§ 742c. — Loans for financing or refinancing of cost of purchasing, constructing, equipping, maintaining, repairing, or operating commercial fishing vessels or gear.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 16USC742c]
TITLE 16--CONSERVATION
CHAPTER 9--FISH AND WILDLIFE SERVICE
Sec. 742c. Loans for financing or refinancing of cost of
purchasing, constructing, equipping, maintaining, repairing, or
operating commercial fishing vessels or gear
(a) Authorization
The Secretary of the Interior is authorized, under such rules and
regulations and under such terms and conditions as he may prescribe, to
make loans for financing or refinancing of the cost of purchasing,
constructing, equipping, maintaining, repairing, or operating new or
used commercial fishing vessels or gear.
(b) Conditions
Any loans made under the provisions of this section shall be subject
to the following restrictions:
(1) Bear an interest rate of not less than (a) a rate determined
by the Secretary of the Treasury, taking into consideration the
average market yield on outstanding Treasury obligations of
comparable maturity, plus (b) such additional charge, if any, toward
covering other costs of the program as the Secretary may determine
to be consistent with its purpose.
(2) Mature in not more than ten years, except that where a loan
is for all or part of the costs of constructing a new fishing
vessel, such period may be fourteen years.
(3) No financial assistance shall be extended pursuant to this
section unless reasonable financial assistance applied for is not
otherwise available on reasonable terms.
(4) Loans shall be approved only upon the furnishing of such
security or other reasonable assurance of repayment as the Secretary
may require considering the objectives of this section which are to
upgrade commercial fishing vessels and gear and to provide
reasonable financial assistance not otherwise available to
commercial fishermen. The proposed collateral for a loan must be of
such a nature that, when considered with the integrity and ability
of the management, and the applicant's past and prospective
earnings, repayment of the loan will be reasonably assured.
(5) The applicant shall possess the ability, experience,
resources, and other qualifications necessary to enable him to
operate and maintain new or used commercial fishing vessels or gear.
(6) Before the Secretary approves a loan for the purchase or
construction of a new or used vessel which will not replace an
existing commercial fishing vessel, he shall determine that the
applicant's contemplated operation of such vessel in a fishery will
not cause economic hardship or injury to the efficient vessel
operators already operating in that fishery.
(7) An applicant for a fishery loan must be a citizen or
national of the United States.
(8) Within the meaning of this section, a corporation,
partnership, or association shall not be deemed to be a citizen of
the United States unless the Secretary determines that it
satisfactorily meets all of the requirements set forth in sections
802 and 803 of title 46, Appendix, for determining the United States
citizenship of a corporation, partnership, or association operating
a vessel in the coastwise trade.
(9)(A) The nationality of an applicant shall be established to
the satisfaction of the Secretary. Within the meaning of this
section, no corporation, partnership, or association organized under
the laws of American Samoa shall be deemed a national of the United
States unless 75 per centum of the interest therein is owned by
nationals of the United States, citizens of the United States, or
both, and in the case of a corporation, unless its president or
other chief executive officer and the chairman of its board are
nationals or citizens of the United States and unless no more of its
directors than a minority of the number necessary to constitute a
quorum are nonnationals and noncitizens.
(B) Seventy-five per centum of the interest in a corporation
shall not be deemed to be owned by nationals of the United States,
citizens of the United States, or both, (i) if the title to 75 per
centum of its stock is not vested in such nationals and citizens
free from any trust or fiduciary obligation in favor of any person
not a national or citizen of the United States; or (ii) if 75 per
centum of the voting power in such corporation is not vested in
nationals of the United States, citizens of the United States, or
both; or (iii) if through any contract or understanding it is so
arranged that more than 25 per centum of the voting power may be
exercised, directly or indirectly, in behalf of any person who is
not a national or citizen of the United States; or (iv) if by any
other means whatsoever control of any interest in the corporation in
excess of 25 per centum is conferred upon or permitted to be
exercised by any person who is not a national or citizen of the
United States.
(c) Fisheries loan fund; interest payments on appropriations available
as capital to the fund less average undispersed cash balance
There is created a fisheries loan fund, which shall be used by the
Secretary as a revolving fund to make loans for financing and
refinancing under this section. Any funds received by the Secretary on
or before September 30, 1986, in payment of principal or interest on any
loans so made shall be deposited in the fund and be available for making
additional loans under this section. Any funds received in the fisheries
loan fund after September 30, 1986, shall be covered into the Treasury
as miscellaneous receipts. There is authorized to be appropriated to the
fisheries loan fund the sum of $20,000,000 to provide initial capital.
(d) Modification of loan contract
The Secretary, subject to the specific limitations in this section,
may consent to the modification, with respect to the rate of interest,
time of payment of any installment of principal, or security, of any
loan contract to which he is a party.
(e) Chartering vessels; loans to Alaskan earthquake victims; termination
date
The Secretary is authorized under such terms and conditions and
pursuant to regulations prescribed by him to use the funds appropriated
under this section to make loans to commercial fishermen for the purpose
of chartering fishing vessels pending the construction or repair of
vessels lost, destroyed, or damaged by the earthquake of March 27, 1964,
and subsequent tidal waves related thereto: Provided, That any loans
made under this subsection shall only be repaid from the net profits of
the operations of such chartered vessels, which profits shall be reduced
by such reasonable amount as determined by the Secretary for the salary
of the fishermen chartering such vessels. The funds authorized herein
shall not be available for such loans after June 30, 1966.
(Aug. 8, 1956, ch. 1036, Sec. 4, 70 Stat. 1121; Pub. L. 85-888, Sept. 2,
1958, 72 Stat. 1710; Pub. L. 88-309, Sec. 9, May 20, 1964, 78 Stat. 199;
Pub. L. 89-85, Secs. 1-4, July 24, 1965, 79 Stat. 262; Pub. L. 91-279,
Sec. 9, June 12, 1970, 84 Stat. 309; Pub. L. 91-387, Secs. 1, 2, Aug.
24, 1970, 84 Stat. 829; Pub. L. 94-273, Sec. 2(8), Apr. 21, 1976, 90
Stat. 375; Pub. L. 96-478, Sec. 16(a), Oct. 21, 1980, 94 Stat. 2303;
Pub. L. 97-347, Sec. 1, Oct. 18, 1982, 96 Stat. 1652; Pub. L. 98-44,
title I, Sec. 103(a)(1), July 12, 1983, 97 Stat. 216; Pub. L. 98-498,
title IV, Sec. 430(1), Oct. 19, 1984, 98 Stat. 2310; Pub. L. 99-659,
title IV, Sec. 409, Nov. 14, 1986, 100 Stat. 3740.)
Amendments
1986--Subsec. (c). Pub. L. 99-659 amended third sentence generally,
striking out ``and any balance remaining therein at the close of
September 30, 1986 (at which time the fund shall cease to exist),''
after ``1986,''.
1984--Subsec. (c). Pub. L. 98-498 substituted ``September 30, 1986''
for ``September 30, 1984'' wherever appearing.
1983--Subsec. (c). Pub. L. 98-44 substituted ``September 30, 1984''
for ``September 30, 1983'' wherever appearing.
1982--Subsec. (c). Pub. L. 97-347 substituted ``September 30, 1983''
for ``September 30, 1982'' wherever appearing.
1980--Subsec. (c). Pub. L. 96-478 substituted ``September 30, 1982''
for ``September 30, 1980'' wherever appearing and struck out interest
payment provisions respecting, payment at close of each fiscal year from
fisheries loan fund into miscellaneous receipts of the Treasury on
cumulative amount of appropriations available as capital to the fund
from and after July 1, 1965, less average undispersed balance in the
fund during the year, determination of interest rate on basis of average
market yield during month preceding each fiscal year on outstanding
Treasury obligations of maturity comparable to average maturity of loans
made from the fund, and interest payment deferrals approved by the
Secretary of the Treasury subject to interest on deferred amounts.
1976--Subsec. (c). Pub. L. 94-273 substituted ``September'' for
``June'' wherever appearing.
1970--Subsec. (b)(2). Pub. L. 91-279 provided maturity period of
fourteen years for loans for all or part of costs of constructing new
fishing vessels.
Subsec. (b)(7). Pub. L. 91-387, Sec. 2, permitted a national of the
United States to be an applicant for a fishery loan.
Subsec. (b)(8). Pub. L. 91-387, Sec. 2, substituted provision for
Secretary's determination of United States citizenship of a corporation,
partnership, or association by satisfactorily meeting all requirements
set forth in section 802 of title 46 for determination of citizenship of
such entity operating a vessel in coastwise trade, for prior provision
for establishment of such citizenship within meaning of section 802 of
title 46 to satisfaction of the Secretary.
Subsec. (b)(9). Pub. L. 91-387, Sec. 2, added par. (9).
Subsec. (c). Pub. L. 91-387, Sec. 1, extended term for making
fisheries loans, substituting ``June 30, 1980'' for ``June 30, 1970''
wherever appearing.
1965--Subsec. (a). Pub. L. 89-85, Sec. 1, substituted ``financing or
refinancing of the cost of purchasing, constructing, equipping,
maintaining, repairing, or operating new or used commercial fishing
vessels or gear'' for ``financing and refinancing of operations,
maintenance, replacement, repair, and equipment of fishing gear and
vessels'' and struck out provision for research into basic problems of
fisheries.
Subsec. (b). Pub. L. 89-85, Secs. 2, 3, substituted in par. (1)
provision respecting determination of interest rate taking into
consideration average market yield on outstanding Treasury obligations
of comparable maturity plus additional charge toward coverage of other
costs of program for former provision prescribing an interest rate of
not less than 3 per centum per annum and added pars. (4) to (8),
respectively.
Subsec. (c). Pub. L. 89-85, Sec. 4, extended term for making
fisheries loans from June 30, 1965, to June 30, 1970, required Secretary
to pay at end of each fiscal year into miscellaneous receipts of the
Treasury interest on cumulative amount of appropriations available as
capital to fund after July 1, 1965, less average undispersed cash
balance in fund during the year, provided formula for determination of
rate of interest, and authorized deferral of interest payments but with
payment of interest on deferred payments.
1964--Subsec. (e). Pub. L. 88-309 added subsec. (e).
1958--Subsec. (c). Pub. L. 85-888 increased authorization for
$10,000,000 to $20,000,000.
Effective Date of 1980 Amendment
Section 16(b) of Pub. L. 96-478 provided that: ``The amendments made
by subsection (a) [amending this section] shall take effect on September
1, 1980.''
Effective Date of 1970 Amendment; Fisheries Loan Fund Available for
Loans From July 1, 1970 to Close of June 30, 1980
Section 3 of Pub. L. 91-387 provided that: ``The provisions of this
Act [amending this section] shall be effective July 1, 1970.
Notwithstanding the provisions of section 4(c) of the Fish and Wildlife
Act of 1956, as amended [subsec. (c) of this section], any balance
remaining in the fisheries loan fund at the close of June 30, 1970,
shall be available to make loans for the purposes of section 4 of said
Act [this section] from July 1, 1970, to the close of June 30, 1980.''
Effective Date of 1965 Amendment; Remaining Funds; Availability for
Loans
Section 5 of Pub. L. 89-85 provided that: ``The provisions of this
Act [amending this section] shall be effective July 1, 1965.
Notwithstanding the provisions of section 4(c) of the Fish and Wildlife
Act of 1956, as amended [subsec. (c) of this section], any balance
remaining in the fisheries loan fund at the close of June 30, 1965,
shall be available to make loans for the purposes of section 4 of said
Act [this section] from July 1, 1965, to the close of June 30, 1970.''
Transfer of Functions
Transfer of functions to Secretary of Commerce from Secretary of the
Interior by Reorg. Plan No. 4 of 1970, eff. Oct. 3, 1970, 35 F.R. 15627,
84 Stat. 2090, see note set out under section 742b of this title.
Loans Under Fish and Wildlife Act of 1956
Pub. L. 96-561, title II, Sec. 221, Dec. 22, 1980, 94 Stat. 3295, as
amended by Pub. L. 98-44, title I, Sec. 103(b), July 12, 1983, 97 Stat.
216; Pub. L. 98-498, title IV, Sec. 431, Oct. 19, 1984, 98 Stat. 2310,
provided that:
``(a) Loan Authority.--During the period beginning on the date of
the enactment of this title [Dec. 22, 1980] and ending at the close of
September 30, 1986, the Secretary of Commerce (hereinafter in this
section referred to as the `Secretary') may make loans from the
fisheries loan fund established under subsection (c) of section 4 of the
Fish and Wildlife Act of 1956 (16 U.S.C. 742c) only for the purposes set
forth in subsections (b) and (c) of this section. Except to the extent
that they are inconsistent with, or contrary to, this section, the
provisions of such section 4 shall apply with respect to loans made for
such purposes.
``(b) Loans To Avoid Default on Obligations Covering Fishing
Vessels.--(1) The Secretary may make loans for the purpose of assisting
obligors to avoid default on obligations that are issued with respect to
the construction, reconstruction, reconditioning or purchase of fishing
vessels and that--
``(A) are guaranteed by the United States under title XI of the
Merchant Marine Act, 1936 (46 U.S.C. 1271-1280, relating to Federal
ship mortgage insurance); or
``(B) are not guaranteed under such title XI, but the fishing
vessels concerned meet the use and documentation requirements, and
the obligors meet the citizenship requirements, that would apply if
the obligations were guaranteed under that title.
``(2)(A) Within the 30-day period beginning on the date of the
enactment of this title [Dec. 22, 1980] in the case of fiscal year 1981,
and before the beginning of each of fiscal years 1982, 1983, 1984, 1985,
and 1986, the Secretary shall estimate the number, and the aggregate
amount, of loans described in paragraph (1)(A) for which application
will likely be made during each of such fiscal years and shall reserve
that amount in the fisheries loan fund for the purpose of making such
loans during such year (or if such amount is larger than the fund
balance, the Secretary shall reserve the whole fund for such purpose).
``(B) If any moneys are available in the fisheries loan fund for
each such fiscal year after subparagraph (A) is complied with for that
year, the Secretary shall use such moneys for the purpose of making
loans described in paragraph (1)(B) during that year.
``(C) At an appropriate time during each of fiscal years 1981, 1982,
1983, 1984, 1985, and 1986, the Secretary shall compare the actual loan
experience during that year with the estimate made for that year under
subparagraph (A) and if the Secretary determines, on the basis of such
comparison, that the demand for loans described in paragraph (1)(A) will
be less than estimated, the Secretary shall, for the fiscal year
concerned, apply moneys reserved for such loans for the purpose of
making loans described in paragraph (1)(B) and, to the extent not
utilized for loans described in paragraph (1)(B), for the purpose of
making loans under subsection (c).
``(3) The Secretary may make loans under this subsection only to
owners or operators who, in the judgment of the Secretary, have
substantial experience and proven ability in the management and
financing of fishing operations, and only if (A) loans for the purpose
described in paragraph (1) are not otherwise available at reasonable
rates which permit continued operations, and (B) the loans are likely to
result in the financial viability of the fishing operations of the
owners or operators. Each such loan shall be subject to such terms and
conditions as the Secretary deems necessary or appropriate to protect
the interests of the United States and to carry out the purpose of this
subsection. In establishing such terms and conditions, the Secretary
shall take into account, among such other factors he deems pertinent,
the extent to which the obligations concerned have been retired, and the
overall financial condition of the obligors. The interest rate on loans
made under the authority of this subsection shall not exceed that rate
determined by the Secretary to be sufficient to cover the costs incurred
in processing and servicing of such loans.
``(c) Loans To Cover Operating Losses.--(1) If the Secretary
determines that moneys will be available in such fisheries loan fund for
any of fiscal years 1981, 1982, 1983, 1984, 1985, and 1986, after loans
under subsection (b) are provided for for that year, the Secretary may
make loans for the purpose of assisting owners and operators of fishing
vessels to cover vessel operating expenses in cases where an owner or
operator incurs, or may incur, a net operating loss within such fiscal
year.
``(2) Each loan made by the Secretary under this subsection shall be
subject to such terms and conditions as the Secretary deems necessary or
appropriate to protect the interests of the United States and to carry
out the purposes of this subsection. The Secretary may make loans under
this subsection only to owners or operators who, in the judgment of the
Secretary, have substantial experience and proven ability in the
management and financing of fishing operations, and only if (A) loans
for the purpose described in paragraph (1) are not otherwise available
at reasonable rates which permit continued operation, and (B) the loans
are likely to result in the financial viability of the fishing
operations of the owners or operators. The interest rate on loans made
under this subsection shall be the rate prevailing for loans made under
the Emergency Agricultural Credit Act of 1978 (7 U.S.C. preceding 1961
note).''
Section Referred to in Other Sections
This section is referred to in sections 742c-1, 742k, 1534 of this
title.
