Findings related to economic soundness

  1. Law
  2. USC 46
  3. Shipping
  4. Merchant Marine
  5. Financial Assistance Programs
  6. LOANS AND GUARANTEES
  7. GENERAL
  8. Findings related to economic soundness

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§53708. Findings related to economic soundness

(a) By Administrator.-The Administrator may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Administrator finds that the property or project for which the obligation will be executed will be economically sound. In making that finding, the Administrator shall consider-

(1) the need in the particular segment of the maritime industry for new or additional capacity, including any impact on existing equipment for which a guarantee under this chapter is in effect;

(2) the market potential for employment of the vessel over the life of the guarantee;

(3) projected revenues and expenses associated with employment of the vessel;

(4) any charter, contract of affreightment, transportation agreement, or similar agreement or undertaking relevant to the employment of the vessel;

(5) other relevant criteria; and

(6) for inland waterways, the need for technical improvements, including increased fuel efficiency or improved safety.


(b) By Secretary.-The Secretary may not guarantee or make a commitment to guarantee an obligation under this chapter unless the Secretary finds, at or prior to the time the commitment is made or the guarantee becomes effective, that-

(1) the property or project for which the obligation will be executed will be economically sound; and

(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 development, 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 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 or Administrator may make a determination that aspects of an application under this chapter require independent analysis to be conducted by third party experts due to risk factors associated with markets, technology, or financial structures. A third party independent analysis conducted under this subsection shall be performed by a private sector expert in assessing such risk factors who is selected by the Secretary or Administrator.

(e) Additional Equity Because of Increased Risks.-Notwithstanding any other provision of this chapter, the Secretary or Administrator may make a determination that an application under this title requires additional equity because of increased risk factors associated with markets, technology, or financial structures.

( Pub. L. 109–304, §8(c), Oct. 6, 2006, 120 Stat. 1608 ; Pub. L. 109–163, div. C, title XXXV, §3507(a)(1)(D), (2)(D), (b)(3)(A), (4), Jan. 6, 2006, 119 Stat. 3555 , 3556; Pub. L. 110–181, div. C, title XXXV, §3522(a)(4), (b), Jan. 28, 2008, 122 Stat. 597 , 598.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
53708(a) 46 App.:1274(d)(1)(A). June 29, 1936, ch. 858, title XI, §1104A(d)(1), (2) [§1104A formerly §1104], as added June 23, 1938, ch. 600, §46, 52 Stat. 970 ; Aug. 4, 1939, ch. 417, §14, 53 Stat. 1187 ; Sept. 28, 1950, ch. 1093, §4, 64 Stat. 1078 ; Aug. 15, 1953, ch. 513, §2, 67 Stat. 626 ; Sept. 3, 1954, ch. 1265, §4, 68 Stat. 1269 ; Pub. L. 86–123, §§1(3), 2, July 31, 1959, 73 Stat. 269 , 271; Pub. L. 86–127, §1(3), (4), July 31, 1959, 73 Stat. 273 ; Pub. L. 86–518, §1, June 12, 1960, 74 Stat. 216 ; Pub. L. 86–685, §§2, 3, Sept. 2, 1960, 74 Stat. 733 ; Pub. L. 90–341, June 15, 1968, 82 Stat. 180 ; Pub. L. 91–469, §§31, 32, Oct. 21, 1970, 84 Stat. 1035 ; restated Pub. L. 92–507, §3, Oct. 19, 1972, 86 Stat. 910 ; Pub. L. 96–561, title II, §220(3)(C), Dec. 22, 1980, 94 Stat. 3293 ; Pub. L. 97–31, §12(136), Aug. 6, 1981, 95 Stat. 166 ; Pub. L. 97–35, title XVI, §1606(c), Aug. 13, 1981, 95 Stat. 752 ; Pub. L. 98–595, §1(6), Oct. 30, 1984, 98 Stat. 3130 ; §1104 renumbered as §1104A, Pub. L. 101–380, title IV, §4115(f)(1), Aug. 18, 1990, 104 Stat. 521 .
53708(b) 46 App.:1274(d)(1)(B).
53708(c) 46 App.:1274(d)(2).
53708(d) 46 App.:1274(f)(2). June 29, 1936, ch. 858, title XI, §1104A(f)(2), (3), as added Pub. L. 108–136, title XXXV, §3526(2)(C), Nov. 24, 2003, 117 Stat. 1801 .
53708(e) 46 App.:1274(f)(3).

Amendments

2008-Pub. L. 110–181, §3522(b), repealed Pub. L. 109–163, §3507(a)(1)(D), (2)(D), (b)(3)(A), (4). See 2006 Amendment note below.

Subsec. (a). Pub. L. 110–181, §3522(a)(4)(A), (B), incorporated the substance of the amendment by Pub. L. 109–163, §3507(a)(2)(D), (b)(3)(A), into this section by substituting in the heading, "Administrator" for "Secretary of Transportation" and, in introductory provisions, "Administrator may" for "Secretary of Transportation may", "Administrator finds" for "Secretary finds", and "Administrator shall" for "Secretary shall". 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.

Subsec. (b). Pub. L. 110–181, §3522(a)(4)(C), (D), struck out "of Commerce" after "Secretary" in heading and the first time appearing in introductory provisions.

Subsec. (c). Pub. L. 110–181, §3522(a)(4)(D), struck out "of Commerce" after "Secretary".

Subsec. (d). Pub. L. 110–181, §3522(a)(4)(E), incorporated the substance of the amendment by Pub. L. 109–163, §3507(a)(1)(D), (b)(4)(A), (C), into this section by inserting "or Administrator" after "The Secretary" and substituting "or financial structures. A third party independent analysis conducted under this subsection shall be performed by a private sector expert in assessing such risk factors who is selected by the Secretary or Administrator." for "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." 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.

Subsec. (e). Pub. L. 110–181, §3522(a)(4)(F), incorporated the substance of the amendment by Pub. L. 109–163, §3507(a)(1)(D), (b)(4)(B), into this section by inserting "or Administrator" after "chapter, the Secretary" and substituting "or financial structures" for "financial structures, or other risk factors identified by the Secretary". 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)(D), (2)(D), (b)(3)(A), (4), which directed the amendment of section 1274(d)(1)(A), (f)(2), (3) of the former Appendix to this title from which this section was derived in part, was repealed by Pub. L. 110–181, §3522(b). See 2008 Amendment notes for subsecs. (a), (d), and (e) and Historical and Revision notes above.


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