Source: http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53511&num=0&edition=prelim
Timestamp: 2019-04-21 06:52:49+00:00

Document:
(a) In General.-Except as provided in section 53513 of this title, a withdrawal from a fund that is not a qualified withdrawal shall be treated as a nonqualified withdrawal.
(3) third from the capital account.
(C) no interest shall be payable on amounts treated as withdrawn on a last-in-first-out basis under section 53512 of this title.
(2) the money rates and investment yields for the calendar year 1970.
(2) Earnings.-The earnings of a capital construction fund for any taxable year (except net gains) shall be treated under this subsection as an amount deposited for the taxable year.
(3) Contract for qualified withdrawal.-Under paragraph (1), an amount shall not be treated as remaining in a capital construction fund at the close of a taxable year to the extent there is a binding contract at the close of the taxable year for a qualified withdrawal of the amount for an identified item for which the withdrawal may be made.
(4) Excess earnings.-If the Secretary determines that the balance in a capital construction fund exceeds the amount appropriate to meet the vessel construction program objectives of the person that established the fund, the amount of the excess shall be treated as a nonqualified withdrawal under paragraph (1) unless the person develops appropriate program objectives within 3 years to dissipate the excess.
(5) Amounts in fund on january 1, 1987.-Under this subsection, amounts in a capital construction fund on January 1, 1987, shall be treated as having been deposited in that fund on that date.
(B) increasing the tax imposed by chapter 1 of such Code by the product of the amount of the withdrawal and the highest tax rate specified in section 1 (or section 11 for a corporation) of such Code (26 U.S.C. 1, 11).
(2) Maximum tax rate.-For that portion of a nonqualified withdrawal made from the capital gain account during a taxable year to which section 1(h) or 1201(a) 1 of such Code (26 U.S.C. 1(h), 1201(a)) applies, the tax rate used under paragraph (1)(B) may not exceed 20 percent (or 34 percent for a corporation).
(B) an amount equal to that portion shall be allowed as a deduction under section 172 of such Code (26 U.S.C. 172) for the taxable year in which the withdrawal occurs.
(4) Coordination with deduction for net operating losses.-A nonqualified withdrawal excluded from gross income under paragraph (1) shall be excluded in determining taxable income under section 172(b)(2) of such Code (26 U.S.C. 172(b)(2)).
53511 46 App.:1177(h) (less (2) (last sentence)). June 29, 1936, ch. 858, title VI, §607(h) (less (2) (last sentence)), 49 Stat. 2005 ; June 23, 1938, ch. 600, §§23–28, 52 Stat. 960 ; Aug. 4, 1939, ch. 417, §10, 53 Stat. 1185 ; July 17, 1952, ch. 939, §§17–19, 66 Stat. 764 ; Pub. L. 85–637, Aug. 14, 1958, 72 Stat. 216 ; Pub. L. 86–518, §1, June 12, 1960, 74 Stat. 216 ; Pub. L. 87–45, §6, May 27, 1961, 75 Stat. 91 ; Pub. L. 87–271, Sept. 21, 1961, 75 Stat. 570 ; restated Pub. L. 91–469, §21(a), Oct. 21, 1970, 84 Stat. 1030 ; Pub. L. 97–31, §12(97)(A), Aug. 6, 1981, 95 Stat. 162 ; Pub. L. 99–514, title II, §261(e)(6), Oct. 22, 1986, 100 Stat. 2215 ; Pub. L. 100–647, title I, §1002(m)(2), Nov. 10, 1988, 102 Stat. 3382 ; Pub. L. 101–508, title XI, §11101(d)(7)(B), Nov. 5, 1990, 104 Stat. 1388–405 ; Pub. L. 105–34, title III, §311(c)(2), Aug. 5, 1997, 111 Stat. 835 ; Pub. L. 108–27, title III, §301(a)(2)(E), May 28, 2003, 117 Stat. 758 .
In subsection (c)(3)(C), the words "or in the case of any nonqualified withdrawal arising from the application of the recapture provision of section 1176(5) of this Appendix as in effect on December 31, 1969" are omitted as obsolete.
In subsection (d), the words "made in a taxable year beginning in 1970 or 1971 is 8 percent" are omitted as obsolete.
Section 1201 of such Code, referred to in subsec. (f)(2), means section 1201 of the Internal Revenue Code of 1986, act Aug. 16, 1954, ch. 736, 68A Stat. 320 , which was repealed by Pub. L. 115–97, title I, §13001(b)(2)(A), Dec. 22, 2017, 131 Stat. 2096 , applicable to taxable years beginning after Dec. 31, 2017.
2013-Subsec. (f)(2). Pub. L. 112–240 substituted "20 percent" for "15 percent".
Amendment by Pub. L. 112–240 applicable to taxable years beginning after Dec. 31, 2012, see section 102(d)(1) of Pub. L. 112–240, set out as a note under section 1 of Title 26, Internal Revenue Code.
Pub. L. 110–181, div. C, title XXXV, §3528, Jan. 28, 2008, 122 Stat. 603 , provided that: "For purposes of section 303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (Public Law 108–27, [former] 26 U.S.C. 1 note), the amendment made by section 301(a)(2)(E) of that Act [which amended section 1177(h)(6)(A) of the former Appendix to this title from which subsec. (f)(2) of this section was derived by substituting "15 percent" for "20 percent"] shall be deemed to have been made to section 53511(f)(2) of title 46, United States Code."

References: §607
 §10
 §1
 §6
 §21
 §12
 §261
 §1002
 §11101
 §311
 §301
 §13001
 §3528