This subpart contains citizen ownership requirements and procedures to allow documentation of vessels that do not meet the requirements of part 67 of this chapter. The requirements are for corporations engaged in a manufacturing or mineral industry in the United States.

Act means the Act of September 2, 1958 (46 U.S.C. App. 883-1).

883-1 citizen or 883-1 corporation means a corporation which qualifies for the special citizenship status created by the Act of September 2, 1958 (46 U.S.C. App. 883-1).

Parent corporation means one incorporated under the laws of the United States, or any state, territory, or district of the United States, which controls (directly or indirectly) at least 50 percent of the voting stock of another corporation.

Subsidiary corporation means one incorporated under the laws of the United States, or any state, territory, or district of the United States, which has not less than 50 percent of its voting stock controlled (directly or indirectly) by another corporation.

A corporation seeking to establish its citizenship under the Act of September 2, 1958 (46 U.S.C. App. 883-1) must meet the following criteria as specified in the Act:

(a) It must be incorporated under the laws of the United States, or any state, territory, district, or possession of the United States;

(b) A majority of the officers and directors of the corporation must be citizens of the United States;

(c) Not less than 90 percent of the employees of the corporation must be residents of the United States;

(d) Such corporation must be engaged primarily in a manufacturing or mineral industry in the United States or any territory, district, or possession of the United States;

(e) The aggregate book value of the vessels owned by the corporation must not exceed 10 percent of the aggregate book value of the assets of the corporation; and

(f) The corporation must purchase or produce in the United States, its territories or possessions, not less than 75 percent of the raw materials used or sold in its operations.

(a) To be formally qualified as an 883-1 corporation for all purposes under the Act, a corporation which meets the requirements of § 68.5 must file with the Director, National Vessel Documentation Center a certificate under oath as described in appendix A.

(b) Upon the filing of the certificate required under paragraph (a) of this section, the Director, National Vessel Documentation Center will furnish the corporation a Certificate of Compliance which is valid for a period of 3 years from the date of its issuance, unless there is a change in corporate status requiring a report under § 68.11(a). On or before the date of expiration of the Certificate of Compliance, a new certificate under oath as described in appendix A of this subpart must be filed with the Director, National Vessel Documentation Center.

(a) To be formally qualified as a parent corporation, as defined in § 68.3, a corporation must file with the Director, National Vessel Documentation Center a certificate under oath as described in appendix B of this subpart.

(b) To be formally qualified as subsidiary corporation as defined in § 68.3, a corporation must file with the Director, National Vessel Documentation Center a certificate under oath as described in appendix B of this subpart.

(c) Upon the filing of the certificate required under paragraph (a) or (b) of this section, the Director, National Vessel Documentation Center will furnish the corporation a certificate of parent or subsidiary status which is valid for a period of 3 years from the date of its issuance unless there is a change in corporate status requiring a report under § 68.11(a). On or before the date of expiration of the certificate of parent or subsidiary status, a new certificate under oath as described in appendix B of this subpart must be filed with the Director, National Vessel Documentation Center.

(a) If after filing the certificate required by § 68.7, a change occurs whereby an 883-1 corporation no longer meets the criteria in § 68.5(a), that corporation's qualification for the privileges enumerated in §§ 68.13 and 68.15 is terminated effective as of the date and time of the change. The corporation must report the change in writing to the Director, National Vessel Documentation Center.

(b) If, after filing the certificate required by § 68.9, a change occurs whereby the corporation is no longer entitled to be deemed a parent or subsidiary corporation, that corporation's qualification for the privileges in §§ 68.13 and 68.15 is terminated effective as of the date and time of the change. The corporation must report such change in writing to the Director, National Vessel Documentation Center.

The special citizenship status created by the Act entitles the 883-1 corporation to document certain vessels for certain limited purposes:

(a) An 883-1 corporation may document under the Act only vessels which are qualified for employment in the coastwise trade and which are either non-self propelled or, if self-propelled, are of less than 500 gross tons.

(b) A vessel owned by an 883-1 corporation and meeting the criteria in paragraph (a) of this section may be documented only for use in the coastwise trade subject to the restrictions in § 68.17.

(c) Section 68.19 contains details concerning the documentation of vessels by an 883-1 corporation.

(a) The special citizenship status created by the Act entitles the 883-1 corporation to operate, subject to the restrictions in § 68.17, vessels which are qualified to engage in the coastwise trade and are exempt from documentation. (See § 67.9 for classes of exempt vessels.)

(b) Vessels, documented or exempt from documentation, employed subject to the Act may carry passengers and merchandise of the 883-1 corporation owning such vessels only between points in the United States, including territories, districts, and possessions thereof embraced in the coastwise laws.

(c) The special citizenship status created by the Act entitles an 883-1 corporation owning vessels as described in paragraphs (a) and (b) of this section to transport merchandise or passengers for hire in the coastwise trade as a service for a duly qualified parent or subsidiary corporation as defined in § 68.3.

(d) The special citizenship status created by the Act entitles an 883-1 corporation owning vessels as described in paragraphs (a) and (b) of this section to demise or bareboat charter such vessels to common or contract carriers subject to the restrictions in § 68.17(c).

(a) Vessels employed subject to the Act are entitled to operation only in the coastwise trade and only to the extent described in paragraphs (b) and/or (c) of this section.

(b) A vessel owned by an 883-1 corporation may engage in coastwise transportation for hire as a service to a parent or subsidiary corporation as defined in § 68.3. Such transportation for hire must be between points of the United States, including territories, districts, and possessions thereof embraced in the coastwise laws.

(c) A vessel owned by an 883-1 corporation may be operated under demise or bareboat charter to a common or a contract carrier subject to 49 U.S.C. chapter 101 if the corporation is a U.S. citizen as defined in 46 U.S.C. App. 802.

(1) Such common or contract carrier may not be connected either directly or indirectly by ownership or control with the 883-1 corporation.

(2) The demise or bareboat charter must be at prevailing rates.

(3) The vessels under a demise or bareboat charter may not be used in non-contiguous trade.

(a) An application by an 883-1 corporation to document a vessel must comply with the applicable requirements in subparts A, D, E, F, G, H, I, K, and L of part 67 of this chapter.

(b) An application by an 883-1 corporation to document a vessel must include a copy of the Certificate of Compliance issued under § 68.7.

I, the affiant named above, swear that I am legally authorized to make this oath on behalf of the corporation, that a majority of the officers and directors of the above-named corporation are citizens of the United States, as shown by the attached listing incorporated in and made a part of this oath which truly and correctly names all such officers and directors, giving the home address and citizenship of each; that not less than 90 percent of the employees of the corporation are residents of the United States; that the corporation is engaged primarily in a manufacturing or mineral industry in the United States or in a territory, district or possession thereof; that the aggregate book value of the vessels owned by the corporation does not exceed 10 percent of the aggregate book value of the assets of the corporation; and that the corporation purchases or produces in the United States, its territories or possessions not less than 75 percent of the raw materials used or sold in its operation. 2

The above named corporation fails to qualify as a citizen within the meaning of § 67.39(c) of this chapter by reason of: 3

Subscribed and sworn to before me on the day and year shown

Status (Parent) 1 ________ (Subsidiary) 2 ________

I, the affiant named above, swear that the corporation first named herein is the (parent) 1 (subsidiary) 2 of the associated corporation named, that I am the duly authorized officer or agent of the corporation first named, and that the associated corporation has previously established that it is a citizen within the meaning of the Act of September 2, 1958 (46 U.S.C. app. 883-1).

Subscribed and sworn to before me on the day and year shown