576 



(b) Disbursement prior to termination of escrow 

 agreement. 



The Secretary of Commerce shall, as specified In 

 the escrow agreement, disburse the escrow fund to 

 pay amounts the obligor is obligated to pay as in- 

 terest on such obligations or for the construction, re- 

 construction, or reconditioning of the vessel or ves- 

 sels used as security for the guarantee of the Secre- 

 tary of Commerce under this subchapter, to redeem 

 such obligations in connection with a refinancing 

 under paragraph (4) of section 1274(a) of this title 

 or to pay to the obligor at such times as may be 

 provided for in the escrow agreement any excess 

 Interest deposits, except that 11 payments become due 

 under the guaxantee prior to the termination of the 

 escrow agreement, all amounts in the escrow fund 

 at the time such payments become due (Including 

 realized income which has not yet been paid to the 

 obligor) shall be paid into the Fund and (1) be 

 credited against any amounts due or to become due 

 to the Secretary of Commerce from the obligor with 

 respect to the guaranteed obligations and (11) to the 

 extent not so required, be paid to the obligor. 



(c) Disbursement upon termination of escrow agree- 

 ment. 



If payments under the guarantee have not become 

 due prior to the termination of the escrow agree- 

 ment, any balance of the escrow fund at the time of 

 such termination shall be disbursed to prepay the 

 excess of the principal of all obligations whose pro- 

 ceeds are to be used to finance the construction, re- 

 construction, or reconditioning of the vessel or ves- 

 sels which serve or will serve as security for such 

 guarantee over 75 per centum or 871/2 per centum, 

 whichever is applicable under section 1274 of this 

 title, of the actual cost of such vessel or vessels to 

 the extent paid, and to pay interest on such prepaid 

 amount of principal, and the remainder of such 

 balance of the escrow fund shall be paid to the 

 obligor. 



(d) Investment of fund. 



The Secretary of Commerce may invest and rein- 

 vest all or any part ofthe escrow fund in obligations 

 of the United States with such maturities that the 

 escrow fund will be available as required for purposes 

 of the escrow agreement. 



(e) Payment of income 



Any income realized on the escrow fund shall, 

 upon receipt, be paid to the obligor. 



(f) Terms of escrow agreement. 



The escrow agreement shall contain such other 

 terms as the Secretary of Commerce may consider 

 necessary to protect fully the interests of the United 

 States. (June 29. 1936, ch. 858, § 1108, formerly 

 5 1111, as added July 31, 1959, Pub. L. 86-127, { 1(2), 



73 Stat. 272, renumbered and amended Oct. 19, 1972, 

 Pub. L. 92-507, § 5, 86 Stat. 916.) 



Amendments 

 1672 — Subsec. (a) . Pub. L. 92-507 substantially r«en- 

 acted subsec. (a) and substituted requirement that an 

 escrow fund be created out of proceeds of obligations, for 

 requirement that such fund be created out of sale of 

 bonds. 



Subsec. (b). Pub. L. 92-507 substituted provisions for 

 the disbursement of escrow fund to pay certain payments 

 the obligor is obligated to pay. for provisions for the dis- 

 bursement of such fund to pay certain payments the 

 mortgagor or borrower Is obligated to pay. 



Subsec. (c). Pub. L. 92-607 substituted provisions for 

 the disbursement of the remainder of funds in the escrow 

 fund to the obligor on the termination of the escrow 

 agreement, for provisions for the disbursement of such 

 funds to the mortgagor or borrower as the case may be. 



Subsec. (d). Pub. L. 98-607 substituted "the escrow 

 fund" for "such fund". 



Subsec. (e). Pub. L. 62-607 sulMtltuted provisions for 

 payment of Income to obligor, for provisions for payment 

 of such Income to mortgagor or borrower. 



Subsec. (f). Pub. L. 93-607 substituted "to protect 

 fvUly" for "to fully protect". 



§ 1279b. Rules and regulations. 



The Secretary of Commerce is authorized and di- 

 rected to make such rules and regulations as may be 

 deemed necessary or appropriate to carry out the 

 purposes and provisions of this subchapter. (June 29, 

 1936, ch. 858, 5 1108, formerly { 1111, as added 

 July 31, 1959, Pub. L. 86-127, 5 1(2), 73 Stat. 272, 

 renumbered and amended Oct. 19, 1972, Pub. L. 92- 

 507, ; 5, 86 Stat. 917.) 



Amendments 



1972— Pub. L. 93-507 substituted authority of the Sec- 

 retary to make rules and regulations, for provisions relat- 

 ing to Insurance of mortgage securing loan for restoration 

 and return of merchant vessel, Kalulanl. 



§ 1280. Advances (o fund. 



The Secretary of Commerce is authorized to ad- 

 vance to the Federal Ship Mortgage Insurance Fund 

 from the "Vessel operations revolving fund", such 

 amounts as may be required for the payment, pur- 

 suant to section 1275 of this title, of unpaid princi- 

 pal amounts of defaulted mortgages and loans and 

 of unpaid interest thereon : Provided, That such ad- 

 vances shall be repaid to the "Vessel operations re- 

 volving fund" as soon as practicable consistent with 

 the status of the Federal Ship Mortgage Insurance 

 Fund: Provided further. That the total advances 

 outstanding at any one time shall not exceed 

 $10,000,000. (Pub. L. 86-469, title I, i 101, June 25 

 1958,72 Stat. 331.) 



