—XYZ Company summary of cash on deposit in capital construction fund as of june 30, 19____ Thousands First American Bank, San Francisco, Calif., checking account No. 654-0876-211 $1,025 Total cash in capital construction fund at June 30, 19____ 1,025 Exhibit A-2—XYZ Co., Summary of Securities and Stock (Adjusted Basis and Fair Market Value) in Capital Construction Fund as of June 30, 19____(in Thousands) Adjusted basis Fair market value Treasury notes—due July 4, 19____, $800,000 face value, 1st American Bank, San Francisco, Calif., trust account No. 610-2135 $760 $760 Negotiable certificate of deposit—due July 31, 19____, $500,000 at 8 percent, 1st American Bank, San Francisco, Calif., CD No. 186007 500 500 U.S.A. Motors, Inc.—class A common stock, 5,000 shares, Southern California National Bank, trust account No. 358-21 625 725 Energy Co., Inc.—1st preferred, 4,100 shares, Southern California National Bank, trust account No. 358-21 205 255 Boon Corp.—class A common stock, 10,000 shares, Southern California National Bank, San Francisco, Calif., trust account No. 358-21 470 520 Total securities and stock in capital construction fund at June 30, 19____ 2,560 2,760 Exhibit A-3—XYZ Co., Summary of Net Accrued Deposits and Withdrawals in Capital Construction Fund as of June 19____ Thousands Accrued deposits: 19____ income (6 mos. ended June 30, 19____) $500 Depreciation 200 Total 700 Accrued withdrawals: Progress payment made from general fund—hull 210 250 Net accrued deposits and withdrawals in capital construction fund at June 30, 19____ 450 Exhibit B—XYZ Co., Transcript of Transactions in the Capital Construction Fund for the 6 Mos. Ended June 30, 19____ Date Description of transaction Cash Securities and stock (at adjusted basis) Detail Debit Credit Debit Credit Jan. 1, 19____ Balances brought forward $1,500,000 $2,000,000 Jan. 1, 19____ Bond debt payment—SS Smith. $250,000 Jan. 3, 19____ Deposit 19____ depreciation 300,000 Jan. 4, 19____ Purchased Treasury notes—90 days at 6-percent discount. 752,000 752,000 $800,000 at 6-percent discount. Feb. 29, 19____ Dividends earned 4,500 $0.45 per share on 10,000 shares Boon Corp. Mar. 15, 19____ Progress payment No. 3 hull 210. 172,500 Apr. 4, 19____ Sale of Treasury notes—cost 752,000 752,000 Income from sale 48,000 Apr. 4, 19____ Purchased Treasury notes 90 days at 5-percent discount 760,000 760,000 $800,000 at 5-percent discount. Apr. 15, 19____ Deposit from 19____ earnings 310,000 May 15, 19____ Progress payment No. 4—hull 210. 180,000 June 15, 19____ Sale of stock—cost 200,000 200,000 4,000 shares at $56.25 per share. Gain on sale of stock Energy Co., Inc. 25,000 Balances carried forward 1,025,000 2,560,000 Exhibit C—XYZ Co., Summary of Total Transaction Affecting the Tax Account Balances in the Capital Construction Fund for the 6 Mos. Ended June 30, 19____ Ordinary income Capital gain Capital Total Opening balance, Jan. 1, 19____ $1,000,000 $1,000,000 $1,500,000 $3,500,000 Deposits, income, transfers in, etc 362,500 25,000 300,000 687,500 Total 1,362,500 1,025,000 1,800,000 4,187,500 Withdrawals, losses, transfers out, etc 602,500 Balance at June 30, 19____ 1,362,500 1,025,000 1,197,500 3,585,000 Exhibit D—XYZ Company summary by vessel of qualified withdrawals from the fund for the six months ending june 30, 19____ A. Acquisition or Construction of Vessels (1) 80,000 dwt tanker: No qualified withdrawals have been made to date; construction is presently scheduled to commence in mid-1977. (2) 130-foot ocean tug hull No. 210: Balance brought forward $700,000 Qualified withdrawals during period 352,500 Total qualified withdrawals to date 1,052,500 130-foot ocean tug hull No. 211: No withdrawals have been made to date; construction is presently scheduled to commence in November 1975 B. Acquisition or Construction of Barges, Containers and Trailers 250-foot tank barge: No qualified withdrawals have been made to date; construction presently scheduled to commence in November 1975. C. Reconstruction of Vessels None. D. Reconstruction of Barges, Containers, and Trailers None. E. Payment of Principal on Existing Indebtedness SS Smith Balance brought forward $500,000 Qualified withdrawals during period 250,000 Total qualified withdrawals to date 750,000 Appendix IV to Part 390—Sample Addendum to Maritime Administration Capital Construction Fund Agreement This Agreement, made by the Maritime Administrator, Department of Transportation (“Maritime Administrator”) and ______ (“Party”), a citizen of the United States of America, as an Addendum to that certain agreement, Contract No. MA/CCF— Whereas: 1. On ______, the parties hereto entered into a Capital Construction Fund Agreement (“Agreement”) under 46 U.S.C. 53501 et seq 2. The parties hereto desire to modify that Agreement in the manner hereinafter set forth; 3. The parties hereto have agreed to said amendment and desire to incorporate the same into the Agreement. Now, therefore, in consideration of the premises the Maritime Administrator and the Party agree as follows: Notwithstanding the provisions of Article 4(A)(2) of the Agreement, the Party may, within sixty (60) days after notice appears in the Federal Register In witness whereof, the Secretary and the Party have executed this addendum, in quadruplicate, effective as of the date indicated below. United States of America Secretary of Transportation, Maritime Administrator, Department of Transportation By By................. (Contracting Officer) Date Title................. Attest: Attest: By By.................... (Secretary) Title................ (Seal) (Seal) Approved as to form: (Assistant Chief Counsel Maritime Administration) [G.O. 109, Rev., Amdt. 6, 42 FR 43634, Aug. 30, 1977, as amended at 73 FR 56741, Sept. 30, 2008; 74 FR 17097, Apr. 14, 2009] Appendix V to Part 390—Sample Qualified Trade Affidavit affidavit State of County of I, ______, (Name) being duly sworn, depose and say: 1. That I am the ______ (Title) of ______. (Name of party) 2. That I am fully acquainted with and have knowledge of the operations of all qualified agreement vessels owned or operated by my company and identified in Capital Construction Fund Agreement, MA/CCF ______. 3. That I have full knowledge of the trading restrictions and liquidated damages provisions pertaining to qualified agreement vessels, as stipulated in46 U.S.C. 53501 et seq 4. That based on my inspection of Company records and to the best of my knowledge and belief, except as noted below in statement 5 of this affidavit, during the period __________ (Beginning of taxable year) through __________ (End of taxable year) my company operated its qualified agreement vessels only in the United States, foreign, Great Lakes, and noncontiguous domestic trade in accordance with Capital Construction Fund Agreement, MA/CCF ______. 5. Exceptions to statement 4 of this Affidavit are as follows (indicate exceptions below or attach a supplemental statement if additional space is needed; if there are no exceptions, write “none”): (Affiant) Subscribed and sworn to before me, a Notary Public in and for the State, City and County above named, this ____________ day of ________________, 19____. (Notary Public) My commission expires ________________________, 19____ [41 FR 39751, Sept. 16, 1976; 74 FR 17097, Apr. 14, 2009]