570 



not to exceed twenty-five years from the date the 

 vessel was delivered by tlie shipbuilder, or, if the 

 vesssl has been reconstmcted or reconditioned, the 

 actual cost of the vessel depreciated on a straightline 

 basis from the date the vessel was delivered by the 

 shipbuilder to the date of such reconstruction or re- 

 conditioning on the basis of the original useful life 

 of the vessel and from the date of such reconstruction 

 or reconditioning on a straightline basis and on the 

 basis of a useful life of the vessel determined by the 

 Secretary of Commerce, plus all amounts paid or 

 obligated to be paid for the reconstruction or recon- 

 ditioning depreciated on a straightline basis and on 

 the basis of a useful life of the vessel determined by 

 the Secretary of Commerce; and 



(h) The terms "construction," "reconstruction," 

 or "reconditioning" shall include, but shall not be 

 limited to, designing, inspecting, outfitting, and 

 equipping. (As amended Oct. 19, 1972, Pub. L. 92-507, 

 § 1, 86 Stat. 909.) 



Amendments 



1972 — Subsec. (a) . Pub. L. 92-507 reduced the minimum 

 size requirement for certain vessels from 200 gross tons 

 to 25 gross tons. 



Subsec. (b). Pub. L. 92-507 substituted definition of 

 "vessel" for definition of "loan". 



Subsec. (c). Pub. L. 92-507 .substituted definition of 

 "obligation" for definition of "vessel". 



Subsec. (d). Pub. L. 92-507 substituted definition of 

 "obligor" for definition of "mortgagee". 



Subsec. (e). Pub. L. 92-507 substituted definition of 

 "obligee" for the definition of "mortgagor". 



Subsec. (f). Pub. L. 92-507 struck out the proviso and 

 subitituted obligor for mortgagor or borrower. 



Subsecs. (g) and (h). Pub. L. 92-507 added subsecs. 

 (g) and (h). 



§ 1272. Federal Ship Financing Fund. 



There is created a Federal Ship Financing Fund 

 (hereinafter referred to as the Fund) which shall 

 be used by the Secretary of Commerce as a revolving 

 fund for the purpose of carrying out the provisions 

 of this subchapter, and there shall be allocated to 

 such fund the sum of $1,090,000 out of funds made 

 available to the Secretary of Commerce under the 

 appropriation authorized by section 1279 of this title. 

 Moneys in the Fund shall be deposited in the Treas- 

 ury of the United States to the credit of the Fund 

 or invested in bonds or other obligations of, or 

 guaranteed as to principal and interest by, the United 

 States. (Ao amended Oct. 19, 1972, Pub. L. 92-507, 

 § 2, 86 Stat. 910.) 



Amendments 



1972— Pub. L. 92-507 substituted "Federal Ship Fi- 

 nancing Fi;nd" for "Federal Ship Mortgage Insurance 

 ■Fund", and "Fund" for "fund" in four places. 



§ 1273. Authorization of Secretary to guarantee obli- 

 gatiOiis. 



(a) Principal and interest. 



The Secretary of Commerce, upon application by 

 a citizen of the United States, is authorized to 

 guarantee, and to enter into commitments to 

 guarantee, the payment of the interest on, and the 

 unpaid balance of the principal of, any obligation 

 which is eligible to be guaranteed under this sub- 

 chapter. 



(b) Security interest. 



No obligation shall be gu?.rantecd under this sub- 

 chapter unless the obligor conveys or agrees to con- 

 vey to the Secretary of Commerce such security in- 

 terest, which may include a mortsa&e or mortgages 

 on a vessel or vessels, as the Secrctai-y of Commerce 

 may reasonably require to protect the interests of 

 the United States. 



(c) Amount of guarantee; percentage limitation; de- 

 termination of actual cost of vessel. 



The Secretary of Commerce shall not guarantee 

 the principal of obligations in an amount in excess 

 of 75 per centum, or 87 '/2 per centurn, whichever is 

 applicable under section 1274 of this title, of the 

 amount, as determined by the Ss reiary of Com- 

 merce which determination shrll be conclusive, paid 

 by or for the account of the obligor for the construc- 

 tion, reconstruction, or reconditioning of a vessel or 

 vessels with respect to which a security interest has 

 been conveyed to the Secretary of Commerce, unless 

 the obligor creates an escrow fund as authorized by 

 section 1279a of this title, in which case the Secretary 

 of Commerce may guarantee 75 per centum or 87 '72 

 per centum, whichever is applicable under section 

 1274 of this title, of the actual cost of such vessel or 

 vessels. 



(d) Pledge of United States. 



The full faith and credit of the United States Is 

 pledged to the payment of all guare-ntees made under 

 this subchapter with reepect to both principal and 

 interest, including interest, as may be provided for 

 in the guarantee, accruing between the date of de- 

 fault under a guaranteed obligation and the pay- 

 ment in full of the guarantee. 



(e) Proof of obligations. 



Any guarantee, or commitment to guarantee, made 

 by the Secretary of Commerce under thij subchap- 

 ter shall be conclusive evidence of the eligibility of 

 the obligations for such guarantee, and the validity 

 of any guarantee, or commitment to gu.irantee, so 

 made shall be incontestable. 



(f) Limitation on outstanding amount. 



The aggregate unpaid principal amount of the 

 obligations guaranteed under this section and out- 

 standing at any one time shall not exceed $7,000,- 

 000,000. (As amended Oct. 19, 1972, Pub. L. 92-507, 

 § 3. 86 SUt. 910; July 10, 1973, Pub. L. 93-70, § 3, 87 

 Stat. 168; Nov. 13, 1975, Pub. L. 94-127, § 5, 89 Stat. 



681.) 



Amendments 



1975 — Subsec. (f). Pub. L. 94-127 Increased limitation 

 on amount of outstanding obligations from $5,000,000,000 

 to $7,000,000,000. 



1973_Subsec. (f). Pub. L. 93-70 increased limitation 

 on amount of outstanding obligations from $3,000,000,000 

 to $5,000,000,000. 



1972 — Subsec. (a). Pub. L. 92-507 incorporated provi- 

 sions of former subsecs. (a) and (b) into subsec. (a) and 

 substituted provisions authorizing the Secretary to 

 guarantee the payment of principal and interest on the 

 obligation for provisions authorizing the Secretary to 

 insure a mortgage or a loan. 



Subsec. (b). Pub. L. 92-507 added subsec. (b). Provi- 

 sions of former subsec. (b) were Incorporated into subsec. 

 (a). 



