46 U.S.C. § 53708 — Findings related to economic soundness

Page 444 TITLE 46—SHIPPING § 53708 HISTORICAL AND REVISION NOTES—CONTINUED Revised Section Source (U.S. Code) Source (Statutes at Large) 53707(c) ...... 46 App.:1273a(b). 53707(d) ...... 46 App.:1274(d)(4). June 29, 1936, ch. 858, title XI, § 1104A(d)(4), as added Pub. L. 108–136, title XXXV, § 3522, Nov. 24, 2003, 117 Stat. 1800. Editorial Notes AMENDMENTS 2008—Pub. L. 110–181, § 3522(b), repealed Pub. L. 109–163, § 3507(a)(1)(D), (b)(3)(B), (C), (c)(1). See 2006 Amendment note below. Subsec. (a). Pub. L. 110–181, § 3522(a)(3)(A), incor- porated the substance of the amendment by Pub. L. 109–163, § 3507(a)(1)(D), into this section by inserting ‘‘or Administrator’’ after ‘‘Secretary’’ in two places. See 2006 Amendment note below and section 18(a) of Pub. L. 109–304, set out as a Legislative Purpose and Construc- tion note preceding section 101 of this title. Subsec. (b). Pub. L. 110–181, § 3522(a)(3)(B), incor- porated the substance of the amendment by Pub. L. 109–163, § 3507(c)(1), into this section by substituting ‘‘Administrator’’ for ‘‘Secretary of Transportation’’. 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. Subsec. (c). Pub. L. 110–181, § 3522(a)(3)(C), struck out ‘‘of Commerce’’ after ‘‘The Secretary’’ in introductory provisions. Subsec. (d). Pub. L. 110–181, § 3522(a)(3)(A), (D), incor- porated the substance of the amendment by Pub. L. 109–163, § 3507(b)(3)(B), (C), into this section by inserting ‘‘or Administrator’’ after ‘‘Secretary’’ in introductory provisions and in par. (2) by inserting ‘‘if the Secretary or Administrator considers necessary,’’ before ‘‘the waiver’’ and substituting ‘‘any significant increase in’’ for ‘‘the increased’’. See 2006 Amendment note below and section 18(a) of Pub. L. 109–304, set out as a Legisla- tive Purpose and Construction note preceding section 101 of this title. 2006—Pub. L. 109–163, § 3507(a)(1)(D), (b)(3)(B), (C), (c)(1), which directed the amendment of sections 1273a(a) and 1274(b)(1), (d)(4)(B) of the former Appendix to this title from which this section was derived in part, was repealed by Pub. L. 110–181, § 3522(b). See 2008 Amendment notes for subsecs. (a), (b), and (d) and His- torical and Revision notes above. § 53708. Findings related to economic soundness (a) BY ADMINISTRATOR.—The Administrator may not guarantee or make a commitment to guarantee an obligation under this chapter un- less the Administrator finds that the property or project for which the obligation will be exe- cuted 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 ca- pacity, 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 associ- ated with employment of the vessel; (4) any charter, contract of affreightment, transportation agreement, or similar agree- ment or undertaking relevant to the employ- ment of the vessel; (5) other relevant criteria; and (6) for inland waterways, the need for tech- nical improvements, including increased fuel efficiency or improved safety. (b) BY SECRETARY.—The Secretary may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Sec- retary finds, at or prior to the time the commit- ment is made or the guarantee becomes effec- tive, that— (1) the property or project for which the ob- ligation will be executed will be economically sound; and (2) for a fishing vessel, the purpose of the fi- nancing or refinancing is consistent with— (A) the wise use of the fisheries resources and the development, advancement, manage- ment, conservation, and protection of the fisheries resources; or (B) the need for technical improvements, including increased fuel efficiency or im- proved safety. (c) USED FISHING VESSELS AND FACILITIES.— 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 devel- opment 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 defini- tion of ‘‘fishery facility’’ in section 53701 of this title with respect to an underused fish- ery. (d) INDEPENDENT ANALYSIS.—The Secretary or Administrator may make a determination that aspects of an application under this chapter re- quire independent analysis to be conducted by third party experts due to risk factors associ- ated with markets, technology, or financial structures. A third party independent analysis conducted under this subsection shall be per- formed by a private sector expert in assessing such risk factors who is selected by the Sec- retary or Administrator. (e) ADDITIONAL EQUITY BECAUSE OF INCREASED RISKS.—Notwithstanding any other provision of this chapter, the Secretary or Administrator may make a determination that an application under this title requires additional equity be- cause of increased risk factors associated with markets, technology, or financial structures. (Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1608; Pub. L. 109–163, div. C, title XXXV, § 3507(a)(1)(D), (2)(D), (b)(3)(A), (4), Jan. 6, 2006, 119 Stat. 3555, 3556; Pub. L. 110–181, div. C, title XXXV, § 3522(a)(4), (b), Jan. 28, 2008, 122 Stat. 597, 598.) Page 445 TITLE 46—SHIPPING § 53709 HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 53708(a) ...... 46 App.:1274(d)(1)(A). June 29, 1936, ch. 858, title XI, § 1104A(d)(1), (2) [§ 1104A formerly § 1104], as added June 23, 1938, ch. 600, § 46, 52 Stat. 970; Aug. 4, 1939, ch. 417, § 14, 53 Stat. 1187; Sept. 28, 1950, ch. 1093, § 4, 64 Stat. 1078; Aug. 15, 1953, ch. 513, § 2, 67 Stat. 626; Sept. 3, 1954, ch. 1265, § 4, 68 Stat. 1269; Pub. L. 86–123, §§ 1(3), 2, July 31, 1959, 73 Stat. 269, 271; Pub. L. 86–127, § 1(3), (4), July 31, 1959, 73 Stat. 273; Pub. L. 86–518, § 1, June 12, 1960, 74 Stat. 216; Pub. L. 86–685, §§ 2, 3, Sept. 2, 1960, 74 Stat. 733; Pub. L. 90–341, June 15, 1968, 82 Stat. 180; Pub. L. 91–469, §§ 31, 32, Oct. 21, 1970, 84 Stat. 1035; restated Pub. L. 92–507, § 3, Oct. 19, 1972, 86 Stat. 910; Pub. L. 96–561, title II, § 220(3)(C), Dec. 22, 1980, 94 Stat. 3293; Pub. L. 97–31, § 12(136), Aug. 6, 1981, 95 Stat. 166; Pub. L. 97–35, title XVI, § 1606(c), Aug. 13, 1981, 95 Stat. 752; Pub. L. 98–595, § 1(6), Oct. 30, 1984, 98 Stat. 3130; § 1104 re- numbered as § 1104A, Pub. L. 101–380, title IV, § 4115(f)(1), Aug. 18, 1990, 104 Stat. 521. 53708(b) ...... 46 App.:1274(d)(1)(B). 53708(c) ...... 46 App.:1274(d)(2). 53708(d) ...... 46 App.:1274(f)(2). June 29, 1936, ch. 858, title XI, § 1104A(f)(2), (3), as added Pub. L. 108–136, title XXXV, § 3526(2)(C), Nov. 24, 2003, 117 Stat. 1801. 53708(e) ...... 46 App.:1274(f)(3). Editorial Notes AMENDMENTS 2008—Pub. L. 110–181, § 3522(b), repealed Pub. L. 109–163, § 3507(a)(1)(D), (2)(D), (b)(3)(A), (4). See 2006 Amendment note below. Subsec. (a). Pub. L. 110–181, § 3522(a)(4)(A), (B), incor- porated the substance of the amendment by Pub. L. 109–163, § 3507(a)(2)(D), (b)(3)(A), into this section by sub- stituting in the heading, ‘‘Administrator’’ for ‘‘Sec- retary of Transportation’’ and, in introductory provi- sions, ‘‘Administrator may’’ for ‘‘Secretary of Trans- portation may’’, ‘‘Administrator finds’’ for ‘‘Secretary finds’’, and ‘‘Administrator shall’’ for ‘‘Secretary shall’’. 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. Subsec. (b). Pub. L. 110–181, § 3522(a)(4)(C), (D), struck out ‘‘of Commerce’’ after ‘‘Secretary’’ in heading and the first time appearing in introductory provisions. Subsec. (c). Pub. L. 110–181, § 3522(a)(4)(D), struck out ‘‘of Commerce’’ after ‘‘Secretary’’. Subsec. (d). Pub. L. 110–181, § 3522(a)(4)(E), incor- porated the substance of the amendment by Pub. L. 109–163, § 3507(a)(1)(D), (b)(4)(A), (C), into this section by inserting ‘‘or Administrator’’ after ‘‘The Secretary’’ and substituting ‘‘or financial structures. A third party independent analysis conducted under this subsection shall be performed by a private sector expert in assess- ing such risk factors who is selected by the Secretary or Administrator.’’ for ‘‘financial structures, or other risk factors identified by the Secretary. Any inde- pendent analysis conducted under this subsection shall be performed by a party chosen by the Secretary.’’ See 2006 Amendment note below and section 18(a) of Pub. L. 109–304, set out as a Legislative Purpose and Construc- tion note preceding section 101 of this title. Subsec. (e). Pub. L. 110–181, § 3522(a)(4)(F), incor- porated the substance of the amendment by Pub. L. 109–163, § 3507(a)(1)(D), (b)(4)(B), into this section by in- serting ‘‘or Administrator’’ after ‘‘chapter, the Sec- retary’’ and substituting ‘‘or financial structures’’ for ‘‘financial structures, or other risk factors identified by the Secretary’’. 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)(D), (2)(D), (b)(3)(A), (4), which directed the amendment of section 1274(d)(1)(A), (f)(2), (3) of the former Appendix to this title from which this section was derived in part, was repealed by Pub. L. 110–181, § 3522(b). See 2008 Amend- ment notes for subsecs. (a), (d), and (e) and Historical and Revision notes above. § 53709. Amount of obligations (a) IN GENERAL.—The principal of an obliga- tion may not be guaranteed in an amount great- er 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, reconstruc- tion, or reconditioning of the vessel used as se- curity for the guarantee; or (2) if the obligor creates an escrow fund under section 53715 of this title, the actual cost of the vessel. (b) LIMITATIONS ON AMOUNT BORROWED.— (1) IN GENERAL.—Except as otherwise pro- vided, the principal amount of an obligation guaranteed under this chapter may not exceed 75 percent of the actual cost or depreciated ac- tual cost, as determined by the Secretary or Administrator, of the vessel used as security for the guarantee. (2) CERTAIN APPROVED VESSELS.—The prin- cipal 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 ap- proved by the Secretary or Administrator; (B) the vessel is or would have been eligi- ble 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-dif- ferential subsidy and the subsidy has been repaid; and (C) the vessel is of a type described in that section for which the minimum down pay- ment required by that section is 12.5 percent of the cost of the vessel. (3) FISHING VESSELS AND FISHERY FACILI- TIES.—For a fishing vessel or fishery facility, the principal amount may not exceed 80 per- cent of the actual cost or depreciated actual cost. However, debt for the vessel or facility may not be placed through the Federal Fi- nancing Bank. (4) OTEC.—For an ocean thermal energy conversion facility or plantship constructed without a construction-differential subsidy, the principal amount may not exceed 87.5 per- cent of the actual cost or depreciated actual cost of the facility or plantship. (c) SECURITY INVOLVING MULTIPLE VESSELS.— The principal amount of an obligation having more than one vessel as security for the guar-