H. R. 1442—130
‘‘(A) for a delivered vessel or equipment, at least 0.5 
percent and not more than 1 percent; and 
‘‘(B) for a vessel to be constructed, reconstructed, or 
reconditioned or equipment to be delivered, at least 0.25 
percent and not more than 0.5 percent. 
‘‘(c) WHEN FEE COLLECTED.—A fee for the guarantee of an 
obligation under this chapter shall be collected not later than the 
date on which an amount is first paid on the obligation. 
‘‘(d) FINANCING THE FEE.—A fee paid under this section is 
eligible to be financed under this chapter and shall be included 
in the actual cost of the obligation guaranteed. 
‘‘(e) NOT REFUNDABLE.—A fee paid under this section is not 
refundable. However, an obligor shall receive credit for the amount 
paid for the remaining term of the obligation if the obligation 
is refinanced and guaranteed under this chapter after the refi-
nancing. 
‘‘§ 53715. Escrow fund 
‘‘(a) IN GENERAL.—If the proceeds of an obligation guaranteed 
under this chapter are to be used to finance the construction, 
reconstruction, or reconditioning of a vessel that will serve as secu-
rity for a guarantee under this chapter, the Secretary may accept 
and hold in escrow, under an escrow agreement with the obligor, 
a portion of the proceeds of all obligations guaranteed under this 
chapter whose proceeds are to be so used which is equal to—
‘‘(1) the excess of—
‘‘(A) the principal amount of all obligations whose pro-
ceeds are to be so used; over 
‘‘(B) 75 percent or 87.5 percent, whichever is applicable 
under section 53709(b) of this title, of the amount paid 
by or for the account of the obligor for the construction, 
reconstruction, or reconditioning of the vessel; plus 
‘‘(2) any interest the Secretary may require on the amount 
described in paragraph (1). 
‘‘(b) SECURITY INVOLVING BOTH UNCOMPLETED AND DELIVERED 
VESSELS.—If the security for the guarantee of an obligation relates 
both to a vessel to be constructed, reconstructed, or reconditioned 
and to a delivered vessel, the principal amount of the obligation 
shall be prorated for purposes of subsection (a) under regulations 
prescribed by the Secretary. 
‘‘(c) DISBURSEMENT BEFORE TERMINATION OF AGREEMENT.—
‘‘(1) PURPOSES.—The Secretary shall disburse amounts in 
the escrow fund, as specified in the escrow agreement, to—
‘‘(A) pay amounts the obligor is obligated to pay for—
‘‘(i) the construction, reconstruction, or recondi-
tioning of a vessel used as security for the guarantee; 
and 
‘‘(ii) interest on the obligations; 
‘‘(B) redeem the obligations under a refinancing 
guaranteed under this chapter; and 
‘‘(C) pay any excess interest deposits to the obligor 
at times provided for in the escrow agreement. 
‘‘(2) MANNER
OF
PAYMENT.—If a payment becomes due 
under the guarantee before the termination of the escrow agree-
ment, the amount in the escrow fund at the time the payment 
becomes due, including realized income not yet paid to the 
obligor, shall be paid into the appropriate account under section
H. R. 1442—131
53717 of this title. The amount shall be credited against 
amounts due or to become due from the obligor to the Secretary 
on the guaranteed obligations or, to the extent not so required, 
be paid to the obligor. 
‘‘(d) PAYMENTS REQUIRED BEFORE DISBURSEMENT.—
‘‘(1) IN GENERAL.—No disbursement shall be made under 
subsection (c) to any person until the total amount paid by 
or for the account of the obligor from sources other than the 
proceeds of the obligation equals at least 25 percent or 12.5 
percent, whichever is applicable under section 53709(b) of this 
title, of the aggregate actual cost of the vessel, as previously 
approved by the Secretary. If the aggregate actual cost of 
the vessel has increased since the Secretary’s initial approval 
or if it increases after the first disbursement is permitted 
under this subsection, then no further disbursements shall 
be made under subsection (c) until the total amount paid by 
or for the account of the obligor from sources other than the 
proceeds of the obligation equals at least 25 percent or 12.5 
percent, as applicable, of the increase, as determined by the 
Secretary, in the aggregate actual cost of the vessel. This para-
graph does not require the Secretary to consent to finance 
any increase in actual cost unless the Secretary determines 
that such an increase in the obligation meets all the terms 
and conditions of this chapter or other applicable law. 
‘‘(2) DOCUMENTED PROOF OF PROGRESS REQUIREMENT.—The 
Secretary shall, by regulation, establish a transparent, inde-
pendent, and risk-based process for verifying and documenting 
the progress of projects under construction before disbursing 
guaranteed loan funds. At a minimum, the process shall require 
documented proof of progress in connection with the construc-
tion, reconstruction, or reconditioning of a vessel or vessels 
before disbursements are made from the escrow fund. The 
Secretary may require that the obligor provide a certificate 
from an independent party certifying that the requisite progress 
in construction, reconstruction, or reconditioning has taken 
place. 
‘‘(e) DISBURSEMENT ON TERMINATION OF AGREEMENT.—
‘‘(1) IN GENERAL.—If a payment has not become due under 
the guarantee before the termination of the escrow agreement, 
the balance of the escrow fund at the time of termination 
shall be disbursed to—
‘‘(A) prepay the excess of—
‘‘(i) the principal amount of all obligations whose 
proceeds are to be used to finance the construction, 
reconstruction, or reconditioning of the vessel used or 
to be used as security for the guarantee; over 
‘‘(ii) 75 percent or 87.5 percent, whichever is 
applicable under section 53709(b) of this title, of the 
actual cost of the vessel to the extent paid; and 
‘‘(B) pay interest on that prepaid amount of principal. 
‘‘(2) REMAINING BALANCE.—Any remaining balance of the 
escrow fund shall be paid to the obligor. 
‘‘(f) INVESTMENT.—The Secretary may invest and reinvest any 
part of an escrow fund in obligations of the United States Govern-
ment with maturities such that the escrow fund will be available 
as required for purposes of the escrow agreement. Investment 
income shall be paid to the obligor when received.
H. R. 1442—132
‘‘(g) TERMS TO PROTECT GOVERNMENT.—The escrow agreement 
shall contain other terms the Secretary considers necessary to pro-
tect fully the interests of the Government. 
‘‘§ 53716. Deposit fund 
‘‘(a) IN GENERAL.—There is a deposit fund in the Treasury 
for purposes of this section. The Secretary, in accordance with 
an agreement under subsection (b), may deposit into and hold 
in the fund cash belonging to an obligor to serve as collateral 
for a guarantee made under this chapter with respect to the obligor. 
‘‘(b) AGREEMENT.—The Secretary and an obligor shall make 
a reserve fund or other collateral account agreement to govern 
the deposit, withdrawal, retention, use, and reinvestment of cash 
of the obligor held in the fund. The agreement shall contain—
‘‘(1) terms and conditions required by this section; 
‘‘(2) terms that grant to the United States Government 
a security interest in all amounts deposited into the fund; 
and 
‘‘(3) any additional terms considered by the Secretary to 
be necessary to protect fully the interests of the Government. 
‘‘(c) INVESTMENT.—The Secretary may invest and reinvest any 
part of the amounts in the fund in obligations of the Government 
with maturities such that amounts in the fund will be available 
as required for purposes of the agreement under subsection (b). 
Cash balances in the fund in excess of current requirements shall 
be maintained in a form of uninvested funds, and the Secretary 
of the Treasury shall pay interest on these funds. 
‘‘(d) WITHDRAWALS.—
‘‘(1) IN GENERAL.—Cash deposited into the fund may not 
be withdrawn without the consent of the Secretary. 
‘‘(2) USE OF INCOME.—Subject to paragraph (3), the Sec-
retary may pay any income earned on cash of an obligor depos-
ited into the fund in accordance with the agreement with the 
obligor under subsection (b). 
‘‘(3) RETENTION
AGAINST
DEFAULT.—The Secretary may 
retain and offset any or all of the cash of an obligor in the 
fund, and any income realized thereon, as part of the Secretary’s 
recovery against the obligor in case of a default by the obligor 
on an obligation. 
‘‘§ 53717. Management of funds in the Treasury 
‘‘(a) DEFINITION.—In this section, the term ‘FCRA’ means the 
Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.). 
‘‘(b) LOAN GUARANTEES BY SECRETARY OF TRANSPORTATION.—
‘‘(1) WHEN
NOT
SUBJECT
TO
FCRA.—The Secretary of 
Transportation shall account for payments and disbursements 
involving obligations guaranteed under this chapter and not 
subject to FCRA in an account in the Treasury entitled the 
Federal Ship Financing Fund Liquidating Account (a liqui-
dating account as defined in FCRA). 
‘‘(2) WHEN SUBJECT TO FCRA.—The Secretary of Transpor-
tation shall account for payments and disbursements involving 
obligations guaranteed under this chapter and subject to FCRA 
in a separate account in the Treasury entitled the Federal 
Ship Financing Guaranteed Loan Financing Account (a 
financing account as defined in FCRA). 
‘‘(c) LOAN GUARANTEES BY SECRETARY OF COMMERCE.—
H. R. 1442—133
‘‘(1) WHEN NOT SUBJECT TO FCRA.—The Secretary of Com-
merce shall account for payments and disbursements involving 
obligations guaranteed under this chapter and not subject to 
FCRA in a separate account in the Treasury established for 
this purpose. 
‘‘(2) WHEN SUBJECT TO FCRA.—The Secretary of Commerce 
shall account for payments and disbursements involving obliga-
tions guaranteed under this chapter and subject to FCRA in 
a separate account in the Treasury established for this purpose. 
‘‘(d) DIRECT LOANS BY SECRETARY OF COMMERCE.—The Sec-
retary of Commerce shall account for payments and disbursements 
involving direct loans made under this chapter in a separate account 
in the Treasury established for this purpose. 
‘‘§ 53718. Annual report to Congress 
‘‘The Secretary of Transportation shall report to Congress 
annually on the loan guarantee program under this chapter. Each 
report shall include—
‘‘(1) the size, in dollars, of the portfolio of loans guaranteed; 
‘‘(2) the size, in dollars, of projects in the portfolio facing 
financial difficulties; 
‘‘(3) the number and type of projects covered; 
‘‘(4) a profile of pending loan applications; 
‘‘(5) the amount of appropriations available for new guaran-
tees; 
‘‘(6) a profile of each project approved since the last report; 
and 
‘‘(7) a profile of any defaults since the last report. 
‘‘SUBCHAPTER II—DEFAULT PROVISIONS 
‘‘§ 53721. Rights of obligee 
‘‘(a) DEMANDS BY OBLIGEES.—Except as provided in subsection 
(c), if an obligor has continued in default for 30 days in the payment 
of principal or interest on an obligation guaranteed under this 
chapter, the obligee or the obligee’s agent may demand that the 
Secretary pay the unpaid principal amount of the obligation and 
the unpaid interest on the obligation to the date of payment. The 
demand must be made within the earlier of—
‘‘(1) a period that may be specified in the guarantee or 
a related agreement; or 
‘‘(2) 90 days from the date of the default. 
‘‘(b) PAYMENTS BY SECRETARY.—
‘‘(1) IN GENERAL.—If a demand is made under subsection 
(a), the Secretary shall pay to the obligee or the obligee’s 
agent the unpaid principal amount of the obligation and the 
unpaid interest on the obligation to the date of payment. Pay-
ment shall be made within the earlier of—
‘‘(A) a period that may be specified in the guarantee 
or a related agreement; or 
‘‘(B) 30 days from the date of the demand. 
‘‘(2) IF
NO
EXISTING
DEFAULT.—The Secretary is not 
required to make payment under this subsection if, within 
the appropriate period under paragraph (1), the Secretary finds 
that the obligor was not in default or that the default was 
remedied before the demand.
H. R. 1442—134
‘‘(c) ASSUMPTION
OF
RIGHTS
AND
OBLIGATIONS
BEFORE 
DEMAND.—An obligee or the obligee’s agent may not demand pay-
ment under this section if the Secretary, before the demand and 
on terms that may be provided in the obligation or a related 
agreement, has assumed the obligor’s rights and duties under the 
obligation and any related agreement and made any payment in 
default. However, the guarantee of the obligation remains in effect 
after the Secretary’s assumption. 
‘‘§ 53722. Actions by Secretary 
‘‘(a) GENERAL AUTHORITY.—On default under an obligation or 
related agreement between the Secretary and the obligor, the Sec-
retary, on terms that may be provided in the obligation or agree-
ment, may—
‘‘(1) assume the obligor’s rights and duties under the obliga-
tion or agreement, make any payment in default, and notify 
the obligee or the obligee’s agent of the default and the Sec-
retary’s assumption; or 
‘‘(2) notify the obligee or the obligee’s agent of the default. 
‘‘(b) DEMANDS BY OBLIGEES.—
‘‘(1) DEMAND.—If the Secretary proceeds under subsection 
(a)(2), the obligee or the obligee’s agent may demand that 
the Secretary pay the unpaid principal amount of the obligation 
and the unpaid interest on the obligation. The demand must 
be made within the earlier of—
‘‘(A) a period that may be specified in the guarantee 
or a related agreement; or 
‘‘(B) 60 days from the date of the Secretary’s notice. 
‘‘(2) PAYMENT.—If a demand is made under paragraph (1), 
the Secretary shall pay to the obligee or the obligee’s agent 
the unpaid principal amount of the obligation and the unpaid 
interest on the obligation to the date of payment. Payment 
shall be made within the earlier of—
‘‘(A) a period that may be specified in the guarantee 
or a related agreement; or 
‘‘(B) 30 days from the date of the demand. 
‘‘(c) CONTINUED EFFECT OF GUARANTEE.—A guarantee of an 
obligation remains in effect after an assumption of the obligation 
by the Secretary. 
‘‘(d) ADDITIONAL RESPONSES.—If there is a default on an obliga-
tion, the Secretary shall conduct operations under this chapter 
in a manner that—
‘‘(1) maximizes the net present value return from the sale 
or disposition of assets associated with the obligation, including 
prompt referral to the Attorney General for collection as appro-
priate; 
‘‘(2) minimizes the amount of any loss realized in the resolu-
tion of the guarantee; 
‘‘(3) ensures adequate competition and fair and consistent 
treatment of offerors; and 
‘‘(4) requires appraisal of assets by an independent 
appraiser. 
‘‘§ 53723. Payments by Secretary and issuance of obligations 
‘‘(a) CASH PAYMENT.—Amounts required to be paid by the Sec-
retary under section 53721 or 53722 of this title shall be paid 
in cash.
H. R. 1442—135
‘‘(b) ISSUANCE OF OBLIGATIONS.—If amounts in the appropriate 
account under section 53717 of this title are not sufficient to make 
a payment required under section 53721 or 53722 of this title, 
the Secretary may issue obligations to the Secretary of the Treasury. 
The Secretary, with the approval of the Secretary of the Treasury, 
shall prescribe the form, denomination, maturity, and other terms 
(except the interest rate) of the obligations. The Secretary of the 
Treasury shall set the interest rate for the obligations, considering 
the current average market yield on outstanding marketable obliga-
tions of the United States Government of comparable maturities 
during the month before the obligations are issued. 
‘‘(c) PURCHASE OF OBLIGATIONS.—The Secretary of the Treasury 
shall purchase the obligations issued under this section. To purchase 
the obligations, the Secretary of the Treasury may use as a public 
debt transaction the proceeds from the sale of securities issued 
under chapter 31 of title 31. The purposes for which securities 
may be issued under that chapter are extended to include the 
purchase of obligations under this subsection. The Secretary of 
the Treasury may sell obligations purchased under this section. 
A redemption, purchase, or sale of the obligations by the Secretary 
of the Treasury is a public debt transaction of the Government. 
‘‘(d) DEPOSITS AND REDEMPTIONS.—The Secretary shall deposit 
amounts borrowed under this section in the appropriate account 
under section 53717 of this title and make redemptions of the 
obligations from that account. 
‘‘§ 53724. Rights to secured property 
‘‘(a) ACQUISITION OF SECURITY RIGHTS.—When the Secretary 
makes a payment on, or assumes, an obligation under section 
53721 or 53722 of this title, the Secretary acquires the rights 
under the security agreement with the obligor in the security held 
by the Secretary to guarantee the obligation. 
‘‘(b) USE AND DISPOSITION OF SECURED PROPERTY.—Notwith-
standing any other law relating to the acquisition, handling, or 
disposal of property by the United States Government, the Secretary 
has the right, in the Secretary’s discretion, to complete, reconstruct, 
recondition, renovate, repair, maintain, operate, charter, or sell 
any property acquired under a security agreement with an obligor, 
or to place a vessel so acquired in the National Defense Reserve 
Fleet. The terms of a sale under this subsection shall be as approved 
by the Secretary. 
‘‘§ 53725. Actions against obligor 
‘‘(a) IN GENERAL.—For a default under a guaranteed obligation 
or related agreement, the Secretary may take any action against 
the obligor or another liable party that the Secretary considers 
necessary to protect the interests of the United States Government. 
A civil action may be brought in the name of the United States 
or the obligee. The obligee shall make available to the Government 
all records and evidence necessary to prosecute the action. 
‘‘(b) TITLE, POSSESSION, AND PURCHASE.—
‘‘(1) IN GENERAL.—The Secretary may—
‘‘(A) accept a conveyance of title to and possession 
of property from the obligor or another party liable to 
the Secretary; and
H. R. 1442—136
‘‘(B) purchase the property for an amount not greater 
than the unpaid principal amount of the obligation and 
interest thereon. 
‘‘(2) PAYMENT OF EXCESS.—If, through the sale of property, 
the Secretary receives an amount of cash greater than the 
unpaid principal amount of the obligation, the unpaid interest 
on the obligation, and the expenses of collecting those amounts, 
the Secretary shall pay the excess to the obligor. 
‘‘SUBCHAPTER III—PARTICULAR PROJECTS 
‘‘§ 53731. Commercial demonstration ocean thermal energy 
conversion facilities and plantships 
‘‘(a) IN GENERAL.—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 that 
aids in financing (including reimbursement of an obligor for expendi-
tures previously made for) the construction, reconstruction, or 
reconditioning of a commercial demonstration ocean thermal energy 
conversion facility or plantship. This section may be used to guar-
antee obligations for a total of not more than 5 separate facilities 
and plantships or a demonstrated 400 megawatt capacity, whichever 
comes first. 
‘‘(b) 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. 
‘‘(c) ECONOMIC SOUNDNESS.—The required determination of eco-
nomic soundness under section 53708 of this title applies to a 
guarantee or commitment to guarantee for that portion of a facility 
or plantship not to be supported with appropriated Federal funds. 
‘‘(d) REASONABLENESS OF RISK.—A guarantee or commitment 
to guarantee may not be made under this section unless the Sec-
retary of Energy, in consultation with the Secretary, certifies to 
the Secretary that, for the facility or plantship for which the guar-
antee or commitment to guarantee is sought, there is sufficient 
guarantee of performance and payment to lower the risk to the 
United States Government to a reasonable level. In deciding 
whether to issue such a certification, the Secretary of Energy shall 
consider—
‘‘(1) the successful demonstration of the technology to be 
used in the facility at a scale sufficient to establish the likeli-
hood of technical and economic viability in the proposed market; 
and 
‘‘(2) the need of the United States to develop new and 
renewable sources of energy and the benefits to be realized 
from the construction and successful operation of the facility 
or plantship. 
‘‘(e) AMOUNT OF OBLIGATION.—The total principal amount of 
an obligation guaranteed under this section may not exceed 87.5 
percent of—
‘‘(1) the actual cost or depreciated actual cost of the facility 
or plantship; or 
‘‘(2) if the facility or plantship is supported with appro-
priated Federal funds, the total principal amount of that portion 
of the actual cost or depreciated actual cost for which the
H. R. 1442—137
obligor is obligated to secure financing under the agreement 
between the obligor and the Department of Energy or other 
Federal agency. 
‘‘(f) OTEC DEMONSTRATION FUND.—
‘‘(1) IN GENERAL.—There is a special subaccount, known 
as the OTEC Demonstration Fund, in the account established 
under section 53717(b)(1) of this title. 
‘‘(2) USE AND OPERATION.—The OTEC Demonstration Fund 
shall be used for obligation guarantees authorized under this 
section that do not qualify under subchapter I of this chapter. 
Except as otherwise provided in this section, the OTEC Dem-
onstration Fund shall be operated in the same manner as 
the parent account. However—
‘‘(A) amounts received by the Secretary under sub-
chapter I of this chapter related to guarantees or commit-
ments to guarantee made under this section shall be depos-
ited only in the OTEC Demonstration Fund; and 
‘‘(B) when obligations issued by the Secretary under 
section 53723 of this title related to the OTEC Demonstra-
tion Fund are outstanding, any amount received by the 
Secretary under subchapter I of this chapter related to 
ocean thermal energy conversion facilities or plantships 
shall be deposited in the OTEC Demonstration Fund. 
‘‘(3) TRANSFERS.—Assets in the OTEC Demonstration Fund 
may be transferred to the parent account when and to the 
extent the balance in the OTEC Demonstration Fund exceeds 
the total guarantees or commitments to guarantee made under 
this section then outstanding, plus obligations issued by the 
Secretary under section 53723 of this title related to the OTEC 
Demonstration Fund. 
‘‘(4) LIABILITY.—The parent account is not liable for a guar-
antee or commitment to guarantee made under this section. 
‘‘(5) MAXIMUM
UNPAID
PRINCIPAL
AMOUNT.—The total 
unpaid principal amount of the obligations guaranteed with 
the backing of the OTEC Demonstration Fund and outstanding 
at any one time may not exceed $1,650,000,000. 
‘‘(g) ISSUANCE AND PAYMENT OF OBLIGATIONS.—Section 53723 
of this title applies to the OTEC Demonstration Fund. However, 
obligations issued by the Secretary under that section related to 
the OTEC Demonstration Fund shall be payable only from proceeds 
realized by the OTEC Demonstration Fund. 
‘‘(h) TAXATION OF INTEREST.—Interest on an obligation guaran-
teed under this section shall be included in gross income under 
chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. ch. 
1). 
‘‘§ 53732. Eligible export vessels 
‘‘(a) APPLICABLE TERMS.—The Secretary may guarantee an 
obligation for an eligible export vessel in accordance with—
‘‘(1) the terms applicable under this chapter for vessels 
documented under the laws of the United States; or 
‘‘(2) other terms the Secretary determines are more favor-
able than those terms and compatible with export credit terms 
offered by foreign governments for the sale of vessels built 
in foreign shipyards. 
‘‘(b) INTERAGENCY COUNCIL.—
H. R. 1442—138
‘‘(1) ESTABLISHMENT.—There is an interagency council to 
carry out this section. 
‘‘(2) COMPOSITION.—The council is composed of the fol-
lowing individuals or their designees: 
‘‘(A) The Secretary of Transportation, who is the chair-
man of the council. 
‘‘(B) The Secretary of the Treasury. 
‘‘(C) The Secretary of State. 
‘‘(D) The Assistant to the President for Economic Policy. 
‘‘(E) The United States Trade Representative. 
‘‘(F) The President and Chairman of the Export-Import 
Bank of the United States. 
‘‘(3) FUNCTIONS.—The council shall—
‘‘(A) obtain information on shipbuilding loan guaran-
tees, direct and indirect subsidies, and other favorable 
treatment of shipyards provided by foreign governments 
to shipyards in competition with United States shipyards; 
‘‘(B) consult regularly with United States shipbuilders 
to obtain the essential information about international 
shipbuilding competition on which to set terms for loan 
guarantees under subsection (a)(2); and 
‘‘(C) provide guidance to the Secretary in establishing 
terms for loan guarantees under subsection (a)(2). 
‘‘(4) ANNUAL REPORT.—Not later than January 31 of each 
year, the Secretary shall submit to Congress a report on activi-
ties of the Secretary under this section during the preceding 
year. The report shall include—
‘‘(A) documentation of sources of information about 
assistance by governments of other countries to shipyards 
in those countries; and 
‘‘(B) a summary of recommendations made to the Sec-
retary during the preceding year about applications sub-
mitted to the Secretary during that year for loan guaran-
tees to construct eligible export vessels. 
‘‘(c) REQUIRED FINDINGS.—
‘‘(1) BENEFIT TO SHIPBUILDING INDUSTRY.—The Secretary 
may not guarantee or make a commitment to guarantee an 
obligation for an eligible export vessel unless the Secretary 
finds that the construction, reconstruction, or reconditioning 
of the vessel will aid in the transition of United States ship-
yards to commercial activities or will preserve shipbuilding 
assets that would be essential in time of war or national emer-
gency. 
‘‘(2) PRIORITY
OF
DOCUMENTED
VESSELS.—The Secretary 
may not make a commitment to guarantee an obligation for 
an eligible export vessel unless the Secretary determines that 
making the commitment will not result in denial of an economi-
cally sound application for a commitment to guarantee an 
obligation for a vessel documented under the laws of the United 
States and operating in the domestic or foreign commerce of 
the United States. The Secretary has sole discretion in making 
the determination. In making the determination, the Secretary 
shall consider—
‘‘(A) the status and economic soundness of pending 
applications for commitments to guarantee obligations for 
vessels documented under the laws of the United States