§53704 Funding Limits

Summary

Caps the total amount of loans the government can guarantee at $12,000,000,000 at any one time. Up to $850,000,000 of that total can be for fishing vessels and fishery facilities. No extra limits can be added for new guarantees in a fiscal year unless Congress sets them ahead of time in annual authorization laws. A vessel cannot be turned down just because of its type. The Secretary or Administrator must make and update every year a system that puts guaranteed loans into risk groups and gives each group a subsidy rate (the government’s cost) as a percent of the loan. Before giving a guarantee, and each year for projects already covered, they must place the loan in a group using these risk factors: length of the guarantee; size of the loan versus project cost; the borrower’s finances; other related guarantees; expected use of the vessel or equipment; the market to be served; collateral; the borrower’s management experience; whether the guarantee covers construction; and concentration of loans with one borrower or related group. The government treats the estimated cost of a guarantee as the loan amount times the group’s subsidy rate, and it reduces the amount available for future guarantees by that cost. No more guarantees can be made once the available funds are reduced to zero.