Public Law 98–595

in section 1103(e), after the last sentence, by adding: “Notwithstanding an assumption of an obligation by the Secretary under section 1105 (a) or (b) of this Act, the validity of the guarantee of an obligation made by the Secretary under this title is unaffected and the guarantee remains in full force and effect.”;

in section 1104, by striking subsection (a)(3) and substituting:

“(3)“(3)

financing the purchase, reconstruction, or reconditioning

Vessels.

Fish and fishing.

of vessels or fishery facilities for which obligations were guaranteed under this title that, under the provisions of section 1105:

“(A)“(A)

are vessels or fishery facilities for which obligations were accelerated and paid;

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“(B)“(B)

were acquired by the Fund; or

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“(C)“(C)

were sold at foreclosure instituted by the Secretary;”;

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in section U04(a)(5), by adding “or” at the end;

in section 1104(a)(6), by striking “facilities; or” and substituting “facilities.”;

in section 1104, by striking subsection (a)(7);

in section 1104, by striking subsection (d)(1) and substituting:

“(d)“(d)

(1)(1)

(A)(A)

No commitment to guarantee, or guarantee of, an obligation shall be made by the Secretary of Transportation unless the Secretary finds that the property or project with respect to which the obligation will be executed will be economically sound. In making that determination, the Secretary shall consider—

“(i)“(i)

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 title is in effect;

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“(ii)“(ii)

the market potential for the employment of the vessel over the life of the guarantee;

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“(iii)“(iii)

projected revenues and expenses associated with employment of the vessel;

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“(iv)“(iv)

any charters, contracts of affreightment, transportation agreements, or similar agreements or undertakings relevant to the employment of the vessel;

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“(v)“(v)

other relevant criteria; and

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“(vi)“(vi)

for inland waterways, the need for technical improvements, including but not limited to increased fuel efficiency, or improved safety.

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“(B)“(B)

No commitment to guarantee, or guarantee of, an obligation shall be made by the Secretary of Commerce unless the Secretary finds, at or prior to the time such commitment is made or guarantee becomes effective, that the property or project with respect to which the obligation will be executed will be, in the Secretary’s opinion, economically sound and in the case of fishing vessels, that the purpose of the financing or refinancing is consistent with the wise use of the fisheries resources and with the development, advancement, management, conservation, and protection of the fisheries resources, or with the need for technical improvements including but not limited to increased fuel efficiency or improved safety.”;

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in section 1104(h), after the word “acceleration”, by adding

46 USC app. 1274.

46 USC app. 1275.

“, assumption,”;

in section 1105(a), in the first sentence after the word “demand”, by adding: “(unless the Secretary shall, upon such terms as may be provided in the obligation or related agreements, prior to that demand, have assumed the obligor’s rights and duties under the obligation and agreements and shall have made any payments in default)”;

in section 1105, by striking subsection (b) and substituting:

“(b)“(b)

In the event of a default under a mortgage, loan agreement,

Loans.

or other security agreement between the obligor and the Secretary, the Secretary may upon such terms as may be provided in the obligation or related agreement, either:

“(1)“(1)

assume the obligor’s rights and duties under the agreement, make any payment in default, and notify the obligee or the obligee’s agent of the default and the assumption by the Secretary; or

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“(2)“(2)

notify the obligee or the obligee’s agent of the default, and the obligee or the obligee’s agent shall have the right to demand at or before the expiration of such period as may be specified in the guarantee or related agreements, but not later than 60 days from the date of such notice, payment by the Secretary of the unpaid principal amount of said obligation and of the unpaid interest thereon. Within such period as may be specified in the guarantee or related agreements, but not later than 30 days from the date of such demand, the Secretary shall promptly pay to the obligee or the obligee’s agent the unpaid principal amount of said obligation and unpaid interest thereon to the date of payment.”;

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in section 1105(c), first sentence, after the word “payment”, by adding “or assumption”;

in section 1105(e), by striking the last sentence and substituting: “In the event that the Secretary shall receive through the sale of property an amount of cash in excess of the unpaid principal amount of the obligation and unpaid interest on the obligation and the expenses of collection of those amounts, the Secretary shall pay the excess to the obligor.”; and

in section 1104(e), by adding the following sentence at the end thereof: “Such regulations shall provide a formula for determining the creditworthiness of obligors under which the most creditworthy obligors pay a fee computed on the lowest allowable percentage and the least creditworthy obligors pay a fee which may be computed on the highest allowable percentage (the range of creditworthiness to be based on obligors which have actually issued guaranteed obligations).”.

The Shipping Act, 1916 (46 App. U.S.C. 801), is amended as follows:

The Shipping Act of 1984 (46 App. U.S.C. 1701), is amended as follows: