46 U.S.C. § 53706 — Eligible purposes of obligations

(a) In General. To qualify for a guarantee, an obligation^* must help pay for one of these: (1)(A) financing (or repaying the obligor^* for already-made payments toward) building, rebuilding, or reconditioning^* a vessel^* designed mainly for research or commercial use — (i) in coastwise or intercoastal trade; (ii) on the Great Lakes, or on U.S. bays, sounds, rivers, harbors, or inland lakes; (iii) in foreign trade as defined in section 109(b); (iv) as an ocean thermal energy conversion facility or plantship^*; or (v) as a floating drydock used to build, rebuild, recondition, or repair vessels. (B) A guarantee under (A) generally can't be made more than a year after the vessel is delivered (or redelivered, if rebuilt), unless the money finances more construction^*, rebuilding, reconditioning, or related marine facilities or equipment. (2) Financing (or repaying) the building, rebuilding, reconditioning, or purchase of a U.S.-citizen-owned vessel designed mainly for research or commercial fishing use. (3) Financing the purchase, rebuilding, or reconditioning of a vessel or fishery facility^* that (A) already had an obligation guaranteed under this chapter, and (B) under subchapter II, either (i) had that obligation accelerated and paid off, (ii) was taken over by the Federal Ship Financing Fund or its successor under section 53717, or (iii) was sold in a foreclosure the Secretary^* or Administrator^* started or joined. (4) Financing repayment to the government of any construction-differential subsidy paid for a vessel. (5) Refinancing an existing obligation (guaranteed or not) that was issued for one of the purposes in (1) through (4), including a short-term loan meant to be refinanced. (6) Financing or refinancing (or repaying) building, rebuilding, reconditioning, or buying a fishery facility. (7) Financing or refinancing: (A) buying individual fishing quotas under section 303(d)(4) of the Magnuson-Stevens Act (including repaying earlier purchases); (B) activities that help reduce fishing capacity; or (C) technology or upgrades that improve fishery-data collection and reporting, cut bycatch, improve gear selectivity, reduce gear's harmful impacts, or improve safety. (8) Financing (or repaying) reconstruction^*, reconditioning, retrofitting, repair, reconfiguration, or similar work at a U.S. shipyard.

(b) Non-Vessels Treated as Vessels. An obligation guaranteed under (a)(6) or (7) is treated the same as one financing a vessel's construction, rebuilding, reconditioning, or purchase, except for provisions that by nature only apply to vessels.

(c) Priorities for Certain Vessels. (1) In guaranteeing obligations, the Administrator must give priority to: (A) an otherwise-eligible vessel built with help under subtitle D of the Maritime Security Act of 2003; (B) after (A), an otherwise-eligible vessel the Secretary of Defense finds is suitable as a naval auxiliary in war or emergency and fills a sealift shortfall; and (C) after (A) and (B), Vessels of National Interest. (2) The Secretary of Defense must decide whether a vessel meets (1)(B) within 30 days of the Administrator's request.