§53704 — Title 46 Shipping | U.S. Code

Summary

Limits the total unpaid principal of guaranteed loans that can be outstanding at one time to $12,000,000,000, and caps guarantees for fishing vessels and fishery facilities at $850,000,000. New yearly commitments can’t have extra limits unless Congress sets amounts ahead in annual authorization laws. A vessel that is eligible for a guarantee cannot be turned down just because of its type. The Secretary or Administrator must each year make risk categories for guaranteed loans, set a subsidy rate (the cost percentage) for each category, and keep similar loans together based on past data and statistics. Before giving a guarantee, and each year for guaranteed projects, they must place the loan in a category using specific risk factors, then count the loan’s estimated cost by multiplying the guaranteed amount times that category’s subsidy rate. They must stop making guarantees if available funds for those costs are used up. Cost — meaning defined by section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a). Risk factors include loan length, size relative to project cost, borrower finances and experience, other guarantees, expected use and market for financed vessels or equipment, collateral, construction-period coverage, and concentration risk.

Title 46, §53704

Shipping — Source: USLM XML via OLRC

(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.

(b)Additional limitations may not be imposed on new commitments to guarantee loans for any fiscal year, except in amounts established in advance by annual authorization laws. A vessel eligible for a guarantee under this chapter may not be denied eligibility because of its type.

(c)(1)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).

(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.

(3)(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).

(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).

(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.

(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).

(4)The risk factors referred to in this subsection are—

(A)the period for which an obligation is guaranteed or to be guaranteed;

(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;

(C)the financial condition of an obligor or applicant for a guarantee;

(D)if applicable, other guarantees related to the project;

(E)if applicable, the projected employment of each vessel or equipment to be financed with an obligation;

(F)if applicable, the projected market that will be served by each vessel or equipment to be financed with an obligation;

(G)the collateral provided for a guarantee for an obligation;

(H)the management and operating experience of an obligor or applicant for a guarantee;

(I)whether a guarantee under this chapter is or will be in effect during the construction 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.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (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.

§53704 Funding limits

Summary

Title 46, §53704

Notes & Related Subsidiaries

Historical and Revision Notes

Editorial Notes

Amendments

Construction

Historical and Revision Notes

Citations & Metadata