citizen of the United States, if the Secretary of Commerce determines that such citizen possesses the ability, experience, financial resources, and other qualifications necessary for the operation and maintenance of the vessel at a price corresponding to the estimated cost, as determined by the Secretary of Commerce pursuant to the provisions of this chapter, of building such vessel in a foreign shipyard. (As amended July 10, 1973, Pub. L. 93-71, 87 Stat. 169.) AMENDMENTS 1973-Subsec. (a). Pub. L. 93-71 in third sentence, substituted "June 30, 1976" for "June 30, 1973" and limited vessel construction subsidy to 39 per centum in fiscal 1974, 37 per centum in fiscal 1975, and 35 per centum in fiscal 1976. § 1155. Eligible shipyards; materials; conditions of contracts; limitation to American shipyards; American materials, waiver; ability of bidders; filing bids and data. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 1152 of this title. § 1159. Vessels to be operated in domestic trade; terms and conditions of construction aid and sale to purchaser. Any citizen of the United States may make application to the Secretary of Commerce for aid in the construction of a new vessel to be operated in the foreign or domestic trade (excepting vessels engaged solely in the transportation of property on inland rivers and canals exclusively). If such application is approved by the Secretary of Commerce, the vessel may be constructed under the terms and conditions of this subchapter, but no construction-differential subsidy shall be allowed. The Secretary of Commerce shall pay for the cost of national-defense features incorporated in such vessel. In case the vessel is designed to be of not less than three thousand five hundred gross tons and to be capable of sustained speed of not less than fourteen knots, or in the case of a passenger vessel operating solely on the inland rivers and waterways which is designed to be of not less than one thousand gross tons and to be capable of sustained speed of not less than eight knots, or in the case of an oceangoing tug of more than two thousand five hundred horsepower or oceangoing barge of more than two thousand five hundred gross tons, or in the case of a vessel of more than two thousand five hundred horsepower designed to be capable of sustained speed of not less than forty knots, the purchaser shall be required to pay the Secretary of Commerce not less than 122 per centum of the cost of such vessel, and in the case of any other vessel the purchaser shall be required to pay the Secretary of Commerce not less than 25 per centum of the cost of such vessel (excluding from such cost, in either case, the cost of national defense features); and the balance of such purchase price shall be paid by the purchaser within twenty-five years in not to exceed twenty-five equal annual installments, with interest at a rate not less than (i) a rate determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans, adjusted to the nearest one-eighth of 1 per centum, plus (ii) an allowance adequate in the judgment of the Secretary of Commerce to cover administrative costs, the balance of such purchase price being secured by a preferred mortgage on the vessel sold and otherwise secured as the Secretary of Commerce may determine: Provided, That, notwithstanding any other provisions of law, the balance of the purchase price of a passenger vessel constructed under this section which is delivered subsequent to March 8, 1946, and which has the tonnage, speed, passenger accommodations, and other characteristics set forth in section 1153 of this title, may, with the approval of the Secretary of Commerce, be secured as provided in such section, and the obligation of the purchaser of such a vessel shall be satisfied and discharged as provided in such section. (As amended Aug. 10, 1972, Pub. L. 92-374, 86 Stat. 528.) AMENDMENTS 1972-Pub. L. 92-374 inserted "or in the case of a vessel of more than two thousand five hundred horsepower designed to be capable of sustained speed of not less than forty knots" in the sentence dealing with the percentage of cost payable by the purchaser, following "barge of more than two thousand five hundred gross tons". § 1160. Acquisition of obsolete vessels. SECRETARY OF COMMERCE AUTHORIZED TO PURCHASE Section 2 of Pub. L. 92-296, May 16, 1972, 86 Stat. 140 provided that: "The Secretary of Commerce is authorized and directed to purchase the steamship United States, as is, where is, at the depreciated cost of the vessel to the owner, as determined by the Secretary of Commerce, less the unpaid principal and interest on the mortgage on the vessel, for layup in the National Defense Reserve Fleet and operation for the account of any agency or department of the United States during any period in which vessels may be requisitioned under section 902 of the Merchant Marine Act, 1936 [section 1242 of this title], and/or for sale or charter to a qualified operator for operation under the American flag. The depreciated cost of the vessel to the owner shall be computed on the schedule adopted by the Internal Revenue Service for income tax purposes. Such determination shall be final. The Secretary of Commerce shall require the owner of the vessel to agree that it will pay all existing private obligations related to the vessel, and that it will be commit an amount equal to the net proceeds received from such sale in excess of existing obligations and expenses incident to the sale, within a reasonable period not to exceed twelve months of receipt, as equity capital for the construction of new vessels which the Secretary determines are built to effectuate the purposes and policy of the Merchant Marine Act, 1936, as amended [this chapter]." SUBCHAPTER VI.-OPERATING-DIFFERENTIAL SUBSIDY § 1177. Capital construction fund. (k) Definitions. For purposes of this section (8) The term "noncontiguous trade" means (i) trade between the contiguous forty-eight States on the one hand and Alaska, Hawaii, Puerto Rico and the insular territories and possessions of the United States on the other hand, and (ii) trade from any point in Alaska, Hawaii, Puerto Rico, and such territories and possessions to any other point in Alaska, Hawaii, Puerto Rico, and such territories and possessions. (As amended Oct. 1, 1973, Pub. L. 93-116, 87 Stat. 421.) AMENDMENTS 1973 Subsec. (k) (8). Pub. L. 93-116 substituted "(ii) trade from any point in Alaska, Hawaii, Puerto Rico, and such territories and possessions to any other point in Alaska, Hawaii, Puerto Rico, and such territories and possessions." for "(ii) trade between Alaska, Hawaii, and Puerto Rico and such territories and possessions and (iii) trade between the islands of Hawaii." DEPOSITS INTO CAPITAL RESERVE FUND Section 6 of Pub. L. 92-507, Oct. 19, 1972, 86 Stat. 917 provided that: "Nothing in this Act [which enacted this note and amended subchapter XI of this chapter] shall limit or affect the right of an obligor who maintains a capital reserve fund under section 607 of the Merchant Marine Act, 1936 [this section] to make deposits of the proceeds of guaranteed obligations into such capital reserve fund as provided in subparagraph (c) of condition (6) of section 1107 of the Merchant Marine Act, 1936 [subparagraph (c) of condition (6) of former section 1276a of this title], as in effect prior to the effective date of this Act [Oct. 9, 1972]." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 1244 of this title. (b) Authorization for payment of subsidy. If the Secretary of Commerce finds that the operation of any passenger vessel with respect to which a contract for the payment of an operating-differential subsidy has been entered into under section 1173 of this title effective before January 2, 1960, is not required for all of each year, in order to furnish adequate service on the service, route, or line covered by such contract, he may amend such contract to agree to pay an operating-differential subsidy for operation of the vessel (1) on such service, route, or line for some part or no part of each year, and (2) on cruises for all or part of each year if such specific cruise is approved by the Secretary of Commerce under subsection (e) of this section: Provided, however, That no such vessel may cruise for more than seven months of each year to ports which are regularly served by another United States-flag passenger vessel pursuant to an operating-differential subsidy contract. (d) Conditions for cruises or domestic service while on voyages in an essential service in foreign commerce. When a vessel is being operated on cruises or has been authorized under this section to provide domestic passenger services while on voyages in an essential service in foreign commerce of the United States (1) except as provided in subdivision (4) of this subsection, it shall carry no mail unless required by law, or cargo except passengers' luggage, except between those ports between which it may carry mail and cargo on its regular service assigned by contract; (2) it may not carry one-way passengers between those ports served by another United States carrier on its regular service assigned by contract, without the consent of such carrier, except between those ports between which it may carry one-way passengers on its own regular service assigned by contract; (3) it shall stop at other domestic ports only for the same time and the same purpose as is permitted with respect to a foreign-flag vessel which is carrying passengers who embarked at a domestic port, except that a cruise may end at a different port or coast from that where it began and may embark or disembark passengers at other domestic ports, either when not involving transportation in the domestic offshore trade in competition with a United States-flag passenger vessel offering berth service therein, or, if involving such transportation, with the consent of such carrier: Provided, however, That nothing herein shall be construed to repeal or modify section 1223(a) of this title. (4) Any other provisions of this chapter or of the Shipping Act, 1916, to the contrary notwithstanding, with the approval of the Secretary of Commerce, it may carry cargo and mail between ports to the extent such carriage is not in direct competition with a carrier offering United Statesflag berth service between those ports, or, if such carriage is in direct competition with one or more carriers offering United States-flag berth service between such ports, with the consent of the next scheduled United States-flag carrier, which consent shall not be unreasonably withheld in the judgment of the Maritime Administrator. Section 1175 (c) of this title shall not apply to cruises authorized under this section. Notwithstanding the applicable provisions of sections 1175 (c) and 1156 of this title requiring the reduction of operating differential subsidy and the partial payback of construction differential subsidy for operating in the domestic trades, such reduction of operating subsidy and partial payback of construction subsidy under sections 1175 (a) and 1156, respectively, of this title, shall not apply to cruises or domestic services authorized under this section. (e) Application for approval of cruise; notice to other American flag operators. Upon the application of any operator for approval of a specific cruise, the Secretary after notice to all other American flag operators who may be affected and after affording all such operators an opportunity to submit written data, views or arguments, with or without opportunity to present the same orally in any manner, and after consideration of all relevant matter presented, shall approve the proposed cruise, if he determines that the proposed cruise will not substantially adversely affect an existing operator's service performed with passenger vessels of United States registry. Such approval shall not be given more than two years in advance of the beginning of the cruise. (As amended June 30, 1972, Pub. L. 92-323, 86 Stat. 389.) REFERENCES IN TEXT The Shipping Act, 1916, referred to in subsec. (d) (4). is classified to chapter 23 (sec. 801 et seq.) of this title. AMENDMENTS 1972 Subsec. (b). Pub. L. 92-323, § 1(a), substituted provisions authorizing the Secretary of Commerce to permit passenger vehicles with respect to which an operat ing differential subsidy contract was entered into prior to January 2, 1960, to cruise for the whole year, for provisions permitting such passenger vessels to cruise off their essential trade routes for two-thirds of each year. Subsec. (d). Pub. L. 92-323, § 1(b), added subd. (4) and qualified subd. (1) by making it subject to the provisions in subd. (4). Subsec. (e). Pub. L. 92-323, § 1 (c), changed phraseology. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 865a of this title. SUBCHAPTER VIII-A.-OFFENSES AND PENALTIES §1228. Fines and penalties; conviction as rendering persons ineligible to receive benefits of law. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 1276 of this title. SUBCHAPTER IX.-MISCELLANEOUS PROVISIONS § 1241. Transportation in American vessels of Government personnel and certain cargoes. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in title 22 section 2399d. § 1241a. Vessel operations revolving fund; establishment; uses; limitation. TRANSFER OF FUNCTIONS All functions vested by law (including reorganization plan) in the Bureau of the Budget or the Director of the Bureau of the Budget were transferred to the President of the United States by section 101 of 1970 Reorg. Plan No. 2, eff. July 1, 1970, 35 F.R. 7959, 84 Stat. 2085. Section 102 of 1970 Reorg. Plan No. 2, redesignated the Bureau of the Budget as the Office of Management and Budget. See Change of Name note set out under this section in the main volume. § 1242. Requisition or purchase of vessels in time of emergency. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 865a of this title. 1244. Definitions. When used in this chapter (a) The words "foreign commerce" or "foreign trade" mean commerce or trade between the United States, its Territories or possessions, or the District of Columbia, and a foreign country, except that in the context of section 1177 of this title concerning capital construction funds and in the context of subchapter V of this chapter concerning constructiondifferential subsidy, the said words "foreign commerce" or "foreign trade" shall also include, in the case of liquid and dry bulk cargo carrying services, trading between foreign ports in accordance with normal commercial bulk shipping practices in such manner as will permit U.S.-flag bulk vessels freely to compete with foreign-flag bulk carrying vessels in their operation or in competing for charters, subject to rules and regulations promulgated by the Secretary of Commerce pursuant to section 1114 (b) of this title. (As amended Aug. 22, 1972, Pub. L. 92-402, § 2, 86 Stat. 617.) AMENDMENTS 1972 Subsec. (a). Pub. L. 92-402 made definition of "foreign commerce" or "foreign trade" in context of subchapter V of this chapter concerning constructiondifferential subsidy applicable in context of section 1177 of this title concerning capital construction funds, made such definition subject to rules and regulations promulgated by the Secretary of Commerce pursuant to section 1114(b) of this title rather than only to uniform regulations promulgated by the Secretary and also applicable, in the case of bulk cargo carrying services, to trading between foreign ports in such manner as will permit U.S.-flag bulk carrying vessels freely to compete with foreign-flag bulk carrying vessels in their operation or in competing for charters. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 1274 of this title. SUBCHAPTER XI.-FEDERAL SHIP MORTGAGE INSURANCE § 1271. Definitions. As used in this subchapter (a) The term "mortgage" includes a preferred mortgage as defined in the Ship Mortgage Act, 1920, as amended, on any vessel of the United States (other than a towboat, barge, scow, lighter, car float, canal boat, or tank vessel of less than twenty-five gross tons), and a mortgage on such a vessel which will become a preferred mortgage when recorded and endorsed as required by the Ship Mortgage Act, 1920, as amended: (b) The term "vessel" includes all types, whether in existence or under construction, of passenger cargo and combination passenger-cargo carrying vessels, tankers, tugs, towboats, barges and dredges which are or will be documented under the laws of the United States, fishing vessels whose ownership will meet the citizenship requirements for documenting vessels in the coastwise trade within the meaning of section 802 of this title, floating drydocks which have a capacity of thirty-five thousand or more lifting tons and a beam of one hundred and twenty-five feet or more between the wing walls and oceanographic research or instruction or pollution treatment, abatement or control vessels owned by citizens of the United States; (c) The term "obligation" shall mean any note, bond, debenture, or other evidence of indebtedness (exclusive of notes or other obligations issued by the Secretary of Commerce pursuant to section 1275(d) of this title and obligations eligible for investment of funds under sections 1272 and 1279a (d) of this title), issued for one of the purposes specified in section 1274(a) of this title; (d) The term "obligor" shall mean any party primarily liable for payment of the principal of or interest on any obligation; (e) The term "obligee" shall mean the holder of an obligation; (f) The term "actual cost" of a vessel as of any specified date means the aggregate, as determined by the Secretary of Commerce, of (i) all amounts paid by or for the account of the obligor on or before that date, and (ii) all amounts which the obligor is then obligated to pay from time to time thereafter, for the construction, reconstruction, or reconditioning of such vessel; (g) The term "depreciated actual cost" of a vessel means the actual cost of the vessel depreciated on a straightline basis over the useful life of the vessel as determined by the Secretary of Commerce, not to exceed twenty-five years from the date the vessel was delivered by the shipbuilder, or, if the vessel has been reconstructed 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 reconditioning 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 reconditioning 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 substituted obligor for mortgagor or borrower. Subsecs. (g) and (h). Pub. L. 92-507 added subsecs. (g) and (h). SHORT TITLE Section 8 of Pub. L. 92-507 provided that: "This Act [amending sections 1271-1276, 1279a and 1279b of this title, repealing sections 1276a, 1277 and 1278 of this title, and enacting provisions set out as notes under sections 1177 and 1273 of this title] may be cited as the 'Federal Ship Financing Act of 1972'.” § 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 $1,000,000 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 Treasury 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. (As amended Oct. 19, 1972, Pub. L. 92-507, § 2, 86 Stat. 910.) AMENDMENTS 1972-Pub. L. 92-507 substituted "Federal Ship Financing Fund" for "Federal Ship Mortgage Insurance Fund", and "Fund" for "fund" in four places. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 1271 of this title. § 1273. Authorization of Secretary to guarantee obligations. (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 subchapter. (b) Security interest. No obligation shall be guaranteed under this subchapter unless the obligor conveys or agrees to convey to the Secretary of Commerce such security interest, which may include a mortgage or mortgages on a vessel or vessels, as the Secretary of Commerce may reasonably require to protect the interests of the United States. (c) Amount of guarantee; percentage limitation; determination 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 871⁄2 per centum, whichever is applicable under section 1274 of this title, of the amount, as determined by the Secretary of Commerce which determination shall be conclusive, paid by or for the account of the obligor for the construction, 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 87/2 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 guarantees made under this subchapter with respect to both principal and interest, including interest, as may be provided for in the guarantee, accruing between the date of default under a guaranteed obligation and the payment in full of the guarantee. (e) Proof of obligations. Any guarantee, or commitment to guarantee, made by the Secretary of Commerce under this subchapter shall be conclusive evidence of the eligibility of the obligations for such guarantee, and the validity of any guarantee, or commitment to guarantee, so made shall be incontestable. (f) Limitation on outstanding amount. The aggregate unpaid principal amount of the obligations guaranteed under this section and outstanding at any one time shall not exceed $5,000,000,000. (As amended Oct. 19, 1972, Pub. L. 92-507, § 3, 86 910; July 10, 1973, Pub. L. 93-70, § 3, 87 Stat. 168.) AMENDMENTS 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 provisions 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). Provisions of former subsec. (b) were incorporated into subsec. (a). Subsec. (c). Pub. L. 92-507 substituted provisions making the Secretary's determination of actual cost of the vessel conclusive for the purposes of determining the maximum amount which may be guaranteed, for provi sions making the mortgagee or lender the beneficiary of insurance contracts. Subsec. (d). Pub. L. 92-507 substituted provisions pledging the full faith and credit of the United States for payment of all guarantees with interest, for provisions pledging the faith of the United States to the payment of principal and interest of each mortgage and loan. Subsec. (e). Pub. L. 92-507 added subsec. (e). Former subsec. (e) redesignated (f). Subsec. (f). Pub. L. 92-507 redesignated former subsec. (e) as subsec. (f), and in subsec. (f) as so redesignated, substituted "obligations guaranteed" for "mortgages and loans insured". ELECTION OF COVERAGE Section 7 of Pub. L. 92-507 provided that: "Any citizen of the United States to whom the Secretary of Commerce issued an approval in principle of an application for loan or mortgage insurance or a commitment with respect to such insurance under the provisions of title XI of the Merchant Marine Act, 1936 [this subchapter], prior to the effective date of this Act [Oct. 19, 1972] may elect, with respect to the vessels covered by such approval or commitment, to be bound either by the provisions of title XI of the Merchant Marine Act, 1936 [this subchapter], as in effect prior to the effective date of this Act [Oct. 19, 1972] or by the provisions of this Act [see Short Title note under section 1271 of this Title]." § 1274. Eligibility for guarantee. (a) Purpose of obligations. Pursuant to the authority granted under section 1273 (a) of this title, the Secretary of Commerce, upon such terms as he shall prescribe, may guarantee or make a commitment to guarantee, payment of the principal of and interest on an obligation which aids in (1) financing, including reimbursement of an obligor for expenditures previously made for, construction, reconstruction, or reconditioning of a vessel or vessels owned by citizens of the United States which are designed principally for research, or for commercial use (A) in the coastwise or intercoastal trade; (B) on the Great Lakes, or on bays, sounds, rivers, harbors, or inland lakes of the United States; (C) in foreign trade as defined in section 1244 of this title for purposes of subchapter V of this chapter; (D) in the fishing trade or industry; or (E) with respect to floating drydocks, in the construction, reconstruction, reconditioning, or repair of vessels: Provided, however, That no guarantee shall be entered into pursuant to this paragraph (a) (1) later than one year after delivery, or redelivery in the case of reconstruction or reconditioning of any such vessel unless the proceeds of the obligation are used to finance the construction, reconstruction, or reconditioning of a vessel or vessels, or facilities or equipment pertaining to marine operations; (2) financing the purchase of vessels theretofore acquired by the Fund under the provisions of section 1275 of this title and reconditioning and reconstructing such vessels; (3) financing, in whole or in part, the repayment to the United States of any amount of construction-differential subsidy paid with respect to a vessel pursuant to subchapter V of this chapter; (4) refinancing existing obligations issued for one of the purposes specified in (1), (2), or (3) whether or not guaranteed under this subchapter, including, but not limited to, short-term obligations incurred for the purpose of obtaining tem porary funds with the view to refinancing from time to time. (b) Contents of obligations. Obligations guaranteed under this subchapter— (1) shall have an obligor approved by the Secretary of Commerce as responsible and possessing the ability, experience, financial resources, and other qualifications necessary to the adequate operation and maintenance of the vessel or vessels which serve as security for the guarantee of the Secretary of Commerce; (2) subject to the provisions of paragraph (1) of subsection (c) of this section, shall be in an aggregate principal amount which does not exceed 75 per centum of the actual cost or depreciated actual cost, as determined by the Secretary of Commerce, of the vessel which is used as security for the guarantee of the Secretary of Commerce: Provided, however, That in the case of a vessel, the size and speed of which are approved by the Secretary of Commerce, and which is or would have been eligible for mortgage aid for construction under section 1159 of this title (or would have been eligible for mortgage aid under section 1159 of this title except that the vessel was built with the aid of construction-differential subsidy and said subsidy has been repaid) and in respect of which the minimum downpayment by the mortgagor required by that section would be or would have been 122 per centum of the cost of such vessel, such obligations may be in an amount which does not exceed 871⁄2 per centum of such actual cost or depreciated actual cost: Provided, further, That the obligations which relate to a barge which is constructed without the aid of construction-differential subsidy, or, if so subsidized, on which said subsidy has been repaid, may be in an aggregate principal amount which does not exceed 871⁄2 per centum of the actual cost or depreciated actual cost thereof; (3) shall have maturity dates satisfactory to the Secretary of Commerce but, subject to the provisions of paragraph (2) of subsection (c) of this section, not to exceed twenty-five years from the date of the delivery of the vessel which serves as security for the guarantee of the Secretary of Commerce or, if the vessel has been reconstructed or reconditioned, not to exceed the later of (i) twenty-five years from the date of delivery of the vessel and (ii) the remaining years of the useful life of the vessel as determined by the Secretary of Commerce; (4) shall provide for payments by the obligor satisfactory to the Secretary of Commerce; (5) shall bear interest (exclusive of charges for the guarantee and service charges, if any) at rates not to exceed such per centum per annum on the unpaid principal as the Secretary of Commerce determines to be reasonable, taking into account the range of interest rates prevailing in the private market for similar loans and the risks assumed by the Secretary of Commerce; (6) shall provide, or a related agreement shall provide, that if the vessel used as security for the guarantee of the Secretary of Commerce is a delivered vessel, the vessel shall be in class A-1, |