Page:United States Statutes at Large Volume 100 Part 3.djvu/400

 100 STAT. 2208

PUBLIC LAW 99-514—OCT. 22, 1986 (4) DEFINITIONS.—For purposes of this subsection, terms used in such subsection which are also used in section 42 of the Internal Revenue Code of 1986 (as added by this section) shall have the meanings given such terms by such section 42.

Subtitle G—Merchant Marine Capital Construction Funds SEC. 261. PROVISIONS RELATING TO MERCHANT CONSTRUCTION FUNDS.

MARINE

CAPITAL

(a) PURPOSE.—The purpose of this section is to coordinate the application of the Internal Revenue Code of 1986 with the capital construction program under the Merchant Marine Act, 1936. (b) AMENDMENT OF 1986 CODE.—Chapter 77 (relating to miscellaneous provisions) is amended by adding at the end thereof the following new section: "SEC. 7518. TAX INCENTIVES RELATING TO MERCHANT MARINE CAPITAL CONSTRUCTION FUNDS. "(a) C E I L I N G ON D E P O S I T S. —

"(1) IN GENERAL.—The amount deposited in a fund established under section 607 of the Merchant Marine Act, 1936 (hereinafter in this section referred to as a 'capital construction fund') shall not exceed for any taxable year the sum of: "(A) that portion of the taxable income of the owner or lessee for such year (computed as provided in chapter 1 but without regard to the carryback of any net operating loss or net capital loss and without regard to this section) which is attributable to the operation of the agreement vessels in ,.. the foreign or domestic commerce of the United States or in the fisheries of the United States, "(B) the amount allowable as a deduction under section 167 for such year with respect to the agreement vessels, "(C) if the transaction is not taken into account for purposes of subparagraph (A), the net proceeds (as defined in joint regulations) from— "(i) the sale or other disposition of any agreement vessel, or "(ii) insurance or indemnity attributable to any agreement vessel, and "(D) the receipts from the investment or reinvestment of amounts held in such fund. "(2) LIMITATIONS ON DEPOSITS BY LESSEES.—In the case of a lessee, the maximum amount which may be deposited with respect to an agreement vessel by reason of paragraph (1)(B) for any period shall be reduced by any amount which, under an agreement entered into under section 607 of the Merchant Marine Act, 1936, the owner is required or permitted to deposit for such period with respect to such vessel by reason of paragraph (1)(B). "(3) CERTAIN BARGES AND CONTAINERS INCLUDED.—For purposes of paragraph (1), the term 'agreement vessel' includes barges and containers which are part of the complement of such vessel and which are provided for in the agreement. "(b) REQUIREMENTS AS TO INVESTMENTS.—

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