(3) The casualty resulted from some other cause unassociated with other vessels.

(d) Proof after rebuttal of presumption. Once the presumption of causation has been rebutted, the burden rests with the applicant to provide sufficient evidence that the damage, loss, or destruction of the fishing gear was in fact caused by other vessels.

§ 258.35 Amount of compensation for actual damage, loss, or destruction.

(a) General. The amount of compensation under this section is the amount determined in accordance with paragraph (b) of this section minus the sum of any deduction for the negligence of the applicant determined under paragraph (e) of this section and minus any deduction for insurance proceeds under paragraph (f) of this section.

(b) Amount of compensation. If the property concerned is determined by the Chief, FSD, to be repairable at a cost less than its depreciated replacement cost, the compensable amount is the repair cost. The compensable amount for property which is totally (actually or constructively) lost or destroyed is its depreciated replacement cost.

(c) Depreciated replacement cost. For purposes of this section the depreciated replacement cost is the present replacement cost of the property (at the time the claim is submitted) involved in the casualty, depreciated (on a straightline basis over the property's economically useful life) so as to exclude from the replacement cost the value of the property's economically useful life which is already expired. The present replacement cost is the lower of the two submitted estimates required to be submitted under § 258.33(g).

(d) Economically useful life remaining. (1) If the age, condition, and value of individual units of fishing gear involved in the casualty cannot be established to the satisfaction of the Chief, FSD, the Chief, FSD, shall use the average remaining economically useful life for all units identified in the inventory required by § 258.33 in calculating the depreciated replacement cost.

(2) If the average remaining economically useful life of fishing gear involved in the casualty is less than the average remaining economically useful life of all the property in the inventory required by § 258.33, the average remaining economically useful life of the fishing gear in the casualty will be used as the basis for calculating the depreciated replacement cost.

Example No. 1: (i) Applicant claims to have lost 100 crab pots with various remaining economically useful lives averaging 2.5 years. The applicant's fishing gear inventory shows that the applicant owns 500 crab pots (including the 100 involved in the casualty) with various remaining economically useful lives averaging 3.5 years.

(ii) The replacement cost of the 100 pots involved in the casualty will be depreciated as if they each had a remaining economically useful life of 2.5 years.

(iii) If the present replacement cost of the pots is $500 each and they have an economically useful life when new of 5 years, the depreciated replacement cost of each pot will be $250 (or 50 percent of the replacement cost), since 2.5 years (or 50 percent of their new economically useful life) was regarded as remaining at the time of the casualty.

(iv) Thus, the compensation would be 100 pots at a depreciated replacement cost of $250 each, for a total of $25,000.

(3) If the average remaining economically useful life of the fishing gear involved in the casualty is more than the average remaining economically useful life of all the fishing gear in the inventory required by § 258.33, the average remaining economically useful life of all the fishing gear in the inventory will be used as the basis for calculating the depreciated replacement cost.

Example No. 2: If the 100 crab pots described in Example No. 1 above, had an average remaining economically useful life of 4 years (instead of 2.5 years), then the 3.5year average remaining economically useful life of all the fishing gear in the inventory would be used as the basis for depreciating the cost of the replacement pots. Since 3.5 years is 70 percent of the new economically useful life (5 years) of the pots, the compensation would be $35,000 (70 percent of $500 equals $350 times 100 pots equals $35,000).

(e) Comparative negligence. In calculating the amount of compensation under this section, the compensable amount determined under paragraph

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(b) of this section will be reduced proportionally to the extent that any negligence of the applicant (or the applicant's agents) contributed to the cause or extent of the casualty.

Example: If the applicant's total damages (property and resulting economic loss) were $25,000 and 10 percent of the damages were the result of the applicant's negligence, the applicant would receive $22,500 in compensation. If the negligence of the applicant had caused 90 percent of the loss, $2,500 in compensation would be paid.

(f) Insurance proceeds. For purposes of calculating the amount of compensation under this section, the amount of compensation determined under paragraph (b) of this section will be reduced by the amount the applicant has, or reasonbly would have, received under a commercial policy of full hull and machinery and protection and indemnity insurance, whether or not such insurance was in effect at the time the casualty occurred. Recovery will be allowed for a reasonable deductible as set forth in § 258.32(f).

§ 258.36 Compensation for resulting economic loss.

(a) General. Applicants shall be eligible to receive compensation for up to 25 percent of the gross income lost as a direct result of the casualty with respect to which the claim is filed. The amount of compensation will be reduced proportionally to the extent that any negligence of the applicant (or applicant's agents) contributed to the cause or extent of the casualty. (See example of proportionate reduction under § 258.35(e)). No compensation will be paid for economic loss resulting from a gear or vessel casualty for which a vessel owner or operator is not otherwise entitled to compensation for property loss under this subpart. Compensation will be made for up to 25 percent of:

(1) Gross income lost on the vessel trip during which the casualty was discovered; and

(2) Gross income lost on the next vessel trip which was made or, if fishing is discontinued because of the casualty, would have been made after the vessel trip of the casualty, if the gear involved in the casualty was not replaced or repaired between the vessel

trip of the discovery of the casualty and the next vessel trip; and

(3) Gross income lost within the compensable period specified in paragraph (b) of this section on vessel trips made at a reduced level of effort because of the casualty or, if fishing is discontinued because of the casualty, on vessel trips which would normally have been made at full operational capacity.

(b) Compensable period. Except as specified in paragraph (a)(2) of this section, applicants will be eligible for compensation for income lost after the vessel trip on which the casualty was discovered only during the period between the dates of order and receipt of replacement gear or the dates repair begins and ends (whichever is appropriate), or such other period as the Chief, FSD, determines to be reasonable.

(c) Calculation of economic loss for the vessel trip of discovery of casualty. Compensation for economic loss on the vessel trip during which the casualty was discovered shall be determined as follows:

(1) For casualties involving fixed gear by:

(i) Totaling the dollar value of the catch for the three vessel trips immediately before the trip of the casualty, or the three trips nearest in time to that of the casualty, if the former is unavailable;

(ii) Dividing this total value by the total number of gear units hauled during these three trips;

(iii) Multiplying this average dollar value per gear unit times the number of units lost or damaged; and

(iv) Computing 25 percent of the result.

(2) For casualties involving mobile gear by:

(i) Totaling the dollar value of the catch for the three vessels trips immediately before the trip of the casualty, or the three trips nearest in time to that of the casualty if the former is unavailable;

(ii) Dividing this total value by the total number of units (hours, days) of fishing time during these three trips;

(iii) Multiplying this average dollar value per unit of fishing time times

the number of units of fishing time lost as a result of the casualty; and (iv) Computing 25 percent of the result.

(d) Calculation of economic loss on the next vessel trip after the discovery of the casualty. (1) If fishing is continued at a reduced level of effort because of the casualty, compensation for resulting economic loss on the next vessel trip made after the discovery of the casualty shall be computed by dividing the value of the catch by the number of operable gear units (units in the total inventory minus those involved in the casualty); multiplying this average value per gear unit times the number of units involved in the casualty; and computing 25 percent of the result.

(2) If fishing is discontinued because of the casualty, the compensation for economic loss on the next vessel trip which would normally have been made shall be the same as the amount computed under paragraph (c)(1) of this section.

(e) Calculation of economic loss during the compensable period. Resulting economic loss suffered during the compensable period may result from an inability to fish or from fishing at a reduced level of effort because of the casualty. In either case, the calculation of the amount of the loss shall be based upon:

(1) The number of gear units lost, or damaged, or destroyed in the casualty or, in the case of mobile gear, the amount of fishing time lost;

(2) The length of the compensable period;

(3) The number of gear units hauled on each vessel trip made during the compensable period or during the corresponding period of the previous year;

(4) Information, such as amount and value of catch, available from trip tickets, or other suitable documentation, for the vessel trips made during the compensable period or the corresponding period of the previous year; and

(5) The number of operable gear units in the claimant's complete inventory under § 258.33(f)(1).

§ 258.37 Initial determination.

After receipt of an application which is properly completed as to claims for actual loss, damage, or destruction, the Chief, FSD, will make an initial determination of the amount of any compensation to be paid the applicant for such loss, damage, or destruction. After receipt of all required information and documentation of resulting economic loss, the Chief, FSD, will make an initial determination of the amount of any compensation to be paid to the applicant for resulting economic loss.

(a) Contents. An initial determination shall state:

(1) If the application is disapproved, the reasons therefore; or

(2) If the application is approved, the amount of compensation and the basis upon which the amount was determined.

(b) Notice. The initial determination, along with the subrogation agreement (where applicable) provided for in § 258.38, shall be mailed to the applicant.

§ 258.38 Final determination.

(a) Final determination. Unless appealed under paragraph (b) of this section the initial determination of the Chief, FSD, shall become final 30 days after its issuance under § 258.37.

(b) Appeal. Any applicant may, within 30 days after the date of issuance of an initial determination under § 258.37, file with the Assistant Administrator at 3300 Whitehaven Street, Washington, DC 20235 a written request for review of the initial determination.

(c) Additional evidence. The applicant may submit to the Assistant Administrator written data relating to the initial determination no later than 30 calendar days after the filing of a petition under paragraph (b) of this section.

(d) Appellate determination. The Assistant Administrator shall issue a final determination on an appealed application within 60 days of the submission of any written data by the applicant under paragraph (c) of this section. A copy of the final determination shall be mailed to the applicant.

§ 258.39 Subrogation.

(a) After approval of an applicant's claim, but before compensation is disbursed, the applicant shall execute a subrogation agreement in a form satisfactory to the Chief, FSD, which:

(1) Assigns to the United States all rights which the applicant may have to proceed against any party who may be liable for damages with respect to any part of a casualty for which compensation is being made hereunder, and;

(2) Requires, as a condition of continuing to retain any compensation, that the applicant assist the Chief, FSD, in any reasonable way to pursue collection of the subrogated rights.

§ 259.1 Execution of agreements and deposits made in a Capital Construction Fund.

In the case of a taxable year of a taxpayer beginning after December 31, 1969, and before January 1, 1972, the rules governing the execution of agreements and deposits under such agreements shall be as follows:

(a) A capital construction fund agreement executed and entered into by the taxpayer on or prior to the due date, with extensions, for the filing of his Federal income tax return for such taxable year or years will be deemed to be effective on the date of the execution of such agreement or as of the close of business of the last regular business day of each such taxable year or years to which such deposit relates, whichever day is earlier.

(b) Notwithstanding the provisions of paragraph (a) of this section, where: (1) For taxable years beginning

after December 31, 1969, and prior to January 1, 1971, an application for a capital construction fund agreement is filed by a taxpayer prior to January 1, 1972, and a capital construction fund agreement is executed and entered into by the taxpayer prior to March 1, 1972, and (2) for taxable years beginning after December 31, 1970, and prior to January 1, 1972, an application for a capital construction fund agreement is filed by a taxpayer prior to January 1, 1973, and a capital construction fund agreement is executed and entered into by the taxpayer prior to March 1, 1973 (or, if earlier, 60 days after the publication of final joint regulations under section 607 of the Merchant Marine Act, 1936, as amended); then such a capital construction fund agreement will be deemed to be effective as of the close of business of the last regular business day of each such taxable year or years to which such deposit related.

(c) (1) Deposits made in a capital construction fund pursuant to such an agreement within 60 days after the date of execution of the agreement, or on or prior to the due date, with extensions, for the filing of his Federal income tax return for such taxable year or years, whichever date shall be later, shall be deemed to have been made on the date of the actual deposit or as of the close of business of the last regular business day of each such taxable year or years to which such deposit relates, whichever day is earli

er.

(2) Notwithstanding

paragraph

(c)(1) of this section, for taxable years beginning after December 31, 1970, and ending prior to January 1, 1972, deposits made later than the last date permitted under paragraph (c)(1) of this section but on or before January 9, 1973, in a capital construction fund pursuant to an agreement with the Secretary of Commerce, acting by and through the Administrator of the National Oceanic and Atmospheric Administration, shall be deemed to have been made on the date of the actual deposit or as of the close of business of the last regular business day of such taxable year, whichever is earlier.

(d) Nothing in this section shall alter the rules and regulations govern

ing the timing of deposits with respect to existing capital and special reserve funds or with respect to the treatment of deposits for any taxable year or years other than a taxable year or years beginning after December 31, 1969, and before January 1, 1972.1

[37 FR 25025, Nov. 25, 1972, as amended at 38 FR 8163, Mar. 29, 1973]

CAPITAL CONSTRUCTION FUND
AGREEMENT

SOURCE: Sections 259.30 to 259.38 appear at 39 FR 33675, Sept. 19, 1974, unless otherwise noted.

§ 259.30 Application for Interim Capital Construction Fund Agreement (“Interim CCF Agreement”).

(a) General qualifications. To be eligible to enter into an Interim CCF Agreement an applicant must:

(1) Be a citizen of the United States (citizenship requirements are those for documenting vessels in the coastwise trade within the meaning of section 2 of the Shipping Act, 1916, as amended);

(2) Own or lease one or more eligible vessels (as defined in sec. 607(k)(1) of the Act) operating in the foreign or domestic commerce of the United States.

(3) Have an acceptable program for the acquisition, construction, or reconstruction of one or more qualified vessels (as defined in section 607(k)(2) of the Act). Qualified vessels must be for commercial operation in the fisheries of the United States. If the qualified vessel is 5 net tons or over, it must be documented in the fisheries of the United States. Dual documentation in both the fisheries and the coastwise trade of the United States is permissible. Any vessel which will carry fishing parties for hire must be inspected and certified (under 46 CFR Part 176) by the U.S. Coast Guard as qualified to

'The phrase "existing capital and special reserve funds" does not refer to the Capital Construction Fund program but rather to funds established with the Maritime Administration prior to the amendment of the Merchant Marine Act, 1936, which authorized the Capital Construction Fund program.