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Determination of Foreign Reconstruction or Rebuilding of U.S.-Built Vessels That Participate in the Capital Construction Fund and Cargo Preference Programs

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Maritime Administration, Department of Transportation.


Notice and Request for Comments.


The Maritime Administration seeks public comment on what standards the Maritime Administration should apply when making determinations of foreign reconstruction of U.S.-built vessels that participate in the Capital Construction Fund program and foreign rebuilding of U.S.-built vessels that participate in the cargo preference program.


Comments are due January 14, 2008.


You may submit comments by any of the following methods:

  • Web Site: Follow the instructions for submitting comments on the Federal Dockets Management System (FDMS) electronic docket site.
  • Mail: Docket Management Facility; U.S. Department of Transportation, 1200 New Jersey Ave., SE., Washington, DC 20590-0001. Faxed or hand-delivered submissions must be unbound, no larger than 81/2 by 11 inches, and suitable for copying and electronic scanning. Mailed submissions requiring confirmation of receipt should include a stamped, self-addressed postcard or envelope.
  • Hand Delivery: Plaza level of Department of Transportation Headquarters, 1200 New Jersey Ave., SE., Washington, DC 20590-0001, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Instructions: All submissions must include the agency name and docket number for this action. Regardless of the method used for submitting comments or material, all submissions will be posted, without change, to the FDMS Web site (, and will include any personal information provided. Therefore, submitting this information makes it public. Please read the Privacy Act notice that is available on the FDMS Web site, or the Department of Transportation Privacy Act statement that appeared in the Federal Register on April 11, 2000 (65 FR 19477).

Docket: For access to the docket to read background documents or comments received, go to

Privacy Act: Anyone is able to 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, etc.). You may review the Department of Transportation's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78).

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Murray A. Bloom, Chief, Division of Maritime Programs, Office of Chief Counsel, Maritime Administration, 1200 New Jersey Ave., SE., Washington, DC 20590; Ph. (202) 366-5320, fax: (202) 366-5123; or e-mail

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There are three maritime promotional statutes that mandate the use of U.S.-built vessels and generally provide that a U.S.-built vessel becomes ineligible if the vessel is reconstructed or rebuilt in a foreign country.

1. Section 12132(b) of title 46, United States Code, provides that a vessel eligible to engage in the U.S. coastwise trade and later rebuilt outside the United States may no longer engage in the coastwise trade. This statute is administered by the U.S. Coast Guard.

2. Chapter 535 of title 46, United States Code, established the Capital Construction Fund (CCF) program, whereby a U.S. citizen owner of an eligible vessel may defer Federal income taxes on income derived from the operation of eligible vessels to the extent that income is deposited into a fund to be used solely for the acquisition, construction or reconstruction of qualified vessels. The statutory definitions of both “eligible” and “qualified” vessels require such vessels, if reconstructed, to be reconstructed in the United States. The Maritime Administration administers the CCF program (except for the CCF applicable to fishery vessels administered by the National Oceanic and Atmospheric Administration) under regulations located at 46 CFR 390.

3. Chapter 553 of title 46, United States Code, provides that preference be given in the carriage of U.S. Government-impelled cargoes to “privately-owned commercial vessels of the United States.” That term is defined by statute as excluding a vessel rebuilt in a foreign country, unless the vessel shall have been documented under U.S. registry for at least three years. The shippers responsible for shipping cargo subject to the cargo preference statutes do so under regulations issued by the Maritime Administration at 46 CFR Part 381.

These three statutes raise difficult problems of interpretation and enforcement. The Maritime Administration will consider any and all comments as to how the Maritime Administration should administer the programs assigned to it. However, in order to focus the discussion, we suggest that submitters of comments respond to the following questions:

1. What substantive standards should the Maritime Administration apply to determine whether a CCF vessel has been reconstructed or a cargo preference vessel has been rebuilt?

2. What procedures should the Maritime Administration adopt to investigate whether a CCF vessel has been reconstructed or a cargo preference vessel has been rebuilt?

3. What role, if any, should unrelated third parties, such as competitors or shipyards, play in developing a record for decision on whether a CCF vessel has been reconstructed or a cargo preference vessel has been rebuilt?

4. What public disclosure criteria should apply to the record for decision on whether a CCF vessel has been reconstructed or a cargo preference vessel has been rebuilt?

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Authority: 49 CFR 1.66.

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Dated: November 7, 2007.

By Order of the Maritime Administrator.

Christine S. Gurland,

Acting Secretary, Maritime Administration.

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[FR Doc. E7-22189 Filed 11-13-07; 8:45 am]