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2011 US Code
Title 46 - Shipping
Subtitle V - Merchant Marine (§§ 50101 - 58109)
Part C - Financial Assistance Programs (§§ 53101 - 54101)
Chapter 535 - CAPITAL CONSTRUCTION FUNDS (§§ 53501 - 53517)
Section 53506 - Investment and fiduciary requirements

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Metadata
Publication TitleUnited States Code, 2006 Edition, Supplement 5, Title 46 - SHIPPING
CategoryBills and Statutes
CollectionUnited States Code
SuDoc Class NumberY 1.2/5:
Contained WithinTitle 46 - SHIPPING
Subtitle V - Merchant Marine
Part C - Financial Assistance Programs
CHAPTER 535 - CAPITAL CONSTRUCTION FUNDS
Sec. 53506 - Investment and fiduciary requirements
Containssection 53506
Date2011
Laws in Effect as of DateJanuary 3, 2012
Positive LawYes
Dispositionstandard
Source CreditPub. L. 109-304, §8(c), Oct. 6, 2006, 120 Stat. 1594.
Statutes at Large References49 Stat. 2005
52 Stat. 960
53 Stat. 1185
66 Stat. 764
72 Stat. 216
74 Stat. 216
75 Stat. 91, 570
84 Stat. 1027
95 Stat. 162
120 Stat. 1594
Public Law ReferencesPublic Law 85-637, Public Law 86-518, Public Law 87-45, Public Law 87-271, Public Law 91-469, Public Law 97-31, Public Law 109-304

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46 USC § 53506 (2011)
§53506. Investment and fiduciary requirements

(a) In General.—Amounts in a capital construction fund shall be kept in the depository specified in the agreement and shall be subject to trustee and other fiduciary requirements prescribed by the Secretary. Except as provided in subsection (b), amounts in the fund may be invested only in interest-bearing securities approved by the Secretary.

(b) Stock Investments.—

(1) In general.—With the approval of the Secretary, an agreed percentage (but not more than 60 percent) of the assets of the fund may be invested in the stock of domestic corporations that—

(A) is fully listed and registered on an exchange registered with the Securities and Exchange Commission as a national securities exchange; and

(B) would be acquired by a prudent investor seeking a reasonable income and the preservation of capital.


(2) Preferred stock.—The preferred stock of a corporation is deemed to satisfy the requirements of this subsection, even though it may not be registered and listed because it is nonvoting stock, if the common stock of the corporation satisfies the requirements and the preferred stock otherwise would satisfy the requirements.


(c) Maintaining Agreed Percentage.—If at any time the fair market value of the stock in the fund is more than the agreed percentage of the assets in the fund, any subsequent investment of amounts deposited in the fund, and any subsequent withdrawal from the fund, shall be made in a way that tends to restore the fair market value of the stock to not more than the agreed percentage.

(Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1594.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
53506 46 App.:1177(c). June 29, 1936, ch. 858, title VI, §607(c), 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. 1027; Pub. L. 97–31, §12(97)(A), Aug. 6, 1981, 95 Stat. 162.

In subsection (b)(1)(B), the words “prudent investor” are substituted for “prudent men of discretion and intelligence in such matters” to eliminate unnecessary words.

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