H. R. 1442—139
that are operating or will be operating in the domestic 
or foreign commerce of the United States; and 
‘‘(B) the amount of guarantee authority available. 
‘‘(d) RESTRICTION ON TRANSFER OF VESSEL.—The Secretary may 
not guarantee or make a commitment to guarantee an obligation 
for an eligible export vessel unless the owner of the vessel agrees 
with the Secretary that the vessel will not be transferred to a 
country designated by the Secretary of Defense as a country whose 
interests are hostile to the interests of the United States. 
‘‘(e) REVIEW BY SECRETARY OF DEFENSE.—
‘‘(1) NOTIFICATION.—The Secretary shall promptly notify 
the Secretary of Defense of the receipt of an application for 
a loan guarantee for an eligible export vessel. 
‘‘(2) DISAPPROVAL.—The Secretary of Defense, within 30 
days after receiving the notice, may disapprove the guarantee 
based on an assessment of the potential use of the vessel 
in a manner that may harm the national security interests 
of the United States. The Secretary may not disapprove a 
guarantee solely because of the type of vessel to be constructed. 
‘‘(3) DELEGATION.—The authority of the Secretary of 
Defense to disapprove a guarantee under this subsection may 
be delegated only to a civilian officer of the Department of 
Defense appointed by the President by and with the advice 
and consent of the Senate. 
‘‘(4) PROHIBITION.—The Secretary may not make a loan 
guarantee disapproved by the Secretary of Defense under this 
subsection. 
‘‘(f) EXPIRATION OF AUTHORITY.—The Secretary may not issue 
a commitment to guarantee an obligation for an eligible export 
vessel under this chapter after the last date on which such a 
commitment may be issued under any treaty or convention entered 
into after November 30, 1993, that prohibits guarantee of such 
an obligation. 
‘‘§ 53733. Shipyard modernization and improvement 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) ADVANCED
SHIPBUILDING
TECHNOLOGY.—The term 
‘advanced shipbuilding technology’ includes—
‘‘(A) numerically controlled machine tools, robots, auto-
mated process control equipment, computerized flexible 
manufacturing systems, associated computer software, and 
other technology for improving shipbuilding and related 
industrial production that advance the state-of-the-art; and 
‘‘(B) novel techniques and processes designed to 
improve shipbuilding quality, productivity, and practice, 
and 
to 
promote 
sustainable 
development, 
including 
engineering 
design, 
quality 
assurance, 
concurrent 
engineering, continuous process production technology, 
energy 
efficiency, 
waste 
minimization, 
design 
for 
recyclability or parts reuse, inventory management, 
upgraded worker skills, and communications with cus-
tomers and suppliers. 
‘‘(2) GENERAL SHIPYARD FACILITY.—The term ‘general ship-
yard facility’ means—
‘‘(A) for operations on land—
H. R. 1442—140
‘‘(i) a structure or appurtenance thereto designed 
for the construction, reconstruction, repair, rehabilita-
tion, or refurbishment of a vessel, including a graving 
dock, building way, ship lift, wharf, or pier crane; 
‘‘(ii) the land necessary for the structure or appur-
tenance; and 
‘‘(iii) equipment that is for use with the structure 
or appurtenance and that is necessary for performing 
a function referred to in clause (i); and 
‘‘(B) for operations not on land, a vessel, floating dry-
dock, or barge built in the United States and used for, 
equipped to be used for, or of a type normally used for, 
performing a function referred to in subparagraph (A)(i). 
‘‘(3) 
MODERN
SHIPBUILDING
TECHNOLOGY.—The 
term 
‘modern shipbuilding technology’ means the best available 
proven technology, techniques, and processes appropriate to 
enhancing the productivity of shipyards. 
‘‘(b) GENERAL AUTHORITY.—Under subchapter I of this chapter, 
the Secretary may guarantee or make a commitment to guarantee 
the payment of the principal of and interest on an obligation for 
advanced shipbuilding technology and modern shipbuilding tech-
nology of a general shipyard facility in the United States. Only 
a private shipyard is eligible to receive a guarantee. 
‘‘(c) APPLICABILITY OF OTHER PROVISIONS.—Except as otherwise 
provided in this section, a guarantee or commitment to guarantee 
under this section is subject to all the provisions applicable to 
a guarantee or commitment to guarantee under subchapter I of 
this chapter. 
‘‘(d) AMOUNT
OF OBLIGATION.—The principal amount of an 
obligation guaranteed under this chapter may not exceed 87.5 per-
cent of the actual cost of the advanced shipbuilding technology 
or modern shipbuilding technology. 
‘‘(e) TRANSFER OF AMOUNTS.—The Secretary may accept the 
transfer of amounts from a department, agency, or instrumentality 
of the United States Government and may use those amounts 
to cover the cost (as defined in section 502 of the Federal Credit 
Reform Act of 1990 (2 U.S.C. 661a)) of making guarantees or 
commitments to guarantee under this section. 
‘‘§ 53734. Replacement of vessels because of changes in oper-
ating standards 
‘‘(a) GENERAL AUTHORITY.—Notwithstanding any other provi-
sion of this chapter, the Secretary, on terms the Secretary 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 ves-
sels in the trades in which the applicant operated vessels 
before the change;
H. R. 1442—141
‘‘(3) the applicant is presently engaged in transporting car-
goes 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 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 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 construc-
tion or reconstruction of the vessel. The Secretary may not 
establish a percentage under this paragraph that is to be 
applied uniformly to all guarantees or commitments to guar-
antee 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 shall require 
by regulation that an applicant under this section provide adequate 
security against default. 
‘‘(e) GUARANTEE FEES.—The Secretary 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. 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; 
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. 
‘‘§ 53735. Fisheries financing and capacity reduction 
‘‘(a) DEFINITION.—In this section, the term ‘program’ means 
a fishing capacity reduction program established under section 312 
of the Magnuson-Stevens Fishery Conservation and Management 
Act (16 U.S.C. 1861a). 
‘‘(b) GUARANTEE AUTHORITY.—The Secretary may guarantee 
the repayment of debt obligations issued by entities under this 
section. Debt obligations to be guaranteed may be issued by any 
entity that has been approved by the Secretary and has agreed 
with the Secretary to conditions the Secretary considers necessary 
for this section to achieve the objective of the program and to 
protect the interest of the United States.
H. R. 1442—142
‘‘(c) REQUIREMENTS OF OBLIGATIONS.—A debt obligation guaran-
teed under this section shall—
‘‘(1) be treated in the same manner and to the same extent 
as other obligations guaranteed under this chapter, except with 
respect to provisions of this chapter that by their nature cannot 
be applied to obligations guaranteed under this section; 
‘‘(2) have the fishing fees established under the program 
paid into a separate subaccount of the fishing capacity reduction 
fund established under this section; 
‘‘(3) not exceed $100,000,000 in an unpaid principal amount 
outstanding at any one time for a program; 
‘‘(4) have such maturity (not to exceed 20 years), take 
such form, and contain such conditions as the Secretary deter-
mines necessary for the program to which they relate; 
‘‘(5) have as the exclusive source of repayment (subject 
to the second sentence of subsection (d)(2)) and as the exclusive 
payment security, the fishing fees established under the pro-
gram; and 
‘‘(6) at the discretion of the Secretary be issued in the 
public market or sold to the Federal Financing Bank. 
‘‘(d) FISHING CAPACITY REDUCTION FUND.—
‘‘(1) IN
GENERAL.—There is a separate account in the 
Treasury, known as the Fishing Capacity Reduction Fund. 
Within the Fund, at least one subaccount shall be established 
for each program into which shall be paid all fishing fees 
established under the program and other amounts authorized 
for the program. 
‘‘(2) AVAILABILITY OF AMOUNTS.—Amounts in the Fund shall 
be available, without appropriation or fiscal year limitation, 
to the Secretary to pay the cost of the program, including 
payments to financial institutions to pay debt obligations 
incurred by entities under this section. Funds available for 
this purpose from other amounts available for the program 
may also be used to pay those debt obligations. 
‘‘(3) INVESTMENT.—Amounts in the Fund that are not cur-
rently needed for the purpose of this section shall be kept 
on deposit or invested in obligations of the United States 
Government. 
‘‘(e) REGULATIONS.—The Secretary shall prescribe regulations 
the Secretary considers necessary to carry out this section.
‘‘CHAPTER 539—WAR RISK INSURANCE
‘‘Sec. 
‘‘53901.
Definitions. 
‘‘53902.
Authority to provide insurance. 
‘‘53903.
Insurable interests. 
‘‘53904.
Liability insurance for persons involved in war or defense efforts. 
‘‘53905.
Agency insurance. 
‘‘53906.
Hull insurance valuation. 
‘‘53907.
Reinsurance. 
‘‘53908.
Additional insurance privately obtained. 
‘‘53909.
War risk insurance revolving fund. 
‘‘53910.
Administrative. 
‘‘53911.
Civil actions for losses. 
‘‘53912.
Expiration date.
‘‘§ 53901. Definitions 
‘‘In this chapter: 
‘‘(1) AMERICAN
VESSEL.—The term ‘American vessel’ 
includes—