I
103D CONGRESS
1ST SESSION
H. R. 2152
To amend the Merchant Marine Act, 1936 to encourage merchant marine
investment, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 19, 1993
Mr. STUDDS (for himself, Mr. LIPINSKI, Mr. FIELDS of Texas, Mr. BATEMAN,
Mr. YOUNG of Alaska, Mr. HUGHES, Mr. HUTTO, Mr. TAUZIN, Mr.
ORTIZ, Mr. MANTON, Mr. PICKETT, Mr. HOCHBRUECKNER, Mr.
PALLONE, Mrs. UNSOELD, Mr. LANCASTER, Mr. ANDREWS of Maine, Mr.
GENE GREEN of Texas, Mr. HASTINGS, Mr. HAMBURG, Mr. STUPAK, Mr.
THOMPSON of Mississippi, Mr. ACKERMAN, and Mr. KING) introduced the
following bill; which was referred jointly to the Committees on Merchant
Marine and Fisheries and Ways and Means
A BILL
To amend the Merchant Marine Act, 1936 to encourage
merchant marine investment, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Merchant Marine
Investment Act of 1993’’.
SEC. 2. AMENDMENTS OF MERCHANT MARINE ACT, 1936.
(a) CHANGES IN VESSELS TO WHICH CAPITAL CON-
STRUCTION FUNDS APPLY.—
(1) The second sentence of section 607(a) of
the Merchant Marine Act, 1936 (46 App. U.S.C.
1177) is amended to read as follows: ‘‘Any agree-
ment entered into under this section shall be for the
purpose of providing replacement vessels, additional
vessels, or reconstructed vessels, built in the United
States and documented under the laws of the United
States for operation in the foreign or domestic com-
merce of the United States or in the fisheries of the
United States and shall provide for the deposit in
the fund of the amounts agreed upon as necessary
or appropriate to provide for qualified withdrawals
under subsection (f).’’
(2) Paragraph (1) of section 607(k) of such Act
(defining eligible vessel) is amended to read as fol-
lows:
‘‘(1) The term ‘eligible vessel’ means any ves-
sel—
‘‘(A) documented under the laws of the
United States, and
‘‘(B) operated in the foreign or domestic
commerce of the United States or in the fish-
eries of the United States.’’
(3) Paragraph (2) of section 607(k) of such Act
is amended by striking subparagraph (C) and insert-
ing the following:
‘‘(C) which the person maintaining the
fund agrees with the Secretary will be operated
in the foreign or domestic commerce of the
United States or in the fisheries of the United
States.
Such term shall not include any towing vessel,
barge, or dry or liquid bulk vessel operated on the
inland waterways of the United States.’’
(4) Subsection (f) of section 607 of such Act is
amended by adding at the end thereof the following
new paragraph:
‘‘(3) For purposes of this subsection, the deter-
mination of whether any withdrawal from amounts
in any capital construction fund as of the date of the
enactment of the Merchant Marine Investment Act
of 1993 (or from earnings thereon) is a qualified
withdrawal shall be made using the definition of
‘qualified vessel’ as in effect on the day before such
date of the enactment.’’
(5) Subsection (k) of section 607 of such Act
is amended by adding at the end thereof the follow-
ing new paragraphs:
‘‘(10) The term ‘inland waterways of the Unit-
ed States’ means any inland waterway of the United
States which is described in section 206 of the In-
land Waterways Revenue Act of 1978 (33 U.S.C.
1804).
‘‘(11) The terms ‘foreign commerce’ and ‘for-
eign trade’ have the meanings given such terms in
section 905, except that such terms shall include
commerce or trade between foreign ports.’’
(6) Paragraph (7) of section 607(k) of such Act
is amended by inserting ‘‘containers or barges in-
tended for use as part of the complement of 1 or
more qualified vessels and’’ before ‘‘cargo handling’’.
(b) TREATMENT OF FUND EARNINGS.—
(1) Section 607 of such Act is amended by add-
ing at the end thereof the following new subsection:
‘‘(n) TAXATION OF EARNINGS ON INVESTMENTS.—
‘‘(1) IN GENERAL.—The tax imposed by chap-
ter 1 of the Internal Revenue Code of 1986 shall be
determined—
‘‘(A) by excluding from gross income the
taxable earnings from the investment and rein-
vestment of amounts held in a capital construc-
tion fund, and
‘‘(B) by increasing the tax imposed by
such chapter by the product of the amount of
such taxable earnings and the highest rate of
tax specified in section 1 (section 11 in the case
of a corporation) of such Code.
‘‘(2) MAXIMUM RATE ON CAPITAL GAINS.—If
there is a net capital gain on amounts held in a cap-
ital construction fund, the rate of tax taken into ac-
count under paragraph (1)(B) with respect to such
gain shall not exceed the rate applicable to net cap-
ital gain under section 1(h) or 1201(a) of such
Code, as the case may be.
‘‘(3) COORDINATION
WITH
DEDUCTION
FOR
NET
OPERATING
LOSSES.—Any earnings excluded
from gross income under paragraph (1) shall be ex-
cluded in determining taxable income under section
172(b)(2) of such Code.
‘‘(4) TAXABLE
EARNINGS.—For purposes of
this section, the term ‘taxable earnings’ means net
earnings determined with the following modifica-
tions:
‘‘(A) There shall be excluded interest in-
come exempt from taxation under section 203
of such Code.