Rule2023-27441
Amendment to the Federal Ship Financing Program Regulations; Financial Requirements
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 14, 2023
Effective
January 16, 2024
Issuing agencies
Transportation DepartmentMaritime Administration
Abstract
This document serves to inform interested parties and the public that the Maritime Administration (MARAD) is amending its regulations implementing the Federal Ship Financing Program's (Title XI Program) financial requirements. This action is necessary to implement statutory changes and update the existing financial requirements imposed on Title XI Program obligors to align with more up-to-date vessel financing and federal credit best practices.
Full Text
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<title>Federal Register, Volume 88 Issue 239 (Thursday, December 14, 2023)</title>
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[Federal Register Volume 88, Number 239 (Thursday, December 14, 2023)]
[Rules and Regulations]
[Pages 86608-86612]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-27441]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
46 CFR Part 298
[Docket Number MARAD-2023-0086]
RIN 2133-AB98
Amendment to the Federal Ship Financing Program Regulations;
Financial Requirements
AGENCY: Maritime Administration, Department of Transportation.
ACTION: Final rule.
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SUMMARY: This document serves to inform interested parties and the
public that the Maritime Administration (MARAD) is amending its
regulations implementing the Federal Ship Financing Program's (Title XI
Program) financial requirements. This action is necessary to implement
statutory changes and update the existing financial requirements
imposed on Title XI Program obligors to align with more up-to-date
vessel financing and federal credit best practices.
DATES: This rule will be effective January 16, 2024.
FOR FURTHER INFORMATION CONTACT: David M. Gilmore, Director, Office of
Marine Financing, at (202) 366-5737, or via email at
<a href="/cdn-cgi/l/email-protection#650804170c0b00030c0b040b060c0b0225010a114b020a13"><span class="__cf_email__" data-cfemail="a5c8c4d7cccbc0c3cccbc4cbc6cccbc2e5c1cad18bc2cad3">[email protected]</span></a>. You may send mail to Mr. Gilmore at Department
of Transportation, Maritime Administration, Office of Marine Financing,
1200 New Jersey Avenue SE, Washington, DC 20590. If you have questions
on viewing the Docket, call Docket Operations, telephone: (800) 647-
5527.
SUPPLEMENTARY INFORMATION:
Background
The Secretary of Transportation, through MARAD, is authorized to
provide guarantees of debt (obligation guarantees) to finance all types
of vessel construction and shipyard modernization and improvement,
except for fishing vessels. The Title XI Program is a loan guarantee
program, administered by MARAD, which was established under Title XI of
the Merchant Marine Act, 1936, Public Law 74-835, codified at 46 U.S.C.
Chapter 537, as amended (the ``Act''). Title XI provides for the full
faith and credit of the United States, acting by and through the
Maritime Administrator, for the payment of debt obligations for: (1)
U.S. shipowners for the purpose of financing or refinancing U.S. flag
vessels constructed, reconstructed, or reconditioned in U.S. shipyards;
and (2) U.S. shipyards for the purpose of financing advanced
shipbuilding technology and modern shipbuilding technology of a
privately-owned shipyard facility located in the U.S. As the Title XI
Program guarantees full payment of the obligation's unpaid principal
and interest in the event of a default by the borrower, both the
statute and regulations contain several criteria and requirements
intended to reduce the risk of a loan default. Though the Title XI
Program regulations have been amended over the years, the current
financial requirements and limitations remain substantially the same as
when MARAD introduced them in 1978. As lending practices have evolved,
MARAD's regulatory standards have not changed to reflect modern lending
practices for vessel financing. For example, when the regulations where
implemented, certain leases were not included as an expense under
generally accepted accounting principles (GAAP), but today GAAP
requires that all leases be included as an expense. Today, retained
earnings are also expected to be included in any calculation of equity
or net worth pursuant to GAAP. Accordingly, the modifications to the
regulations will eliminate confusion and align the Title XI Program
regulations with modern accounting standards.
Prior to execution of a guarantee, MARAD is bound by statute to,
among other things, make determinations of economic soundness of the
project and the financial and operating capability of the applicant. To
that end, the Title XI regulations currently require each borrower, and
operator if applicable, to have and maintain: (1) working capital of at
least $1; (2) at least 90 percent of its equity as shown on the last
audited balance sheet; and (3) long-term debt not to exceed twice its
equity. By this amendment, MARAD is modernizing its financial review
process by removing static financial covenants and loan thresholds and
replacing them with a review and evaluation of the creditworthiness of
each borrower based on revenue metrics based on federal credit and
maritime lending best practices. The use of these revenue metrics is
intended to improve the quality of MARAD financial requirements applied
to new borrowers. As part of its regular programmatic evaluation
process, MARAD frequently seeks feedback from potential applicants
[[Page 86609]]
and borrowers on its processes. Potential applicants have advised MARAD
that the challenges caused by the regulatory requirements are a reason
why they will not use the program. Borrowers also have cited the
incompatibility of Title XI debt financial covenants with the other
lender covenants as an obstacle in the prompt processing and approval
of loan guarantee applications.
The ``National Defense Authorization Act for Fiscal Year 2020,''
(Pub. L. 116-92; December 20, 2019) (``NDAA 2020'') established the
Federal Financing Bank as the ``preferred lender'' for the Title XI
Program. Additionally, the NDAA 2020 directed MARAD to periodically
review Title XI application procedures and documents to assure they
``meet current commercial best practices to the extent permitted by
law.'' The 2020 NDAA also provided that MARAD establish a process for
expedited consideration of low-risk applications which would ``utilize,
to the extent practicable, relevant Federal and industry best practices
found in the maritime and shipbuilding industries.'' As a result, MARAD
identified best practices from federal credit programs that make loans
and obligation guarantees similar to the Title XI Program. MARAD
considered a review of federal credit practices that identified the
Title XI Program was the only program with regulatorily-imposed
financial covenants and thresholds.\1\ This deviation from federal
credit best practices was highlighted as a significant hinderance to
the Title XI Program's ability to tailor the terms of credit assistance
to address the characteristics of a specific project.
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\1\ U.S. Department of Transportation, Maritime Administration,
Federal Credit and Maritime Lending Industry Best Practices, June
2020. Available at <a href="https://www.maritime.dot.gov/grants/title-xi/statute-regulations-and-guidance">https://www.maritime.dot.gov/grants/title-xi/statute-regulations-and-guidance</a>.
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Restrictions on the flexibility of the program limit the program's
ability to succeed. Reliance on the current static metrics and limited
amortization requirements prevent the Title XI Program from adjusting
its financial terms and conditions and debt amortization when best
credit practices would recommend otherwise. The amendments made to the
regulation under this final rule are intended to attract a higher
volume of high-quality applicants and mitigate risk to the U.S.
Government.
Moreover, with the implementation of the Federal Financing Bank as
the preferred lender for Title XI obligation guarantees, there is no
longer a need for the strict uniformity in the regulatory structure of
the guaranteed obligations. Previously, Title XI guaranteed debt was
marketed to the public through investment banks. This created a need
for uniformity to encourage the purchase of the debt by entities not
familiar with maritime financings and to allow for easier resale by a
debt purchaser to a third-party at a future date. The expectation of
uniformity by the market limited the payment schedule options available
for Title XI Program participants in circumstances where it may have
been in the U.S. Government's best interest to structure the debt
differently to mitigate risk.
Due to the length of time since the regulations were last updated,
the availability of modern financial requirements of similar federal
programs, the evolving maritime environment, changes to federal credit
and maritime lending best practices, and updates to the Title XI
statute, MARAD is amending its regulations. These amendments include
permitting MARAD to use financial requirements, consistent with federal
credit and maritime lending best practices for entities having a
similar credit rating that MARAD determines are necessary and
appropriate to protect the interest of the United States. The
amendments will also allow MARAD to use alternative methods of
amortization, other than level principal or level debt payment, when an
independent financial advisor approved by MARAD conducts independent
analysis and review and demonstrates that such other method is in the
best interests of the United States.
The final rule will update the lending parameters in the current
regulations, which no longer best achieve the intended purpose of
minimizing the risk of Title XI Program defaults and will better align
the lending practices to reflect federal credit and maritime lending
best practices. Additionally, MARAD expects that the amended
regulations will reduce the economic burden on applicants in complying
with Title XI Program requirements that are inconsistent with other
lending instruments. MARAD also expects that the updated lending
parameters will encourage the construction of vessels in United States
shipyards which otherwise would not meet the current constrained Title
XI Program financial requirements.
Response to Comments
In developing this rule, MARAD published a notice of proposed
rulemaking in the Federal Register on April 25, 2023 (88 FR 24962) with
a sixty-day comment period which closed on June 26, 2023. MARAD
received one comment from Argent Group, Ltd. a financial services firm
specializing in the Jones Act maritime industry.
The commenter expressed concern that the proposed modifications to
the regulations for both the qualifying requirements of a company to
close on the Title XI Program financing documents as well as the
continuing financial compliance requirements for a company to maintain
throughout the time the Title XI Program financing documents are in
effect.
The commenter proposed a modification to the regulation that was
the same for both sections. The commenter noted that the changes to the
regulation made it unclear what the financial requirements would be for
a company and proposed MARAD maintain substantially similar financial
tests as exist in the current regulations except when a company has
existing credit agreements then MARAD should apply those financial
covenants or ratios.
MARAD does not agree that maintaining the current financial
compliance requirements provides clarity as the commenter suggests. The
statute has been updated several times since the regulations were last
updated. The final rule conforms MARAD creditworthiness review
standards with the statute. Additionally, the commenter proposes that
MARAD adopt requirements to provide for an alternative to the existing
financial compliance covenants in instances where the company has
existing private sector credit agreements. MARAD does not agree. The
option to incorporate the financial compliance covenants or ratios of
applicable private sector credit agreements already exists in MARAD
regulations.
The commenter expressed concern about the proposed modification to
the regulation for changes to the amortization schedule of guaranteed
obligations requiring independent analysis by a third-party expert. The
commenter noted that MARAD regularly retains third party experts and,
while MARAD would likely consult third-party experts as part of any
adjustment to the amortization schedule of guaranteed obligations,
nowhere else in the regulation is there a requirement that MARAD use
third-party experts to determine what is in the best interests of the
United States Government. MARAD agrees and is removing that requirement
from the final rule.
I. Regulatory Analyses and Notices
Privacy Act
Anyone can search the electronic form of all comments received into
any
[[Page 86610]]
of our dockets by the name of the individual submitting the comment (or
signing the comment, if submitted on behalf of an association,
business, labor union, etc.). For information on DOT's compliance with
the Privacy Act, please visit <a href="https://www.transportation.gov/privacy">https://www.transportation.gov/privacy</a>.
Executive Order 12866 (Regulatory Planning and Review), 13563
(Improving Regulation and Regulatory Review) and DOT Regulatory
Policies and Procedures.
Under Executive Order (E.O.) 12866, as amended (58 FR 51735,
October 4, 1993, 88 FR 21879, April 11, 2023), supplemented by E.O.
13563, as amended (76 FR 3821, January 18, 2011, 88 FR 21879, April 11,
2023) and USDOT policies and procedures, a determination must be made
whether a regulatory action is ``significant,'' and therefore subject
to the Office of Management and Budget (OMB) review and the
requirements of the order. The order defines ``significant regulatory
action'' as one likely to result in a rule that may: (1) have an annual
effect on the economy of $200 million or more (adjusted every 3 years
by the Administrator of OIRA for changes in gross domestic product); or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, territorial, or tribal governments
or communities; (2) create a serious inconsistency or otherwise
interfere with an action taken or planned by another agency; (3)
materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raise legal or policy issues for which centralized
review would meaningfully further the President's priorities or the
principles set forth in this Executive order, as specifically
authorized in a timely manner by the Administrator of OIRA in each
case.
This rulemaking has been determined to be a non-significant
regulatory action under section 3(f) of E.O. 12866 by the Office of
Information and Regulatory Affairs (OIRA) within OMB.
Analysis of Benefits and Costs
The Title XI Program guarantees full payment of the obligation's
unpaid principal and interest in the event of a default by the
borrower. Both the statute and MARAD's implementing regulations also
contain several criteria and requirements intended to reduce the risk
of a loan default. Though the Title XI Program regulations have been
amended over the years, the current financial requirements and
limitations remain substantially the same as when they were introduced
in 1978. As lending practices have evolved, the regulatory standards
have not changed to reflect current lending practices for vessel
financing.
Benefits
The major benefits of amending Part 298 will be to: (1) modernize
MARAD's financial review process by removing static financial covenants
and loan thresholds and replacing them with best practices intended to
improve the quality of MARAD financial reviews; and (2) allow MARAD to
examine more indicators of financial health, thus improving MARAD's
ability to accurately assess applicants and to better mitigate
financial risk to the Government.
Costs
MARAD does not believe that the rulemaking is likely to impose
quantifiable or nonquantifiable costs. The primary function of this
regulatory change is to modernize MARAD financial review methods and
processes, thereby improving MARAD's ability to evaluate applicants.
Analysis of Alternatives
On December 20, 2019, the NDAA 2020 directed MARAD ``to utilize, to
the extent practicable, relevant Federal and industry best practices
found in the maritime and shipbuilding industries.'' In considering
potential alternatives, MARAD reviewed several Federal credit programs
that make loans and obligation guarantees similar to the Title XI
Program. MARAD considered a review of Federal credit practices that
identified the Title XI Program as the only Federal program with
regulatorily-imposed financial covenants and thresholds.\2\ The report
found that the static regulatory requirements significantly hindered
the Title XI Program's ability to tailor the terms of credit assistance
to address the characteristics of a specific project. MARAD considered
the report's findings in light of its current practices and is in this
final rule amending the regulations to conform to the report's
findings.
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\2\ U.S. Department of Transportation, Maritime Administration,
Federal Credit and Maritime Lending Industry Best Practices, June
2020. Available at <a href="https://www.maritime.dot.gov/grants/title-xi/statute-regulations-and-guidance">https://www.maritime.dot.gov/grants/title-xi/statute-regulations-and-guidance</a>.
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Executive Order 13132 (Federalism)
MARAD has examined the rule pursuant to E.O. 13132 (64 FR 43255,
August 10, 1999) and concluded that no additional consultation with
States, local governments, or their representatives is mandated beyond
the rulemaking process. The Agency has concluded that the rulemaking
would not have sufficient federalism implications to warrant
consultation with State and local officials or the preparation of a
federalism summary impact statement. The rule will not have
``substantial direct effects on the States, on the relationship between
the National Government and the States, or on the distribution of power
and responsibilities among the various levels of government.''
Executive Order 13175 (Consultation and Coordination With Indian Tribal
Governments)
MARAD has determined that this rulemaking, in which MARAD proposes
to amend its regulations implementing the Title XI Program financial
requirements to implement statutory changes and update the existing
financial requirements imposed on Title XI Program obligors, will not
significantly or uniquely affect the communities of Indian Tribal
Governments when analyzed under the principles and criteria contained
in E.O. 13175 (Consultation and Coordination with Indian Tribal
Governments). Therefore, the funding and consultation requirements of
this Executive order do not apply.
Executive Order 12372 (Intergovernmental Review)
The requirements of E.O. 12372 regarding intergovernmental
consultation on Federal programs and activities do not apply to this
rulemaking, because it would not directly affect the interests of State
and local governments.
Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 requires MARAD to assess
whether this rulemaking would have a significant economic impact on a
substantial number of small entities and to minimize any adverse
impact. Potential applicants to the Title XI program are vessel owners
and operators, as well as shipyard owners. These industries fit under
NAICS codes 336611, Ship Building and Repairing and NAICS codes 483111-
483212, which cover different types of transportation by vessel and
would include vessel owners and operators.\3\ The SBA defines a small
[[Page 86611]]
business under NAICS code 36611 as a business with 1,250 employees or
less and under NAICS code. The SBA defines small businesses under NAICS
codes 483111-483212 as businesses with 500-1,500 employees or less,
depending on the specific NAICS code.
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\3\ These NAICS codes are 483111/483112 Deep Sea Freight/
Passenger Transportation, 483113/483114 Coastal and Great Lakes
Freight/Passenger Transportation, and 4832111/483212 Inland Water
Freight/Passenger Transportation. Navigational Services to Shipping,
under NAICS code 488330 may also be applicable. SBA defines a small
business under this NAICS code as having an average annual revenue
of $41.5 million or less.
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The Title XI Program guarantees full payment of the obligation's
unpaid principal and interest in the event of a default by the
borrower. The program maintains a $5,000 application fee, a fee that
has not increased in 30 years and would remain unchanged by this
proposal. MARAD also estimates that the application process currently
takes approximately 150 hours, a figure that would also remain
unchanged by this proposal. The program provides substantial financial
assistance to maritime industry participants, and the changes are
intended to eliminate challenges caused by the regulatory requirements,
a reason cited by stakeholders as to why they will not use the program.
The rule is also intended to make Title XI debt financial covenants
compatible with other lender covenants, which stakeholders cited as an
obstacle in the prompt processing and approval of loan guarantee
applications. MARAD intends for the changes to attract a higher volume
of high-quality applicants to the program. Based on the foregoing,
MARAD certifies that this rulemaking will not have a significant
economic impact on a substantial number of small entities.
Executive Order 12988 (Civil Justice Reform)
E.O. 12988 requires that agencies promulgating new regulations or
reviewing existing regulations take steps to minimize litigation,
eliminate ambiguity and to reduce burdens on the regulated public.
MARAD has reviewed this rulemaking and has determined that this
rulemaking action conforms to the applicable standards in sections 3(a)
and 3(b)(2) of E.O. 12988, Civil Justice Reform,
Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 requires Agencies to
evaluate whether an Agency action would result in the expenditure by
State, local, and Tribal Governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any 1 year, and if so, to take steps to minimize these
unfunded mandates. This action will not result in additional
expenditures by State, local, or tribal governments or by any members
of the private sector. Therefore, MARAD has not prepared an assessment
pursuant to the Unfunded Mandates Reform Act.
Regulation Identifier Number (RIN)
A regulation identifier number (RIN) is assigned to each regulatory
action listed in the Unified Agenda of Federal Regulations. The
Regulatory Information Service Center publishes the Unified Agenda in
April and October of each year. The RIN number contained in the heading
of this document can be used to cross-reference this action with the
Unified Agenda.
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA), a person is not
required to respond to a collection of information by a federal agency
unless the collection displays a valid OMB control number. This
rulemaking amends an existing regulation without any change to the
contemplated submission of information which might otherwise result in
a change to the applicant's burden hours. Therefore, the rulemaking can
rely on the existing information collected under OMB control number
2133-0018. Information submitted by applicants to the program will
continue to be used to evaluate an applicant's project and
capabilities, make the required determinations, and administer any
agreements executed upon approval of loan guarantees.
List of Subjects in 46 CFR Part 298
Obligation guarantees.
For the reasons described in the preamble, the Maritime
Administration amends 46 CFR part 298 to read as follows:
PART 298--OBLIGATION GUARANTEES
Subpart B--Eligibility
0
1. The authority citation for 46 CFR part 298 is revised to read as
follows:
Authority: 46 U.S.C. chapter 537; 49 CFR 1.93.
0
2. Amend Sec. 298.13 by revising the introductory text of paragraph
(d), paragraph (d)(2)(ii), the introductory text of paragraphs (d)(3)
and (e), and paragraphs (e)(3)(i) and (f) through (i) to read as
follows:
Sec. 298.13 Financial requirements.
* * * * *
(d) Financial definitions. For the purpose of this section and
Sec. Sec. 298.35, 298.36, and 298.42 of this part:
(2) * * *
(ii) In determining current liabilities, you must deduct any excess
of unterminated voyage expenses over unterminated voyage revenue.
(3) ``Equity'' or ``Net Worth'' means, as of any date, (the total
of paid-in-capital stock, paid-in surplus, earned surplus, retained
earnings, and appropriated surplus,) and all other amounts that would
be included in net worth in accordance with GAAP, but does not include:
* * * * *
(e) Applicability. The financial resources must be adequate to meet
the financial terms MARAD requires pursuant to paragraph (f) of this
section.
(3) * * *
(i) A pro forma balance sheet at the time of the application; and
* * * * *
(f) Financial requirements at Closing. As a condition of
disbursement of a guaranteed loan, the Company must demonstrate
financial performance that supports a reasonable prospect of repayment
taking into account foreseeable negative economic conditions.
(1) The financial requirements of this section are applicable to
Companies qualifying under one of the following three categories:
(i) Owner as vessel operator, where the owner is to be the vessel
operator;
(ii) Lessee or charterer as operator, where the lessee or charterer
is to be the vessel operator; or
(iii) Owner as general shipyard facility, where the owner of a
shipyard project is a general shipyard facility.
(2) Qualifying financial performance will be substantiated by
financial results over at least the trailing 12 quarters and/or
demonstrated by pro-forma financial performance that is underpinned by
reasonable assumptions.
(3) Qualifying creditworthiness will be substantiated by reviewing
and evaluating applicants based on revenue metrics which include the
following non-exhaustive list:
(i) Market factors;
(ii) Strategic positioning;
(iii) Management and governance;
(iv) Pro-forma financial strength;
(v) Project specific factors; and
(vi) Loan terms.
(g) Adjustments to financial requirements at Closing. If the owner,
although not operating a vessel, assumes any of the operating
responsibilities, MARAD may adjust the financial requirements of the
owner and operator by increasing the requirements of the owner and
decreasing those of the operator.
(h) Subordinated debt considered to be equity. With MARAD approval,
part
[[Page 86612]]
of the equity requirements applicable under paragraph (c) of this
section may be satisfied by debt, fully subordinated by a subordination
agreement with MARAD, as to the payment of principal and interest on
the Secretary's Note and any claims secured as provided for in the
Security Agreement or the Mortgage. Repayment of subordinated debt may
be made only from funds available for payment of dividends or for other
distributions, in accordance with requirements of the Title XI Reserve
Fund and Financial Agreement (described in section 298.35). Such
subordinated debt must not be secured by any interest in property that
is security for Guarantees under Title XI, unless the obligor and the
lender enter into a written agreement approved by MARAD. The written
agreement must provide, among other things, that if any Title XI
financing or advance by us to the obligor occurs in the future, such
security interest of the lender must become subordinated to any
indebtedness to MARAD incurred by the obligor and to any security
interest obtained by MARAD in that property or other property, with
respect to the subsequent indebtedness.
(i) Modified requirements. MARAD may waive or modify the financial
terms or requirements otherwise applicable under sections 298.35 and
298.42, upon determining that there is adequate security for the
guarantees or that such waiver or modification is in the best interests
of the United States. MARAD may impose similar financial requirements
on any person providing other security for the guarantees.
Subpart C--Guarantees
Sec. 298.21 [Amended]
0
3. Amend Sec. 298.21, in paragraph (b)(1), by removing the word
``Equity'' and adding in its place the word ``equity''.
0
4. Amend Sec. 298.22 by revising paragraph (b) to read as follows:
Sec. 298.22 Amortization of Obligations.
* * * * *
(b) Usually, the payment of principal (amortization) must be made
semi-annually, but in no event less frequently than on an annual basis,
and in either case the amortization must be in equal payments of
principal (level principal), unless MARAD approves the periodic payment
of a constant aggregate amount, comprised of both interest and
principal components that are variable in amount (level payment). No
other method of amortization will be allowed that would reduce the
amount of periodic amortization below that determined under the level
principal or level payment basis at any time prior to maturity of the
obligations, except where a third-party expert approved or engaged by
MARAD conducts an independent analysis and review of a project and
structure of an obligation and demonstrates that such other method is
in the best interests of the United States.
Subpart D--Documentation
0
5. Amend Sec. 298.35 by revising the introductory text of paragraphs
(b)(2) and (d) to read as follows:
Sec. 298.35 Title XI Reserve Fund and Financial Agreement.
* * * * *
(b) * * *
(2) Supplemental covenants which may become applicable. Unless,
after giving effect to such transaction or transactions, during any
fiscal year of the Company, the Company must remain in compliance with
financial terms and requirements specified by MARAD based on the
agency's evaluation for financial performance and creditworthiness and
appropriate to protect the interest of the United States. The Company
must not, without prior MARAD written consent:
* * * * *
(d) Deposits. Unless the Company, as of the close of its accounting
year, was subject to and in compliance with the financial terms
required by paragraph (b)(2) of this section, the Company must make one
or more deposits to MARAD to be held by the Depository (the Title XI
Reserve Fund), as further provided for in the depository agreement. The
amount of deposit for any year, or period less than a full year, where
applicable, will be determined as follows:
* * * * *
(Authority: National Defense Authorization Act for Fiscal Year 2020,
Pub. L. 116-92, 46 U.S.C. chapter 537, 49 CFR 1.93(a))
By order of the Maritime Administrator.
T. Mitchell Hudson, Jr.,
Secretary, Maritime Administration.
[FR Doc. 2023-27441 Filed 12-13-23; 8:45 am]
BILLING CODE 4910-81-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.