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46 U.S.C. § 53734 — Replacement of vessels because of changes in operating standards
Federal law — U.S. Code and appendices · legal_authorities
**(a) General Authority.—** 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
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Source location: Title 46, Chapter 537, § 53734; chapter-537-loans-and-guarantees.md
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**(a) General Authority.—** 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.
**(b) Term and Amount of Obligation.—**
(1) **Term.—** — The term of an obligation guaranteed under this section may not exceed 25 years.
(2) **Amount.—** — 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.
**(c) Applicability of Other Provisions.—** A guarantee or commitment to guarantee under this section is also subject to sections 53701, 53702(a), 53704, 53705, 53707(a), 53708(d) and (e), 53709(a), 53710(a)(1), (2), and (4) and (c), 53711(a), 53713, 53714, 53717, and 53721–53725 of this title.
**(d) Security Against Default.—** The Secretary or Administrator shall require by regulation that an applicant under this section provide adequate security against default.
**(e) Guarantee Fees.—** 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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53714&num=0&edition=prelim). 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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53714&num=0&edition=prelim); 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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Federal law — U.S. Code and appendices · legal_authorities
In this title, the term “agency” means a department, agency, or instrumentality of the United States Government.
Source: Supplied U.S. Code snapshot — release unconfirmed · 46 U.S.C. § 101
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Regulations.—** Subject to this section, the Secretary or Administrator shall prescribe regulations to assess a fee for guaranteeing an obligation under this chapter.
**(b) Computation of Fee.—**
(1) **In general.—** — The amount of the fee for a guarantee under this chapter shall be equal to the sum of the amounts determined under paragraph (2) for the years in which the guarantee is in effect.
(2) **Present value for each year.—** — 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.
(3) **Calculation of amount.—** — The amount referred to in paragraph (2) shall be calculated by multiplying—
(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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53715&num=0&edition=prelim)); by
(B) the fee rate set under paragraph (4).
(4) **Setting fee rates.—** — 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)
Source: Supplied U.S. Code snapshot — release unconfirmed · 46 U.S.C. § 53714
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Federal law — U.S. Code and appendices · legal_authorities
Page 460
TITLE 46—SHIPPING
§ 53734
109–163, § 3507(a)(2)(K), into this section by substituting
‘‘Administrator’’ for ‘‘Secretary’’. See 2006 Amendment
note below and section 18(a) of Pub. L. 109–304, set out
as a Legislative Purpose and Construction note pre-
ceding section 101 of this title.
2006—Pub. L. 109–163, § 3507(a)(2)(K), which directed
the amendment of section 1279e of the former Appendix
to this title from which this section was derived, was
repealed by Pub. L. 110–181, § 3522(b). See 2008 Amend-
ment note for subsecs. (b), (e) and Historical and Revi-
sion notes above.
§ 53734.
Replacement
of
vessels
because
of
changes in operating standards
(a)
GENERAL
AUTHORITY.—Notwithstanding
any other provision of this chapter, the Sec-
retary or Administrator, on terms the Secretary
or Administrator may prescribe, may guarantee
or make a commitment to guarantee the pay-
ment of the principal of and interest on an obli-
gation that aids in financing or refinancing (in-
cluding reimbursement of an obligor for expend-
itures 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 nec-
essary to replace a vessel that cannot con-
tinue to be operated because of a change re-
quired by law in the standards for the oper-
ation of vessels, and the applicant for the
guarantee or commitment would not other-
wise legally be able to continue operating ves-
sels in the trades in which the applicant oper-
ated 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 t
Source: Supplied 2024 U.S. Code historical extraction · 46 U.S.C. § 53734
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.