Amendment to the Federal Ship Financing Program Regulations; Financial Requirements, 86608-86612 [2023-27441]

Agencies

• Maritime Administration
• DEPARTMENT OF TRANSPORTATION

[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 [www.gpo.gov]
[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 
[email protected]. 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 https://www.maritime.dot.gov/grants/title-xi/statute-regulations-and-guidance.
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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 https://www.transportation.gov/privacy.

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 https://www.maritime.dot.gov/grants/title-xi/statute-regulations-and-guidance.
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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