Sec. 8. Tax incentives relating to merchant marine capital construction funds
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Section 7518 of the Internal Revenue Code of 1986 is amended— in subsection (a)— by striking paragraph
(1)and inserting the following: The amount deposited in a fund established under chapter 535 of title 46 of the United States Code (hereinafter in this section referred to as a capital construction fund ) for a taxable year may not exceed the amount specified in the agreement under section 53503(a) of such title, which shall be an amount that is related to a commitment to invest the revenue from the capital construction fund into funding the construction of new vessels or funding cargo handling equipment. , in paragraph (2), by striking paragraph (1)(B) each place it appears and inserting paragraph
(1), and by adding at the end the following new paragraph: For the purposes of paragraph (1), the revenue from the capital construction fund may include— income attributable to the operation of any agreement vessel in foreign commerce or domestic trade or fisheries or the operation of a marine terminal in the United States, the net proceeds from the disposition of an agreement vessel or cargo handling equipment or insurance or indemnity attributable to the vessel or cargo handling equipment, the receipts from the investment or reinvestment of amounts held in the fund, and the amount allowable as a deduction under section 167 for the taxable year with respect to the agreement vessels or cargo handling equipment. , in subsection (b)(2), by striking Amounts in any capital construction fund and all that follows through (not in excess of 60 percent) and inserting An agreed percentage , in subsection (e)— by striking paragraph
(1)and inserting the following: A qualified withdrawal from the fund is one made in accordance with the terms of the agreement but only if it is for— the acquisition, construction, repowering, or reconstruction of— a qualified vessel or a barge or container that is part of the complement of a qualified vessel, or cargo handling equipment, or the payment of the principal on indebtedness incurred in the acquisition, construction, repowering, or reconstruction of— a qualified vessel or a barge or container that is part of the complement of a qualified vessel, or cargo handling equipment. Except to the extent provided in regulations prescribed by the Secretary, subparagraph (A), and so much of subparagraph
(B)as relates only to barges and containers, shall apply only with respect to barges and containers constructed in the United States. , by redesignating paragraph
(2)as paragraph (4), and by inserting after paragraph
(1)the following: No withdrawals may be made from a capital construction fund to purchase fully automated cargo handling equipment that is remotely operated or remotely monitored with or without the exercise of human intervention or control, if the Secretary determines such equipment would result in a net loss of jobs within a marine terminal. No withdrawals may be made from a capital construction fund to purchase cranes manufactured in the People's Republic of China. , in subsection (f)— in paragraph (2), by inserting cargo handling equipment, after barge, both places the term appears, in paragraph (3), by inserting cargo handling equipment, after barge, both places the term appears, and in paragraph (4), by inserting cargo handling equipment, after barges, , in subsection (g)— in the flush matter at the end of paragraph (2), by inserting cargo handling equipment, after advanced , and in paragraph (5)(A)— in the heading, by striking and inserting 25 years , 15 years by striking 26th, 27th, 28th, 29th, or 30th taxable year and inserting following specified taxable year , and by striking the table contained therein and inserting the following: If the amount remains in the fund at the close of the- The applicable percentage is- 16th taxable year 20 percent 17th taxable year 40 percent 18th taxable year 60 percent 19th taxable year 80 percent 20th taxable year 100 percent , and in subsection (i), by striking as in effect on the date of the enactment of this section . The amendments made by this section shall apply to taxable years beginning after December 31, 2025.