149 
‘‘(2) for a fishing vessel, the purpose of the financing or refinancing 
is consistent with— 
‘‘(A) the wise use of the fisheries resources and the develop-
ment, advancement, management, conservation, and protection of 
the fisheries resources; or 
‘‘(B) the need for technical improvements, including increased 
fuel efficiency or improved safety. 
‘‘(c) USED FISHING VESSELS AND FACILITIES.—The Secretary of Com-
merce 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 development 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 definition of ‘fishery facility’ 
in section 53701 of this title with respect to an underused fishery. 
‘‘(d) INDEPENDENT ANALYSIS.—The Secretary may make a determina-
tion that aspects of an application under this chapter require independent 
analysis to be conducted by third party experts due to risk factors associ-
ated with markets, technology, financial structures, or other risk factors 
identified by the Secretary. Any independent analysis conducted under this 
subsection shall be performed by a party chosen by the Secretary. 
‘‘(e) ADDITIONAL EQUITY BECAUSE OF INCREASED RISKS.—Notwith-
standing any other provision of this chapter, the Secretary may make a de-
termination that an application under this title requires additional equity 
because of increased risk factors associated with markets, technology, finan-
cial structures, or other risk factors identified by the Secretary. 
‘‘§ 53709. Amount of obligations 
‘‘(a) IN GENERAL.—The principal of an obligation may not be guaranteed 
in an amount greater than the amount determined by multiplying the per-
centage applicable under subsection (b) by— 
‘‘(1) the amount paid by or for the account of the obligor (as deter-
mined by the Secretary, which determination shall be conclusive) for 
the construction, reconstruction, or reconditioning of the vessel used as 
security 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 provided, the principal 
amount of an obligation guaranteed under this chapter may not exceed 
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75 percent of the actual cost or depreciated actual cost, as determined 
by the Secretary, of the vessel used as security for the guarantee. 
‘‘(2) CERTAIN APPROVED VESSELS.—The principal 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 approved by the Sec-
retary; 
‘‘(B) the vessel is or would have been eligible 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-differential subsidy and the subsidy has been 
repaid; and 
‘‘(C) the vessel is of a type described in that section for which 
the minimum down payment required by that section is 12.5 per-
cent of the cost of the vessel. 
‘‘(3) BARGES.—For a barge constructed without a construction-dif-
ferential subsidy or for which the subsidy has been repaid, the principal 
amount may not exceed 87.5 percent of the actual cost or depreciated 
actual cost. 
‘‘(4) FISHING VESSELS AND FISHERY FACILITIES.—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 Financing 
Bank. 
‘‘(5) OTEC.—For an ocean thermal energy conversion facility or 
plantship constructed without a construction-differential subsidy, the 
principal amount may not exceed 87.5 percent of the actual cost or de-
preciated actual cost of the facility or plantship. 
‘‘(6) ELIGIBLE EXPORT VESSELS.—For an eligible export vessel, the 
principal amount may not exceed 87.5 percent of the actual cost or de-
preciated actual cost. 
‘‘(c) SECURITY INVOLVING MULTIPLE VESSELS.—The principal amount 
of an obligation having more than one vessel as security for the guarantee 
may not exceed the sum of the principal amounts allowable for all the ves-
sels. 
‘‘(d) PROHIBITION ON UNIFORM PERCENTAGE LIMITATIONS.—The Sec-
retary may not establish a percentage under any provision of subsection (b) 
that is to be applied uniformly to all guarantees or commitments to guar-
antee made under that provision. 
‘‘(e) PROHIBITION ON MINIMUM PRINCIPAL AMOUNT.—The Secretary 
may not establish, as a condition of eligibility for a guarantee under this 
chapter, a minimum principal amount for an obligation covering the recon-
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struction or reconditioning of a fishing vessel or fishery facility. For pur-
poses of this chapter, the reconstruction or reconditioning of a fishing vessel 
or fishery facility does not include the routine minor repair or maintenance 
of the vessel or facility. 
‘‘§ 53710. Contents of obligations 
‘‘(a) IN GENERAL.—An obligation guaranteed under this chapter must— 
‘‘(1) provide for payments by the obligor satisfactory to the Sec-
retary; 
‘‘(2) provide for interest (exclusive of guarantee fees and other fees) 
at a rate not more than the annual rate on the unpaid principal that 
the Secretary determines is reasonable, considering the range of inter-
est rates prevailing in the private market for similar loans and the 
risks assumed by the Secretary; 
‘‘(3) have a maturity date satisfactory to the Secretary, but— 
‘‘(A) not more than 25 years after the date of delivery of the 
vessel used as security for the guarantee; or 
‘‘(B) if the vessel has been reconstructed or reconditioned, not 
more than the later of— 
‘‘(i) 25 years after the date of delivery of the vessel; or 
‘‘(ii) the remaining years of useful life of the vessel as de-
termined by the Secretary; and 
‘‘(4) provide, or a related agreement must provide, that if the vessel 
used as security for the guarantee is a delivered vessel, the vessel shall 
be— 
‘‘(A) in class A–1, American Bureau of Shipping, or meet other 
standards acceptable to the Secretary, with all required certifi-
cates, including marine inspection certificates of the Coast Guard 
or, in the case of an eligible export vessel, of the appropriate for-
eign authorities under a treaty, convention, or other international 
agreement to which the United States is a party, and with all out-
standing requirements and recommendations necessary for class 
retention accomplished, unless the Secretary permits a deferment 
of repairs necessary to meet these requirements; and 
‘‘(B) well equipped, in good repair, and in every respect sea-
worthy and fit for service. 
‘‘(b) PROVISIONS FOR CERTAIN PASSENGER VESSELS.— 
‘‘(1) IN GENERAL.—With the Secretary’s approval, if the vessel used 
as security for the guarantee is a passenger vessel having the tonnage, 
speed, passenger accommodations, and other characteristics described 
in section 503 of the Merchant Marine Act, 1936, an obligation guar-
anteed under this chapter or a related agreement may provide that— 
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‘‘(A) the only recourse by the United States Government 
against the obligor for payments under the guarantee will be re-
possession of the vessel and assignment of insurance claims; and 
‘‘(B) the obligor’s liability for payments under the guarantee 
will be satisfied and discharged by the surrender of the vessel and 
all interest in the vessel to the Government in the condition de-
scribed in paragraph (2). 
‘‘(2) SURRENDER OF VESSEL.— 
‘‘(A) IN GENERAL.—On surrender, the vessel must be— 
‘‘(i) free and clear of all liens and encumbrances except the 
security interest conveyed to the Secretary under this chapter; 
‘‘(ii) in class; and 
‘‘(iii) in as good order and condition (ordinary wear and 
tear excepted) as when acquired by the obligor. 
‘‘(B) COVERING DEFICIENCIES BY INSURANCE.—To the extent 
covered by insurance, a deficiency related to a requirement in sub-
paragraph (A) may be satisfied by assignment of the obligor’s in-
surance claims to the Government. 
‘‘(c) OTHER PROVISIONS TO PROTECT SECURITY INTERESTS.—An obli-
gation guaranteed under this chapter and any related agreement must con-
tain other provisions for the protection of the security interests of the Gov-
ernment (including acceleration, assumption, and subrogation provisions and 
the issuance of notes by the obligor to the Secretary), liens and releases of 
liens, payment of taxes, and other matters that the Secretary may prescribe. 
‘‘§ 53711. Security interest 
‘‘(a) IN GENERAL.—The Secretary may guarantee an obligation under 
this chapter only if the obligor conveys or agrees to convey to the Secretary 
a security interest the Secretary considers necessary to protect the interest 
of the United States Government. 
‘‘(b) MULTIPLE VESSELS AND TYPES OF SECURITY.—The security inter-
est may relate to more than one vessel and may consist of more than one 
type of security. If the security interest relates to more than one vessel, the 
obligation may have the latest maturity date allowable under section 
53710(a)(3) of this title for any of the vessels used as security for the guar-
antee. However, the Secretary may require such payments of principal prior 
to maturity, with respect to all related obligations, as the Secretary con-
siders necessary to maintain adequate security for the guarantee. 
‘‘§ 53712. Monitoring financial condition and operations of 
obligor 
‘‘(a) IN GENERAL.—The Secretary shall monitor the financial condition 
and operations of the obligor on a regular basis during the term of the 
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