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vided for by chapter 43 of title 38 for any member of a reserve component 
of the armed forces of the United States who is ordered to active duty. 
‘‘(b) TIME FOR APPLICATION.—An individual may submit an application 
for certification under subsection (c) to the Secretary not later than 45 days 
after the date the individual completes a period of employment described in 
subsection (c)(1)(A) with respect to which the application is submitted. 
‘‘(c) CERTIFICATION DETERMINATION.—Not later than 20 days after the 
date the Secretary receives from an individual an application for certifi-
cation under this subsection, the Secretary shall— 
‘‘(1) determine whether the individual— 
‘‘(A) was employed in the activation or operation of a vessel— 
‘‘(i) in the National Defense Reserve Fleet maintained 
under section 11 of the Merchant Ship Sales Act of 1946 (50 
App. U.S.C. 1744) in a period in which the vessel was in use 
or being activated for use under subsection (b) of that sec-
tion; 
‘‘(ii) requisitioned or purchased under chapter 563 of this 
title; or 
‘‘(iii) owned, chartered, or controlled by the United States 
Government and used by the Government for a war, armed 
conflict, national emergency, or maritime mobilization need 
(including for training purposes or testing for readiness and 
suitability for mission performance); and 
‘‘(B) during the period of that employment, possessed a valid 
license, certificate of registry, or merchant mariner’s document 
issued under chapter 71 or 73 of this title; and 
‘‘(2) if the Secretary makes affirmative determinations under sub-
paragraphs (A) and (B) of paragraph (1), certify that individual under 
this subsection. 
‘‘(d) EQUIVALENCE TO MILITARY SELECTIVE SERVICE ACT CERTIFI-
CATE.—For purposes of reemployment rights and benefits provided by this 
section, a certification under subsection (c) shall be considered to be the 
equivalent of a certificate described in section 9(a) of the Military Selective 
Service Act (50 App. U.S.C. 459(a)). 
‘‘PART C—FINANCIAL ASSISTANCE PROGRAMS’’. 
(c) CHAPTERS FOLLOWING CHAPTER 531.—Subtitle V of title 46, United 
States Code, is amended by adding at the end the following: 
‘‘CHAPTER 533—CONSTRUCTION RESERVE FUNDS 
‘‘Sec. 
‘‘53301.
Definitions. 
‘‘53302.
Authority for construction reserve funds. 
‘‘53303.
Persons eligible to establish funds. 
‘‘53304.
Vessel ownership. 
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‘‘53305.
Eligible fund deposits. 
‘‘53306.
Recognition of gain for tax purposes. 
‘‘53307.
Basis for determining gain or loss and for depreciating new vessels. 
‘‘53308.
Order and proportions of deposits and withdrawals. 
‘‘53309.
Accumulation of deposits. 
‘‘53310.
Obligation of deposits and period for construction of certain vessels. 
‘‘53311.
Taxation of deposits on failure of conditions. 
‘‘53312.
Assessment and collection of deficiency tax. 
‘‘§ 53301. Definitions 
‘‘(a) IN GENERAL.—In this chapter: 
‘‘(1) CONSTRUCTION CONTRACT.—The term ‘construction contract’ 
includes, for a taxpayer constructing a new vessel in a shipyard owned 
by that taxpayer, an agreement between the taxpayer and the Secretary 
of Transportation for that construction containing provisions the Sec-
retary considers advisable to carry out this chapter. 
‘‘(2) NEW VESSEL.—The term ‘new vessel’ means— 
‘‘(A) a vessel— 
‘‘(i) constructed in the United States after December 31, 
1939, constructed with a construction-differential subsidy 
under title V of the Merchant Marine Act, 1936, or con-
structed with financing or a financing guarantee under chap-
ter 537 or 575 of this title; 
‘‘(ii) documented or agreed with the Secretary to be docu-
mented under the laws of the United States; and 
‘‘(iii)(I) of a type, size, and speed that the Secretary deter-
mines is suitable for use on the high seas or Great Lakes in 
carrying out this subtitle, but not less than 2,000 gross tons 
or less than 12 knots speed unless the Secretary certifies in 
each case that a vessel of lesser tonnage or speed is desirable 
for use by the United States Government in case of war or 
national emergency; or 
‘‘(II) constructed to replace a vessel bought or requisitioned 
by the Government; and 
‘‘(B) a vessel reconstructed or reconditioned for use only on the 
Great Lakes, including the Saint Lawrence River and Gulf, if the 
Secretary finds that the reconstruction or reconditioning will pro-
mote the objectives of this subtitle. 
‘‘(b) ADDITIONAL TAX-RELATED TERMS.—Other terms used in this 
chapter have the same meaning as in chapter 1 of the Internal Revenue 
Code of 1986 (26 U.S.C. ch. 1). 
‘‘§ 53302. Authority for construction reserve funds 
‘‘(a) GENERAL AUTHORITY.—An eligible person under section 53303 of 
this title may establish a construction reserve fund for the construction, re-
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construction, reconditioning, or acquisition of a new vessel or for other pur-
poses authorized by this chapter. 
‘‘(b) APPLICATION OF CERTAIN LAWS AND REGULATIONS.—The fund 
shall be established, maintained, expended, and used as provided by this 
chapter and regulations prescribed jointly by the Secretary of Transpor-
tation and the Secretary of the Treasury. 
‘‘§ 53303. Persons eligible to establish funds 
‘‘A construction reserve fund may be established by a citizen of the 
United States that— 
‘‘(1) is operating a vessel in the foreign or domestic commerce of the 
United States or in the fisheries; 
‘‘(2) owns, in whole or in part, a vessel being operated in the foreign 
or domestic commerce of the United States or in the fisheries; 
‘‘(3) was operating a vessel in the foreign or domestic commerce of 
the United States or in the fisheries when it was bought or requi-
sitioned by the United States Government; 
‘‘(4) owned, in whole or in part, a vessel being operated in the for-
eign or domestic commerce of the United States or in the fisheries 
when it was bought or requisitioned by the Government; or 
‘‘(5) had acquired or was having constructed a vessel to operate in 
the foreign or domestic commerce of the United States or in the fish-
eries when it was bought or requisitioned by the Government. 
‘‘§ 53304. Vessel ownership 
‘‘In this chapter, a vessel is deemed to be constructed or acquired by a 
taxpayer if constructed or acquired by a corporation when the taxpayer 
owns at least 95 percent of each class of stock of the corporation. 
‘‘§ 53305. Eligible fund deposits 
‘‘A construction reserve fund may include deposits of— 
‘‘(1) the proceeds from the sale of a vessel; 
‘‘(2) indemnities for the loss of a vessel; 
‘‘(3) earnings from the operation of a documented vessel and from 
services incident to the operation; and 
‘‘(4) interest or other amounts accrued on deposits in the fund. 
‘‘§ 53306. Recognition of gain for tax purposes 
‘‘(a) DEFINITIONS.—In this section, the terms ‘net proceeds’ and ‘net in-
demnity’ mean the sum of— 
‘‘(1) the adjusted basis of the vessel; and 
‘‘(2) the amount of gain the taxpayer would recognize without regard 
to this section. 
‘‘(b) RECOGNITION OF GAIN.—In computing net income under the income 
or excess profits tax laws of the United States, a taxpayer does not recog-
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nize a gain on the sale or the actual or constructive total loss of a vessel 
if the taxpayer— 
‘‘(1) deposits an amount equal to the net proceeds of the sale or the 
net indemnity for the loss in a construction reserve fund within 60 days 
after receiving the payment of proceeds or indemnity; and 
‘‘(2) elects under this section not to recognize the gain. 
‘‘(c) WHEN ELECTION MUST BE MADE.— 
‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the tax-
payer must make the election referred to in subsection (b) in the tax-
payer’s income tax return for the taxable year in which the gain was 
realized. 
‘‘(2) RECEIPT AFTER TAXABLE YEAR.—If the vessel is bought or 
requisitioned by the United States Government, or is lost, and the tax-
payer receives payment for the vessel or indemnity for the loss from 
the Government after the end of the taxable year in which it was 
bought, requisitioned, or lost, the taxpayer must make the election re-
ferred to in subsection (b) within 60 days after receiving the payment 
or indemnity, on a form prescribed by the Secretary of the Treasury. 
‘‘(d) EFFECT OF STATUTE OF LIMITATION.—If the taxpayer makes an 
election under subsection (c)(2), and computation or recomputation under 
this section is otherwise allowable but is prevented by a statute of limitation 
on the date the election is made or within 6 months thereafter, the com-
putation or recomputation nevertheless shall be made notwithstanding the 
statute if the taxpayer files a claim for the computation or recomputation 
within 6 months after the date of making the election. 
‘‘§ 53307. Basis for determining gain or loss and for depre-
ciating new vessels 
‘‘Under the income or excess profits tax laws of the United States, the 
basis for determining a gain or loss and for depreciation of a new vessel 
constructed, reconstructed, reconditioned, or acquired by the taxpayer, or 
for which purchase-money indebtedness is liquidated as provided in section 
53310 of this title, with amounts from a construction reserve fund, shall 
be reduced by that part of the deposits in the fund expended in the con-
struction, reconstruction, reconditioning, acquisition, or liquidation of pur-
chase-money indebtedness of the new vessel that represents a gain not rec-
ognized for tax purposes under section 53306 of this title. 
‘‘§ 53308. Order and proportions of deposits and with-
drawals 
‘‘In this chapter— 
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