§53701. Definitions — Inbound Citations
46 U.S.C. § 53701
Cited by 617 provisions in release 119-102.
Citations to 46 U.S.C. § 53701 as a whole
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(B) for a purpose described in the definition of “fishery facility” in section 53701 of this title with respect to an underused fishery.
Citations to §53701(1)
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(2) if the obligor creates an escrow fund under section 53715 of this title, the actual cost of the vessel.
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(1) Except as otherwise provided, the principal amount of an obligation guaranteed under this chapter may not exceed 75 percent of the actual cost or depreciated actual cost, as determined by the Secretary or Administrator, of the vessel used as security for the guarantee.
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(2) The principal amount may not exceed 87.5 percent of the actual cost or depreciated actual cost if—(A) the size and speed of the vessel are approved by the Secretary or Administrator;(B) the vessel is or would have been eligible for mortgage aid for construction under section 509 of the Merchant Marine Act, 1936, or would have been eligible except that the vessel was built with a construction-differential subsidy and the subsidy has been repaid; and
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(3) For a fishing vessel or fishery facility, the principal amount may not exceed 80 percent of the actual cost or depreciated actual cost. However, debt for the vessel or facility may not be placed through the Federal Financing Bank.
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(4) For an ocean thermal energy conversion facility or plantship constructed without a construction-differential subsidy, the principal amount may not exceed 87.5 percent of the actual cost or depreciated actual cost of the facility or plantship.
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(d) A fee paid under this section is eligible to be financed under this chapter and shall be included in the actual cost of the obligation guaranteed.
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(1) No disbursement shall be made under subsection (c) to any person until the total amount paid by or for the account of the obligor from sources other than the proceeds of the obligation equals at least 25 percent or 12.5 percent, whichever is applicable under section 53709(b) of this title, of the aggregate actual cost of the vessel, as previously approved by the Secretary or Administrator. If the aggregate actual cost of the vessel has increased since the Secretary’s or Administrator’s initial approval or if it increases after the first disbursement is permitted under this subsection, then no further disbursements shall be made under subsection (c) until the total amount paid by or for the account of the obligor from sources other than the proceeds of the obligation equals at least 25 percent or 12.5 percent, as applicable, of the increase, as determined by the Secretary or Administrator, in the aggregate actual cost of the vessel. This paragraph does not require the Secretary or Administrator to consent to finance any increase in actual cost unless the Secretary or Administrator determines that such an increase in the obligation meets all the terms and conditions of this chapter or other applicable law.
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(ii) 75 percent or 87.5 percent, whichever is applicable under section 53709(b) of this title, of the actual cost of the vessel to the extent paid; and
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(1) the actual cost or depreciated actual cost of the facility or plantship; or
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(2) if the facility or plantship is supported with appropriated Federal funds, the total principal amount of that portion of the actual cost or depreciated actual cost for which the obligor is obligated to secure financing under the agreement between the obligor and the Department of Energy or other Federal agency.
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(d) The principal amount of an obligation guaranteed under this chapter may not exceed 87.5 percent of the actual cost of the advanced shipbuilding technology or modern shipbuilding technology.
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(2) The amount of an obligation guaranteed under this section may not exceed 87.5 percent of the actual cost or depreciated actual cost to the applicant for the construction or reconstruction of the vessel. The Secretary or Administrator may not establish a percentage under this paragraph that is to be applied uniformly to all guarantees or commitments to guarantee made under this section.
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(c) Merchandise transported in violation of subsection (b) is liable to seizure by and forfeiture to the Government. Alternatively, an amount equal to the value of the merchandise (as determined by the Secretary of Homeland Security) or the actual cost of the transportation, whichever is greater, may be recovered from any person transporting the merchandise or causing the merchandise to be transported.
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(b) The price paid for the vessel shall be based on a fair and reasonable valuation. However, the price may not exceed by more than 5 percent the cost of the vessel to the owner (excluding any construction-differential subsidy and the cost of national defense features paid by the Secretary of Transportation) plus the actual cost previously expended for reconditioning, less depreciation based on a 25-year life for a dry-cargo or passenger vessel and a 20-year life for a tanker or other liquid bulk carrier vessel.
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(3) Payments made in advance shall be for any part of the estimated cost as determined by the Secretary of Transportation. Adjustments to the amounts paid in advance shall be made as agreed to by the Secretary of Transportation and the head of the ordering agency or unit based on the actual cost of goods or services provided.
Citations to §53701(2)
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(1) The Secretary of Transportation, acting through the Maritime Administrator, shall engage in or support the study, research, development, assessment, and deployment of emerging marine technologies and practices related to the maritime transportation system through eligible entities.
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(5) Subject to the availability of appropriations, the Maritime Administrator, may establish and carry out a competitive grant program to award grants to eligible entities for projects in the United States consistent with the goals of this subsection to study, evaluate, test, demonstrate, or apply technologies and practices to improve environmental performance.
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(c) Activities carried out under a grant or cooperative agreement made under this section may be conducted on public vessels under the control of the Maritime Administration, upon approval of the Maritime Administrator.
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(a) The Maritime Administrator may make grants to, and enter into contracts and agreement with, eligible State and Tribal entities and eligible entities for—(1) the costs of capital projects to protect, repair, reconstruct, or replace equipment and facilities of the United States maritime transportation system that the Maritime Administrator determines is in danger of suffering serious physical damage, or has suffered serious physical damage, as a result of an emergency; and(2) eligible operating costs of United States maritime transportation equipment and facilities in an area directly affected by an emergency during—(A) the one-year period beginning on the date of a declaration of an emergency referred to in subparagraph (A) or (B) of subsection (j)(4); and(B) an additional one-year period beginning one year after the date of an emergency referred to in subparagraph (A) or (B) of subsection (j)(4), if the Maritime Administrator, in consultation with the Administrator of the Federal Emergency Management Agency, determines there is a compelling need arising out of the emergency for which the declaration is made.
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(1) the costs of capital projects to protect, repair, reconstruct, or replace equipment and facilities of the United States maritime transportation system that the Maritime Administrator determines is in danger of suffering serious physical damage, or has suffered serious physical damage, as a result of an emergency; and
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(B) an additional one-year period beginning one year after the date of an emergency referred to in subparagraph (A) or (B) of subsection (j)(4), if the Maritime Administrator, in consultation with the Administrator of the Federal Emergency Management Agency, determines there is a compelling need arising out of the emergency for which the declaration is made.
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(1) The Maritime Administrator shall determine an appropriate method for the equitable allocation and distribution of funds under this section to eligible State and Tribal entities and eligible entities.
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(2) To the extent practicable, in allocating and distributing funds under this section, the Maritime Administrator shall give priority to applications submitted by eligible State or Tribal entities.
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(c) An applicant for assistance under this section shall submit an application for such assistance to the Maritime Administrator at such time, in such manner, and containing such information and assurances as the Maritime Administrator may require.
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(1) subject to the terms and conditions the Maritime Administrator determines are necessary;
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(h) The Maritime Administrator shall institute adequate policies, procedures, and internal controls to prevent waste, fraud, abuse, and program mismanagement for the distribution of funds under this section.
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(i) On an annual basis, the Maritime Administrator shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives a report on the financial assistance provided under this section during the year covered by the report. Each such report shall include, for such year, a description of such assistance provided and of how such assistance—(1) affected the United States maritime transportation system;(2) mitigated the financial impact of the emergency on the recipient of the assistance; and(3) protected critical infrastructure in the United States.
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(A) the Governor of a State has declared an emergency and the Maritime Administrator, in consultation with the Administrator of the Federal Emergency Management Agency, has concurred in the declaration;
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(L) the Administrator of the Environmental Protection Agency;
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In accordance with section 139 of title 23, the Maritime Administrator may approve any action qualifying as a categorical exclusion applicable to the Federal Highway Administration, the Federal Transit Administration, or the Federal Railroad Administration when the applicable requirements of that categorical exclusion have been met that are in compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), and any other applicable law. Nothing in this section shall be interpreted to limit any existing authority of the Maritime Administration to approve, promulgate, or publish categorical exclusions consistent with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) or any other applicable law.
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The Secretary of the Navy, in cooperation with the Maritime Administrator and the head of each State maritime academy, shall ensure that—
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(1) The immediate command of the United States Merchant Marine Academy shall be in the Superintendent of the Academy, subject to the direction of the Maritime Administrator under the general supervision of the Secretary of Transportation.
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(1) Subject to any otherwise applicable restrictions on disclosure in section 552a of title 5, the Secretary of Defense, the Secretary of the department in which the Coast Guard is operating, the Administrator of the National Oceanic and Atmospheric Administration, and the Surgeon General of the Public Health Service—(A) shall report the status of obligated service of an individual graduate of the Academy upon request of the Secretary; and(B) may, in their discretion, notify the Secretary of any failure of the graduate to perform the graduate’s duties, either on active duty or in the Ready Reserve component of their respective service, or as a commissioned officer of the National Oceanic and Atmospheric Administration or the Public Health Service, respectively.
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(2) Failure to implement or adhere to the policies, programs, criteria, and requirements referred to in paragraph (1) may, as determined by the Maritime Administrator, constitute a violation of an operating agreement entered into under chapter 531, 532, or 534 of this title and the Maritime Administrator may—(A) require the operator to take corrective actions; or(B) withhold payment due to the operator until the violation, as determined by the Maritime Administrator, has been remedied.
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(B) withhold payment due to the operator until the violation, as determined by the Maritime Administrator, has been remedied.
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(3) Any payment withheld pursuant to paragraph (2)(B) may be paid, upon a determination by the Maritime Administrator that the operator is in compliance with the policies, programs, criteria, and requirements referred to in paragraph (1).
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(3) in cooperation with the Maritime Administrator and the Superintendent of the Academy, advise the Board of any institutional issues, consistent with applicable laws concerning the disclosure of information.
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(a) An Advisory Board to the United States Merchant Marine Academy shall be established to visit the Academy at least once during each academic year, for the purpose of examining the course of instruction and management of the Academy and advising the Maritime Administrator and the Superintendent of the Academy.
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(a) The Maritime Administrator may accept and use conditional or unconditional gifts of money or property for the benefit of the United States Merchant Marine Academy, including acceptance and use for non-appropriated fund instrumentalities of the Merchant Marine Academy. The Maritime Administrator may accept a gift of services in carrying out the Administrator’s duties and powers. Property accepted under this section and proceeds from that property must be used, as nearly as possible, in accordance with the terms of the gift.
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(b) There is established in the Treasury a fund, to be known as the “Academy Gift Fund”. Disbursements from the Fund shall be made on order of the Maritime Administrator. Unless otherwise specified by the terms of the gift, the Maritime Administrator may use monies in the Fund for appropriated or non-appropriated purposes at the Academy. The Fund consists of—(1) gifts of money;(2) income from donated property accepted under this section;(3) proceeds from the sale of donated property; and(4) income from securities under subsection (c) of this section.
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(c) On request of the Maritime Administrator, the Secretary of the Treasury may invest and reinvest amounts in the Fund in securities of, or in securities the principal and interest of which is guaranteed by, the United States Government.
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(f) The Maritime Administrator may pay all necessary expenses in connection with the conveyance or transfer of a gift, devise, or bequest accepted under this section.
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Notwithstanding any other provision of law, the Maritime Administrator may appoint any present employee of the United States Merchant Marine Academy non-appropriated fund instrumentality to a position on the General Schedule of comparable pay. Eligible personnel shall be engaged in work permissibly funded by annual appropriations, and such appointments to the Civil Service shall be without regard to competition, for a term not to exceed 2 years.
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(a) The Maritime Administrator may establish a program for the purpose of contracting with individuals as personal services contractors to provide services as adjunct professors at the Academy, if the Maritime Administrator determines that there is a need for adjunct professors and the need is not of permanent duration.
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(1) must be approved by the Maritime Administrator;
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(2) shall be for a duration, including options, of not to exceed one year unless the Maritime Administrator finds that exceptional circumstances justify an extension of up to one additional year; and
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(A) The Maritime Administrator shall direct the Superintendent of the United States Merchant Marine Academy to develop a mandatory training program at the Academy for each individual who is involved in implementing the Academy’s student disciplinary grievance procedures, including each individual who is responsible for—(i) resolving complaints of reported sexual harassment, dating violence, domestic violence, sexual assault, and stalking;(ii) resolving complaints of reported violations of the sexual misconduct policy of the Academy; or(iii) conducting an interview with a victim of sexual harassment, dating violence, domestic violence, sexual assault, or stalking.
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(1) The Maritime Administrator shall ensure that the development program of the Academy includes a section that—(A) describes the relationship between honor, respect, and character development and the prevention of sexual harassment, dating violence, domestic violence, sexual assault, and stalking at the Academy;(B) includes a brief history of the problem of sexual harassment, dating violence, domestic violence, sexual assault, and stalking in the merchant marine, in the Armed Forces, and at the Academy; and(C) includes information relating to reporting sexual harassment, dating violence, domestic violence, sexual assault, and stalking, victims’ rights, and dismissal for offenders.
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(A) Not later than 90 days after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2018, the Maritime Administrator shall direct the Superintendent of the United States Merchant Marine Academy to implement and maintain a plan to combat retaliation against cadets at the Academy and other Academy personnel who report sexual harassment, dating violence, domestic violence, sexual assault, or stalking.
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(A) The Maritime Administrator shall ensure the staff at the Academy are provided adequate and appropriate sexual harassment, dating violence, domestic violence, sexual assault, and stalking prevention and response training materials and resources. Such resources shall include staff as follows:(i) Sexual assault response coordinator.(ii) Prevention educator.(iii) Civil rights officer.(iv) Staff member to oversee Sea Year.
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(A) Not later than 90 days after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2018, the Maritime Administrator, in consultation with the Director of the Maritime Administration Office of Civil Rights, shall develop a process to verify that each sexual assault response coordinator has completed proper training.
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(e) The Administrator of the Maritime Administration may appoint qualified candidates to positions under subsections (a) and (d) of this section without regard to sections 3309 through 3319 of title 5.
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(C) has total net assets of an amount considered by the Maritime Administrator to qualify the bank as a major bank.
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(ii) holds for the account of others investment assets in a total amount considered by the Maritime Administrator to qualify the bank as a major investment management firm.
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(A) is made by 1 or more persons in connection with a donation for the project of a total amount in cash or securities that the Maritime Administrator determines is sufficient to defray a substantial portion of the total cost of the project;
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(5) The term “qualified account control agreement”, with respect to a guarantee of a donor, means an agreement among the donor, the Maritime Administrator, and a major United States investment management firm that—(A) ensures the availability of sufficient funds or other financial resources to pay the amount guaranteed during the period of the guarantee;(B) provides for the perfection of a security interest in the assets of the account for the United States for the benefit of the United States Merchant Marine Academy with the highest priority available for liens and security interests under applicable law;(C) requires the donor to maintain in an account with the investment management firm assets having a total value that is not less than 130 percent of the amount guaranteed; and(D) requires the investment management firm, whenever the value of the account is less than the value required to be maintained under subparagraph (C), to liquidate any noncash assets in the account and reinvest the proceeds in Treasury bills issued under section 3104 of title 31.
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(b) Subject to subsection (d), the Maritime Administrator may accept a qualified guarantee from a donor or donors for the completion of a major project for the benefit of the United States Merchant Marine Academy.
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(d) The Maritime Administrator may not accept a qualified guarantee under this section for the completion of a major project until 30 days after the date on which a report of the facts concerning the proposed guarantee is submitted to Congress.
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(e) The Maritime Administrator may not enter into any contract or other transaction involving the use of a qualified guarantee and appropriated funds in the same contract or transaction.
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(1) The Maritime Administrator shall establish a separate account for administering funds received from research grants under this section.
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(a) The Maritime Administrator, after consulting with the Commandant of the Coast Guard, shall establish—(1) criteria, to which an owner or operator of a vessel engaged in commercial service shall adhere prior to carrying a cadet performing their Sea Year service from the United States Merchant Marine Academy, that addresses prevention of, and response to, sexual harassment, dating violence, domestic violence, sexual assault, and stalking; and(2) a process for collecting pertinent information from such owners or operators and verifying their compliance with the criteria.(A) As part of training that shall be provided not less than semiannually to all midshipmen of the Academy, pursuant to section 51318, the Maritime Administrator shall develop and implement comprehensive in-person sexual assault risk-reduction and response training that, to the extent practicable, conforms to best practices in the sexual assault prevention and response field and includes appropriate scenario-based training.(B) In developing the sexual assault risk-reduction and response training under subparagraph (A), the Maritime Administrator shall consult with and incorporate, as appropriate, the recommendations and views of experts in the sexual assault field.
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(A) As part of training that shall be provided not less than semiannually to all midshipmen of the Academy, pursuant to section 51318, the Maritime Administrator shall develop and implement comprehensive in-person sexual assault risk-reduction and response training that, to the extent practicable, conforms to best practices in the sexual assault prevention and response field and includes appropriate scenario-based training.
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(B) In developing the sexual assault risk-reduction and response training under subparagraph (A), the Maritime Administrator shall consult with and incorporate, as appropriate, the recommendations and views of experts in the sexual assault field.
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(7) any other issues the Maritime Administrator determines necessary to ensure the safety of cadets during Sea Year training.
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(c) The Maritime Administrator shall require the owner or operator of any commercial vessel that is carrying a cadet from the United States Merchant Marine Academy to annually certify that—(1) the vessel owner or operator is in compliance with the criteria established under subsection (a); and
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(d) The Maritime Administrator shall ensure that a cadet participating in Sea Year—(1) receives training specific to vessel safety, including sexual harassment, dating violence, domestic violence, sexual assault, and stalking prevention and response training, prior to the cadet boarding a vessel for Sea Year training;(2) is equipped with an appropriate means of communication and has been trained on its use;(3) has access to a helpline to report incidents of sexual harassment, dating violence, domestic violence, sexual assault, or stalking that is monitored by trained personnel; and(4) is informed of the legal requirements for vessel owners and operators to provide for the security of individuals onboard, including requirements under section 70103(c) and chapter 81.
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(2) The vessel operator shall make available to staff conducting a vessel check such information as the Maritime Administrator determines is necessary to determine whether the vessel is being operated in compliance with the criteria established under subsection (a).
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(f) The Maritime Administrator shall require the owner or operator of a commercial vessel, and the seafarer union for a commercial vessel, to maintain records of sexual assault training for any person required to have such training.
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(1) The Maritime Administrator shall require each cadet from the Academy, upon completion of the cadet’s Sea Year, to complete a survey regarding the environment and conditions during the Sea Year of the vessel to which the cadet was assigned.
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(2) The Maritime Administrator shall make available to the public for each year—(A) the questions used in the survey required by paragraph (1); and(B) the aggregated data received from such surveys.
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(2) The Maritime Administrator may establish criteria and requirements that the operators of public vessels shall meet to participate in the Sea Year program of the United States Merchant Marine Academy that addresses prevention of, and response to, sexual harassment, dating violence, domestic violence, sexual assault, and stalking.
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(i) The Maritime Administrator shall share with State maritime academies best practices for, and lessons learned with respect to, the prevention of, and response to, sexual harassment, dating violence, domestic violence, sexual assault, and stalking.
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(1) Not later than January 1, 2023, the Maritime Administrator shall establish within the United States Merchant Marine Academy Sexual Assault prevention and Response Program, an information management system to track and maintain, in such a manner that patterns can be reasonably identified, information regarding claims and incidents involving cadets that are reportable pursuant to subsection (d) of section 51318 of this chapter.
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(3) The information management system under this section shall include the relevant data listed in this subsection related to sexual assault and sexual harassment that the Maritime Administrator possesses, and shall not be limited to data collected after January 1, 2023.
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(4) The Maritime Administrator and the Chief Information Officer of the Department of Transportation shall coordinate to ensure that the information management system under this section shall—(A) be established and maintained in a secure fashion to ensure the protection of the privacy of any individuals whose information is entered in such system; and(B) be free of personally identifiable information and maintain only the data required to satisfy the statistical purpose of such system.
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(6) In establishing the information management system, the Maritime Administrator shall create a process to ensure that if any incident report results in a final agency action or final judgement that acquits an individual of wrongdoing, all personally identifiable information about the acquitted individual is removed from that incident report in the system.
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(b) The Maritime Administrator shall provide for the establishment of in-person and virtual confidential exit interviews, to be conducted by personnel who are not involved in the assignment of the midshipmen to a Sea Year vessel, for midshipmen from the Academy upon completion of Sea Year and following completion by the midshipmen of the survey under section 51322(d).1
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(a) The Maritime Administrator shall establish at the United States Merchant Marine Academy an advisory board to be known as the Advisory Board to the Secretary of Transportation (referred to in this section as the “Advisory Board”).
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(c) Midshipmen shall serve on the Advisory Board pursuant to appointment by the Maritime Administrator. Appointments shall be made not later than 60 days after the date of the swearing in of a new class of midshipmen at the Academy. The term of membership of a midshipmen on the Advisory Board shall be 1 academic year.
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(d) The Maritime Administrator may reappoint not more than 6 cadets from the previous term to serve on the Advisory Board for an additional academic year if the Maritime Administrator determines such reappointment to be in the best interests of the Merchant Marine Academy.
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(e) The Advisory Board shall meet with the Secretary of Transportation not less than once each academic year to discuss the activities of the Advisory Board. The Advisory Board shall meet in person with the Maritime Administrator not less than 2 times each academic year to discuss the activities of the Advisory Board.
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(3) periodically review the efficacy of the program in section 51325(b), as appropriate, and provide recommendations to the Maritime Administrator for improvement.
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(h) The Advisory Board shall regularly provide the Secretary of Transportation and the Maritime Administrator reports and briefings on the results of its duties, including recommendations for actions to be taken in light of such results. Such reports and briefings may be provided in writing, in person, or both.
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The Maritime Administrator shall—
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(1) Not later than 90 days after the date of enactment of the National Defense Authorization Act for Fiscal Year 2019, the Secretary, acting through the Maritime Administrator, shall upon consultation with the maritime academies, and to the extent feasible with the consent of the maritime academies, implement a program of training vessel sharing, requiring maritime academies to share training vessel1 provided by the Secretary among maritime academies, as necessary to ensure that training needs of each academy are met.
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(3) Subject to the availability of appropriations, the Maritime Administrator may provide additional funding to State maritime academies during periods of limited training vessel capacity, for costs associated with training vessel sharing.
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(4) Not later than 30 days after the beginning of each fiscal year, the Secretary, acting through the Maritime Administrator, shall evaluate the vessel sharing program under this subsection to determine the optimal utilization of State maritime training vessels, and modify the program as necessary to improve utilization.
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(1) Not later than one year after the date of the enactment of this section, and at least once every five years thereafter until the termination date under paragraph (6), the Secretary of Transportation, acting through the Administrator of the Maritime Administration, shall publish in the Federal Register a plan to recruit, train, and retain merchant mariners for the five-year period following the date of publication of the most recently published plan under this paragraph.
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(6) The requirement to publish a plan under this paragraph shall terminate on the date that the Administrator of the Maritime Administration determines that there is an adequate number of United States mariners for sustained strategic sealift.
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(a) The Maritime Administrator may issue a special certificate to an individual, or the personal representative of an individual, in recognition of service of that individual in the merchant marine of the United States, if the service has been determined to be active duty under section 401 of the GI Bill Improvement Act of 1977 (Public Law 95–202; 38 U.S.C. 106 note).
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(1) The Secretary or Administrator, on terms the Secretary or Administrator may prescribe, may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation eligible to be guaranteed under this chapter. A guarantee or commitment to guarantee shall cover 100 percent of the principal and interest.
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(1) The Secretary or Administrator shall approve or deny an application for a loan guarantee under this chapter within 270 days after the date on which the signed application is received by the Secretary or Administrator.
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(2) On request by an applicant, the Secretary or Administrator may extend the 270-day period in paragraph (1) to a date not later than 2 years after the date on which the signed application was received by the Secretary or Administrator.
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(b) The Secretary or Administrator may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Secretary or Administrator certifies that a full and fair consideration of all the regulatory requirements, including economic soundness and financial requirements applicable to the obligor and related parties, and a thorough assessment of the technical, economic, and financial aspects of the loan application, has been made.
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(1) To assess and mitigate the risks due to factors associated with markets, technology, financial, or legal structures related to an application or guarantee under this chapter, the Secretary or Administrator may utilize third party experts, including legal counsel, to—(A) process and review applications under this chapter, including conducting independent analysis and review of aspects of an application;(B) represent the Secretary or Administrator in structuring and documenting the obligation guarantee;(C) analyze and review aspects of, structure, and document the obligation guarantee during the term of the guarantee;(D) recommend financial covenants or financial ratios to be met by the applicant during the time a guarantee under this chapter is outstanding that are—(i) based on the financial covenants or financial ratios, if any, that are then applicable to the obligor under private sector credit agreements; and(ii) in lieu of other financial covenants applicable to the obligor under this chapter with respect to requirements regarding long-term debt-to-equity, minimum working capital, or minimum amount of equity; and(E) represent the Secretary or Administrator to protect the security interests of the Government relating to an obligation guarantee.
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(B) represent the Secretary or Administrator in structuring and documenting the obligation guarantee;
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(E) represent the Secretary or Administrator to protect the security interests of the Government relating to an obligation guarantee.
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(2) Independent analysis, review, and representation conducted under this subsection shall be performed by a private sector expert in the applicable field who is selected by the Secretary or Administrator.
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(1) The Secretary or Administrator may post a notice in the Federal Register regarding the availability of funding for obligation guarantees under this chapter for the construction, reconstruction, or reconditioning of a Vessel of National Interest and include a timeline for the submission of applications for such vessels.
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(A) The Secretary or Administrator, in consultation with the Secretary of Defense, the Secretary of the Department in which the Coast Guard is operating when it is not operating as service in the Department of the Navy, or the heads of other Federal agencies, shall develop and publish a list of vessel types that would be considered Vessels of National Interest.
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(B) Such list shall be reviewed and revised every four years or as necessary, as determined by the Administrator.
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(2) The Secretary or Administrator shall—(A) establish, and update annually, a system of risk categories for obligations guaranteed under this chapter that categorizes the relative risk of guarantees based on the risk factors set forth in paragraph (4);(B) determine annually for each risk category a subsidy rate equivalent to the cost of obligations in the category, expressed as a percentage of the amount guaranteed for obligations in the category; and(C) ensure that each risk category is comprised of loans that are relatively homogeneous in cost and share characteristics predictive of defaults and other costs, given the facts known at the time of obligation or commitment, using a risk category system that is based on historical analysis of program data and statistical evidence concerning the likely costs of defaults or other costs that are expected to be associated with the loans in the category.
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(A) Before making a guarantee under this chapter for an obligation, and annually for projects subject to a guarantee, the Secretary or Administrator shall apply the risk factors specified in paragraph (4) to place the obligation in a risk category established under paragraph (2).
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(B) The Secretary or Administrator shall consider the total amount available to the Secretary or Administrator for making guarantees under this chapter to be reduced by the amount determined by multiplying—(i) the amount guaranteed under this chapter for an obligation; by(ii) the subsidy rate for the category in which the obligation is placed under subparagraph (A).
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(D) The Secretary or Administrator may not guarantee obligations under this chapter after the total amount available to the Secretary or Administrator under appropriations laws for the cost of loan guarantees is considered to be reduced to zero under subparagraph (B).
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(iii) was sold at foreclosure begun or intervened in by the Secretary or Administrator.
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(1) In guaranteeing or making a commitment to guarantee an obligation under this chapter, the Administrator shall give priority to—(A) a vessel that is otherwise eligible for a guarantee and is constructed with assistance under subtitle D of the Maritime Security Act of 2003 (46 U.S.C. 53101 note);(B) after applying subparagraph (A), a vessel that is otherwise eligible for a guarantee and that the Secretary of Defense determines—(i) is suitable for service as a naval auxiliary in time of war or national emergency; and(ii) meets a shortfall in sealift capacity or capability; and
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(2) The Secretary of Defense shall determine whether a vessel satisfies paragraph (1)(B) not later than 30 days after receipt of a request from the Administrator for such a determination.
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(a) The Secretary or Administrator may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Secretary or Administrator finds that the obligor is responsible and has the ability, experience, financial resources, and other qualifications necessary for the adequate operation and maintenance of each vessel that will serve as security for the guarantee.
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(b) The Administrator may not guarantee or make a commitment to guarantee a loan for the construction, reconstruction, or reconditioning of a liner vessel under this chapter unless the Chairman of the Federal Maritime Commission certifies that the operator of the vessel has not been found by the Commission to have committed, within the previous 5 years—(1) a violation of part A of subtitle IV of this title that involves unjust or unfair discriminatory treatment or undue or unreasonable prejudice or disadvantage with respect to a United States shipper, ocean transportation intermediary, ocean common carrier, or port; or(2) a violation of part B of subtitle IV of this title.
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(d) The Secretary or Administrator shall prescribe regulations concerning circumstances under which waivers of, or exceptions to, otherwise applicable regulatory requirements concerning financial condition can be made. The regulations shall require that—(1) the economic soundness requirements in section 53708(a) of this title are met after the waiver of the financial condition requirement; and(2) if the Secretary or Administrator considers necessary, the waiver shall provide for the imposition of other requirements on the obligor designed to compensate for any significant increase in risk associated with the obligor’s failure to meet regulatory requirements applicable to financial condition.
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(2) if the Secretary or Administrator considers necessary, the waiver shall provide for the imposition of other requirements on the obligor designed to compensate for any significant increase in risk associated with the obligor’s failure to meet regulatory requirements applicable to financial condition.
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(a) The Administrator may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Administrator finds that the property or project for which the obligation will be executed will be economically sound. In making that finding, the Administrator shall consider—(1) the need in the particular segment of the maritime industry for new or additional capacity, including any impact on existing equipment for which a guarantee under this chapter is in effect;(2) the market potential for employment of the vessel over the life of the guarantee;(3) projected revenues and expenses associated with employment of the vessel;(4) any charter, contract of affreightment, transportation agreement, or similar agreement or undertaking relevant to the employment of the vessel;(5) other relevant criteria; and(6) for inland waterways, the need for technical improvements, including increased fuel efficiency or improved safety.
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(d) The Secretary or Administrator may make a determination that aspects of an application under this chapter require independent analysis to be conducted by third party experts due to risk factors associated with markets, technology, or financial structures. A third party independent analysis conducted under this subsection shall be performed by a private sector expert in assessing such risk factors who is selected by the Secretary or Administrator.
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(e) Notwithstanding any other provision of this chapter, the Secretary or Administrator may make a determination that an application under this title requires additional equity because of increased risk factors associated with markets, technology, or financial structures.
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(1) the amount paid by or for the account of the obligor (as determined by the Secretary or Administrator, which determination shall be conclusive) for the construction, reconstruction, or reconditioning of the vessel used as security for the guarantee; or
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(1) Except as otherwise provided, the principal amount of an obligation guaranteed under this chapter may not exceed 75 percent of the actual cost or depreciated actual cost, as determined by the Secretary or Administrator, of the vessel used as security for the guarantee.
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(A) the size and speed of the vessel are approved by the Secretary or Administrator;
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(d) The Secretary or Administrator may not establish a percentage under any provision of subsection (b) that is to be applied uniformly to all guarantees or commitments to guarantee made under that provision.
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(1) provide for payments by the obligor satisfactory to the Secretary or Administrator;
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(2) provide for interest (exclusive of guarantee fees and other fees) at a rate not more than the annual rate on the unpaid principal that the Secretary or Administrator determines is reasonable, considering the range of interest rates prevailing in the private market for similar loans and the risks assumed by the Secretary or Administrator;
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(3) have a maturity date satisfactory to the Secretary or Administrator, but—(A) not more than 25 years after the date of delivery of the vessel used as security for the guarantee; or(B) if the vessel has been reconstructed or reconditioned, not more than the later of—(i) 25 years after the date of delivery of the vessel; or(ii) the remaining years of useful life of the vessel as determined by the Secretary or Administrator; and
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(ii) the remaining years of useful life of the vessel as determined by the Secretary or Administrator; and
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(A) in class A–1, American Bureau of Shipping, or meet other standards acceptable to the Secretary or Administrator, with all required certificates, including marine inspection certificates of the Coast Guard, and with all outstanding requirements and recommendations necessary for class retention accomplished, unless the Secretary or Administrator permits a deferment of repairs necessary to meet these requirements;
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(1) With the Administrator’s approval, if the vessel used as security for the guarantee is a passenger vessel having the tonnage, speed, passenger accommodations, and other characteristics described in section 503 of the Merchant Marine Act, 1936, an obligation guaranteed under this chapter or a related agreement may provide that—(A) the only recourse by the United States Government against the obligor for payments under the guarantee will be repossession of the vessel and assignment of insurance claims; and(B) the obligor’s liability for payments under the guarantee will be satisfied and discharged by the surrender of the vessel and all interest in the vessel to the Government in the condition described in paragraph (2).
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(i) free and clear of all liens and encumbrances except the security interest conveyed to the Administrator under this chapter;
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(1) provisions for the protection of the security interests of the Government (including acceleration, assumption, and subrogation provisions and the issuance of notes by the obligor to the Secretary or Administrator), liens and releases of liens, payment of taxes; and
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(2) any other provisions that the Secretary or Administrator may prescribe.
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(a) The Secretary or Administrator may guarantee an obligation under this chapter only if the obligor conveys or agrees to convey to the Secretary or Administrator a security interest the Secretary or Administrator considers necessary to protect the interest of the United States Government.
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(b) The security interest may relate to more than one vessel and may consist of more than one type of security. If the security interest relates to more than one vessel, the obligation may have the latest maturity date allowable under section 53710(a)(3) of this title for any of the vessels used as security for the guarantee. However, the Secretary or Administrator may require such payments of principal prior to maturity, with respect to all related obligations, as the Secretary or Administrator considers necessary to maintain adequate security for the guarantee.
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(a) The Secretary or Administrator shall monitor the financial condition and operations of the obligor on a regular basis during the term of the guarantee. The Secretary or Administrator shall document the results of the monitoring on an annual or quarterly basis depending on the condition of the obligor. If the Secretary or Administrator determines that the financial condition of the obligor warrants additional protections to the Secretary or Administrator, the Secretary or Administrator shall take appropriate action under subsection (b). If the Secretary or Administrator determines that the financial condition of the obligor jeopardizes its continued ability to perform its responsibilities in connection with the guarantee of an obligation by the Secretary or Administrator, the Secretary or Administrator shall make an immediate determination whether default should take place and whether further measures described in subsection (b) should be taken to protect the interests of the Secretary or Administrator while ensuring that program objectives are met.
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(b) The Secretary or Administrator shall include provisions in a loan agreement with an obligor that provides additional authority to the Secretary or Administrator to take action to limit potential losses in connection with a defaulted loan or a loan that is in jeopardy due to the deteriorating financial condition of the obligor. If the Secretary or Administrator has waived a requirement under section 53707(d) of this title, the loan agreement shall include requirements for additional payments, collateral, or equity contributions to meet the waived requirement upon the occurrence of verifiable conditions indicating that the obligor’s financial condition enables the obligor to meet the waived requirement.
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(a) The Secretary or Administrator shall charge and collect from the obligor fees the Secretary or Administrator considers reasonable for processing the application and monitoring the loan guarantee, including for—(1) investigating an application for a guarantee;(2) appraising property offered as security for a guarantee;(3) issuing a commitment;(4) providing services related to an escrow fund under section 53715 of this title or a deposit fund under section 53716 of this title;(5) inspecting property during construction, reconstruction, or reconditioning; and(6) monitoring and providing services related to the obligor’s compliance with any terms related to the obligations, the guarantee, or maintenance of the Secretary or Administrator’s security interests under this chapter.
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(6) monitoring and providing services related to the obligor’s compliance with any terms related to the obligations, the guarantee, or maintenance of the Secretary or Administrator’s security interests under this chapter.
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(1) The Secretary or Administrator may charge and collect fees to cover the costs of independent analysis under section 53703(c) of this title. Notwithstanding section 3302 of title 31, any fee collected under this subsection shall—(A) be credited as an offsetting collection to the account that finances the administration of the loan guarantee program;(B) be available for expenditure only to pay the costs of activities and services for which the fee is imposed; and(C) remain available until expended.
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(a) Subject to this section, the Secretary or Administrator shall prescribe regulations to assess a fee for guaranteeing an obligation under this chapter.
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(2) The amount referred to in paragraph (1) for a year in which the guarantee is in effect is the present value of the amount calculated under paragraph (3). To determine the present value, the Secretary or Administrator shall apply a discount rate determined by the Secretary of the Treasury, considering current market yields on outstanding obligations of the United States Government having periods to maturity comparable to the period to maturity for the guaranteed obligation.
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(4) To set the fee rate referred to in paragraph (3)(B), the Secretary or Administrator shall establish a formula that—(A) takes into account the security provided for the guaranteed obligation; and(B) is a sliding scale based on the creditworthiness of the obligor, using—(i) the lowest allowable rate under paragraph (5) for the most creditworthy obligors; and(ii) the highest allowable rate under paragraph (5) for the least creditworthy obligors.
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(a) If the proceeds of an obligation guaranteed under this chapter are to be used to finance the construction, reconstruction, or reconditioning of a vessel that will serve as security for a guarantee under this chapter, the Secretary or Administrator may accept and hold in escrow, under an escrow agreement with the obligor, a portion of the proceeds of all obligations guaranteed under this chapter whose proceeds are to be so used which is equal to—(1) the excess of—(A) the principal amount of all obligations whose proceeds are to be so used; over(B) 75 percent or 87.5 percent, whichever is applicable under section 53709(b) of this title, of the amount paid by or for the account of the obligor for the construction, reconstruction, or reconditioning of the vessel; plus(2) any interest the Secretary or Administrator may require on the amount described in paragraph (1).
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(2) any interest the Secretary or Administrator may require on the amount described in paragraph (1).
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(b) If the security for the guarantee of an obligation relates both to a vessel to be constructed, reconstructed, or reconditioned and to a delivered vessel, the principal amount of the obligation shall be prorated for purposes of subsection (a) under regulations prescribed by the Secretary or Administrator.
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(1) The Secretary or Administrator shall disburse amounts in the escrow fund, as specified in the escrow agreement, to—(A) pay amounts the obligor is obligated to pay for—(i) the construction, reconstruction, or reconditioning of a vessel used as security for the guarantee; and(ii) interest on the obligations;(B) redeem the obligations under a refinancing guaranteed under this chapter; and
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(2) If a payment becomes due under the guarantee before the termination of the escrow agreement, the amount in the escrow fund at the time the payment becomes due, including realized income not yet paid to the obligor, shall be paid into the appropriate account under section 53717 of this title. The amount shall be credited against amounts due or to become due from the obligor to the Secretary or Administrator on the guaranteed obligations or, to the extent not so required, be paid to the obligor.
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(1) No disbursement shall be made under subsection (c) to any person until the total amount paid by or for the account of the obligor from sources other than the proceeds of the obligation equals at least 25 percent or 12.5 percent, whichever is applicable under section 53709(b) of this title, of the aggregate actual cost of the vessel, as previously approved by the Secretary or Administrator. If the aggregate actual cost of the vessel has increased since the Secretary’s or Administrator’s initial approval or if it increases after the first disbursement is permitted under this subsection, then no further disbursements shall be made under subsection (c) until the total amount paid by or for the account of the obligor from sources other than the proceeds of the obligation equals at least 25 percent or 12.5 percent, as applicable, of the increase, as determined by the Secretary or Administrator, in the aggregate actual cost of the vessel. This paragraph does not require the Secretary or Administrator to consent to finance any increase in actual cost unless the Secretary or Administrator determines that such an increase in the obligation meets all the terms and conditions of this chapter or other applicable law.
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(2) The Secretary or Administrator shall, by regulation, establish a transparent, independent, and risk-based process for verifying and documenting the progress of projects under construction before disbursing guaranteed loan funds. At a minimum, the process shall require documented proof of progress in connection with the construction, reconstruction, or reconditioning of a vessel or vessels before disbursements are made from the escrow fund. The Secretary or Administrator may require that the obligor provide a certificate from an independent party certifying that the requisite progress in construction, reconstruction, or reconditioning has taken place.
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(f) The Secretary or Administrator may invest and reinvest any part of an escrow fund in obligations of the United States Government with maturities such that the escrow fund will be available as required for purposes of the escrow agreement. Investment income shall be paid to the obligor when received.
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(g) The escrow agreement shall contain other terms the Secretary or Administrator considers necessary to protect fully the interests of the Government.
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(a) There is a deposit fund in the Treasury for purposes of this section. The Secretary or Administrator, in accordance with an agreement under subsection (b), may deposit into and hold in the fund cash belonging to an obligor to serve as collateral for a guarantee made under this chapter with respect to the obligor.
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(b) The Secretary or Administrator and an obligor shall make a reserve fund or other collateral account agreement to govern the deposit, withdrawal, retention, use, and reinvestment of cash of the obligor held in the fund. The agreement shall contain—(1) terms and conditions required by this section;(2) terms that grant to the United States Government a security interest in all amounts deposited into the fund; and(3) any additional terms considered by the Secretary or Administrator to be necessary to protect fully the interests of the Government.
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(3) any additional terms considered by the Secretary or Administrator to be necessary to protect fully the interests of the Government.
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(c) The Secretary or Administrator may invest and reinvest any part of the amounts in the fund in obligations of the Government with maturities such that amounts in the fund will be available as required for purposes of the agreement under subsection (b). Cash balances in the fund in excess of current requirements shall be maintained in a form of uninvested funds, and the Secretary of the Treasury shall pay interest on these funds.
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(1) Cash deposited into the fund may not be withdrawn without the consent of the Secretary or Administrator.
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(2) Subject to paragraph (3), the Secretary or Administrator may pay any income earned on cash of an obligor deposited into the fund in accordance with the agreement with the obligor under subsection (b).
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(3) The Secretary or Administrator may retain and offset any or all of the cash of an obligor in the fund, and any income realized thereon, as part of the Secretary’s or Administrator’s recovery against the obligor in case of a default by the obligor on an obligation.
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(1) The Administrator shall account for payments and disbursements involving obligations guaranteed under this chapter and not subject to FCRA in an account in the Treasury entitled the Federal Ship Financing Fund Liquidating Account (a liquidating account as defined in FCRA).
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(2) The Administrator shall account for payments and disbursements involving obligations guaranteed under this chapter and subject to FCRA in a separate account in the Treasury entitled the Federal Ship Financing Guaranteed Loan Financing Account (a financing account as defined in FCRA).
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The Administrator shall report to Congress annually on the loan guarantee program under this chapter. Each report shall include—
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The Secretary or Administrator shall ensure that all standard documents and agreements that relate to loan guarantees made pursuant to this chapter are reviewed and updated every four years to ensure that such documents and agreements meet the current commercial best practices to the extent permitted by law.
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(a) Except as provided in subsection (c), if an obligor has continued in default for 30 days in the payment of principal or interest on an obligation guaranteed under this chapter, the obligee or the obligee’s agent may demand that the Secretary or Administrator pay the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. The demand must be made within the earlier of—(1) a period that may be specified in the guarantee or a related agreement; or(2) 90 days from the date of the default.
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(1) If a demand is made under subsection (a), the Secretary or Administrator shall pay to the obligee or the obligee’s agent the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. Payment shall be made within the earlier of—(A) a period that may be specified in the guarantee or a related agreement; or(B) 30 days from the date of the demand.
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(2) The Secretary or Administrator is not required to make payment under this subsection if, within the appropriate period under paragraph (1), the Secretary or Administrator finds that the obligor was not in default or that the default was remedied before the demand.
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(c) An obligee or the obligee’s agent may not demand payment under this section if the Secretary or Administrator, before the demand and on terms that may be provided in the obligation or a related agreement, has assumed the obligor’s rights and duties under the obligation and any related agreement and made any payment in default. However, the guarantee of the obligation remains in effect after the Secretary’s or Administrator’s assumption.
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(a) On default under an obligation or related agreement between the Secretary or Administrator and the obligor, the Secretary or Administrator, on terms that may be provided in the obligation or agreement, may—(1) assume the obligor’s rights and duties under the obligation or agreement, make any payment in default, and notify the obligee or the obligee’s agent of the default and the Secretary’s or Administrator’s assumption; or
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(1) assume the obligor’s rights and duties under the obligation or agreement, make any payment in default, and notify the obligee or the obligee’s agent of the default and the Secretary’s or Administrator’s assumption; or
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(1) If the Secretary or Administrator proceeds under subsection (a)(2), the obligee or the obligee’s agent may demand that the Secretary or Administrator pay the unpaid principal amount of the obligation and the unpaid interest on the obligation. The demand must be made within the earlier of—(A) a period that may be specified in the guarantee or a related agreement; or(B) 60 days from the date of the Secretary’s or Administrator’s notice.
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(B) 60 days from the date of the Secretary’s or Administrator’s notice.
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(2) If a demand is made under paragraph (1), the Secretary or Administrator shall pay to the obligee or the obligee’s agent the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. Payment shall be made within the earlier of—(A) a period that may be specified in the guarantee or a related agreement; or(B) 30 days from the date of the demand.
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(c) A guarantee of an obligation remains in effect after an assumption of the obligation by the Secretary or Administrator.
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(d) If there is a default on an obligation, the Secretary or Administrator shall conduct operations under this chapter in a manner that—(1) maximizes the net present value return from the sale or disposition of assets associated with the obligation, including prompt referral to the Attorney General for collection as appropriate;(2) minimizes the amount of any loss realized in the resolution of the guarantee;(3) ensures adequate competition and fair and consistent treatment of offerors; and(4) requires appraisal of assets by an independent appraiser.
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(a) Amounts required to be paid by the Secretary or Administrator under section 53721 or 53722 of this title shall be paid in cash.
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(b) If amounts in the appropriate account under section 53717 of this title are not sufficient to make a payment required under section 53721 or 53722 of this title, the Secretary or Administrator may issue obligations to the Secretary of the Treasury. The Secretary or Administrator, with the approval of the Secretary of the Treasury, shall prescribe the form, denomination, maturity, and other terms (except the interest rate) of the obligations. The Secretary of the Treasury shall set the interest rate for the obligations, considering the current average market yield on outstanding marketable obligations of the United States Government of comparable maturities during the month before the obligations are issued.
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(d) The Secretary or Administrator shall deposit amounts borrowed under this section in the appropriate account under section 53717 of this title and make redemptions of the obligations from that account.
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(a) When the Secretary or Administrator makes a payment on, or assumes, an obligation under section 53721 or 53722 of this title, the Secretary or Administrator acquires the rights under the security agreement with the obligor in the security held by the Secretary or Administrator to guarantee the obligation.
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(b) Notwithstanding any other law relating to the acquisition, handling, or disposal of property by the United States Government, the Secretary or Administrator has the right, in the Secretary’s or Administrator’s discretion, to complete, reconstruct, recondition, renovate, repair, maintain, operate, charter, or sell any property acquired under a security agreement with an obligor, or to place a vessel so acquired in the National Defense Reserve Fleet. The terms of a sale under this subsection shall be as approved by the Secretary or Administrator.
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(a) For a default under a guaranteed obligation or related agreement, the Secretary or Administrator may take any action against the obligor or another liable party that the Secretary or Administrator considers necessary to protect the interests of the United States Government. A civil action may be brought in the name of the United States or the obligee. The obligee shall make available to the Government all records and evidence necessary to prosecute the action.
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(1) The Secretary or Administrator may—(A) accept a conveyance of title to and possession of property from the obligor or another party liable to the Secretary or Administrator; and(B) purchase the property for an amount not greater than the unpaid principal amount of the obligation and interest thereon.
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(A) accept a conveyance of title to and possession of property from the obligor or another party liable to the Secretary or Administrator; and
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(2) If, through the sale of property, the Secretary or Administrator receives an amount of cash greater than the unpaid principal amount of the obligation, the unpaid interest on the obligation, and the expenses of collecting those amounts, the Secretary or Administrator shall pay the excess to the obligor.
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(a) Under subchapter I of this chapter, the Administrator may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation that aids in financing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, or reconditioning of a commercial demonstration ocean thermal energy conversion facility or plantship. This section may be used to guarantee obligations for a total of not more than 5 separate facilities and plantships or a demonstrated 400 megawatt capacity, whichever comes first.
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(d) A guarantee or commitment to guarantee may not be made under this section unless the Secretary of Energy, in consultation with the Administrator, certifies to the Administrator that, for the facility or plantship for which the guarantee or commitment to guarantee is sought, there is sufficient guarantee of performance and payment to lower the risk to the United States Government to a reasonable level. In deciding whether to issue such a certification, the Secretary of Energy shall consider—(1) the successful demonstration of the technology to be used in the facility at a scale sufficient to establish the likelihood of technical and economic viability in the proposed market; and(2) the need of the United States to develop new and renewable sources of energy and the benefits to be realized from the construction and successful operation of the facility or plantship.
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(A) amounts received by the Administrator under subchapter I of this chapter related to guarantees or commitments to guarantee made under this section shall be deposited only in the OTEC Demonstration Fund; and
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(B) when obligations issued by the Administrator under section 53723 of this title related to the OTEC Demonstration Fund are outstanding, any amount received by the Administrator under subchapter I of this chapter related to ocean thermal energy conversion facilities or plantships shall be deposited in the OTEC Demonstration Fund.
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(3) Assets in the OTEC Demonstration Fund may be transferred to the parent account when and to the extent the balance in the OTEC Demonstration Fund exceeds the total guarantees or commitments to guarantee made under this section then outstanding, plus obligations issued by the Administrator under section 53723 of this title related to the OTEC Demonstration Fund.
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(g) Section 53723 of this title applies to the OTEC Demonstration Fund. However, obligations issued by the Administrator under that section related to the OTEC Demonstration Fund shall be payable only from proceeds realized by the OTEC Demonstration Fund.
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(b) Under subchapter I of this chapter, the Administrator may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation for advanced shipbuilding technology and modern shipbuilding technology of a general shipyard facility in the United States. Only a private shipyard is eligible to receive a guarantee.
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(e) The Administrator may accept the transfer of amounts from a department, agency, or instrumentality of the United States Government and may use those amounts to cover the cost (as defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of making guarantees or commitments to guarantee under this section.
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(f) Part I of subtitle A of title IX of division G of the Infrastructure Investment and Jobs Act (Public Law 117–58; 41 U.S.C. 8301 note) shall apply to any funds obligated by the Administrator under this section.
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(a) Notwithstanding any other provision of this chapter, the Secretary or Administrator, on terms the Secretary or Administrator may prescribe, may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation that aids in financing or refinancing (including reimbursement of an obligor for expenditures previously made for) a contract for the construction or reconstruction of a vessel if—(1) the vessel is designed and to be used for commercial use in coastwise, intercoastal, or foreign trade;(2) the construction or reconstruction is necessary to replace a vessel that cannot continue to be operated because of a change required by law in the standards for the operation of vessels, and the applicant for the guarantee or commitment would not otherwise legally be able to continue operating vessels in the trades in which the applicant operated vessels before the change;(3) the applicant is presently engaged in transporting cargoes in vessels of the type and class that will be constructed or reconstructed under this section and agrees to employ vessels constructed or reconstructed under this section as replacements only for vessels made obsolete by the change in operating standards;(4) the capacity of the vessels to be constructed or reconstructed under this section will not increase the cargo carrying capacity of the vessels being replaced;(5) the Secretary or Administrator has not determined that the market demand for the vessel over its useful life will diminish so as to make granting the guarantee fiduciarily imprudent;(6) the vessel, if to be reconstructed, will have a useful life of at least 15 years after the reconstruction; and(7) the Secretary or Administrator has considered the criteria specified in section 53708(a)(3)–(5) of this title.
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(5) the Secretary or Administrator has not determined that the market demand for the vessel over its useful life will diminish so as to make granting the guarantee fiduciarily imprudent;
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(7) the Secretary or Administrator has considered the criteria specified in section 53708(a)(3)–(5) of this title.
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(2) The amount of an obligation guaranteed under this section may not exceed 87.5 percent of the actual cost or depreciated actual cost to the applicant for the construction or reconstruction of the vessel. The Secretary or Administrator may not establish a percentage under this paragraph that is to be applied uniformly to all guarantees or commitments to guarantee made under this section.
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(d) The Secretary or Administrator shall require by regulation that an applicant under this section provide adequate security against default.
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(e) The Secretary or Administrator may establish a fee for the guarantee of an obligation under this section that is in addition to the fee established under section 53714 of this title. The fee may be—(1) an annual fee of not more than an additional 1 percent added to the fee established under section 53714 of this title; or(2) a fee based on the amount of the obligation versus the percentage of the obligor’s fleet being replaced by vessels constructed or reconstructed under this section.
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(a) Subject to the availability of appropriations, the Administrator of the Maritime Administration shall execute agreements with shipyards to provide assistance—(1) in the form of grants, loans, and loan guarantees to small shipyards for capital improvements; and(2) for maritime training programs to foster technical skills and operational productivity relating to shipbuilding, ship repair, and associated industries.
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(1) In providing assistance under the program, the Administrator shall consider projects that foster—(A) efficiency, competitive operations, and quality ship construction, repair, and reconfiguration; and(B) employee skills and enhanced productivity related to shipbuilding, ship repair, and associated industries.
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(2) The Administrator shall post a Notice of Funding Opportunity regarding grants awarded under this section not more than 15 days after the date of enactment of the appropriations Act for the fiscal year concerned.
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(3) The Administrator shall award grants under this section not later than 120 days after the date of the enactment of the appropriations Act for the fiscal year concerned.
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(4) Notwithstanding paragraph (3), amounts awarded as a grant under this section that are not expended by the grantee shall remain available to the Administrator for use for grants under this section.
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(A) Subject to subparagraph (B), no funds may be obligated by the Administrator of the Maritime Administration under this section, unless each product and material purchased with those funds (including products and materials purchased by a grantee), and including any commercially available off-the-shelf item, is—(i) an unmanufactured article, material, or supply that has been mined or produced in the United States; or(ii) a manufactured article, material, or supply that has been manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States.
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(i) Notwithstanding subparagraph (A), the requirements of that subparagraph shall not apply with respect to a particular product or material if the Administrator determines—(I) that the application of those requirements would be inconsistent with the public interest;(II) that such product or material is not available in the United States in sufficient and reasonably available quantities, of a satisfactory quality, or on a timely basis; or(III) that inclusion of a domestic product or material will increase the cost of that product or material by more than 25 percent, with respect to a certain contract between a grantee and that grantee’s supplier.
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(ii) A determination made by the Administrator under this subparagraph shall be published in the Federal Register.
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(A) The Administrator may not award more than 25 percent of the funds made available to carry out this section for any fiscal year to any small shipyard in one geographic location that has more than 600 employees.
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(1) To be eligible for assistance under this section, an applicant shall submit an application, in such form, and containing such information and assurances as the Administrator may require, within 60 days after the date of enactment of the appropriations Act for the fiscal year concerned.
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(3) The Administrator, in consultation with the Office of the Inspector General, shall issue guidelines to establish appropriate accounting, reporting, and review procedures to ensure that—(A) grant funds are used for the purposes for which they were made available;(B) grantees have properly accounted for all expenditures of grant funds; and(C) grant funds not used for such purposes and amounts not obligated or expended are returned.
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(4) The Administrator may not award a grant under this section unless the Administrator determines that—(A) sufficient funding is available to meet the matching requirements of subsection (e);(B) the project will be completed without unreasonable delay; and(C) the recipient has authority to carry out the proposed project.
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(g) All grantees under this section shall maintain such records as the Administrator may require and make such records available for review and audit by the Administrator.
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(C) In selecting projects described in paragraph (3), the Maritime Administrator, in consultation with the Secretary of Defense, may give priority to providing funding to strategic seaports in support of national security requirements.
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(1) From amounts reserved under subsection (a)(7)(B), the Secretary, acting through the Administrator of the Maritime Administration, shall make grants under this subsection to eligible applicants for eligible projects at a port, to and from which the average annual tonnage of cargo for the immediately preceding 3 calendar years from the time an application is submitted is less than 8,000,000 short tons, as determined using United States Army Corps of Engineers data or data provided by an independent audit.
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(a) The Administrator of the Maritime Administration shall annually submit to Congress a report on the administration by—(1) the Department of Defense of section 2631 of title 10; and(2) other Federal departments and agencies of programs the Administrator determines are subject to section 55305 of this title.
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(2) other Federal departments and agencies of programs the Administrator determines are subject to section 55305 of this title.
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(c) Not later than January 31 of each year, the head of each Federal department or agency that administers a program covered by a report required under subsection (a) shall submit to the Administrator of the Maritime Administration the information described in subsection (b) for that department or agency.
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(b) The Administrator of General Services shall prescribe regulations under which agencies may not pay for or reimburse an officer or employee for travel or transportation expenses incurred on a foreign vessel in the absence of satisfactory proof of the necessity of using the vessel.
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(1) Notwithstanding any other provision of law, when the President, the Secretary of Defense, or the Secretary of Transportation declares the existence of an emergency justifying a temporary waiver of this section or section 55314 of this title, the President, the Secretary of Defense, or the Secretary of Transportation, following a determination by the Maritime Administrator, acting in the Administrator’s capacity as Director, National Shipping Authority, of the non-availability of qualified United States flag capacity at fair and reasonable rates for commercial vessels of the United States to meet the requirements of this section or section 55314 of this title, may waive compliance with such section to the extent, in the manner, and on the terms the Maritime Administrator, acting in such capacity, prescribes, and no other waivers of the requirements of this section or section 55314 of this title shall be authorized.
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(B) Upon termination of the period of a waiver issued under this subsection, the Maritime Administrator may extend the waiver for an additional period of not more than 30 days, if the Maritime Administrator makes the determinations described in paragraph (1).
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(3) The Maritime Administrator shall—(A) for each determination referred to in paragraph (1), identify any actions that could be taken to enable qualified United States flag capacity to meet the requirements of this section or section 55314 at fair and reasonable rates for commercial vessels of the United States;(B) provide notice of each determination referred to in paragraph (1) to the Secretary of Transportation and, as applicable, the President or the Secretary of Defense; and(C) publish each determination referred to in paragraph (1)—(i) on the website of the Maritime Administration not later than 24 hours after notice of the determination is provided to the Secretary of Transportation; and(ii) in the Federal Register.
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(4) The Maritime Administrator shall notify—(A) the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives of—(i) any request for a waiver (or an extension thereof) made by the Secretary of Transportation of this section or section 55314(a)1 of this title by not later than 72 hours after receiving such a request; and(ii) the issuance of any such waiver (or an extension thereof), and why such waiver or extension was necessary, by not later than 72 hours after such issuance; and(B) the Committee on Commerce, Science, and Transportation and the Committee on Armed Services of the Senate and the Committee on Transportation and Infrastructure and the Committee on Armed Services of the House of Representatives of—(i) any request for a waiver (or an extension thereof) made by the Secretary of Defense of this section or section 55314(a)1 of this title by not later than 72 hours after receiving such a request; and(ii) the issuance of any such waiver (or an extension thereof), and why such waiver or extension was necessary, by not later than 72 hours after such issuance.
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(2) Not later than 180 days after the date on which the Maritime Administrator receives a request for the designation or modification of a marine highway route under paragraph (1), the Maritime Administrator shall make a determination of whether to make the requested designation or modification.
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(3) Not later than 14 days after the date on which the Maritime Administrator makes a determination under paragraph (2), the Maritime Administrator shall notify the requester of the determination.
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(1) The Maritime Administrator shall make publicly available a map showing the location of marine highway routes, including such routes along the coasts, in the inland waterways, and at sea and update that map when a marine highway route is designated or modified pursuant to subsection (b).
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(2) The Maritime Administrator shall coordinate with the Administrator of the National Oceanic and Atmospheric Administration to incorporate the map referred to in paragraph (1) into the Marine Cadastre.
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The Secretary of Transportation, in consultation with the Administrator of the Environmental Protection Agency, may conduct research on marine highway transportation, regarding—
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(f) The Maritime Administrator shall make publicly available on an appropriate website of the Maritime Administration—(1) a detailed summary of each request for a determination, approval, or confirmation that a vessel charter for a passenger vessel is encompassed by the general approval of time charters issued pursuant to this section or regulations prescribed pursuant to such section; and(2) the final action of the Administration with respect to such request, after the provision of notice and opportunity for public comment.
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(5) Any other matters the Maritime Administrator considers appropriate.
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(1) The Secretary of Transportation, acting through the Administrator of the Maritime Administration, may enter into reimbursable agreements with other Federal entities to provide legal services to such entities relating to the salvaging of cargoes for which such entities have custody, or control, or for which for such entities have trustee responsibilities from vessels in the custody or control of the Maritime Administration or its predecessor agencies. The Secretary may receive and retain reimbursement from such entities for all costs incurred related to the provision of such services.
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(1) Fifty percent shall be available to the Administrator of the Maritime Administration for the payment or reimbursement of expenses incurred by or on behalf of State maritime academies or the United States Merchant Marine Academy for facility and training ship maintenance, repair, and modernization, and for the purchase of simulators and fuel.
Citations to §53701(3)
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(1) the relative cost of construction of comparable vessels in the United States and in foreign countries; and
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(2) new designs, new methods of construction, and new types of equipment for vessels.
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(c) The Secretary shall collaborate with vessel owners and shipbuilders in developing plans for the economical construction of vessels and their propelling machinery, of most modern economical types, giving thorough consideration to all well-recognized means of propulsion and taking into account the benefits from standardized production where practicable and desirable.
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(a) There is a “Vessel Operations Revolving Fund” for use by the Secretary of Transportation in carrying out duties and powers related to vessel operations, including charter, operation, maintenance, repair, reconditioning, and improvement of merchant vessels under the jurisdiction of the Secretary. The Fund has a working capital of $20,000,000, to remain available until expended.
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(3) Paragraph (1) does not apply to a vessel under a construction-differential subsidy contract.
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(4) consult with communities on the appropriate location and plan of construction of wharves, piers, and water terminals;
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(A) vessel construction, transportation by water, or support activities for transportation by water with an assigned North American Industry Classification System code beginning with 3366, 483, 4883, or 6113, or in the case of such construction, transportation, or support activities conducted by a fish processing vessel, such an assigned code beginning with 3117; or
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(i) construction or water transportation related to activities described in subparagraph (A); or
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(B) the construction, renovation, or repair of real or personal property.
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(6) The term “United States maritime industry” means the design, construction, repair, operation, manning, and supply of vessels in all segments of the maritime transportation system of the United States, including—(A) the domestic and foreign trade;(B) the coastal, offshore, and inland trade;(C) non-commercial maritime activities, including—(i) recreational boating; and(ii) oceanographic and limnological research as described in section 2101(26).
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(1) The term “construction contract” includes, for a taxpayer constructing a new vessel in a shipyard owned by that taxpayer, an agreement between the taxpayer and the Secretary of Transportation for that construction containing provisions the Secretary considers advisable to carry out this chapter.
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(i) constructed in the United States after December 31, 1939, constructed with a construction-differential subsidy under title V of the Merchant Marine Act, 1936, or constructed with financing or a financing guarantee under chapter 537 or 575 of this title;
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(B) a vessel reconstructed or reconditioned for use only on the Great Lakes, including the Saint Lawrence River and Gulf, if the Secretary finds that the reconstruction or reconditioning will promote the objectives of this subtitle.
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(a) An eligible person under section 53303 of this title may establish a construction reserve fund for the construction, reconstruction, reconditioning, or acquisition of a new vessel or for other purposes authorized by this chapter.
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A construction reserve fund may be established by a citizen of the United States that—
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A construction reserve fund may include deposits of—
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(1) deposits an amount equal to the net proceeds of the sale or the net indemnity for the loss in a construction reserve fund within 60 days after receiving the payment of proceeds or indemnity; and
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Under the income or excess profits tax laws of the United States, the basis for determining a gain or loss and for depreciation of a new vessel constructed, reconstructed, reconditioned, or acquired by the taxpayer, or for which purchase-money indebtedness is liquidated as provided in section 53310 of this title, with amounts from a construction reserve fund, shall be reduced by that part of the deposits in the fund expended in the construction, reconstruction, reconditioning, acquisition, or liquidation of purchase-money indebtedness of the new vessel that represents a gain not recognized for tax purposes under section 53306 of this title.
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For any taxable year, amounts on deposit in a construction reserve fund on the last day of the taxable year, for which the requirements of section 53310 of this title have been satisfied (to the extent they apply on the last day of the taxable year), are deemed to have been retained for the reasonable needs of the business within the meaning of section 537(a) of the Internal Revenue Code of 1986 (26 U.S.C. 537(a)).
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(a) Sections 53306 and 53309 of this title apply to a deposit in a construction reserve fund only if, within 3 years after the date of the deposit (and any extension under subsection (c))—(A) a contract is made for the construction or acquisition of a new vessel 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;(B) the deposit is expended or obligated for expenditure under that contract;(C) at least 12.5 percent of the construction or contract price of the vessel is paid or irrevocably committed for payment; and(D) the plans and specifications for the vessel are approved by the Secretary to the extent the Secretary 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 not a parent company of, or a company affiliated or associated with, the mortgagor on a new vessel.
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(A) a contract is made for the construction or acquisition of a new vessel 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;
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(C) at least 12.5 percent of the construction or contract price of the vessel is paid or irrevocably committed for payment; and
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(b) In addition to the requirements of subsection (a)(1), for a vessel not constructed under a construction-differential subsidy contract or not bought from the Secretary of Transportation—(1) at least 5 percent of the construction (or, if the contract covers more than one vessel, at least 5 percent of the construction of the first vessel) must be completed within 6 months after the date of the construction contract (or within the period of an extension under subsection (c)), as estimated by the Secretary and certified by the Secretary to the Secretary of the Treasury; and(2) construction under the contract must be completed with reasonable dispatch thereafter.
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(1) at least 5 percent of the construction (or, if the contract covers more than one vessel, at least 5 percent of the construction of the first vessel) must be completed within 6 months after the date of the construction contract (or within the period of an extension under subsection (c)), as estimated by the Secretary and certified by the Secretary to the Secretary of the Treasury; and
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(2) construction under the contract must be completed with reasonable dispatch thereafter.
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(c) The Secretary of Transportation may grant extensions of the period within which the deposits must be expended or obligated or within which the construction 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 of deposits or one year for the progress of construction.
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(3) the construction related to that deposited gain has not progressed to the extent of 5 percent of completion within the appropriate period under section 53310 of this title; or
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(4) the Secretary of Transportation finds and certifies to the Secretary of the Treasury that, for causes within the control of the taxpayer, the entire construction related to that deposited gain is not completed with reasonable dispatch.
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(iii) agreed, between the Secretary and the person maintaining the capital construction fund established under section 53503 of this title, to be operated in the foreign or domestic trade of the United States or in the fisheries of the United States; and
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(8) The term “United States foreign trade” includes those areas in domestic trade in which a vessel built with a construction-differential subsidy is allowed to operate under the first sentence of section 506 of the Merchant Marine Act, 1936.
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(a) A citizen of the United States owning or leasing an eligible vessel may make an agreement with the Secretary under this chapter to establish a capital construction fund for the vessel.
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(a) An agreement to establish a capital construction fund shall provide for the deposit in the fund of the amounts agreed to be appropriate to provide for qualified withdrawals under section 53509 of this title.
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(a) The amount deposited in a capital construction fund for a taxable year may not exceed the sum of—(1) that portion of the taxable income of the owner or lessee for the taxable year (computed under chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. ch. 1) but without regard to the carryback of net operating loss or net capital loss or this chapter) that is attributable to the operation of agreement vessels in the foreign or domestic trade of the United States or in the fisheries of the United States;(2) the amount allowable as a deduction under section 167 of such Code (26 U.S.C. 167) for the taxable year for agreement vessels;(3) if the transaction is not taken into account for purposes of paragraph (1), the net proceeds (as defined in joint regulations) from the disposition of an agreement vessel or from insurance or indemnity attributable to an agreement vessel; and(4) the receipts from the investment or reinvestment of amounts held in the fund.
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(b) For a lessee, the maximum amount that may be deposited for an agreement vessel under subsection (a)(2) for any period shall be reduced by any amount the owner is required or permitted, under the capital construction fund agreement, to deposit for that period for the vessel under subsection (a)(2).
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(a) 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.
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(a) A capital construction fund shall have three accounts:(1) The capital account.(2) The capital gain account.(3) The ordinary income account.
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(a) Subject to subsection (b), a withdrawal from a capital construction fund is a qualified withdrawal if it is made under the terms of the agreement and is for—(1) the acquisition, construction, or reconstruction of a qualified vessel or a barge or container that is part of the complement of a qualified vessel; or(2) the payment of the principal on indebtedness incurred in the acquisition, construction, or reconstruction of a qualified vessel or a barge or container that is part of the complement of a qualified vessel.
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(1) the acquisition, construction, or reconstruction of a qualified vessel or a barge or container that is part of the complement of a qualified vessel; or
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(2) the payment of the principal on indebtedness incurred in the acquisition, construction, or reconstruction of a qualified vessel or a barge or container that is part of the complement of a qualified vessel.
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(a) A qualified withdrawal from a capital construction fund shall be treated as made—(1) first from the capital account;(2) second from the capital gain account; and(3) third from the ordinary income account.
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(1) The following applicable percentage of any amount that remains in a capital construction fund at the close of the following specified taxable year following the taxable year for which the amount was deposited shall be treated as a nonqualified withdrawal:
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(2) The earnings of a capital construction fund for any taxable year (except net gains) shall be treated under this subsection as an amount deposited for the taxable year.
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(3) Under paragraph (1), an amount shall not be treated as remaining in a capital construction fund at the close of a taxable year to the extent there is a binding contract at the close of the taxable year for a qualified withdrawal of the amount for an identified item for which the withdrawal may be made.
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(4) If the Secretary determines that the balance in a capital construction fund exceeds the amount appropriate to meet the vessel construction program objectives of the person that established the fund, the amount of the excess shall be treated as a nonqualified withdrawal under paragraph (1) unless the person develops appropriate program objectives within 3 years to dissipate the excess.
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(5) Under this subsection, amounts in a capital construction fund on January 1, 1987, shall be treated as having been deposited in that fund on that date.
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(1) a transfer of a capital construction fund from one person to another person in a transaction to which section 381 of the Internal Revenue Code of 1986 (26 U.S.C. 381) applies may be treated as if the transaction is not a nonqualified withdrawal; and
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(a) In this section, the term “old fund” means a capital construction fund maintained before October 21, 1970.
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(a) Within 120 days after the close of each calendar year, the Secretary of Transportation and the Secretary of Commerce each shall provide the Secretary of the Treasury a written report on the capital construction funds under the particular Secretary’s jurisdiction for the calendar year.
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(1) establishing a capital construction fund during the calendar year;
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(2) maintaining a capital construction fund on the last day of the calendar year;
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(3) terminating a capital construction fund during the calendar year;
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(4) making a deposit to or withdrawal from a capital construction fund during the calendar year, and the amount of the deposit or withdrawal; or
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(5) having been determined during the calendar year to have failed to fulfill a substantial obligation under a capital construction fund agreement to which the person is a party.
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(A) financing the construction or reconstruction of a fishing vessel in a fishery managed under a limited access system; or
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(1) The Secretary or Administrator may post a notice in the Federal Register regarding the availability of funding for obligation guarantees under this chapter for the construction, reconstruction, or reconditioning of a Vessel of National Interest and include a timeline for the submission of applications for such vessels.
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(I) whether a guarantee under this chapter is or will be in effect during the construction period of the project; and
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(A) Financing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, or reconditioning of a vessel designed principally for research, or for commercial use—(i) in the coastwise or intercoastal trade;(ii) on the Great Lakes, or on bays, sounds, rivers, harbors, or inland lakes of the United States;(iii) in foreign trade as defined in section 109(b) of this title;(iv) as an ocean thermal energy conversion facility or plantship; or(v) as a floating drydock in the construction, reconstruction, reconditioning, or repair of vessels.
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(v) as a floating drydock in the construction, reconstruction, reconditioning, or repair of vessels.
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(B) A guarantee under subparagraph (A) may not be made more than one year after delivery of the vessel (or redelivery if the vessel was reconstructed or reconditioned) unless the proceeds of the obligation are used to finance the construction, reconstruction, or reconditioning of a vessel or of facilities or equipment related to marine operations.
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(2) Financing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, reconditioning, or purchase of a vessel owned by citizens of the United States and designed principally for research, or for commercial use in the fishing industry.
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(3) Financing the purchase, reconstruction, or reconditioning of a vessel or fishery facility—(A) for which an obligation was guaranteed under this chapter; and(B) that, under subchapter II of this chapter—(i) is a vessel or fishery facility for which an obligation was accelerated and paid;(ii) was acquired by the Federal Ship Financing Fund or successor account under section 53717 of this title; or(iii) was sold at foreclosure begun or intervened in by the Secretary or Administrator.
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(4) Financing any part of the repayment to the United States Government of any amount of a construction-differential subsidy paid for a vessel.
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(6) Financing or refinancing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, reconditioning, or purchase of a fishery facility.
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(8) Financing (including reimbursement of an obligor for expenditures previously made for) the reconstruction, reconditioning, retrofitting, repair, reconfiguration, or similar work in a shipyard located in the United States.
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(b) An obligation guaranteed under subsection (a)(6) or (7) shall be treated, for purposes of this chapter, in the same manner and to the same extent as an obligation that aids in financing the construction, reconstruction, reconditioning, or purchase of a vessel, except with respect to provisions that by their nature can only be applied to vessels.
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(b) The Administrator may not guarantee or make a commitment to guarantee a loan for the construction, reconstruction, or reconditioning of a liner vessel under this chapter unless the Chairman of the Federal Maritime Commission certifies that the operator of the vessel has not been found by the Commission to have committed, within the previous 5 years—(1) a violation of part A of subtitle IV of this title that involves unjust or unfair discriminatory treatment or undue or unreasonable prejudice or disadvantage with respect to a United States shipper, ocean transportation intermediary, ocean common carrier, or port; or(2) a violation of part B of subtitle IV of this title.
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(c) The Secretary may not guarantee or make a commitment to guarantee a loan for the construction, reconstruction, or reconditioning of a fishing vessel under this chapter if the operator of the vessel has been—(1) held liable, or the vessel has been held liable in rem, for a civil penalty under section 308 of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1858) and the operator has not paid the penalty;(2) found guilty of an offense under section 309 of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1859) and not paid the assessed fine or served the assessed sentence;(3) held liable for a civil or criminal penalty under section 105 of the Marine Mammal Protection Act of 1972 (16 U.S.C. 1375) and not paid the assessed fine or served the assessed sentence; or(4) held liable for a civil penalty by the Coast Guard under this title or title 33 and not paid the assessed fine.
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(1) the amount paid by or for the account of the obligor (as determined by the Secretary or Administrator, which determination shall be conclusive) for the construction, reconstruction, or reconditioning of the vessel used as security for the guarantee; or
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(B) the vessel is or would have been eligible for mortgage aid for construction under section 509 of the Merchant Marine Act, 1936, or would have been eligible except that the vessel was built with a construction-differential subsidy and the subsidy has been repaid; and
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(4) For an ocean thermal energy conversion facility or plantship constructed without a construction-differential subsidy, the principal amount may not exceed 87.5 percent of the actual cost or depreciated actual cost of the facility or plantship.
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(e) The Secretary may not establish, as a condition of eligibility for a guarantee under this chapter, a minimum principal amount for an obligation covering the reconstruction or reconditioning of a fishing vessel or fishery facility. For purposes of this chapter, the reconstruction or reconditioning of a fishing vessel or fishery facility does not include the routine minor repair or maintenance of the vessel or facility.
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(5) inspecting property during construction, reconstruction, or reconditioning; and
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(a) If the proceeds of an obligation guaranteed under this chapter are to be used to finance the construction, reconstruction, or reconditioning of a vessel that will serve as security for a guarantee under this chapter, the Secretary or Administrator may accept and hold in escrow, under an escrow agreement with the obligor, a portion of the proceeds of all obligations guaranteed under this chapter whose proceeds are to be so used which is equal to—(1) the excess of—(A) the principal amount of all obligations whose proceeds are to be so used; over(B) 75 percent or 87.5 percent, whichever is applicable under section 53709(b) of this title, of the amount paid by or for the account of the obligor for the construction, reconstruction, or reconditioning of the vessel; plus(2) any interest the Secretary or Administrator may require on the amount described in paragraph (1).
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(B) 75 percent or 87.5 percent, whichever is applicable under section 53709(b) of this title, of the amount paid by or for the account of the obligor for the construction, reconstruction, or reconditioning of the vessel; plus
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(i) the construction, reconstruction, or reconditioning of a vessel used as security for the guarantee; and
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(2) The Secretary or Administrator shall, by regulation, establish a transparent, independent, and risk-based process for verifying and documenting the progress of projects under construction before disbursing guaranteed loan funds. At a minimum, the process shall require documented proof of progress in connection with the construction, reconstruction, or reconditioning of a vessel or vessels before disbursements are made from the escrow fund. The Secretary or Administrator may require that the obligor provide a certificate from an independent party certifying that the requisite progress in construction, reconstruction, or reconditioning has taken place.
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(i) the principal amount of all obligations whose proceeds are to be used to finance the construction, reconstruction, or reconditioning of the vessel used or to be used as security for the guarantee; over
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(a) Under subchapter I of this chapter, the Administrator may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation that aids in financing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, or reconditioning of a commercial demonstration ocean thermal energy conversion facility or plantship. This section may be used to guarantee obligations for a total of not more than 5 separate facilities and plantships or a demonstrated 400 megawatt capacity, whichever comes first.
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(2) the need of the United States to develop new and renewable sources of energy and the benefits to be realized from the construction and successful operation of the facility or plantship.
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(i) a structure or appurtenance thereto designed for the construction, reconstruction, repair, rehabilitation, or refurbishment of a vessel, including a graving dock, building way, ship lift, wharf, or pier crane;
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(a) Notwithstanding any other provision of this chapter, the Secretary or Administrator, on terms the Secretary or Administrator may prescribe, may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation that aids in financing or refinancing (including reimbursement of an obligor for expenditures previously made for) a contract for the construction or reconstruction of a vessel if—(1) the vessel is designed and to be used for commercial use in coastwise, intercoastal, or foreign trade;(2) the construction or reconstruction is necessary to replace a vessel that cannot continue to be operated because of a change required by law in the standards for the operation of vessels, and the applicant for the guarantee or commitment would not otherwise legally be able to continue operating vessels in the trades in which the applicant operated vessels before the change;(3) the applicant is presently engaged in transporting cargoes in vessels of the type and class that will be constructed or reconstructed under this section and agrees to employ vessels constructed or reconstructed under this section as replacements only for vessels made obsolete by the change in operating standards;(4) the capacity of the vessels to be constructed or reconstructed under this section will not increase the cargo carrying capacity of the vessels being replaced;(5) the Secretary or Administrator has not determined that the market demand for the vessel over its useful life will diminish so as to make granting the guarantee fiduciarily imprudent;(6) the vessel, if to be reconstructed, will have a useful life of at least 15 years after the reconstruction; and(7) the Secretary or Administrator has considered the criteria specified in section 53708(a)(3)–(5) of this title.
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(2) the construction or reconstruction is necessary to replace a vessel that cannot continue to be operated because of a change required by law in the standards for the operation of vessels, and the applicant for the guarantee or commitment would not otherwise legally be able to continue operating vessels in the trades in which the applicant operated vessels before the change;
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(6) the vessel, if to be reconstructed, will have a useful life of at least 15 years after the reconstruction; and
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(2) The amount of an obligation guaranteed under this section may not exceed 87.5 percent of the actual cost or depreciated actual cost to the applicant for the construction or reconstruction of the vessel. The Secretary or Administrator may not establish a percentage under this paragraph that is to be applied uniformly to all guarantees or commitments to guarantee made under this section.
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(1) an American vessel, including a vessel under construction;
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(A) efficiency, competitive operations, and quality ship construction, repair, and reconfiguration; and
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(I) any item of supply (including construction material) that is—(aa) a commercial item, as defined by section 2.101 of title 48, Code of Federal Regulations (as in effect on the date of the enactment of the National Defense Authorization Act for Fiscal Year 2020); and(bb) sold in substantial quantities in the commercial marketplace; and
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(ii) The term “product or material” means an article, material, or supply brought to the site by the recipient for incorporation into the building, work, or project. The term also includes an item brought to the site preassembled from articles, materials, or supplies. However, emergency life safety systems, such as emergency lighting, fire alarm, and audio evacuation systems, that are discrete systems incorporated into a public building or work and that are produced as complete systems, are evaluated as a single and distinct construction material regardless of when or how the individual parts or components of those systems are delivered to the construction site.
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(A) to finance or refinance the construction, reconstruction, reconditioning, or purchase of a vessel that is eligible for such assistance under chapter 537, unless the Secretary determines such vessel—(i) is necessary for a project described in paragraph (3)(A)(ii)(III) of this subsection; and(ii) is not receiving assistance under chapter 537; or
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(C) With regard to the construction, repair, or alteration of vessels, the same requirements of section 117(k) of title 23, United States Code, shall apply regardless of whether the location of contract performance is known when bids for such work are solicited.
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(B) The term “project” includes construction, reconstruction, environmental rehabilitation, acquisition of property, including land related to the project and improvements to the land, equipment acquisition, and operational improvements.
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(1) Subsection (a) does not apply to transportation performed by a foreign ocean incineration vessel owned by or under construction on May 1, 1982, for a corporation wholly owned by citizens of the United States under section 50501(a)–(c) of this title.
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(3) A vessel described in paragraph (1) shall be inspected by the Coast Guard, regardless of whether inspected by the nation in which it is registered. The inspection shall be the same as would be required of a vessel of the United States, including drydock inspection and internal examination of tanks and void spaces. The inspection may be made concurrently with an inspection by that nation or within one year after the initial issuance or next scheduled issuance of the Safety of Life at Sea Safety Construction Certificate. In making the inspection, the Coast Guard shall refer to the condition of the hull and superstructure established by the initial foreign certification as the basis for evaluating the current condition of the hull and superstructure. The Coast Guard shall allow the substitution of fittings, material, apparatus, equipment, and appliances different from those required for vessels of the United States if satisfied they are equivalent and at least as effective as those required for vessels of the United States. A satisfactory inspection under this paragraph shall be certified in writing by the Secretary of Homeland Security.
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(A) is being used to launch or raise a vessel in connection with the construction, maintenance, or repair of that vessel;
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(1) In applying subsection (a) to a floating dry dock used for the construction of naval vessels in a shipyard located in the United States, the ownership and operation requirement in paragraph (1)(B) of that subsection shall be treated as satisfied and “December 19, 2017” shall be substituted for the date referred to in paragraph (1)(C) of that subsection if the Secretary of the Navy determines that—(A) such dry dock is necessary for the timely completion of such construction; and(B) such dry dock—(i) is owned and operated by—(I) a shipyard located in the United States that is an eligible owner specified under section 12103(b); or(II) an affiliate of such a shipyard; or(ii) is—(I) owned by the State in which the shipyard is located or a political subdivision of that State; and(II) operated by a shipyard located in the United States that is an eligible owner specified under section 12103(b).
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(A) such dry dock is necessary for the timely completion of such construction; and
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(3) issue, assign, or transfer to a person not a citizen of the United States an instrument of indebtedness secured by a mortgage of a vessel to a trustee, by an assignment of an owner’s interest in a vessel under construction to a trustee, or by a mortgage of a facility for building or repairing vessels to a trustee, unless the trustee or a substitute trustee is approved by the Secretary under subsection (b);
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(4) enter into an agreement or understanding to construct a vessel in the United States for, or to be delivered to, a person not a citizen of the United States without expressly stipulating that construction will not begin until after the war or national emergency has ended;
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During a national emergency declared by Presidential proclamation, or a period for which the President has proclaimed that the security of the national defense makes it advisable, the Secretary of Transportation may requisition or purchase, or requisition or charter the use of, a vessel owned by citizens of the United States, a documented vessel, or a vessel under construction in the United States.
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(1) If a construction-differential subsidy has been paid for the vessel, the value of the vessel at the time of requisition shall be determined under section 802 of the Merchant Marine Act, 1936.
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(2) If a construction-differential subsidy has not been paid for the vessel, the value of any national defense features previously paid for by the United States Government shall be excluded.
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(b) The Secretary may transfer the possession or control of a vessel acquired under this chapter to another department or agency of the United States Government on terms and conditions approved by the President. The department or agency shall promptly reimburse the Secretary for expenditures for just compensation, purchase price, charter hire, repairs, reconditioning, or reconstruction.
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(d) The Secretary of Transportation without regard to the1 section 6101 of title 41 may repair, reconstruct, or recondition any vessels to be utilized under section 56309 or 56310, as applicable. The Secretary of Transportation and any other Government department or agency by which any vessel is acquired or chartered, or to which any vessel is transferred or made available under section 56309 or 56310, as applicable, may, with the aid of any funds available and without regard to the provisions of section 6101 of title 41, repair, reconstruct, or recondition any such vessels to meet the needs of the services intended, or provide facilities for such repair, reconstruction, or reconditioning. The Secretary of Transportation may operate or charter for operation any vessel to be utilized under section 56309 or 56310, as applicable2 to private operators, citizens of the United States, or to any department or agency of the United States Government, without regard to the provisions of chapter 575, and any department or agency of the United States Government is authorized to enter into such charters.
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(1) the requirement to operate the vessel in foreign trade under the applicable operating-differential or construction-differential subsidy contract or mortgage or other agreement; and
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(b) The price paid for the vessel shall be based on a fair and reasonable valuation. However, the price may not exceed by more than 5 percent the cost of the vessel to the owner (excluding any construction-differential subsidy and the cost of national defense features paid by the Secretary of Transportation) plus the actual cost previously expended for reconditioning, less depreciation based on a 25-year life for a dry-cargo or passenger vessel and a 20-year life for a tanker or other liquid bulk carrier vessel.
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(b) A vessel reconditioned, remodeled, or improved under subsection (a) shall be documented under the laws of the United States and remain so documented for at least 5 years after completion of the reconditioning, remodeling, or improvement. During that period, it shall be operated on voyages that are not exclusively coastwise.
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To promote the construction of new, safe, and efficient vessels to carry the domestic and foreign waterborne commerce of the United States, the Secretary of Transportation may acquire an obsolete vessel in exchange for an allowance of credit toward the cost of construction or purchase of a new vessel as provided in this chapter.
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(1) when the owner contracts for the construction or purchase of a new vessel; or
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(b) If acquisition of the obsolete vessel occurs when the owner contracts for the construction of the new vessel, and the owner uses the obsolete vessel during the period of construction of the new vessel, the Secretary shall reduce the trade-in allowance by an amount representing the fair value of that use. The Secretary shall establish the rate for use of the obsolete vessel when the contract for construction of the new vessel is made.
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(a) If acquisition of an obsolete vessel under this chapter occurs when the owner contracts for the construction or purchase of the new vessel, the Secretary of Transportation shall apply the trade-in allowance to the purchase price of the new vessel rather than paying it to the owner. If the new vessel is constructed under this subtitle, the Secretary may apply the trade-in allowance to the required cash payments on terms and conditions the Secretary may prescribe. If the new vessel is not constructed under this subtitle, the Secretary shall pay the trade-in allowance to the builder of the vessel for the account of the owner when the Secretary acquires the obsolete vessel.
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(b) If acquisition of the obsolete vessel occurs when the new vessel is delivered to the owner, the Secretary shall deposit the trade-in allowance in the owner’s capital construction fund.
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(b) Construction, reconditioning, and remodeling of vessels under subsection (a) shall take place in shipyards in the continental United States (including Alaska and Hawaii). However, if satisfactory contracts cannot be obtained from private shipbuilders, the Secretary may have the work done in navy yards.
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(c) Contracts for the construction, reconstruction, or reconditioning of a vessel by a private shipbuilder under this chapter are subject to the provisions of title V of the Merchant Marine Act, 1936, applicable to a contract with a private shipbuilder for the construction of a vessel under title V of that Act.
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(a) The Secretary of Transportation may make a contract with a private shipbuilder for the construction of a new vessel, or for the reconstruction or reconditioning of an existing vessel, only after due advertisement and upon sealed competitive bids.
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(b) If the vessel is to be operated in foreign trade, the minimum price is the estimated foreign construction cost (exclusive of national defense features) determined as of the date the construction contract is executed, less depreciation under subsection (d).
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(c) If the vessel is to be operated in domestic trade, the minimum price is the cost of construction in the United States (exclusive of national defense features), less depreciation under subsection (d).
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(c) An individual or organization convicted of violating a section referred to in subsection (a) is ineligible, at the discretion of the Secretary of Transportation, to receive any benefit under the construction-differential subsidy or operating-differential subsidy programs, or a charter under chapter 575 of this title, for 5 years after the conviction.
Citations to §53701(4)
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(1) Except as otherwise provided, the principal amount of an obligation guaranteed under this chapter may not exceed 75 percent of the actual cost or depreciated actual cost, as determined by the Secretary or Administrator, of the vessel used as security for the guarantee.
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(2) The principal amount may not exceed 87.5 percent of the actual cost or depreciated actual cost if—(A) the size and speed of the vessel are approved by the Secretary or Administrator;(B) the vessel is or would have been eligible for mortgage aid for construction under section 509 of the Merchant Marine Act, 1936, or would have been eligible except that the vessel was built with a construction-differential subsidy and the subsidy has been repaid; and
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(3) For a fishing vessel or fishery facility, the principal amount may not exceed 80 percent of the actual cost or depreciated actual cost. However, debt for the vessel or facility may not be placed through the Federal Financing Bank.
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(4) For an ocean thermal energy conversion facility or plantship constructed without a construction-differential subsidy, the principal amount may not exceed 87.5 percent of the actual cost or depreciated actual cost of the facility or plantship.
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(1) the actual cost or depreciated actual cost of the facility or plantship; or
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(2) if the facility or plantship is supported with appropriated Federal funds, the total principal amount of that portion of the actual cost or depreciated actual cost for which the obligor is obligated to secure financing under the agreement between the obligor and the Department of Energy or other Federal agency.
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(2) The amount of an obligation guaranteed under this section may not exceed 87.5 percent of the actual cost or depreciated actual cost to the applicant for the construction or reconstruction of the vessel. The Secretary or Administrator may not establish a percentage under this paragraph that is to be applied uniformly to all guarantees or commitments to guarantee made under this section.
Citations to §53701(5)(A)
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(1) Notwithstanding any other provision of this chapter, any obligation involving a fishing vessel, fishery facility, aquaculture facility, individual fishing quota, or fishing capacity reduction program issued under this chapter after October 11, 1996, shall be a direct loan obligation for which the Secretary shall be the obligee, rather than an obligation issued to an obligee other than the Secretary and guaranteed by the Secretary. A direct loan obligation under this subsection shall be treated in the same manner and to the same extent as an obligation guaranteed under this chapter except with respect to provisions of this chapter that by their nature can only be applied to obligations guaranteed under this chapter.
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(a) The total unpaid principal amount of obligations guaranteed under this chapter and outstanding at one time may not exceed $12,000,000,000. Of that amount, $850,000,000 shall be limited to obligations related to fishing vessels and fishery facilities.
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(3) Financing the purchase, reconstruction, or reconditioning of a vessel or fishery facility—(A) for which an obligation was guaranteed under this chapter; and(B) that, under subchapter II of this chapter—(i) is a vessel or fishery facility for which an obligation was accelerated and paid;(ii) was acquired by the Federal Ship Financing Fund or successor account under section 53717 of this title; or(iii) was sold at foreclosure begun or intervened in by the Secretary or Administrator.
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(i) is a vessel or fishery facility for which an obligation was accelerated and paid;
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(6) Financing or refinancing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, reconditioning, or purchase of a fishery facility.
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(c) The Secretary may not guarantee or make a commitment to guarantee an obligation under this chapter for the purchase of a used fishing vessel or used fishery facility unless the vessel or facility will be—(1) reconstructed or reconditioned in the United States and will contribute to the development of the United States fishing industry; or(2) used—(A) in the harvesting of fish from an underused fishery; or(B) for a purpose described in the definition of “fishery facility” in section 53701 of this title with respect to an underused fishery.
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(B) for a purpose described in the definition of “fishery facility” in section 53701 of this title with respect to an underused fishery.
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(3) For a fishing vessel or fishery facility, the principal amount may not exceed 80 percent of the actual cost or depreciated actual cost. However, debt for the vessel or facility may not be placed through the Federal Financing Bank.
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(e) The Secretary may not establish, as a condition of eligibility for a guarantee under this chapter, a minimum principal amount for an obligation covering the reconstruction or reconditioning of a fishing vessel or fishery facility. For purposes of this chapter, the reconstruction or reconditioning of a fishing vessel or fishery facility does not include the routine minor repair or maintenance of the vessel or facility.
Citations to §53701(6)
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(B) a commercial fishing vessel—(i) constructed in the United States and, if reconstructed, reconstructed in the United States;(ii) of at least 2 net tons but less than 5 net tons;(iii) owned by a citizen of the United States;(iv) having its home port in the United States; and(v) operated in the commercial fisheries of the United States.
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(B) a commercial fishing vessel—(i) constructed in the United States and, if reconstructed, reconstructed in the United States;(ii) of at least 2 net tons but less than 5 net tons;(iii) owned by a citizen of the United States;(iv) having its home port in the United States; and(v) operated in the commercial fisheries of the United States.
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(1) Notwithstanding any other provision of this chapter, any obligation involving a fishing vessel, fishery facility, aquaculture facility, individual fishing quota, or fishing capacity reduction program issued under this chapter after October 11, 1996, shall be a direct loan obligation for which the Secretary shall be the obligee, rather than an obligation issued to an obligee other than the Secretary and guaranteed by the Secretary. A direct loan obligation under this subsection shall be treated in the same manner and to the same extent as an obligation guaranteed under this chapter except with respect to provisions of this chapter that by their nature can only be applied to obligations guaranteed under this chapter.
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(A) financing the construction or reconstruction of a fishing vessel in a fishery managed under a limited access system; or
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(a) The total unpaid principal amount of obligations guaranteed under this chapter and outstanding at one time may not exceed $12,000,000,000. Of that amount, $850,000,000 shall be limited to obligations related to fishing vessels and fishery facilities.
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(c) The Secretary may not guarantee or make a commitment to guarantee a loan for the construction, reconstruction, or reconditioning of a fishing vessel under this chapter if the operator of the vessel has been—(1) held liable, or the vessel has been held liable in rem, for a civil penalty under section 308 of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1858) and the operator has not paid the penalty;(2) found guilty of an offense under section 309 of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1859) and not paid the assessed fine or served the assessed sentence;(3) held liable for a civil or criminal penalty under section 105 of the Marine Mammal Protection Act of 1972 (16 U.S.C. 1375) and not paid the assessed fine or served the assessed sentence; or(4) held liable for a civil penalty by the Coast Guard under this title or title 33 and not paid the assessed fine.
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(2) for a fishing vessel, the purpose of the financing or refinancing is consistent with—(A) the wise use of the fisheries resources and the development, advancement, management, conservation, and protection of the fisheries resources; or(B) the need for technical improvements, including increased fuel efficiency or improved safety.
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(c) The Secretary may not guarantee or make a commitment to guarantee an obligation under this chapter for the purchase of a used fishing vessel or used fishery facility unless the vessel or facility will be—(1) reconstructed or reconditioned in the United States and will contribute to the development of the United States fishing industry; or(2) used—(A) in the harvesting of fish from an underused fishery; or(B) for a purpose described in the definition of “fishery facility” in section 53701 of this title with respect to an underused fishery.
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(3) For a fishing vessel or fishery facility, the principal amount may not exceed 80 percent of the actual cost or depreciated actual cost. However, debt for the vessel or facility may not be placed through the Federal Financing Bank.
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(e) The Secretary may not establish, as a condition of eligibility for a guarantee under this chapter, a minimum principal amount for an obligation covering the reconstruction or reconditioning of a fishing vessel or fishery facility. For purposes of this chapter, the reconstruction or reconditioning of a fishing vessel or fishery facility does not include the routine minor repair or maintenance of the vessel or facility.
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(2) Paragraph (1)(A) does not apply to a vessel that has been operated only for pleasure or only as a fishing vessel, fish processing vessel, or fish tender vessel (as defined in section 2101 of this title).
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(3) a fishing vessel seized or forfeited pursuant to section 310 of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1860).
Citations to §53701(8)
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(B) mortgages and other contracts securing the property.
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(1) In a proceeding in a court of the United States in which a trustee or receiver may be appointed for a corporation operating a vessel of United States registry between the United States and a foreign country, on which the United States Government holds a mortgage, the court may appoint the Secretary of Transportation as the sole trustee or receiver (subject to the direction of the court) if—(A) the court finds that the appointment will—(i) inure to the advantage of the estate and the parties in interest; and(ii) tend to carry out the purposes of this subtitle; and(B) the Secretary expressly consents to the appointment.
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(B) the vessel is or would have been eligible for mortgage aid for construction under section 509 of the Merchant Marine Act, 1936, or would have been eligible except that the vessel was built with a construction-differential subsidy and the subsidy has been repaid; and
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(2) sell, mortgage, lease, charter, deliver, or in any other manner transfer, or agree to sell, mortgage, lease, charter, deliver, or in any other manner transfer, to a person not a citizen of the United States—(A) a vessel owned as described in paragraph (1), or an interest therein;(B) a vessel documented under the laws of the United States, or an interest therein; or(C) a facility for building or repairing vessels, or an interest therein;
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(3) issue, assign, or transfer to a person not a citizen of the United States an instrument of indebtedness secured by a mortgage of a vessel to a trustee, by an assignment of an owner’s interest in a vessel under construction to a trustee, or by a mortgage of a facility for building or repairing vessels to a trustee, unless the trustee or a substitute trustee is approved by the Secretary under subsection (b);
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(3) During a period when subsection (a) applies, a trustee referred to in subsection (a)(3), even though approved as a trustee by the Secretary, may not operate the vessel under the mortgage or assignment without the Secretary’s approval.
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In the case of any vessel constructed in the United States after January 1, 1937, which has been taken by the United States for use in any manner, the Secretary of Transportation, if in his opinion the transfer would aid in carrying out the policies of this Act,1 is authorized to transfer to the owner of such vessel another vessel which is deemed by the Secretary to be of comparable type with adjustments for depreciation and difference in design or speed, and to the extent applicable, such other adjustments and terms and conditions, including transfer of mortgage obligations in favor of the United States binding upon the old vessel, as the Secretary may prescribe.
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(A) security for a mortgage indebtedness to the United States Government; or
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(1) the requirement to operate the vessel in foreign trade under the applicable operating-differential or construction-differential subsidy contract or mortgage or other agreement; and
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Unless otherwise authorized by the Secretary of Transportation, a vessel purchased, chartered, or leased from the Secretary may be operated only under a certificate of documentation with a registry or coastwise endorsement. Such a vessel, while employed solely as a merchant vessel, is subject to the laws, regulations, and liabilities governing merchant vessels, whether the United States Government has an interest in the vessel as an owner or holds a mortgage, lien, or other interest.
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(1) is in default on a mortgage, note, purchase contract, or other obligation to the Secretary; or
Citations to §53701(9)
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(1) title to the majority of the stock in the corporation is vested in citizens of the United States free from any trust or fiduciary obligation in favor of a person not a citizen of the United States;
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(1) title to at least 75 percent of the stock in the corporation is vested in citizens of the United States free from any trust or fiduciary obligation in favor of a person not a citizen of the United States;
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(2) If the Secretary of Defense is unable or unwilling to order an individual to serve on active duty under paragraph (1), or if the Secretary of Transportation determines that reimbursement of the cost of education provided would better serve the interests of the United States, the Secretary of Transportation may recover from the individual the cost of education provided. The Secretary may reduce the amount to be recovered to reflect partial performance of service obligations and other factors the Secretary determines merit a reduction.
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(2) A report or notice under paragraph (1) shall identify any graduate determined to have failed to comply with service obligation requirements and provide all required information as to why such graduate failed to comply.
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(3) Upon receipt of such a report or notice, such graduate may be considered to be in default of the graduate’s service obligations by the Secretary, and subject to all remedies the Secretary may have with respect to such a default.
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(c) The amount of a qualified guarantee accepted under this section shall be considered as contract authority to provide obligation authority for purposes of Federal fiscal and contractual requirements. Funds available for a project for which such a guarantee has been accepted may be obligated and expended for the project without regard to whether the total amount of funds and other resources available for the project (not taking into account the amount of the guarantee) is sufficient to pay for completion of the project.
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(d) In carrying out its responsibilities under this subsection, the Council shall comply with the obligations of the Department of Transportation to protect personally identifiable information.
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(3) In carrying out this subsection, the Council shall comply with the obligations of the Department of Transportation to protect personally identifiable information.
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(2) If the Secretary of Defense is unable or unwilling to order an individual to serve on active duty under paragraph (1), or if the Secretary of Transportation determines that reimbursement of the cost of education provided would better serve the interests of the United States, the Secretary of Transportation may recover from the individual the amount of student incentive payments, plus interest and attorney fees. The Secretary may reduce the amount to be recovered to reflect partial performance of service obligations and other factors the Secretary determines merit a reduction.
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(2) If the Secretary of Defense is unable or unwilling to order an individual to serve on active duty under paragraph (1), or if the Secretary of Transportation determines that reimbursement of the cost of education provided would better serve the interests of the United States, the Secretary of Transportation may recover from the individual the amount of student incentive payments, plus interest and attorney fees. The Secretary may reduce the amount to be recovered to reflect partial performance of service obligations and other factors the Secretary determines merit a reduction.
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(III) that certifies to the Secretary that there are no treaties, statutes, regulations, or other laws that would prohibit the contractor for the vessel from performing its obligations under an operating agreement under this chapter;
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(C) the Secretary and the Secretary of Defense notify the Committee on Armed Services and the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Armed Services of the House of Representatives that they concur with the certification required under subparagraph (A)(ii)(III), and have reviewed and agree that there are no other legal, operational, or other impediments that would prohibit the contractor for the vessel from performing its obligations under an operating agreement under this chapter.
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(B) the Secretary and the Secretary of Defense notify the Committee on Armed Services and the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Armed Services of the House of Representatives that they concur with the certification required under subparagraph (A)(iv), and have reviewed and agree that there are no other legal, operational, or other impediments that would prohibit the contractor for the vessel from performing its obligations under an operating agreement under this chapter.
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(1) each vessel covered by the operating agreement is thereby released from any further obligation under the operating agreement;
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(2) An operating agreement under this chapter constitutes a contractual obligation of the United States Government to pay the amounts provided for in the agreement to the extent of actual appropriations.
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(e) A contractor under an operating agreement may transfer the agreement (including all rights and obligations under the operating agreement) to any person that is eligible to enter into the operating agreement under this chapter if the Secretary and the Secretary of Defense determine that the transfer is in the best interests of the United States. A transaction shall not be considered a transfer of an operating agreement if the same legal entity with the same vessels remains the contracting party under the operating agreement.
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(III) that certifies to the Secretary that there are no treaties, statutes, regulations, or other laws that would prohibit the Contractor for the vessel from performing its obligations under an Operating Agreement under this chapter;
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(C) the Secretary and the Operating Agency notify the Committee on Armed Services and the Committee on Commerce, Science and Transportation of the Senate, and the Committee on Armed Services of the House of Representatives that they concur, and have reviewed the certification required under subparagraph (A)(ii)(III) and determined that there are no legal, operational, or other impediments that would prohibit the Contractor for the vessel from performing its obligations under an Operating Agreement under this chapter.
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(B) the Secretary and the Secretary of Defense notify the Committee on Armed Services and Committee on Commerce, Science, and Transportation of the Senate and the Committee on Armed Services of the House of Representatives that they have reviewed the certification required by subparagraph (A)(iv) and determined that there are no other legal, operational, or other impediments that would prohibit the Contractor for the vessel from performing its obligations under an Operating Agreement under this chapter.
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(d) If, by the first day of a fiscal year, sufficient funds have not been appropriated under the authority provided by this chapter for that fiscal year for all Operating Agreements, then the Secretary shall notify the Committee on Armed Services and the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Armed Services of the House of Representatives that Operating Agreements authorized under this chapter for which sufficient funds are not available will not be renewed for that fiscal year if sufficient funds are not appropriated by the 60th day of that fiscal year. If only partial funding is appropriated by the 60th day of such fiscal year, then the Secretary, in consultation with the Operating Agency, shall select the vessels to retain under Operating Agreements, based on their determinations of which vessels are most useful for national security. In the event that no funds are appropriated, then no Operating Agreements shall be renewed and each Contractor shall be released from its obligations under the Operating Agreement. Final payments under an Operating Agreement that is not renewed shall be made in accordance with section 53206. To the extent that sufficient funds are appropriated in a subsequent fiscal year, an Operating Agreement that has not been renewed pursuant to this subsection may be reinstated if mutually acceptable to the Secretary, in consultation with the Operating Agency, and the Contractor, provided the vessel remains eligible for participation pursuant to section 53202, without regard to subsection 53202 (b)(3).
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(1) each vessel covered by the Operating Agreement that is not renewed is thereby released from any further obligation under the Operating Agreement;
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(2) An Operating Agreement under this chapter constitutes a contractual obligation of the United States Government to pay the amounts provided for in the Operating Agreement to the extent of actual appropriations.
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(2) In any action in any Federal or State court for breach of third-party contract, there shall be available as an affirmative defense that the alleged breach of contract was caused predominantly by action taken to carry out a Contingent Agreement. Such defense shall not release the party asserting it from any obligation under applicable law to mitigate damages to the greatest extent possible.
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(3) if a deposit consists in part of a gain not recognized under section 53306 of this title, any expenditure, obligation, or withdrawal applied against that deposit shall be deemed to be a gain in the proportion that the part of the deposit consisting of a gain bears to the total amount of the deposit.
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(c) The Secretary of Transportation may grant extensions of the period within which the deposits must be expended or obligated or within which the construction 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 of deposits or one year for the progress of construction.
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(III) that certifies to the Secretary of Transportation that there are no treaties, statutes, regulations, or other laws that would prohibit the program participant for the vessel from performing its obligations under an operating agreement under this chapter;
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(C) the Secretary of Transportation and the Secretary of Defense notify the Committee on Armed Services and the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Armed Services and the Committee on Transportation and Infrastructure of the House of Representatives that the Secretaries concur with the certification required under subparagraph (A)(ii)(III), and have reviewed and agree that there are no legal, operational, or other impediments that would prohibit the owner or operator for the vessel from performing its obligations under an operating agreement under this chapter.
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(B) the Secretary of Transportation and the Secretary of Defense notify the Committee on Armed Services and the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Armed Services and the Committee on Transportation and Infrastructure of the House of Representatives that they concur with the certification required under subparagraph (A)(iv), and have reviewed and agree that there are no legal, operational, or other impediments that would prohibit the program participant for the vessel from performing its obligations under an operating agreement under this chapter.
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(1) each vessel covered by the operating agreement is thereby released from any further obligation under the operating agreement;
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(2) An operating agreement under this chapter constitutes a contractual obligation of the United States Government to pay the amounts provided for in the agreement to the extent of actual appropriations.
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(e) A program participant may transfer an operating agreement (including all rights and obligations under the agreement) to any person that is eligible to enter into that operating agreement under this chapter, if the Secretary of Transportation and the Secretary of Defense determine that the transfer is in the best interests of the United States.
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(c) Under joint regulations, if the Secretary determines that a substantial obligation under an agreement is not being fulfilled, the Secretary, after notice and opportunity for a hearing to the person maintaining the fund, may treat any amount in the fund as an amount withdrawn from the fund in a nonqualified withdrawal.
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(5) having been determined during the calendar year to have failed to fulfill a substantial obligation under a capital construction fund agreement to which the person is a party.
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(1) The Secretary or Administrator, on terms the Secretary or Administrator may prescribe, may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation eligible to be guaranteed under this chapter. A guarantee or commitment to guarantee shall cover 100 percent of the principal and interest.
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(2) The Federal Financing Bank shall be the preferred eligible lender of the principal and interest of the guaranteed obligations issued under this chapter.
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(1) Notwithstanding any other provision of this chapter, any obligation involving a fishing vessel, fishery facility, aquaculture facility, individual fishing quota, or fishing capacity reduction program issued under this chapter after October 11, 1996, shall be a direct loan obligation for which the Secretary shall be the obligee, rather than an obligation issued to an obligee other than the Secretary and guaranteed by the Secretary. A direct loan obligation under this subsection shall be treated in the same manner and to the same extent as an obligation guaranteed under this chapter except with respect to provisions of this chapter that by their nature can only be applied to obligations guaranteed under this chapter.
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(2) Notwithstanding any other provision of this chapter, the annual rate of interest an obligor shall pay on a direct loan obligation under this subsection is 2 percent plus the additional percent the Secretary must pay as interest to borrow from the Treasury the funds to make the loan.
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(3) Of the direct loan obligations issued by the Secretary under this chapter, the Secretary shall make a minimum of $59,000,000 available each fiscal year for historic uses.
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(4) In addition to the other eligible purposes and uses of direct loan obligations provided for in this chapter, the Secretary may issue direct loan obligations for the purpose of—(A) financing the construction or reconstruction of a fishing vessel in a fishery managed under a limited access system; or(B) financing the purchase of harvesting rights in a fishery that is federally managed under a limited access system.
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(b) The Secretary or Administrator may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Secretary or Administrator certifies that a full and fair consideration of all the regulatory requirements, including economic soundness and financial requirements applicable to the obligor and related parties, and a thorough assessment of the technical, economic, and financial aspects of the loan application, has been made.
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(B) represent the Secretary or Administrator in structuring and documenting the obligation guarantee;
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(C) analyze and review aspects of, structure, and document the obligation guarantee during the term of the guarantee;
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(E) represent the Secretary or Administrator to protect the security interests of the Government relating to an obligation guarantee.
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(1) The Secretary or Administrator may post a notice in the Federal Register regarding the availability of funding for obligation guarantees under this chapter for the construction, reconstruction, or reconditioning of a Vessel of National Interest and include a timeline for the submission of applications for such vessels.
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(a) The total unpaid principal amount of obligations guaranteed under this chapter and outstanding at one time may not exceed $12,000,000,000. Of that amount, $850,000,000 shall be limited to obligations related to fishing vessels and fishery facilities.
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(A) establish, and update annually, a system of risk categories for obligations guaranteed under this chapter that categorizes the relative risk of guarantees based on the risk factors set forth in paragraph (4);
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(B) determine annually for each risk category a subsidy rate equivalent to the cost of obligations in the category, expressed as a percentage of the amount guaranteed for obligations in the category; and
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(C) ensure that each risk category is comprised of loans that are relatively homogeneous in cost and share characteristics predictive of defaults and other costs, given the facts known at the time of obligation or commitment, using a risk category system that is based on historical analysis of program data and statistical evidence concerning the likely costs of defaults or other costs that are expected to be associated with the loans in the category.
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(A) Before making a guarantee under this chapter for an obligation, and annually for projects subject to a guarantee, the Secretary or Administrator shall apply the risk factors specified in paragraph (4) to place the obligation in a risk category established under paragraph (2).
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(i) the amount guaranteed under this chapter for an obligation; by
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(ii) the subsidy rate for the category in which the obligation is placed under subparagraph (A).
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(C) The estimated cost to the United States Government of a guarantee under this chapter for an obligation is deemed to be the amount determined under subparagraph (B) for the obligation.
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(D) The Secretary or Administrator may not guarantee obligations under this chapter after the total amount available to the Secretary or Administrator under appropriations laws for the cost of loan guarantees is considered to be reduced to zero under subparagraph (B).
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(A) the period for which an obligation is guaranteed or to be guaranteed;
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(B) the amount of an obligation guaranteed or to be guaranteed in relation to the total cost of the project financed or to be financed by the obligation;
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(E) if applicable, the projected employment of each vessel or equipment to be financed with an obligation;
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(F) if applicable, the projected market that will be served by each vessel or equipment to be financed with an obligation;
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(G) the collateral provided for a guarantee for an obligation;
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(a) The full faith and credit of the United States Government is pledged to the payment of a guarantee made under this chapter, for both principal and interest, including interest (as may be provided for in the guarantee) accruing between the date of default under a guaranteed obligation and the date of payment in full of the guarantee.
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(b) A guarantee or commitment to guarantee made under this chapter is conclusive evidence of the eligibility of the obligation for the guarantee. The validity of a guarantee or commitment to guarantee made under this chapter is incontestable.
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(a) To be eligible for a guarantee under this chapter, an obligation must aid in any of the following:(A) Financing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, or reconditioning of a vessel designed principally for research, or for commercial use—(i) in the coastwise or intercoastal trade;(ii) on the Great Lakes, or on bays, sounds, rivers, harbors, or inland lakes of the United States;(iii) in foreign trade as defined in section 109(b) of this title;(iv) as an ocean thermal energy conversion facility or plantship; or(v) as a floating drydock in the construction, reconstruction, reconditioning, or repair of vessels.(B) A guarantee under subparagraph (A) may not be made more than one year after delivery of the vessel (or redelivery if the vessel was reconstructed or reconditioned) unless the proceeds of the obligation are used to finance the construction, reconstruction, or reconditioning of a vessel or of facilities or equipment related to marine operations.(2) Financing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, reconditioning, or purchase of a vessel owned by citizens of the United States and designed principally for research, or for commercial use in the fishing industry.(3) Financing the purchase, reconstruction, or reconditioning of a vessel or fishery facility—(A) for which an obligation was guaranteed under this chapter; and(B) that, under subchapter II of this chapter—(i) is a vessel or fishery facility for which an obligation was accelerated and paid;(ii) was acquired by the Federal Ship Financing Fund or successor account under section 53717 of this title; or(iii) was sold at foreclosure begun or intervened in by the Secretary or Administrator.(4) Financing any part of the repayment to the United States Government of any amount of a construction-differential subsidy paid for a vessel.(5) Refinancing an existing obligation (regardless of whether guaranteed under this chapter) issued for a purpose described in paragraphs (1)–(4), including a short-term obligation incurred to obtain temporary funds with the intention of refinancing.(6) Financing or refinancing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, reconditioning, or purchase of a fishery facility.(7) Financing or refinancing—(A) the purchase of individual fishing quotas in accordance with section 303(d)(4) of the Magnuson-Stevens Fishery Conservation and Management Act (including the reimbursement of obligors for expenditures previously made for such a purchase);(B) activities that assist in the transition to reduced fishing capacity; or(C) technologies or upgrades designed to improve collection and reporting of fishery-dependent data, to reduce bycatch, to improve selectivity or reduce adverse impacts of fishing gear, or to improve safety.(8) Financing (including reimbursement of an obligor for expenditures previously made for) the reconstruction, reconditioning, retrofitting, repair, reconfiguration, or similar work in a shipyard located in the United States.
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(B) A guarantee under subparagraph (A) may not be made more than one year after delivery of the vessel (or redelivery if the vessel was reconstructed or reconditioned) unless the proceeds of the obligation are used to finance the construction, reconstruction, or reconditioning of a vessel or of facilities or equipment related to marine operations.
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(A) for which an obligation was guaranteed under this chapter; and
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(i) is a vessel or fishery facility for which an obligation was accelerated and paid;
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(5) Refinancing an existing obligation (regardless of whether guaranteed under this chapter) issued for a purpose described in paragraphs (1)–(4), including a short-term obligation incurred to obtain temporary funds with the intention of refinancing.
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(b) An obligation guaranteed under subsection (a)(6) or (7) shall be treated, for purposes of this chapter, in the same manner and to the same extent as an obligation that aids in financing the construction, reconstruction, reconditioning, or purchase of a vessel, except with respect to provisions that by their nature can only be applied to vessels.
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(1) In guaranteeing or making a commitment to guarantee an obligation under this chapter, the Administrator shall give priority to—(A) a vessel that is otherwise eligible for a guarantee and is constructed with assistance under subtitle D of the Maritime Security Act of 2003 (46 U.S.C. 53101 note);(B) after applying subparagraph (A), a vessel that is otherwise eligible for a guarantee and that the Secretary of Defense determines—(i) is suitable for service as a naval auxiliary in time of war or national emergency; and(ii) meets a shortfall in sealift capacity or capability; and
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(a) The Secretary or Administrator may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Secretary or Administrator finds that the obligor is responsible and has the ability, experience, financial resources, and other qualifications necessary for the adequate operation and maintenance of each vessel that will serve as security for the guarantee.
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(a) The Administrator may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Administrator finds that the property or project for which the obligation will be executed will be economically sound. In making that finding, the Administrator shall consider—(1) the need in the particular segment of the maritime industry for new or additional capacity, including any impact on existing equipment for which a guarantee under this chapter is in effect;(2) the market potential for employment of the vessel over the life of the guarantee;(3) projected revenues and expenses associated with employment of the vessel;(4) any charter, contract of affreightment, transportation agreement, or similar agreement or undertaking relevant to the employment of the vessel;(5) other relevant criteria; and(6) for inland waterways, the need for technical improvements, including increased fuel efficiency or improved safety.
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(b) The Secretary may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Secretary finds, at or prior to the time the commitment is made or the guarantee becomes effective, that—(1) the property or project for which the obligation will be executed will be economically sound; and(2) for a fishing vessel, the purpose of the financing or refinancing is consistent with—(A) the wise use of the fisheries resources and the development, advancement, management, conservation, and protection of the fisheries resources; or(B) the need for technical improvements, including increased fuel efficiency or improved safety.
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(1) the property or project for which the obligation will be executed will be economically sound; and
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(c) The Secretary may not guarantee or make a commitment to guarantee an obligation under this chapter for the purchase of a used fishing vessel or used fishery facility unless the vessel or facility will be—(1) reconstructed or reconditioned in the United States and will contribute to the development of the United States fishing industry; or(2) used—(A) in the harvesting of fish from an underused fishery; or(B) for a purpose described in the definition of “fishery facility” in section 53701 of this title with respect to an underused fishery.
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(a) The principal of an obligation may not be guaranteed in an amount greater than the amount determined by multiplying the percentage applicable under subsection (b) by—(1) the amount paid by or for the account of the obligor (as determined by the Secretary or Administrator, which determination shall be conclusive) for the construction, reconstruction, or reconditioning of the vessel used as security for the guarantee; or(2) if the obligor creates an escrow fund under section 53715 of this title, the actual cost of the vessel.
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(1) Except as otherwise provided, the principal amount of an obligation guaranteed under this chapter may not exceed 75 percent of the actual cost or depreciated actual cost, as determined by the Secretary or Administrator, of the vessel used as security for the guarantee.
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(c) The principal amount of an obligation having more than one vessel as security for the guarantee may not exceed the sum of the principal amounts allowable for all the vessels.
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(e) The Secretary may not establish, as a condition of eligibility for a guarantee under this chapter, a minimum principal amount for an obligation covering the reconstruction or reconditioning of a fishing vessel or fishery facility. For purposes of this chapter, the reconstruction or reconditioning of a fishing vessel or fishery facility does not include the routine minor repair or maintenance of the vessel or facility.
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(a) An obligation guaranteed under this chapter must—(1) provide for payments by the obligor satisfactory to the Secretary or Administrator;(2) provide for interest (exclusive of guarantee fees and other fees) at a rate not more than the annual rate on the unpaid principal that the Secretary or Administrator determines is reasonable, considering the range of interest rates prevailing in the private market for similar loans and the risks assumed by the Secretary or Administrator;(3) have a maturity date satisfactory to the Secretary or Administrator, but—(A) not more than 25 years after the date of delivery of the vessel used as security for the guarantee; or(B) if the vessel has been reconstructed or reconditioned, not more than the later of—(i) 25 years after the date of delivery of the vessel; or(ii) the remaining years of useful life of the vessel as determined by the Secretary or Administrator; and(4) provide, or a related agreement must provide, that if the vessel used as security for the guarantee is a delivered vessel, the vessel shall be—(A) in class A–1, American Bureau of Shipping, or meet other standards acceptable to the Secretary or Administrator, with all required certificates, including marine inspection certificates of the Coast Guard, and with all outstanding requirements and recommendations necessary for class retention accomplished, unless the Secretary or Administrator permits a deferment of repairs necessary to meet these requirements;(B) well equipped, in good repair, and in every respect seaworthy and fit for service; and(C) documented under the laws of the United States for the term of the guarantee of the obligation or until the obligation is paid in full, whichever is sooner.
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(C) documented under the laws of the United States for the term of the guarantee of the obligation or until the obligation is paid in full, whichever is sooner.
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(1) With the Administrator’s approval, if the vessel used as security for the guarantee is a passenger vessel having the tonnage, speed, passenger accommodations, and other characteristics described in section 503 of the Merchant Marine Act, 1936, an obligation guaranteed under this chapter or a related agreement may provide that—(A) the only recourse by the United States Government against the obligor for payments under the guarantee will be repossession of the vessel and assignment of insurance claims; and(B) the obligor’s liability for payments under the guarantee will be satisfied and discharged by the surrender of the vessel and all interest in the vessel to the Government in the condition described in paragraph (2).
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(c) An obligation guaranteed under this chapter and any related agreement must contain other provisions, which shall include—(1) provisions for the protection of the security interests of the Government (including acceleration, assumption, and subrogation provisions and the issuance of notes by the obligor to the Secretary or Administrator), liens and releases of liens, payment of taxes; and(2) any other provisions that the Secretary or Administrator may prescribe.
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(a) The Secretary or Administrator may guarantee an obligation under this chapter only if the obligor conveys or agrees to convey to the Secretary or Administrator a security interest the Secretary or Administrator considers necessary to protect the interest of the United States Government.
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(b) The security interest may relate to more than one vessel and may consist of more than one type of security. If the security interest relates to more than one vessel, the obligation may have the latest maturity date allowable under section 53710(a)(3) of this title for any of the vessels used as security for the guarantee. However, the Secretary or Administrator may require such payments of principal prior to maturity, with respect to all related obligations, as the Secretary or Administrator considers necessary to maintain adequate security for the guarantee.
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(a) The Secretary or Administrator shall monitor the financial condition and operations of the obligor on a regular basis during the term of the guarantee. The Secretary or Administrator shall document the results of the monitoring on an annual or quarterly basis depending on the condition of the obligor. If the Secretary or Administrator determines that the financial condition of the obligor warrants additional protections to the Secretary or Administrator, the Secretary or Administrator shall take appropriate action under subsection (b). If the Secretary or Administrator determines that the financial condition of the obligor jeopardizes its continued ability to perform its responsibilities in connection with the guarantee of an obligation by the Secretary or Administrator, the Secretary or Administrator shall make an immediate determination whether default should take place and whether further measures described in subsection (b) should be taken to protect the interests of the Secretary or Administrator while ensuring that program objectives are met.
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(6) monitoring and providing services related to the obligor’s compliance with any terms related to the obligations, the guarantee, or maintenance of the Secretary or Administrator’s security interests under this chapter.
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(b) The total fees under subsection (a) may not exceed 0.5 percent of the original principal amount of the obligations to be guaranteed.
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(a) Subject to this section, the Secretary or Administrator shall prescribe regulations to assess a fee for guaranteeing an obligation under this chapter.
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(2) The amount referred to in paragraph (1) for a year in which the guarantee is in effect is the present value of the amount calculated under paragraph (3). To determine the present value, the Secretary or Administrator shall apply a discount rate determined by the Secretary of the Treasury, considering current market yields on outstanding obligations of the United States Government having periods to maturity comparable to the period to maturity for the guaranteed obligation.
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(A) the estimated average unpaid principal amount of the obligation that will be outstanding during the year (excluding the average amount, other than interest, on deposit during the year in an escrow fund under section 53715 of this title); by
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(A) takes into account the security provided for the guaranteed obligation; and
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(c) A fee for the guarantee of an obligation under this chapter shall be collected not later than the date on which an amount is first paid on the obligation.
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(d) A fee paid under this section is eligible to be financed under this chapter and shall be included in the actual cost of the obligation guaranteed.
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(e) A fee paid under this section is not refundable. However, an obligor shall receive credit for the amount paid for the remaining term of the obligation if the obligation is refinanced and guaranteed under this chapter after the refinancing.
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(a) If the proceeds of an obligation guaranteed under this chapter are to be used to finance the construction, reconstruction, or reconditioning of a vessel that will serve as security for a guarantee under this chapter, the Secretary or Administrator may accept and hold in escrow, under an escrow agreement with the obligor, a portion of the proceeds of all obligations guaranteed under this chapter whose proceeds are to be so used which is equal to—(1) the excess of—(A) the principal amount of all obligations whose proceeds are to be so used; over(B) 75 percent or 87.5 percent, whichever is applicable under section 53709(b) of this title, of the amount paid by or for the account of the obligor for the construction, reconstruction, or reconditioning of the vessel; plus(2) any interest the Secretary or Administrator may require on the amount described in paragraph (1).
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(A) the principal amount of all obligations whose proceeds are to be so used; over
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(b) If the security for the guarantee of an obligation relates both to a vessel to be constructed, reconstructed, or reconditioned and to a delivered vessel, the principal amount of the obligation shall be prorated for purposes of subsection (a) under regulations prescribed by the Secretary or Administrator.
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(ii) interest on the obligations;
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(B) redeem the obligations under a refinancing guaranteed under this chapter; and
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(2) If a payment becomes due under the guarantee before the termination of the escrow agreement, the amount in the escrow fund at the time the payment becomes due, including realized income not yet paid to the obligor, shall be paid into the appropriate account under section 53717 of this title. The amount shall be credited against amounts due or to become due from the obligor to the Secretary or Administrator on the guaranteed obligations or, to the extent not so required, be paid to the obligor.
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(1) No disbursement shall be made under subsection (c) to any person until the total amount paid by or for the account of the obligor from sources other than the proceeds of the obligation equals at least 25 percent or 12.5 percent, whichever is applicable under section 53709(b) of this title, of the aggregate actual cost of the vessel, as previously approved by the Secretary or Administrator. If the aggregate actual cost of the vessel has increased since the Secretary’s or Administrator’s initial approval or if it increases after the first disbursement is permitted under this subsection, then no further disbursements shall be made under subsection (c) until the total amount paid by or for the account of the obligor from sources other than the proceeds of the obligation equals at least 25 percent or 12.5 percent, as applicable, of the increase, as determined by the Secretary or Administrator, in the aggregate actual cost of the vessel. This paragraph does not require the Secretary or Administrator to consent to finance any increase in actual cost unless the Secretary or Administrator determines that such an increase in the obligation meets all the terms and conditions of this chapter or other applicable law.
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(i) the principal amount of all obligations whose proceeds are to be used to finance the construction, reconstruction, or reconditioning of the vessel used or to be used as security for the guarantee; over
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(f) The Secretary or Administrator may invest and reinvest any part of an escrow fund in obligations of the United States Government with maturities such that the escrow fund will be available as required for purposes of the escrow agreement. Investment income shall be paid to the obligor when received.
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(c) The Secretary or Administrator may invest and reinvest any part of the amounts in the fund in obligations of the Government with maturities such that amounts in the fund will be available as required for purposes of the agreement under subsection (b). Cash balances in the fund in excess of current requirements shall be maintained in a form of uninvested funds, and the Secretary of the Treasury shall pay interest on these funds.
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(3) The Secretary or Administrator may retain and offset any or all of the cash of an obligor in the fund, and any income realized thereon, as part of the Secretary’s or Administrator’s recovery against the obligor in case of a default by the obligor on an obligation.
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(1) The Administrator shall account for payments and disbursements involving obligations guaranteed under this chapter and not subject to FCRA in an account in the Treasury entitled the Federal Ship Financing Fund Liquidating Account (a liquidating account as defined in FCRA).
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(2) The Administrator shall account for payments and disbursements involving obligations guaranteed under this chapter and subject to FCRA in a separate account in the Treasury entitled the Federal Ship Financing Guaranteed Loan Financing Account (a financing account as defined in FCRA).
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(1) The Secretary shall account for payments and disbursements involving obligations guaranteed under this chapter and not subject to FCRA in a separate account in the Treasury established for this purpose.
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(2) The Secretary shall account for payments and disbursements involving obligations guaranteed under this chapter and subject to FCRA in a separate account in the Treasury established for this purpose.
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(a) Except as provided in subsection (c), if an obligor has continued in default for 30 days in the payment of principal or interest on an obligation guaranteed under this chapter, the obligee or the obligee’s agent may demand that the Secretary or Administrator pay the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. The demand must be made within the earlier of—(1) a period that may be specified in the guarantee or a related agreement; or(2) 90 days from the date of the default.
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(1) If a demand is made under subsection (a), the Secretary or Administrator shall pay to the obligee or the obligee’s agent the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. Payment shall be made within the earlier of—(A) a period that may be specified in the guarantee or a related agreement; or(B) 30 days from the date of the demand.
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(c) An obligee or the obligee’s agent may not demand payment under this section if the Secretary or Administrator, before the demand and on terms that may be provided in the obligation or a related agreement, has assumed the obligor’s rights and duties under the obligation and any related agreement and made any payment in default. However, the guarantee of the obligation remains in effect after the Secretary’s or Administrator’s assumption.
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(a) On default under an obligation or related agreement between the Secretary or Administrator and the obligor, the Secretary or Administrator, on terms that may be provided in the obligation or agreement, may—(1) assume the obligor’s rights and duties under the obligation or agreement, make any payment in default, and notify the obligee or the obligee’s agent of the default and the Secretary’s or Administrator’s assumption; or
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(1) assume the obligor’s rights and duties under the obligation or agreement, make any payment in default, and notify the obligee or the obligee’s agent of the default and the Secretary’s or Administrator’s assumption; or
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(1) If the Secretary or Administrator proceeds under subsection (a)(2), the obligee or the obligee’s agent may demand that the Secretary or Administrator pay the unpaid principal amount of the obligation and the unpaid interest on the obligation. The demand must be made within the earlier of—(A) a period that may be specified in the guarantee or a related agreement; or(B) 60 days from the date of the Secretary’s or Administrator’s notice.
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(2) If a demand is made under paragraph (1), the Secretary or Administrator shall pay to the obligee or the obligee’s agent the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. Payment shall be made within the earlier of—(A) a period that may be specified in the guarantee or a related agreement; or(B) 30 days from the date of the demand.
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(c) A guarantee of an obligation remains in effect after an assumption of the obligation by the Secretary or Administrator.
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(d) If there is a default on an obligation, the Secretary or Administrator shall conduct operations under this chapter in a manner that—(1) maximizes the net present value return from the sale or disposition of assets associated with the obligation, including prompt referral to the Attorney General for collection as appropriate;(2) minimizes the amount of any loss realized in the resolution of the guarantee;(3) ensures adequate competition and fair and consistent treatment of offerors; and(4) requires appraisal of assets by an independent appraiser.
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(1) maximizes the net present value return from the sale or disposition of assets associated with the obligation, including prompt referral to the Attorney General for collection as appropriate;
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(b) If amounts in the appropriate account under section 53717 of this title are not sufficient to make a payment required under section 53721 or 53722 of this title, the Secretary or Administrator may issue obligations to the Secretary of the Treasury. The Secretary or Administrator, with the approval of the Secretary of the Treasury, shall prescribe the form, denomination, maturity, and other terms (except the interest rate) of the obligations. The Secretary of the Treasury shall set the interest rate for the obligations, considering the current average market yield on outstanding marketable obligations of the United States Government of comparable maturities during the month before the obligations are issued.
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(c) The Secretary of the Treasury shall purchase the obligations issued under this section. To purchase the obligations, the Secretary of the Treasury may use as a public debt transaction the proceeds from the sale of securities issued under chapter 31 of title 31. The purposes for which securities may be issued under that chapter are extended to include the purchase of obligations under this subsection. The Secretary of the Treasury may sell obligations purchased under this section. A redemption, purchase, or sale of the obligations by the Secretary of the Treasury is a public debt transaction of the Government.
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(d) The Secretary or Administrator shall deposit amounts borrowed under this section in the appropriate account under section 53717 of this title and make redemptions of the obligations from that account.
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(a) When the Secretary or Administrator makes a payment on, or assumes, an obligation under section 53721 or 53722 of this title, the Secretary or Administrator acquires the rights under the security agreement with the obligor in the security held by the Secretary or Administrator to guarantee the obligation.
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(a) For a default under a guaranteed obligation or related agreement, the Secretary or Administrator may take any action against the obligor or another liable party that the Secretary or Administrator considers necessary to protect the interests of the United States Government. A civil action may be brought in the name of the United States or the obligee. The obligee shall make available to the Government all records and evidence necessary to prosecute the action.
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(B) purchase the property for an amount not greater than the unpaid principal amount of the obligation and interest thereon.
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(2) If, through the sale of property, the Secretary or Administrator receives an amount of cash greater than the unpaid principal amount of the obligation, the unpaid interest on the obligation, and the expenses of collecting those amounts, the Secretary or Administrator shall pay the excess to the obligor.
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(a) Under subchapter I of this chapter, the Administrator may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation that aids in financing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, or reconditioning of a commercial demonstration ocean thermal energy conversion facility or plantship. This section may be used to guarantee obligations for a total of not more than 5 separate facilities and plantships or a demonstrated 400 megawatt capacity, whichever comes first.
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(e) The total principal amount of an obligation guaranteed under this section may not exceed 87.5 percent of—(1) the actual cost or depreciated actual cost of the facility or plantship; or(2) if the facility or plantship is supported with appropriated Federal funds, the total principal amount of that portion of the actual cost or depreciated actual cost for which the obligor is obligated to secure financing under the agreement between the obligor and the Department of Energy or other Federal agency.
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(2) The OTEC Demonstration Fund shall be used for obligation guarantees authorized under this section that do not qualify under subchapter I of this chapter. Except as otherwise provided in this section, the OTEC Demonstration Fund shall be operated in the same manner as the parent account. However—(A) amounts received by the Administrator under subchapter I of this chapter related to guarantees or commitments to guarantee made under this section shall be deposited only in the OTEC Demonstration Fund; and(B) when obligations issued by the Administrator under section 53723 of this title related to the OTEC Demonstration Fund are outstanding, any amount received by the Administrator under subchapter I of this chapter related to ocean thermal energy conversion facilities or plantships shall be deposited in the OTEC Demonstration Fund.
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(B) when obligations issued by the Administrator under section 53723 of this title related to the OTEC Demonstration Fund are outstanding, any amount received by the Administrator under subchapter I of this chapter related to ocean thermal energy conversion facilities or plantships shall be deposited in the OTEC Demonstration Fund.
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(3) Assets in the OTEC Demonstration Fund may be transferred to the parent account when and to the extent the balance in the OTEC Demonstration Fund exceeds the total guarantees or commitments to guarantee made under this section then outstanding, plus obligations issued by the Administrator under section 53723 of this title related to the OTEC Demonstration Fund.
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(5) The total unpaid principal amount of the obligations guaranteed with the backing of the OTEC Demonstration Fund and outstanding at any one time may not exceed $1,650,000,000.
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(g) Section 53723 of this title applies to the OTEC Demonstration Fund. However, obligations issued by the Administrator under that section related to the OTEC Demonstration Fund shall be payable only from proceeds realized by the OTEC Demonstration Fund.
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(h) Interest on an obligation guaranteed under this section shall be included in gross income under chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. ch. 1).
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(b) Under subchapter I of this chapter, the Administrator may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation for advanced shipbuilding technology and modern shipbuilding technology of a general shipyard facility in the United States. Only a private shipyard is eligible to receive a guarantee.
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(d) The principal amount of an obligation guaranteed under this chapter may not exceed 87.5 percent of the actual cost of the advanced shipbuilding technology or modern shipbuilding technology.
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(a) Notwithstanding any other provision of this chapter, the Secretary or Administrator, on terms the Secretary or Administrator may prescribe, may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation that aids in financing or refinancing (including reimbursement of an obligor for expenditures previously made for) a contract for the construction or reconstruction of a vessel if—(1) the vessel is designed and to be used for commercial use in coastwise, intercoastal, or foreign trade;(2) the construction or reconstruction is necessary to replace a vessel that cannot continue to be operated because of a change required by law in the standards for the operation of vessels, and the applicant for the guarantee or commitment would not otherwise legally be able to continue operating vessels in the trades in which the applicant operated vessels before the change;(3) the applicant is presently engaged in transporting cargoes in vessels of the type and class that will be constructed or reconstructed under this section and agrees to employ vessels constructed or reconstructed under this section as replacements only for vessels made obsolete by the change in operating standards;(4) the capacity of the vessels to be constructed or reconstructed under this section will not increase the cargo carrying capacity of the vessels being replaced;(5) the Secretary or Administrator has not determined that the market demand for the vessel over its useful life will diminish so as to make granting the guarantee fiduciarily imprudent;(6) the vessel, if to be reconstructed, will have a useful life of at least 15 years after the reconstruction; and(7) the Secretary or Administrator has considered the criteria specified in section 53708(a)(3)–(5) of this title.
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(1) The term of an obligation guaranteed under this section may not exceed 25 years.
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(2) The amount of an obligation guaranteed under this section may not exceed 87.5 percent of the actual cost or depreciated actual cost to the applicant for the construction or reconstruction of the vessel. The Secretary or Administrator may not establish a percentage under this paragraph that is to be applied uniformly to all guarantees or commitments to guarantee made under this section.
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(e) The Secretary or Administrator may establish a fee for the guarantee of an obligation under this section that is in addition to the fee established under section 53714 of this title. The fee may be—(1) an annual fee of not more than an additional 1 percent added to the fee established under section 53714 of this title; or(2) a fee based on the amount of the obligation versus the percentage of the obligor’s fleet being replaced by vessels constructed or reconstructed under this section.
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(2) a fee based on the amount of the obligation versus the percentage of the obligor’s fleet being replaced by vessels constructed or reconstructed under this section.
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(b) The Secretary may guarantee the repayment of debt obligations issued by entities under this section. Debt obligations to be guaranteed may be issued by any entity that has been approved by the Secretary and has agreed with the Secretary to conditions the Secretary considers necessary for this section to achieve the objective of the program and to protect the interest of the United States.
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(c) A debt obligation guaranteed under this section shall—(1) be treated in the same manner and to the same extent as other obligations guaranteed under this chapter, except with respect to provisions of this chapter that by their nature cannot be applied to obligations guaranteed under this section;(2) have the fishing fees established under the program paid into a separate subaccount of the fishing capacity reduction fund established under this section;(3) not exceed $100,000,000 in an unpaid principal amount outstanding at any one time for a program;(4) have such maturity (not to exceed 20 years), take such form, and contain such conditions as the Secretary determines necessary for the program to which they relate;(5) have as the exclusive source of repayment (subject to the second sentence of subsection (d)(2)) and as the exclusive payment security, the fishing fees established under the program; and(6) at the discretion of the Secretary be issued in the public market or sold to the Federal Financing Bank.
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(1) be treated in the same manner and to the same extent as other obligations guaranteed under this chapter, except with respect to provisions of this chapter that by their nature cannot be applied to obligations guaranteed under this section;
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(2) Amounts in the Fund shall be available, without appropriation or fiscal year limitation, to the Secretary to pay the cost of the program, including payments to financial institutions to pay debt obligations incurred by entities under this section. Funds available for this purpose from other amounts available for the program may also be used to pay those debt obligations.
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(3) Amounts in the Fund that are not currently needed for the purpose of this section shall be kept on deposit or invested in obligations of the United States Government.
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(C) imported to or exported from the United States, or sold or purchased by a citizen or resident of the United States, under a contract of sale or purchase the terms of which provide that the risk of loss by war risks or the obligation to provide insurance against war risks is on a citizen or resident of the United States; or
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(7) statutory or contractual obligations or other liabilities of a vessel insurable under this section or of the owner or charterer of such a vessel, of a nature customarily covered by insurance.
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(d) The Secretary of Transportation may request the Secretary of the Treasury to invest such portion of the fund as is not, in the judgment of the Secretary of Transportation, required to meet the current needs of the fund. These investments shall be made by the Secretary of the Treasury in public debt securities of the Government, with maturities suitable to the needs of the fund, and bearing interest rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the Government of comparable maturity. Interest and benefits from the securities shall be deposited in the fund.
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(III) Any obligation or expenditure of non-Federal funds under clause (i) shall be in compliance with all applicable requirements, including any requirements included in the grant agreement.
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(iii) The obligation or expenditure of any non-Federal funds in accordance with this subparagraph shall not—(I) affect the signing of a grant agreement or other applicable grant procedures with respect to the applicable grant;(II) create an obligation on the part of the Federal Government to repay any non-Federal funds if the grant agreement is not signed; or(III) affect the ability of the recipient of the grant to obligate or expend non-Federal funds to meet the non-Federal cost share for the project for which the grant is provided after the period described in clause (i).
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(II) create an obligation on the part of the Federal Government to repay any non-Federal funds if the grant agreement is not signed; or
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(6) Notwithstanding paragraph (3)(B), amounts awarded under this subsection that are not expended by the recipient within five years after obligation of funds or that are returned shall remain available to the Secretary to make grants and enter into contracts and cooperative agreements under this subsection.
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In the case of any vessel constructed in the United States after January 1, 1937, which has been taken by the United States for use in any manner, the Secretary of Transportation, if in his opinion the transfer would aid in carrying out the policies of this Act,1 is authorized to transfer to the owner of such vessel another vessel which is deemed by the Secretary to be of comparable type with adjustments for depreciation and difference in design or speed, and to the extent applicable, such other adjustments and terms and conditions, including transfer of mortgage obligations in favor of the United States binding upon the old vessel, as the Secretary may prescribe.
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(a) On written application, the Secretary of Transportation may adjust obligations and arrange for maintenance of an essential vessel as provided in this chapter if the Secretary determines, after any investigation or proceeding the Secretary considers desirable, that—(1) the operation of the vessel in the service, route, or line to which it is assigned under this subtitle, or in which it otherwise would be operated, is not—(A) lawful under the Neutrality Act of 1939 (22 U.S.C. 441 et seq.) or a proclamation issued under that Act; or(B) compatible with maintaining the availability of the vessel for national defense and commerce;(2) it is not feasible under existing law to employ the vessel in any other service or operation in foreign or domestic trade (except temporary or emergency operation under section 56503(b)(5) of this title); and(3) the applicant, because of the restrictions of the Neutrality Act of 1939 (22 U.S.C. 441 et seq.) or the withdrawal of vessels for national defense under paragraph (1), is not earning or will not earn a reasonable return on the capital necessarily employed in its business.
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(2) Postponement, for not more than the total period of the lay-up, of the maturity date of each installment of the principal of obligations to the United States Government for the vessel (regardless of whether the maturity date is during a lay-up period), or rearrangement of those maturities.
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(3) Postponement or cancellation of interest accruing on the obligations during a lay-up period.
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(6) Payment to the Secretary, on termination of the arrangements with the applicant, of the applicant’s net profits (earned while the arrangements were in effect) in excess of 10 percent a year on the capital necessarily employed in the applicant’s business, as reimbursement for obligations postponed or canceled and expenses incurred or paid by the Secretary under this section.
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(b) An obligation incurred or expenditure made by the Secretary under this section does not affect any contract authorization of the Secretary, but instead shall be charged against the existing appropriation or contract authorization of the department or agency.
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(2) Amounts received as reimbursements under this subsection shall be credited to the fund or account that was used to cover the costs incurred by the Secretary or, if the period of availability of obligations for that appropriation has expired, to the appropriation of funds that is currently available to the Secretary for substantially the same purpose. Amounts so credited shall be merged with amounts in such fund or account and shall be available for the same purposes, and subject to the same conditions and limitations, as amounts in such fund or account.
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(A) a percentage of the depreciated foreign cost computed annually determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the Government with remaining periods to maturity comparable to the term of the charter, adjusted to the nearest one-eighth percent; and
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(A) a rate determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the Government with remaining periods to maturity comparable to the average maturities of the loans, adjusted to the nearest one-eighth percent; plus
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(1) is in default on a mortgage, note, purchase contract, or other obligation to the Secretary; or
Citations to §53701(10)
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(1) Notwithstanding any other provision of this chapter, any obligation involving a fishing vessel, fishery facility, aquaculture facility, individual fishing quota, or fishing capacity reduction program issued under this chapter after October 11, 1996, shall be a direct loan obligation for which the Secretary shall be the obligee, rather than an obligation issued to an obligee other than the Secretary and guaranteed by the Secretary. A direct loan obligation under this subsection shall be treated in the same manner and to the same extent as an obligation guaranteed under this chapter except with respect to provisions of this chapter that by their nature can only be applied to obligations guaranteed under this chapter.
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(a) Except as provided in subsection (c), if an obligor has continued in default for 30 days in the payment of principal or interest on an obligation guaranteed under this chapter, the obligee or the obligee’s agent may demand that the Secretary or Administrator pay the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. The demand must be made within the earlier of—(1) a period that may be specified in the guarantee or a related agreement; or(2) 90 days from the date of the default.
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(1) If a demand is made under subsection (a), the Secretary or Administrator shall pay to the obligee or the obligee’s agent the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. Payment shall be made within the earlier of—(A) a period that may be specified in the guarantee or a related agreement; or(B) 30 days from the date of the demand.
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(c) An obligee or the obligee’s agent may not demand payment under this section if the Secretary or Administrator, before the demand and on terms that may be provided in the obligation or a related agreement, has assumed the obligor’s rights and duties under the obligation and any related agreement and made any payment in default. However, the guarantee of the obligation remains in effect after the Secretary’s or Administrator’s assumption.
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(1) assume the obligor’s rights and duties under the obligation or agreement, make any payment in default, and notify the obligee or the obligee’s agent of the default and the Secretary’s or Administrator’s assumption; or
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(1) If the Secretary or Administrator proceeds under subsection (a)(2), the obligee or the obligee’s agent may demand that the Secretary or Administrator pay the unpaid principal amount of the obligation and the unpaid interest on the obligation. The demand must be made within the earlier of—(A) a period that may be specified in the guarantee or a related agreement; or(B) 60 days from the date of the Secretary’s or Administrator’s notice.
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(2) If a demand is made under paragraph (1), the Secretary or Administrator shall pay to the obligee or the obligee’s agent the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. Payment shall be made within the earlier of—(A) a period that may be specified in the guarantee or a related agreement; or(B) 30 days from the date of the demand.
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(a) For a default under a guaranteed obligation or related agreement, the Secretary or Administrator may take any action against the obligor or another liable party that the Secretary or Administrator considers necessary to protect the interests of the United States Government. A civil action may be brought in the name of the United States or the obligee. The obligee shall make available to the Government all records and evidence necessary to prosecute the action.
Citations to §53701(11)
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(2) Notwithstanding any other provision of this chapter, the annual rate of interest an obligor shall pay on a direct loan obligation under this subsection is 2 percent plus the additional percent the Secretary must pay as interest to borrow from the Treasury the funds to make the loan.
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(b) The Secretary or Administrator may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Secretary or Administrator certifies that a full and fair consideration of all the regulatory requirements, including economic soundness and financial requirements applicable to the obligor and related parties, and a thorough assessment of the technical, economic, and financial aspects of the loan application, has been made.
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(i) based on the financial covenants or financial ratios, if any, that are then applicable to the obligor under private sector credit agreements; and
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(ii) in lieu of other financial covenants applicable to the obligor under this chapter with respect to requirements regarding long-term debt-to-equity, minimum working capital, or minimum amount of equity; and
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(C) the financial condition of an obligor or applicant for a guarantee;
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(H) the management and operating experience of an obligor or applicant for a guarantee;
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(A) Financing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, or reconditioning of a vessel designed principally for research, or for commercial use—(i) in the coastwise or intercoastal trade;(ii) on the Great Lakes, or on bays, sounds, rivers, harbors, or inland lakes of the United States;(iii) in foreign trade as defined in section 109(b) of this title;(iv) as an ocean thermal energy conversion facility or plantship; or(v) as a floating drydock in the construction, reconstruction, reconditioning, or repair of vessels.
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(2) Financing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, reconditioning, or purchase of a vessel owned by citizens of the United States and designed principally for research, or for commercial use in the fishing industry.
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(6) Financing or refinancing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, reconditioning, or purchase of a fishery facility.
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(A) the purchase of individual fishing quotas in accordance with section 303(d)(4) of the Magnuson-Stevens Fishery Conservation and Management Act (including the reimbursement of obligors for expenditures previously made for such a purchase);
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(8) Financing (including reimbursement of an obligor for expenditures previously made for) the reconstruction, reconditioning, retrofitting, repair, reconfiguration, or similar work in a shipyard located in the United States.
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(a) The Secretary or Administrator may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Secretary or Administrator finds that the obligor is responsible and has the ability, experience, financial resources, and other qualifications necessary for the adequate operation and maintenance of each vessel that will serve as security for the guarantee.
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(2) if the Secretary or Administrator considers necessary, the waiver shall provide for the imposition of other requirements on the obligor designed to compensate for any significant increase in risk associated with the obligor’s failure to meet regulatory requirements applicable to financial condition.
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(1) the amount paid by or for the account of the obligor (as determined by the Secretary or Administrator, which determination shall be conclusive) for the construction, reconstruction, or reconditioning of the vessel used as security for the guarantee; or
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(2) if the obligor creates an escrow fund under section 53715 of this title, the actual cost of the vessel.
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(1) provide for payments by the obligor satisfactory to the Secretary or Administrator;
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(A) the only recourse by the United States Government against the obligor for payments under the guarantee will be repossession of the vessel and assignment of insurance claims; and
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(B) the obligor’s liability for payments under the guarantee will be satisfied and discharged by the surrender of the vessel and all interest in the vessel to the Government in the condition described in paragraph (2).
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(iii) in as good order and condition (ordinary wear and tear excepted) as when acquired by the obligor.
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(B) To the extent covered by insurance, a deficiency related to a requirement in subparagraph (A) may be satisfied by assignment of the obligor’s insurance claims to the Government.
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(1) provisions for the protection of the security interests of the Government (including acceleration, assumption, and subrogation provisions and the issuance of notes by the obligor to the Secretary or Administrator), liens and releases of liens, payment of taxes; and
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(a) The Secretary or Administrator may guarantee an obligation under this chapter only if the obligor conveys or agrees to convey to the Secretary or Administrator a security interest the Secretary or Administrator considers necessary to protect the interest of the United States Government.
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(a) The Secretary or Administrator shall monitor the financial condition and operations of the obligor on a regular basis during the term of the guarantee. The Secretary or Administrator shall document the results of the monitoring on an annual or quarterly basis depending on the condition of the obligor. If the Secretary or Administrator determines that the financial condition of the obligor warrants additional protections to the Secretary or Administrator, the Secretary or Administrator shall take appropriate action under subsection (b). If the Secretary or Administrator determines that the financial condition of the obligor jeopardizes its continued ability to perform its responsibilities in connection with the guarantee of an obligation by the Secretary or Administrator, the Secretary or Administrator shall make an immediate determination whether default should take place and whether further measures described in subsection (b) should be taken to protect the interests of the Secretary or Administrator while ensuring that program objectives are met.
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(b) The Secretary or Administrator shall include provisions in a loan agreement with an obligor that provides additional authority to the Secretary or Administrator to take action to limit potential losses in connection with a defaulted loan or a loan that is in jeopardy due to the deteriorating financial condition of the obligor. If the Secretary or Administrator has waived a requirement under section 53707(d) of this title, the loan agreement shall include requirements for additional payments, collateral, or equity contributions to meet the waived requirement upon the occurrence of verifiable conditions indicating that the obligor’s financial condition enables the obligor to meet the waived requirement.
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(a) The Secretary or Administrator shall charge and collect from the obligor fees the Secretary or Administrator considers reasonable for processing the application and monitoring the loan guarantee, including for—(1) investigating an application for a guarantee;(2) appraising property offered as security for a guarantee;(3) issuing a commitment;(4) providing services related to an escrow fund under section 53715 of this title or a deposit fund under section 53716 of this title;(5) inspecting property during construction, reconstruction, or reconditioning; and(6) monitoring and providing services related to the obligor’s compliance with any terms related to the obligations, the guarantee, or maintenance of the Secretary or Administrator’s security interests under this chapter.
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(6) monitoring and providing services related to the obligor’s compliance with any terms related to the obligations, the guarantee, or maintenance of the Secretary or Administrator’s security interests under this chapter.
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(B) is a sliding scale based on the creditworthiness of the obligor, using—(i) the lowest allowable rate under paragraph (5) for the most creditworthy obligors; and(ii) the highest allowable rate under paragraph (5) for the least creditworthy obligors.
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(i) the lowest allowable rate under paragraph (5) for the most creditworthy obligors; and
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(ii) the highest allowable rate under paragraph (5) for the least creditworthy obligors.
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(e) A fee paid under this section is not refundable. However, an obligor shall receive credit for the amount paid for the remaining term of the obligation if the obligation is refinanced and guaranteed under this chapter after the refinancing.
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(a) If the proceeds of an obligation guaranteed under this chapter are to be used to finance the construction, reconstruction, or reconditioning of a vessel that will serve as security for a guarantee under this chapter, the Secretary or Administrator may accept and hold in escrow, under an escrow agreement with the obligor, a portion of the proceeds of all obligations guaranteed under this chapter whose proceeds are to be so used which is equal to—(1) the excess of—(A) the principal amount of all obligations whose proceeds are to be so used; over(B) 75 percent or 87.5 percent, whichever is applicable under section 53709(b) of this title, of the amount paid by or for the account of the obligor for the construction, reconstruction, or reconditioning of the vessel; plus(2) any interest the Secretary or Administrator may require on the amount described in paragraph (1).
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(B) 75 percent or 87.5 percent, whichever is applicable under section 53709(b) of this title, of the amount paid by or for the account of the obligor for the construction, reconstruction, or reconditioning of the vessel; plus
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(A) pay amounts the obligor is obligated to pay for—(i) the construction, reconstruction, or reconditioning of a vessel used as security for the guarantee; and(ii) interest on the obligations;
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(2) If a payment becomes due under the guarantee before the termination of the escrow agreement, the amount in the escrow fund at the time the payment becomes due, including realized income not yet paid to the obligor, shall be paid into the appropriate account under section 53717 of this title. The amount shall be credited against amounts due or to become due from the obligor to the Secretary or Administrator on the guaranteed obligations or, to the extent not so required, be paid to the obligor.
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(1) No disbursement shall be made under subsection (c) to any person until the total amount paid by or for the account of the obligor from sources other than the proceeds of the obligation equals at least 25 percent or 12.5 percent, whichever is applicable under section 53709(b) of this title, of the aggregate actual cost of the vessel, as previously approved by the Secretary or Administrator. If the aggregate actual cost of the vessel has increased since the Secretary’s or Administrator’s initial approval or if it increases after the first disbursement is permitted under this subsection, then no further disbursements shall be made under subsection (c) until the total amount paid by or for the account of the obligor from sources other than the proceeds of the obligation equals at least 25 percent or 12.5 percent, as applicable, of the increase, as determined by the Secretary or Administrator, in the aggregate actual cost of the vessel. This paragraph does not require the Secretary or Administrator to consent to finance any increase in actual cost unless the Secretary or Administrator determines that such an increase in the obligation meets all the terms and conditions of this chapter or other applicable law.
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(2) The Secretary or Administrator shall, by regulation, establish a transparent, independent, and risk-based process for verifying and documenting the progress of projects under construction before disbursing guaranteed loan funds. At a minimum, the process shall require documented proof of progress in connection with the construction, reconstruction, or reconditioning of a vessel or vessels before disbursements are made from the escrow fund. The Secretary or Administrator may require that the obligor provide a certificate from an independent party certifying that the requisite progress in construction, reconstruction, or reconditioning has taken place.
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(2) Any remaining balance of the escrow fund shall be paid to the obligor.
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(f) The Secretary or Administrator may invest and reinvest any part of an escrow fund in obligations of the United States Government with maturities such that the escrow fund will be available as required for purposes of the escrow agreement. Investment income shall be paid to the obligor when received.
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(a) There is a deposit fund in the Treasury for purposes of this section. The Secretary or Administrator, in accordance with an agreement under subsection (b), may deposit into and hold in the fund cash belonging to an obligor to serve as collateral for a guarantee made under this chapter with respect to the obligor.
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(b) The Secretary or Administrator and an obligor shall make a reserve fund or other collateral account agreement to govern the deposit, withdrawal, retention, use, and reinvestment of cash of the obligor held in the fund. The agreement shall contain—(1) terms and conditions required by this section;(2) terms that grant to the United States Government a security interest in all amounts deposited into the fund; and(3) any additional terms considered by the Secretary or Administrator to be necessary to protect fully the interests of the Government.
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(2) Subject to paragraph (3), the Secretary or Administrator may pay any income earned on cash of an obligor deposited into the fund in accordance with the agreement with the obligor under subsection (b).
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(3) The Secretary or Administrator may retain and offset any or all of the cash of an obligor in the fund, and any income realized thereon, as part of the Secretary’s or Administrator’s recovery against the obligor in case of a default by the obligor on an obligation.
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(a) Except as provided in subsection (c), if an obligor has continued in default for 30 days in the payment of principal or interest on an obligation guaranteed under this chapter, the obligee or the obligee’s agent may demand that the Secretary or Administrator pay the unpaid principal amount of the obligation and the unpaid interest on the obligation to the date of payment. The demand must be made within the earlier of—(1) a period that may be specified in the guarantee or a related agreement; or(2) 90 days from the date of the default.
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(2) The Secretary or Administrator is not required to make payment under this subsection if, within the appropriate period under paragraph (1), the Secretary or Administrator finds that the obligor was not in default or that the default was remedied before the demand.
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(c) An obligee or the obligee’s agent may not demand payment under this section if the Secretary or Administrator, before the demand and on terms that may be provided in the obligation or a related agreement, has assumed the obligor’s rights and duties under the obligation and any related agreement and made any payment in default. However, the guarantee of the obligation remains in effect after the Secretary’s or Administrator’s assumption.
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(a) On default under an obligation or related agreement between the Secretary or Administrator and the obligor, the Secretary or Administrator, on terms that may be provided in the obligation or agreement, may—(1) assume the obligor’s rights and duties under the obligation or agreement, make any payment in default, and notify the obligee or the obligee’s agent of the default and the Secretary’s or Administrator’s assumption; or
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(1) assume the obligor’s rights and duties under the obligation or agreement, make any payment in default, and notify the obligee or the obligee’s agent of the default and the Secretary’s or Administrator’s assumption; or
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(a) When the Secretary or Administrator makes a payment on, or assumes, an obligation under section 53721 or 53722 of this title, the Secretary or Administrator acquires the rights under the security agreement with the obligor in the security held by the Secretary or Administrator to guarantee the obligation.
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(b) Notwithstanding any other law relating to the acquisition, handling, or disposal of property by the United States Government, the Secretary or Administrator has the right, in the Secretary’s or Administrator’s discretion, to complete, reconstruct, recondition, renovate, repair, maintain, operate, charter, or sell any property acquired under a security agreement with an obligor, or to place a vessel so acquired in the National Defense Reserve Fleet. The terms of a sale under this subsection shall be as approved by the Secretary or Administrator.
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(a) For a default under a guaranteed obligation or related agreement, the Secretary or Administrator may take any action against the obligor or another liable party that the Secretary or Administrator considers necessary to protect the interests of the United States Government. A civil action may be brought in the name of the United States or the obligee. The obligee shall make available to the Government all records and evidence necessary to prosecute the action.
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(A) accept a conveyance of title to and possession of property from the obligor or another party liable to the Secretary or Administrator; and
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(2) If, through the sale of property, the Secretary or Administrator receives an amount of cash greater than the unpaid principal amount of the obligation, the unpaid interest on the obligation, and the expenses of collecting those amounts, the Secretary or Administrator shall pay the excess to the obligor.
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(a) Under subchapter I of this chapter, the Administrator may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation that aids in financing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, or reconditioning of a commercial demonstration ocean thermal energy conversion facility or plantship. This section may be used to guarantee obligations for a total of not more than 5 separate facilities and plantships or a demonstrated 400 megawatt capacity, whichever comes first.
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(2) if the facility or plantship is supported with appropriated Federal funds, the total principal amount of that portion of the actual cost or depreciated actual cost for which the obligor is obligated to secure financing under the agreement between the obligor and the Department of Energy or other Federal agency.
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(a) Notwithstanding any other provision of this chapter, the Secretary or Administrator, on terms the Secretary or Administrator may prescribe, may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation that aids in financing or refinancing (including reimbursement of an obligor for expenditures previously made for) a contract for the construction or reconstruction of a vessel if—(1) the vessel is designed and to be used for commercial use in coastwise, intercoastal, or foreign trade;(2) the construction or reconstruction is necessary to replace a vessel that cannot continue to be operated because of a change required by law in the standards for the operation of vessels, and the applicant for the guarantee or commitment would not otherwise legally be able to continue operating vessels in the trades in which the applicant operated vessels before the change;(3) the applicant is presently engaged in transporting cargoes in vessels of the type and class that will be constructed or reconstructed under this section and agrees to employ vessels constructed or reconstructed under this section as replacements only for vessels made obsolete by the change in operating standards;(4) the capacity of the vessels to be constructed or reconstructed under this section will not increase the cargo carrying capacity of the vessels being replaced;(5) the Secretary or Administrator has not determined that the market demand for the vessel over its useful life will diminish so as to make granting the guarantee fiduciarily imprudent;(6) the vessel, if to be reconstructed, will have a useful life of at least 15 years after the reconstruction; and(7) the Secretary or Administrator has considered the criteria specified in section 53708(a)(3)–(5) of this title.
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(2) a fee based on the amount of the obligation versus the percentage of the obligor’s fleet being replaced by vessels constructed or reconstructed under this section.
Citations to §53701(12)
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(iv) as an ocean thermal energy conversion facility or plantship; or
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(4) For an ocean thermal energy conversion facility or plantship constructed without a construction-differential subsidy, the principal amount may not exceed 87.5 percent of the actual cost or depreciated actual cost of the facility or plantship.
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(a) Under subchapter I of this chapter, the Administrator may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation that aids in financing (including reimbursement of an obligor for expenditures previously made for) the construction, reconstruction, or reconditioning of a commercial demonstration ocean thermal energy conversion facility or plantship. This section may be used to guarantee obligations for a total of not more than 5 separate facilities and plantships or a demonstrated 400 megawatt capacity, whichever comes first.
Citations to §53701(13)
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(4) For purposes of the shipping laws of the United States, any vessel documented under the laws of the United States and used in the commercial recovery, processing, or transportation from any mining site of hard mineral resources recovered under a permit issued under this subchapter shall be deemed to be used in, and used in an essential service in, the foreign commerce or foreign trade of the United States, as defined in section 109 of title 46, and shall be deemed to be a vessel as defined in section 53701(13)1 of title 46.
Citations to §53701(15)
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(1) The Secretary or Administrator may post a notice in the Federal Register regarding the availability of funding for obligation guarantees under this chapter for the construction, reconstruction, or reconditioning of a Vessel of National Interest and include a timeline for the submission of applications for such vessels.