Page:United States Statutes at Large Volume 120.djvu/1621

 120 STAT. 1590

PUBLIC LAW 109–304—OCT. 6, 2006

‘‘(B) the deposit is expended or obligated for expenditure under that contract; ‘‘(C) at least 12.5 percent of the construction or contract price of the vessel is paid or irrevocably committed for payment; and ‘‘(D) the plans and specifications for the vessel are approved by the Secretary to the extent the Secretary considers necessary; or ‘‘(2) the deposit is expended or obligated for expenditure for the liquidation of existing or subsequently incurred purchase-money indebtedness to a person not a parent company of, or a company affiliated or associated with, the mortgagor on a new vessel. ‘‘(b) ADDITIONAL REQUIREMENTS FOR CERTAIN VESSELS.—In addition to the requirements of subsection (a)(1), for a vessel not constructed under a construction-differential subsidy contract or not bought from the Secretary of Transportation— ‘‘(1) at least 5 percent of the construction (or, if the contract covers more than one vessel, at least 5 percent of the construction of the first vessel) must be completed within 6 months after the date of the construction contract (or within the period of an extension under subsection (c)), as estimated by the Secretary and certified by the Secretary to the Secretary of the Treasury; and ‘‘(2) construction under the contract must be completed with reasonable dispatch thereafter. ‘‘(c) EXTENSIONS.—The Secretary of Transportation may grant extensions of the period within which the deposits must be expended or obligated or within which the construction must have progressed to the extent of 5 percent completion under this section. However, the extensions may not be for a total of more than 2 years for the expenditure or obligation of deposits or one year for the progress of construction. ‘‘§ 53311. Taxation of deposits on failure of conditions ‘‘A deposited gain, if otherwise taxable income under the law applicable to the taxable year in which the gain was realized, shall be included in gross income for that taxable year, except for purposes of the declared value excess profits tax and the capital stock tax, if— ‘‘(1) the deposited gain is not expended or obligated within the appropriate period under section 53310 of this title; ‘‘(2) the deposited gain is withdrawn before the end of that period; ‘‘(3) the construction related to that deposited gain has not progressed to the extent of 5 percent of completion within the appropriate period under section 53310 of this title; or ‘‘(4) the Secretary of Transportation finds and certifies to the Secretary of the Treasury that, for causes within the control of the taxpayer, the entire construction related to that deposited gain is not completed with reasonable dispatch. ‘‘§ 53312. Assessment and collection of deficiency tax ‘‘Notwithstanding any other provision of law, a deficiency in tax for a taxable year resulting from the inclusion of an amount in gross income as provided by section 53311 of this title, and the amount to be treated as a deficiency under section 53311

VerDate 14-DEC-2004

13:05 Jul 12, 2007

Jkt 059194

PO 00002

Frm 00334

Fmt 6580

Sfmt 6581

E:\PUBLAW\PUBL002.109

APPS06

PsN: PUBL002

�