---
kind: "section"
citation: "46 U.S.C. § 53704"
title: "46"
title_heading: "Shipping"
number: "53704"
heading: "Funding limits"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/46/53704"
units:
  - "Subtitle V — Merchant Marine"
  - "Part C — Financial Assistance Programs"
  - "Chapter 537 — Loans and Guarantees"
  - "Subchapter I — General"
---

# §53704. Funding limits

- (a) **General Limitations.—** The total unpaid principal amount of [obligations](/usc/46/53701.md?p=9) 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](/usc/46/53701.md?p=9) related to [fishing vessels](/usc/46/53701.md?p=6) and [fishery facilities](/usc/46/53701.md?p=5-A).
- (b) **Additional Limitations.—** Additional limitations may not be imposed on new commitments to guarantee loans for any [fiscal year](/usc/46/53201.md?p=6), except in amounts established in advance by annual authorization laws. A [vessel](/usc/46/53501.md?p=9) eligible for a guarantee under this chapter may not be denied eligibility because of its type.
- (c) **Limits Based on Risk Factors.—**
  - (1) **Definition.—** In this subsection, the term “cost” has the meaning given that term in section 502 of the Federal Credit Reform Act of 1990 ([2 U.S.C. 661a](/usc/2/661a.md)).
  - (2) **System of risk categories.—** The [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2) shall—
    - (A) establish, and update annually, a system of risk categories for [obligations](/usc/46/53701.md?p=9) guaranteed under this chapter that categorizes the relative risk of guarantees based on the risk factors set forth in [paragraph (4)](#c-4);
    - (B) determine annually for each risk category a subsidy rate equivalent to the cost of [obligations](/usc/46/53701.md?p=9) in the category, expressed as a percentage of the amount guaranteed for [obligations](/usc/46/53701.md?p=9) 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](/usc/46/53701.md?p=9) 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.
  - (3) **Use of system.—**
    - (A) **Placing obligation in category.—** Before making a guarantee under this chapter for an [obligation](/usc/46/53701.md?p=9), and annually for projects subject to a guarantee, the [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2) shall apply the risk factors specified in [paragraph (4)](#c-4) to place the [obligation](/usc/46/53701.md?p=9) in a risk category established under [paragraph (2)](#c-2).
    - (B) **Reduction of available amount.—** The [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2) shall consider the total amount available to the [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2) 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](/usc/46/53701.md?p=9); by
      - (ii) the subsidy rate for the category in which the [obligation](/usc/46/53701.md?p=9) is placed under [subparagraph (A)](#c-3-A).
    - (C) **Estimated cost.—** The estimated cost to the [United States](/usc/46/53101.md?p=10) Government of a guarantee under this chapter for an [obligation](/usc/46/53701.md?p=9) is deemed to be the amount determined under [subparagraph (B)](#c-3-B) for the [obligation](/usc/46/53701.md?p=9).
    - (D) **Restriction on further guarantees.—** The [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2) may not guarantee [obligations](/usc/46/53701.md?p=9) under this chapter after the total amount available to the [Secretary](/usc/46/53101.md?p=8) or [Administrator](/usc/46/53701.md?p=2) under appropriations laws for the cost of loan guarantees is considered to be reduced to zero under [subparagraph (B)](#c-3-B).
  - (4) **Risk factors.—** The risk factors referred to in this subsection are—
    - (A) the period for which an [obligation](/usc/46/53701.md?p=9) is guaranteed or to be guaranteed;
    - (B) the amount of an [obligation](/usc/46/53701.md?p=9) guaranteed or to be guaranteed in relation to the total cost of the project financed or to be financed by the [obligation](/usc/46/53701.md?p=9);
    - (C) the financial condition of an [obligor](/usc/46/53701.md?p=11) or applicant for a guarantee;
    - (D) if applicable, other guarantees related to the project;
    - (E) if applicable, the projected employment of each [vessel](/usc/46/53501.md?p=9) or equipment to be financed with an [obligation](/usc/46/53701.md?p=9);
    - (F) if applicable, the projected market that will be served by each [vessel](/usc/46/53501.md?p=9) or equipment to be financed with an [obligation](/usc/46/53701.md?p=9);
    - (G) the collateral provided for a guarantee for an [obligation](/usc/46/53701.md?p=9);
    - (H) the management and operating experience of an [obligor](/usc/46/53701.md?p=11) or applicant for a guarantee;
    - (I) whether a guarantee under this chapter is or will be in effect during the [construction](/usc/46/53701.md?p=3) period of the project; and
    - (J) the concentration risk presented by an unduly large percentage of loans outstanding by any one borrower or group of affiliated borrowers.

## Source credit

(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1604; Pub. L. 109–163, div. C, title XXXV, § 3507(a)(1)(C), Jan. 6, 2006, 119 Stat. 3555; Pub. L. 110–181, div. C, title XXXV, § 3522(a)(10)(B), (b), Jan. 28, 2008, 122 Stat. 598; Pub. L. 116–92, div. C, title XXXV, § 3506(d), Dec. 20, 2019, 133 Stat. 1972.)

## Notes

| Historical and Revision Notes |  |  |
| --- | --- | --- |
| Revised<br>Section | Source (U.S. Code) | Source (Statutes at Large) |
| 53704(a) | 46 App.:1273(f) (1st sentence). | June 29, 1936, ch. 858, title XI, § 1103(f), as added June 23, 1938, ch. 600, § 46, 52 Stat. 969; Aug. 15, 1953, ch. 513, § 1, 67 Stat. 626; Sept. 3, 1954, ch. 1265, § 3, 68 Stat. 1268; June 25, 1956, ch. 438, 70 Stat. 332; Aug. 7, 1956, ch. 1026, § 1(a), (c), (d), 70 Stat. 1087; Pub. L. 91–469, § 30, Oct. 21, 1970, 84 Stat. 1035; restated Pub. L. 92–507, § 3, Oct. 19, 1972, 86 Stat. 910; Pub. L. 93–70, § 3, July 10, 1973, 87 Stat. 168; Pub. L. 94–127, § 5, Nov. 13, 1975, 89 Stat. 681; Pub. L. 95–298, § 5, June 26, 1978, 92 Stat. 340; Pub. L. 96–320, title II, § 203(b)(1), Aug. 3, 1980, 94 Stat. 994; Pub. L. 96–561, title II, § 220(2), Dec. 22, 1980, 94 Stat. 3292; Pub. L. 97–35, title XVI, § 1606(a), (b), Aug. 13, 1981, 95 Stat. 752; Pub. L. 97–424, title IV, § 425, Jan. 6, 1983, 96 Stat. 2167; Pub. L. 103–160, title XIII, § 1356(2)(A), Nov. 30, 1993, 107 Stat. 1812; Pub. L. 108–136, title XXXV, § 3528(b), Nov. 24, 2003, 117 Stat. 1802. |
| 53704(b) | 46 App.:1273(f) (2d, last sentences). |  |
| 53704(c) | 46 App.:1273(h). | June 29, 1936, ch. 858, title XI, § 1103(h), as added Pub. L. 104–239, § 13(a), Oct. 8, 1996, 110 Stat. 3134; Pub. L. 108–136, title XXXV, § 3528(b), Nov. 24, 2003, 117 Stat. 1802. |

### Editorial Notes

### Amendments

2019—Subsec. (a). Pub. L. 116–92, § 3506(d)(1), substituted “that amount, $850,000,000 shall be limited to obligations related to fishing vessels and fishery facilities.” for “that amount—” and pars. (1) and (2) which read as follows:

“(1) $850,000,000 shall be limited to obligations related to fishing vessels and fishery facilities; and

“(2) $3,000,000,000 shall be limited to obligations related to eligible export vessels.”

Subsec. (c)(4). Pub. L. 116–92, § 3506(d)(2), redesignated subpars. (B) to (K) as (A) to (J), respectively, and struck out former subpar. (A) which read as follows: “if applicable, the country risk for each eligible export vessel financed or to be financed by an obligation;”.

2008—Pub. L. 110–181, § 3522(b), repealed Pub. L. 109–163, § 3507(a)(1)(C). See 2006 Amendment note below.

Subsec. (c). Pub. L. 110–181, § 3522(a)(10)(B), incorporated the substance of the amendment by Pub. L. 109–163, § 3507(a)(1)(C), into this section by inserting “or Administrator” after “Secretary” wherever appearing. See 2006 Amendment note below and section 18(a) of Pub. L. 109–304, set out as a Legislative Purpose and Construction note preceding section 101 of this title.

2006—Pub. L. 109–163, § 3507(a)(1)(C), which directed the amendment of section 1273(h) of the former Appendix to this title from which subsec. (c) of this section was derived, was repealed by Pub. L. 110–181, § 3522(b). See 2008 Amendment note for subsec. (c) and Historical and Revision notes above.