((a)) ** .—** Notwithstanding any other provision of this chapter, the Secretary or Administrator, on terms the Secretary or Administrator may prescribe, may guarantee or make a commitment to guarantee the payment of the principal of and interest on an obligation that aids in financing or refinancing (including reimbursement of an obligor for expenditures previously made for) a contract for the construction or reconstruction of a vessel if—
((1)) the vessel is designed and to be used for commercial use in coastwise, intercoastal, or foreign trade;
((2)) the construction or reconstruction is necessary to replace a vessel that cannot continue to be operated because of a change required by law in the standards for the operation of vessels, and the applicant for the guarantee or commitment would not otherwise legally be able to continue operating vessels in the trades in which the applicant operated vessels before the change;
((3)) the applicant is presently engaged in transporting cargoes in vessels of the type and class that will be constructed or reconstructed under this section and agrees to employ vessels constructed or reconstructed under this section as replacements only for vessels made obsolete by the change in operating standards;
((4)) the capacity of the vessels to be constructed or reconstructed under this section will not increase the cargo carrying capacity of the vessels being replaced;
((5)) the Secretary or Administrator has not determined that the market demand for the vessel over its useful life will diminish so as to make granting the guarantee fiduciarily imprudent;
((6)) the vessel, if to be reconstructed, will have a useful life of at least 15 years after the reconstruction; and
((7)) the Secretary or Administrator has considered the criteria specified in section 53708(a)(3)–(5) of this title.
((b)) ** .—**
((1)) ** .—** The term of an obligation guaranteed under this section may not exceed 25 years.
((2)) ** .—** The amount of an obligation guaranteed under this section may not exceed 87.5 percent of the actual cost or depreciated actual cost to the applicant for the construction or reconstruction of the vessel. The Secretary or Administrator may not establish a percentage under this paragraph that is to be applied uniformly to all guarantees or commitments to guarantee made under this section.
((c)) ** .—** A guarantee or commitment to guarantee under this section is also subject to sections 53701, 53702(a), 53704, 53705, 53707(a), 53708(d) and (e), 53709(a), 53710(a)(1), (2), and (4) and (c), 53711(a), 53713, 53714, 53717, and 53721–53725 of this title.
((d)) ** .—** The Secretary or Administrator shall require by regulation that an applicant under this section provide adequate security against default.
((e)) ** .—** The Secretary or Administrator may establish a fee for the guarantee of an obligation under this section that is in addition to the fee established under . The fee may be—
((1)) an annual fee of not more than an additional 1 percent added to the fee established under ; or
((2)) a fee based on the amount of the obligation versus the percentage of the obligor’s fleet being replaced by vessels constructed or reconstructed under this section.