---
kind: "section"
citation: "46 U.S.C. § 53310"
title: "46"
title_heading: "Shipping"
number: "53310"
heading: "Obligation of deposits and period for construction of certain vessels"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/46/53310"
units:
  - "Subtitle V — Merchant Marine"
  - "Part C — Financial Assistance Programs"
  - "Chapter 533 — Construction Reserve Funds"
---

# §53310. Obligation of deposits and period for construction of certain vessels

- (a) **Application of Sections 53306 and 53309.—** Sections [53306](/usc/46/53306.md) and [53309](/usc/46/53309.md) of this title apply to a deposit in a [construction](/usc/46/53701.md?p=3) reserve fund only if, within 3 years after the date of the deposit (and any extension under [subsection (c)](#c))—
  - (1)
    - (A) a contract is made for the [construction](/usc/46/53701.md?p=3) or acquisition of a [new vessel](/usc/46/53301.md?p=a-2) or, with the approval of the [Secretary](/usc/46/53101.md?p=8) of Transportation, for a part interest in a [new vessel](/usc/46/53301.md?p=a-2) or for the [reconstruction](/usc/46/53701.md?p=3) or [reconditioning](/usc/46/53701.md?p=3) of a [new vessel](/usc/46/53301.md?p=a-2);
    - (B) the deposit is expended or obligated for expenditure under that contract;
    - (C) at least 12.5 percent of the [construction](/usc/46/53701.md?p=3) or contract price of the [vessel](/usc/46/53501.md?p=9) is paid or irrevocably committed for payment; and
    - (D) the plans and specifications for the [vessel](/usc/46/53501.md?p=9) are approved by the [Secretary](/usc/46/53101.md?p=8) to the extent the [Secretary](/usc/46/53101.md?p=8) 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](/usc/46/53101.md?p=6) not a parent company of, or a company affiliated or associated with, the mortgagor on a [new vessel](/usc/46/53301.md?p=a-2).
- (b) **Additional Requirements for Certain Vessels.—** In addition to the requirements of [subsection (a)(1)](#a-1), for a [vessel](/usc/46/53501.md?p=9) not constructed under a [construction](/usc/46/53701.md?p=3)-differential subsidy contract or not bought from the [Secretary](/usc/46/53101.md?p=8) of Transportation—
  - (1) at least 5 percent of the [construction](/usc/46/53701.md?p=3) (or, if the contract covers more than one [vessel](/usc/46/53501.md?p=9), at least 5 percent of the [construction](/usc/46/53701.md?p=3) of the first [vessel](/usc/46/53501.md?p=9)) must be completed within 6 months after the date of the [construction contract](/usc/46/53301.md?p=a-1) (or within the period of an extension under [subsection (c)](#c)), as estimated by the [Secretary](/usc/46/53101.md?p=8) and certified by the [Secretary](/usc/46/53101.md?p=8) to the [Secretary](/usc/46/53101.md?p=8) of the Treasury; and
  - (2) [construction](/usc/46/53701.md?p=3) under the contract must be completed with reasonable dispatch thereafter.
- (c) **Extensions.—** The [Secretary](/usc/46/53101.md?p=8) of Transportation may grant extensions of the period within which the deposits must be expended or obligated or within which the [construction](/usc/46/53701.md?p=3) 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](/usc/46/53701.md?p=9) of deposits or one year for the progress of [construction](/usc/46/53701.md?p=3).

## Source credit

(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1589.)

## Notes

| Historical and Revision Notes |  |  |
| --- | --- | --- |
| Revised<br>Section | Source (U.S. Code) | Source (Statutes at Large) |
| 53310(a) | 46 App.:1161(g) (less (1)(B)). | June 29, 1936, ch. 858, title V, § 511(g), (h), as added Oct. 10, 1940, ch. 849, 54 Stat. 1107; June 17, 1943, ch. 130, subdivs. (c), (d), 57 Stat. 158; July 17, 1952, ch. 939, §§ 12, 13(a), 66 Stat. 763; Pub. L. 86–237, § 1, Sept. 8, 1959, 73 Stat. 471; Pub. L. 87–303, § 3, Sept. 26, 1961, 75 Stat. 661; Pub. L. 87–782, § 1, Oct. 10, 1962, 76 Stat. 796; Pub. L. 88–227, § 1, Dec. 23, 1963, 77 Stat. 470; Pub. L. 88–595, § 1, Sept. 12, 1964, 78 Stat. 943; Pub. L. 97–31, § 12(92), Aug. 6, 1981, 95 Stat. 161. |
| 53310(b) | 46 App.:1161(g)(1)(B). |  |
| 53310(c) | 46 App.:1161(h). |  |

In this section, the language about joint regulations in 46 App. U.S.C. 1161(g) and (h) is omitted as unnecessary because of section 53302(b) of the revised title.

In subsection (a), the words “(i) two years from the date of deposit or the date of any extension thereof which may be granted by the Secretary of Transportation pursuant to the provisions of subsection (h) of this section, in the case of deposits made prior to the date on which these amendatory provisions become effective, or” in 46 App. U.S.C. 1161(g)(1) and (2) are omitted as obsolete. In paragraph (1)(A), the words “or, with the approval of the Secretary of Transportation, for a part interest in a new vessel or for the reconstruction or reconditioning of a new vessel” are substituted for “(or in the discretion of the Secretary of Transportation, for a part interest therein), or, with the approval of the Secretary of Transportation, for the reconstruction or reconditioning of a new vessel or vessels” to eliminate unnecessary words.

In subsection (c), the proviso in 46 App. U.S.C. 1161(h) is omitted as obsolete.