cfr_sections
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 14:14:4.0.1.1.48.1.8.1 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | A | Subpart A—General | § 298.1 Applicability of part. | FAA | This part establishes classifications of air carriers known as “air taxi operators” and “commuter air carriers,” provides certain exemptions to them from some of the economic regulatory provisions of Subtitle VII of Title 49 of the United States Code (Transportation), specifies procedures by which such air carriers may obtain authority to conduct operations, and establishes rules applicable to their operations in interstate and/or foreign air transportation in all States, Territories and possessions of the United States. This part also establishes reporting requirements for commuter air carriers and small certificated air carriers. | ||||
| 14:14:4.0.1.1.48.1.8.2 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | A | Subpart A—General | § 298.2 Definitions. | FAA | [70 FR 25768, May 16, 2005, as amended by DOT-OST-2014-0140, 84 FR 15934, Apr. 16, 2019] | As used in this part: Air taxi operator means an air carrier as established by § 298.3(a). Air transportation means interstate air transportation, foreign air transportation, or the transportation of mail by aircraft as defined by the Statute. 1 1 Interstate air transportation is defined in section 40102(a)(25) as the transportation of passengers or property by aircraft as a common carrier for compensation, or the transportation of mail by aircraft (1) between a place in (i) a State, territory, or possession of the United States and a place in the District of Columbia or another State, territory, or possession of the United States; (ii) Hawaii and another place in Hawaii through the airspace over a place outside Hawaii; (iii) the District of Columbia and another place in the District of Columbia; or (iv) a territory or possession of the United States and another place in the same territory or possession; and (2) when any part of the transportation is by aircraft. Note: Operations wholly within the geographic limits of a single State are not considered interstate air transportation if in those operations the carrier transports no more than a de minimis volume of passengers or property moving as part of a continuous journey to or from a point outside the State. Foreign air transportation is defined in section 40102(a)(23) of 49 U.S.C. Subtitle VII as the transportation of passengers or property by aircraft as a common carrier for compensation, or the transportation of mail by aircraft, between a place in the United States and a place outside the United States when any part of the transportation is by aircraft. Air transportation also is defined to include the transportation of mail by aircraft. Section 5402 of the Postal Reorganization Act, 39 U.S.C. 5402, authorizes the carriage of mail by air taxi operators and commuter air carriers in some circumstances under contract with the U.S. Postal Service. Aircraft-hours means the airborne hours of aircraft computed from the moment an aircraft leaves the … | |||
| 14:14:4.0.1.1.48.1.8.3 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | A | Subpart A—General | § 298.3 Classification. | FAA | (a) There is hereby established a classification of air carriers, designated as “air taxi operators,” which directly engage in the air transportation of persons or property or mail or in any combination of such transportation and which: (1) Do not directly or indirectly utilize large aircraft in air transportation; (2) Do not hold a certificate of public convenience and necessity and do not engage in scheduled passenger operations as specified in paragraph (b) of this section; (3) Have and maintain in effect liability insurance coverage in compliance with the requirements set forth in part 205 of this chapter and have and maintain a current certificate of insurance evidencing such coverage on file with the Department; (4) If operating in foreign air transportation or participating in an interline agreement, subscribe to Agreement 18900 (OST Form 4523 or OST Form 4507) and comply with all other requirements of part 203 of this chapter; and (5) Have registered with the Department in accordance with subpart C of this part. (b) There is hereby established a classification of air carriers, designated as “commuter air carriers,” which directly engage in the air transportation of persons, property or mail, and which: (1) Do not directly or indirectly utilize large aircraft in air transportation; (2) Do not hold a certificate of public convenience and necessity; (3) Carry passengers on at least five round trips per week on at least one route between two or more points according to its published flight schedules that specify the times, days of the week, and places between which those flights are performed; (4) Have and maintain in effect liability insurance coverage in compliance with the requirements set forth in part 205 of this chapter and have and maintain a current certificate of insurance evidencing such coverage on file with the Department; (5) Have and maintain in effect and on file with the Department a signed counterpart of Agreement 18900 (OST Form 4523) and comply with all other requirements of part… | ||||
| 14:14:4.0.1.1.48.1.8.4 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | A | Subpart A—General | § 298.4 Requests for statement of authority. | FAA | In any instance where an air taxi operator or commuter air carrier is required by a foreign government to produce evidence of its authority to engage in foreign air transportation under the laws of the United States, the Director, Office of Aviation Analysis (X-50), Office of the Secretary, 1200 New Jersey Avenue, SE., Washington, DC 20590, will, upon request, furnish the carrier with a written statement, outlining its general operating privileges under this part for presentation to the proper authorities of the foreign government. | ||||
| 14:14:4.0.1.1.48.2.8.1 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | B | Subpart B—Exemptions | § 298.11 Exemption authority. | FAA | Air taxi operators and commuter air carriers are hereby relieved from the following provisions of 49 U.S.C. Subtitle VII only if and so long as they comply with the provisions of this part and the conditions imposed herein, and to the extent necessary to permit them to conduct air taxi or commuter air carrier operations: (a) Section 41101; (b) Section 41504; except that the requirements of that section shall apply to: (1) Tariffs for through rates, fares, and charges filed jointly by air taxi operators or commuter air carriers with air carriers or with foreign air carriers subject to the tariff-filing requirements of Chapter 415; and (2) Tariffs required to be filed by air taxi operators or commuter air carriers which embody the provisions of the counterpart to Agreement 18900 as specified in part 203 of this chapter; (c) Section 41702, except for the requirements that air taxi operators and commuter air carriers shall: (1) Provide safe service, equipment, and facilities in connection with air transportation; (2) Provide adequate service insofar as that requires them to comply with parts 252 and 382 of this chapter; (3) Observe and enforce just and reasonable joint rates, fares, and charges, and just and reasonable classifications, rules, regulations and practices as provided in tariffs filed jointly by air taxi operators or commuter air carriers with certificated air carriers or with foreign air carriers; and (4) Establish just, reasonable, and equitable divisions of such joint rates, fares, and charges as between air carriers participating therein which shall not unduly prefer or prejudice any of such participating air carriers; (d) Section 41310, except that the requirements of that subsection shall apply to through service provided pursuant to tariffs filed jointly by air taxi operators or commuter air carriers with certificated air carriers or with foreign air carriers and to transportation of the handicapped to the extent that that is required by part 382 of this chapter; (e) Section 41902; (f) … | ||||
| 14:14:4.0.1.1.48.2.8.2 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | B | Subpart B—Exemptions | § 298.12 Duration of exemption. | FAA | The exemption from any provision of 49 U.S.C. Subtitle VII provided by this part shall continue in effect only until such time as the Department shall find that enforcement of that provision would be in the public interest, at which time the exemption shall terminate or be conditioned with respect to the person, class of persons, or service (e.g., limited-entry foreign air transportation market) subject to the finding. | ||||
| 14:14:4.0.1.1.48.3.8.1 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | C | Subpart C—Registration for Exemption by Air Taxi Operators | § 298.21 Filing for registration by air taxi operators. | FAA | [70 FR 25768, May 16, 2005, as amended by DOT-OST-2014-0140, 84 FR 15935, Apr. 16, 2019] | (a) Every air taxi operator who plans to commence operations under this part shall register with the Department not later than 30 days prior to the commencement of such operations, unless, upon a showing of good cause satisfactory to the Manager, Technical Programs Branch (AFS-260), Federal Aviation Administration, registration within a lesser period of time is allowed. (b) The registration of an air taxi operator shall remain in effect until it is amended by the carrier or canceled by the Department. (c) Registration by all air taxi operators shall be accomplished by filing with the Department at the address specified in paragraph (d) of this section the following: (1) Air Taxi Registration (OST Form 4507), executed in duplicate. 6 This form shall be certified by a responsible official and shall include the following information: 6 OST Form 4507 can be obtained from the Manager, Technical Programs Branch, Federal Aviation Administration, AFS-260 at (202) 267-8166, or on the internet at https://www.faa.gov/about/office_org/headquarters_offices/avs/offices/afx/afs/afs200/afs260/exemptions/ (i) The name of the carrier and its mailing address; (ii) The carrier's principal place of business, if different from its mailing address, and its telephone number and fax number; (iii) The carrier's FAA certificate number, if any, and the address and telephone number of the carrier's local FAA office; (iv) The type of service the carrier will offer (scheduled passenger, 7 scheduled cargo, mail under a U.S. Postal Service contract, on-demand passenger, on-demand cargo, or other service such as air ambulance operations, firefighting or seasonal operations); 7 Companies proposing to provide scheduled passenger service at the level established by this Part for commuter air carriers are not permitted to conduct such operations under their air taxi registration; such companies must first be found fit, willing and able to operate and be issued a Commuter Air Carrier Authorization by the Department. (v) A list… | |||
| 14:14:4.0.1.1.48.3.8.2 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | C | Subpart C—Registration for Exemption by Air Taxi Operators | § 298.22 Processing by the Department. | FAA | After examination of the OST Form 4507 submitted by the carrier, the Department will stamp the effective date of the registration on the form and return the duplicate copy to the carrier to confirm that it has registered with the Department as required by this part. The effective date of the registration shall not be earlier than the effective date of the insurance policy or policies named in the certificate of insurance filed by the carrier under § 298.21(c)(2). | ||||
| 14:14:4.0.1.1.48.3.8.3 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | C | Subpart C—Registration for Exemption by Air Taxi Operators | § 298.23 Notifications to the Department of change in operations. | FAA | [70 FR 25768, May 16, 2005, as amended by DOT-OST-2014-0140, 84 FR 15935, Apr. 16, 2019] | (a) If any of the information contained on its registration changes, an air taxi operator shall submit an amendment reflecting the updated information. This amendment shall be filed no later than 30 days after the change occurs. There is no filing fee for submitting an amendment. (b) An amendment shall be made by resubmitting OST Form 4507 to the Department of Transportation, Federal Aviation Administration, Technical Programs Branch (AFS-260), 800 Independence Avenue SW, Room 831, Washington, DC 20591. If the air taxi operator has a mailing address in the State of Alaska, the form shall be mailed to the Department of Transportation, Federal Aviation Administration, Alaskan Region Headquarters Technical Standards Branch, (AAL-231), 222 West 7th Avenue, Box 14, Anchorage, Alaska 99513. | |||
| 14:14:4.0.1.1.48.3.8.4 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | C | Subpart C—Registration for Exemption by Air Taxi Operators | § 298.24 Cancellation of the registration. | FAA | The registration of an air taxi operator may be canceled by the Department if any of the following occur: (a) The operator ceases its operations; (b) The operator's insurance coverage changes or lapses; (c) The operator fails to file an amended registration when required by § 298.23; (d) The operator's Air Carrier Certificate and/or Operations Specifications is revoked by the Federal Aviation Administration; (e) The operator fails to qualify as a citizen of the United States; (f) The Department determines that it is otherwise in the public interest to do so. | ||||
| 14:14:4.0.1.1.48.4.8.1 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | D | Subpart D—Limitations and Conditions on Exemptions and Operations | § 298.30 Public disclosure of policy on consumer protection. | FAA | (a) Every air taxi and commuter air carrier shall cause to be displayed continuously in a conspicuous public place at each desk, station and position in the United States that is in charge of a person employed exclusively by it, or by it jointly with another person, or by any agent employed by it to sell tickets to passengers, a sign located so as to be clearly visible and readable to the traveling public, containing a statement setting forth the air taxi and commuter air carrier's policy on baggage liability and denied boarding compensation. (b) An air taxi or commuter air carrier shall provide a written notice on or with a passenger's ticket concerning baggage liability as provided in § 254.5 of this chapter. These ticket notices are required only for passengers whose ticket includes a flight segment that uses large aircraft (more than 60 seats). (c) If the substantive terms of the counter sign and ticket notice required by this section differ, the terms contained in the required ticket notice govern. | ||||
| 14:14:4.0.1.1.48.4.8.2 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | D | Subpart D—Limitations and Conditions on Exemptions and Operations | § 298.31 Scope of service and equipment authorized. | FAA | Nothing in this part shall be construed as authorizing the operation of large aircraft in air transportation, and the exemption provided by this part to air taxi operators and commuter air carriers that register with the Department extends only to the direct operation in air transportation in accordance with the limitations and conditions of this part of aircraft originally designed to have a maximum passenger capacity of 60 seats or less or a maximum payload capacity of 18,000 pounds or less. | ||||
| 14:14:4.0.1.1.48.4.8.3 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | D | Subpart D—Limitations and Conditions on Exemptions and Operations | § 298.32 Limitations on operations to eligible places. | FAA | No person shall provide scheduled passenger service as a commuter air carrier at an eligible place unless it has been found by the Department to be fit, willing, and able to conduct such service and issued a Commuter Air Carrier Authorization as provided in subpart E of this part. | ||||
| 14:14:4.0.1.1.48.4.8.4 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | D | Subpart D—Limitations and Conditions on Exemptions and Operations | § 298.33 Security requirements. | FAA | In conducting operations under this part, an air taxi operator or a commuter air carrier is required to adhere to all security requirements established by the Department of Transportation and the Department of Homeland Security applicable to such operations. | ||||
| 14:14:4.0.1.1.48.4.8.5 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | D | Subpart D—Limitations and Conditions on Exemptions and Operations | § 298.34 [Reserved] | FAA | |||||
| 14:14:4.0.1.1.48.4.8.6 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | D | Subpart D—Limitations and Conditions on Exemptions and Operations | § 298.35 Limitations on carriage of mail. | FAA | An air taxi operator or commuter air carrier is not authorized to carry mail except pursuant to contract with the U.S. Postal Service entered into pursuant to section 5402 of the Postal Reorganization Act (39 U.S.C. 5402). | ||||
| 14:14:4.0.1.1.48.4.8.7 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | D | Subpart D—Limitations and Conditions on Exemptions and Operations | § 298.36 Limitations on use of business name. | FAA | (a) An air taxi operator or commuter air carrier in holding out to the public and in performing its services in air transportation shall do so only in the name or names in which its air carrier certificate is issued pursuant to section 44702 of 49 U.S.C. Subtitle VII by the Federal Aviation Administration, and in which it is registered with the Department under this part, or in which its Commuter Air Carrier Authorization is issued or other trade name is registered. (b) Slogans shall not be considered names for the purposes of this section, and their use is not restricted hereby. (c) Commuter air carriers are subject to the provisions of part 215 of this chapter with regard to the use and change of air carrier names. (d) Neither the provisions of this section nor the grant of a permission hereunder shall preclude Department intervention or enforcement action should there be evidence of a significant potential for, or of actual, public confusion. | ||||
| 14:14:4.0.1.1.48.4.8.8 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | D | Subpart D—Limitations and Conditions on Exemptions and Operations | § 298.37 Prohibition of services not covered by insurance. | FAA | An air taxi operator or commuter air carrier shall not operate in air transportation or provide or offer to provide air transportation unless there is in effect liability insurance which covers such transportation and which is evidenced by a current certificate of insurance on file with the Department as required by part 205 of this chapter. | ||||
| 14:14:4.0.1.1.48.4.8.9 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | D | Subpart D—Limitations and Conditions on Exemptions and Operations | § 298.38 Financial security arrangements for operating Public Charters. | FAA | When an air taxi operator or commuter air carrier performs a Public Charter under part 380 of this chapter, either: (a) The air taxi operator or commuter air carrier shall meet the bonding or escrow requirements applicable to certificated air carriers as set forth in § 212.8 of this chapter; or (b) The air taxi operator or commuter air carrier shall ensure that it does not receive any payments for the charter until after the charter has been completed. In this case, its contracts with the charter operator and the charter operator's depository bank, if any, shall state that the charter operator or bank, as applicable, shall retain control of and responsibility for all participant funds intended for payment for air transportation until after the charter has been completed, notwithstanding any provision of part 380 of this chapter. | ||||
| 14:14:4.0.1.1.48.5.8.1 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | E | Subpart E—Commuter Air Carrier Authorizations | § 298.50 Application. | FAA | [70 FR 25768, May 16, 2005, as amended by DOT-OST-2014-0140, 84 FR 15935, Apr. 16, 2019] | (a) Any person desiring to provide air transportation as a commuter air carrier must first obtain a Commuter Air Carrier Authorization. This shall be accomplished by filing with the Department— (1) An application in accordance with the requirements of parts 201 and 302 of this chapter; (2) Data in accordance with part 204 of this chapter to support a determination by the Department that the person is “fit, willing, and able” to operate the proposed commuter service; and (3) A $670 filing fee submitted in accordance with the provisions of § 389.21 of this chapter. (b) An executed original and two true copies of an application for a Commuter Air Carrier Authorization shall be filed with Docket Operations Office, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., Washington, DC 20590. | |||
| 14:14:4.0.1.1.48.5.8.2 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | E | Subpart E—Commuter Air Carrier Authorizations | § 298.51 Processing by the Department. | FAA | In processing applications filed in accordance with § 298.50, the Department will generally follow the procedures set forth in §§ 302.207 through 302.211 of this chapter. | ||||
| 14:14:4.0.1.1.48.5.8.3 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | E | Subpart E—Commuter Air Carrier Authorizations | § 298.52 Air taxi operations by commuter air carriers. | FAA | (a) A commuter air carrier that holds an effective Commuter Air Carrier Authorization and otherwise meets the requirements of this part is also authorized to conduct air taxi operations (e.g., scheduled cargo, mail under a U.S. Postal Service contract, on-demand passenger, on-demand cargo, or other service such as air ambulance operations, firefighting or seasonal operations) without having to meet the registration requirements of subpart C of this part, except as provided in paragraph (b) of this section. (b) Should a commuter air carrier cease conducting all scheduled passenger operations and its Commuter Air Carrier Authorization is suspended pursuant to §§ 298.53 and/or 204.7 of this chapter, it may continue to conduct air taxi operations provided that the carrier maintains in effect liability insurance coverage as required for such operations by part 205 of this chapter and, within 10 days of the cessation of scheduled passenger operations, registers as an air taxi operator in accordance with subpart C of this part; and provided further that the carrier continues to hold authority from the Federal Aviation Administration to conduct such air taxi operations. | ||||
| 14:14:4.0.1.1.48.5.8.4 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | E | Subpart E—Commuter Air Carrier Authorizations | § 298.53 Suspension or revocation of authority. | FAA | A Commuter Air Carrier Authorization may be suspended or revoked if any of the following occur: (a) The operator fails to maintain insurance coverage as required by part 205 of this chapter for commuter operations; (b) The scheduled passenger authority under the operator's Air Carrier Certificate is suspended or revoked by the Federal Aviation Administration; (c) The operator does not commence operations for which it has been found fit, or the operator ceases those operations as provided in § 204.7 of this chapter; (d) The Department finds that the carrier is not fit, willing, and able to conduct scheduled service or fails to qualify as a citizen of the United States; or (e) The Department determines that it is otherwise in the public interest to do so. | ||||
| 14:14:4.0.1.1.48.6.8.1 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | F | Subpart F—Reporting Requirements | § 298.60 General reporting instructions. | FAA | [ER-1399, 50 FR 19, Jan. 2, 1985, as amended by Doc. No. 47939, 57 FR 40104, Sept. 2, 1992; 60 FR 66726, Dec. 26, 1995; 67 FR 49231, July 30, 2002; 75 FR 41585, July 16, 2010; DOT-OST-2014-0140, 84 FR 15935, Apr. 16, 2019; DOT-OST-2018-0132, 88 FR 6164, Jan. 31, 2023] | (a) Each commuter air carrier and each small certificated air carrier shall file the applicable schedules of Form 298-C, “Report of Financial and Operating Statistics for Small Aircraft Operators,” Schedule T-100, “U.S. Air Carrier Traffic and Capacity Data by Nonstop Segment and On-Flight Market,” and the “Passenger Origin—Destination Survey” prescribed in part 241, Sec. 19-8, of this subchapter. (b) A single copy of the BTS Form 298-C report shall be filed quarterly with the Office of Airline Information (OAI) for the periods ended March 31, June 30, September 30 and December 31 of each year to be received on or before May 10, August 10, November 10, and February 10, respectively. An electronic filing of the monthly Schedule T-100 is due at OAI within 30 days after the end of each month. Due dates falling on a Saturday, Sunday or Federal holiday will become effective on the next work day. (c) Reports required by this section shall be submitted to the Bureau of Transportation Statistics in a format specified in accounting and reporting directives issued by the Bureau of Transportation Statistics' Director of Airline Information. | |||
| 14:14:4.0.1.1.48.6.8.2 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | F | Subpart F—Reporting Requirements | § 298.61 Reporting of traffic statistics. | FAA | [Doc. No. OST-98-4043, 67 FR 49231, July 30, 2002, as amended by Doc. No. OST-2006-26053, 75 FR 41585, July 16, 2010; DOT-OST-2014-0140, 84 FR 15935, Apr. 16, 2019] | (a) Each commuter air carrier and small certificated air carrier shall file Schedule T-100, U.S. Air Carrier Traffic and Capacity Data by Nonstop Segment and On-Flight Market.” (b) Schedule T-100 shall be filed monthly as set forth in§ 298.60. (1) Schedule T-100 collects summarized flight stage data and on-flight market data from revenue flights. All traffic statistics shall be compiled in terms of each flight stage as actually performed. The detail T-100 data shall be maintained in such a manner as to permit monthly summarization and organization into two basic groupings. The first grouping, the nonstop segment information, is to be summarized by equipment type, within class of service, within pair-of-points, without regard to individual flight number. The second grouping requires that the enplanement/deplanement information be broken out into separate units called on-flight market records, which shall be summarized by class of service, within pair-of-points, without regard for equipment type or flight number. (2) Joint-service operations. The Department may authorize joint service operations between two direct air carriers. Examples of these joint-service operations are: blocked-space agreements; part-charter agreements; code-sharing agreements; wet-lease agreements, and similar arrangements. (i) Joint-service operations are reported by the carrier in operational control of the flight, i.e., the carrier that uses its flight crews under its own FAA operating authority. The traffic moving under these agreements is reported on Schedule T-100 the same way as any other traffic on the aircraft. (ii) If there are questions about reporting a joint-service operation, contact the BTS Assistant Director—Airline Information (fax no. 202 366-3383, telephone no. 202 366-4373). Joint-service operations are reported in Schedule T-100 in accordance with this paragraph (b). (iii) Operational control. The air carrier in operational control of the aircraft (the carrier that uses its flight crews under its own FAA operati… | |||
| 14:14:4.0.1.1.48.6.8.3 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | F | Subpart F—Reporting Requirements | § 298.62 Reporting of financial data. | FAA | [ER-1399, 50 FR 20, Jan. 2, 1985, as amended by 53 FR 48528, Dec. 1, 1988; 60 FR 43528, Aug. 22, 1995; 60 FR 66726, Dec. 26, 1995; 67 FR 49234, July 30, 2002; DOT-OST-2014-0140, 84 FR 15935, Apr. 16, 2019] | (a) Each commuter air carrier and each small certificated air carrier shall file BTS Form 298-C, Schedule F-1 “Report of Financial Data.” This report shall be filed quarterly as set forth in § 298.60 of this part. (b) Each carrier shall indicate in the space provided, its full corporate name and the quarter for which the report is filed. (c) This schedule shall be used to report financial data for the overall or system operations of the carrier. At the option of the carrier, the data may be reported in whole dollars by dropping the cents. Financial data shall be reported in the following categories: (1) Line 1 “Total Operating Revenues” shall include gross revenues accruing from services ordinarily associated with air transportation and air transportation-related services. This category shall include revenue derived from scheduled service operations, revenue derived from nonscheduled service operations, amounts of compensation paid to the carrier under section 41732 of 49 U.S.C. Subtitle VII and other transport-related revenue such as in-flight sales, restaurant and food service (ground), rental of property or equipment, limousine service, cargo pick-up and delivery charges, and fixed-base operations involving the selling or servicing of aircraft, flying instructions, charter flights, etc. (2) Line 2 “Total Operating Expenses” shall include expenses of a character usually and ordinarily incurred in the performance of air transporation and air transportation services. This category shall include expenses incurred: directly in the in-flight operation of aircraft; in the holding of aircraft and aircraft personnel in readiness for assignment to an in-flight status; on the ground in controlling and protecting the in-flight movement of aircraft; landing, handling or servicing aircraft on the ground; selling transportation; servicing and handling traffic; promoting the development of traffic; and administering operations generally. This category shall also include expenses which are specifically identifiable with th… | |||
| 14:14:4.0.1.1.48.6.8.4 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | F | Subpart F—Reporting Requirements | § 298.63 Reporting of aircraft operating expenses and related statistics by small certificated air carriers. | FAA | [ER-1399, 50 FR 20, Jan. 2, 1985, as amended by Doc. No. 47939, 57 FR 40104, Sept. 2, 1992; 60 FR 66726, Dec. 26, 1995; 67 FR 49234, July 30, 2002] | (a) Each small certificated air carrier shall file BTS Form 298-C, Schedule F-2 “Report of Aircraft Operating Expenses and Related Statistics.” This schedule shall be filed quarterly as prescribed in § 298.60. Data reported on this report shall be for the overall or system operations of the air carrier. (b) Each carrier shall indicate in the space provided its full corporate name and the quarter for which the report is filed. (c) This schedule shall show the direct and indirect expenses incurred in aircraft operations. Direct expense data applicable to each aircraft type operated by the carrier shall be reported in separate columns of this schedule. Each aircraft type reported shall be identified at the head of each column in the space provided for “Aircraft Type.” “Aircraft Type” refers to aircraft models such as Beech-18, Piper PA-32, etc. Aircraft Type designations are prescribed in the Accounting and Reporting Directives, which is available from the BTS' Office of Airline Information. In the space provided for “Aircraft Code” carriers shall insert the three digit code prescribed in the Accounting and Reporting Directives for the reported aircraft type. ( Note: Aircraft of the same type but different cabin configuration may be grouped into a single classification; therefore, carriers are not required to report the fourth digit of an aircraft code indicating cabin configuration.) (d) Line 1 Direct aircraft operating expenses shall be reported in the following categories: (1) Line 2 “Flying Operations (Less Rental)” shall be subdivided as follows: (i) Line 3 “Pilot and Copilot” expense shall include pilots' and copilots' salaries, and related employee benefits, pensions, payroll taxes and personnel expenses. (ii) Line 4 “Aircraft Fuel and Oil” expense shall include the cost of fuel and oil used in flight operations and nonrefundable aircraft fuel and oil taxes. (iii) Line 5 “Other” expenses shall include general (hull) insurance, and all other expenses incurred in the in-flight operation of aircraft … | |||
| 14:14:4.0.1.1.48.6.8.5 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | F | Subpart F—Reporting Requirements | § 298.65 Requests for extensions of time within which to file reports or for waivers from reporting requirements. | FAA | [ER-1399, 50 FR 21, Jan. 2, 1985, as amended by Doc. No. 47939, 57 FR 40104, Sept. 2, 1992; 60 FR 66726, Dec. 26, 1995] | (a) If circumstances prevent the filing of BTS Form 298-C on or before the due date, a written request for an extension may be submitted. Except in cases of emergency, the request must be delivered to the BTS's Office of Airline Information in writing at least three days in advance of the due date. The request must state good and sufficient reason to justify the granting of the extension and the date when the reports can be filed. If the request is denied, the air carrier remains subject to the filing requirements to the same extent as if no request for extension of time had been made. (b) The Office of Airline Information may waive any reporting requirements contained in §§ 298.61, 298.62, 298.63 and 298.64 of this part, upon its own initiative or upon written request from any air carrier if the waiver is in the public interest and the request demonstrates that: (1) Unusual circumstances warrant such a departure; (2) A specifically defined alternative procedure or technique will result in a substantially equivalent or more accurate portrayal; and (3) The application of the alternative procedure will maintain or improve uniformity in reporting between air carriers. | |||
| 14:14:4.0.1.1.48.6.8.6 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | F | Subpart F—Reporting Requirements | § 298.66 Reporting exemption for State collection of data. | FAA | [ER-1399, 50 FR 21, Jan. 2, 1985, as amended by Doc. No. 47939, 57 FR 40104, Sept. 2, 1992; 60 FR 66726, Dec. 26, 1995] | (a) The Office of Airline Information may exempt a commuter air carrier from the reporting requirements of § 298.61 of this part if a State government collects the information specified in that section and provides it to the Department by the dates specified. The data provided to the Department in this manner must be at least as reliable as if they were collected by the Department directly. (b) The Office of Airline Information will provide assistance to any State agency interested in participating in this exemption program. | |||
| 14:14:4.0.1.1.48.7.8.1 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | G | Subpart G—Public Disclosure of Data | § 298.70 Public disclosure of data. | FAA | [Doc. No. OST-98-4043, 67 FR 49234, July 30, 2002, as amended by DOT-OST-2014-0140, 84 FR 15935, Apr. 16, 2019] | (a) Detailed domestic on-flight market data and nonstop segment data except military data shall be made publicly available after processing. Domestic data are defined as data from air transportation operations from a place in any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico and the Virgin Islands, or a U.S. territory or possession to a place in any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico and the Virgin Islands, or a U.S. territory or possession. Domestic military operations are reported under service codes N or R. (b) Detailed international on-flight market and nonstop segment data in Schedule T-100 and Schedule T-100(f) reports, except military data, shall be publicly available immediately following the Department's determination that the database is complete, but no earlier than six months after the date of the data. Military operations are reported under service codes N or R. Data for on-flight markets and nonstop segments involving no U.S. points shall not be made publicly available for three years. Industry and carrier summary data may be made public before the end of six months or the end of three years, as applicable, provided there are three or more carriers in the summary data disclosed. The Department may, at any time, publish international summary statistics without carrier detail. (c) Schedule F-1 “Report of Financial Data” shall be withheld from public release for a period of 3 years after the close of the calendar quarter to which the report relates. (d) The Department may release nonstop segment and on-flight market detail data by carrier or individual Schedule F-1 “Report of Financial Data” before the end of the confidentiality period as follows: (1) To foreign governments as provided in reciprocal arrangements between the foreign country and the U.S. Government for exchange of on-flight market and/or nonstop segment data submitted by air carriers of that foreign country and U.S. carriers serving that foreig… | |||
| 14:14:4.0.1.1.48.8.8.1 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | H | Subpart H—Violations | § 298.80 Disclosures. | FAA | [Dockt. No. DOT-OST-2007-27057, 83 FR 46877, Sept. 17, 2018] | (a) Before entering a contract for a specific flight or series of flights with charterers, air taxi operators and commuter air carriers must disclose to the charterer the information in paragraphs (a)(1) and (2) of this section. Before entering a contract for a specific flight or series of flights with charterers, air taxi operators and commuter air carriers must, upon request of the charterer, disclose to the charterer the information in paragraphs (a)(3), (4), and (5) of this section. The disclosures may be accomplished through electronic transmissions. (1) That the flight will be performed by another direct air carrier or direct foreign air carrier if that is the case. The corporate name of the direct air carrier or direct foreign air carrier in operational control of the aircraft on which the air transportation is to be performed and any other names in which that direct carrier holds itself out to the public. (2) If the flight is to be performed by another direct air carrier or direct foreign air carrier, the capacity in which the air taxi operator or commuter air carrier is acting in contracting for the air transportation, i.e., as a principal, as an agent of the charterer, or as an agent of the direct air carrier that will be in operational control of the flight. (3) If the flight is to be performed by another direct air carrier or foreign direct air carrier and the air taxi operator or commuter air carrier is acting as the agent of the charterer, the air taxi operator or commuter air carrier must disclose the existence of any corporate or business relationship, including a preexisting contract, between the air taxi operator or commuter air carrier and the direct carrier that will be in operational control of the flight that may have a bearing on the air taxi operator's or commuter air carrier's selection of the direct carrier that will be in operational control of the flight. (4) The total cost of the air transportation paid by the charterer to or through the air taxi operator or commuter air carrier… | |||
| 14:14:4.0.1.1.48.9.8.1 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | I | Subpart I—Violations | § 298.90 Prohibited unfair or deceptive practices or unfair methods of competition. | FAA | (a) Violations of this Part shall be considered to constitute unfair or deceptive practices or unfair methods of competition in violation of 49 U.S.C. 41712. (b) In addition to paragraph (a) of this section, the following enumerated practices, among others, by an air taxi operator or commuter air carrier are unfair or deceptive practices or unfair methods of competition in violation of 49 U.S.C. 41712: (1) Misrepresentations that may induce members of the public to reasonably believe that the air taxi operator or commuter air carrier will be, or is, in operational control of a flight when that is not the case. (2) Misrepresentations as to the quality or kind of service or type of aircraft. (3) Misrepresentations as to the time of departure or arrival, points served, route to be flown, stops to be made, or total trip-time from point of departure to destination. (4) Misrepresentations as to the qualifications of pilots or safety record or certification of pilots, aircraft, or air carriers. (5) Misrepresentations that passengers are directly insured when they are not so insured. For example, where the only insurance in force is that protecting the air taxi operator or commuter air carrier in the event of liability. (6) Misrepresentations as to fares or charges for air transportation or services in connection therewith. (7) Misrepresentations as to membership in or involvement with an organization that audits direct air carriers or that the direct air carrier to be used for a flight meets a standard set by an auditing organization. (8) Representing that a contract for a specified direct air carrier, aircraft, flight, or time has been arranged without a binding commitment with a direct air carrier for the furnishing of such transportation as represented. (9) Selling or contracting for air transportation while knowing or having reason to know or believe that such air transportation cannot be legally performed by the direct air carrier or foreign direct air carrier that is to perform the air transportation. (… | ||||
| 14:14:4.0.1.1.48.9.8.2 | 14 | Aeronautics and Space | II | A | 298 | PART 298—EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER OPERATIONS | I | Subpart I—Violations | § 298.92 Enforcement. | FAA | [Doc. No. DOT-OST-2007-27057, 83 FR 46877, Sept. 17, 2018, as amended by DOT-OST-2014-0140, 84 FR 15935, Apr. 16, 2019] | In case of any violation of the provisions of 49 U.S.C. Subtitle VII, or this part, or any other rule, regulation, or order issued under the Statute, the violator may be subject to a proceeding pursuant to section 46101 of 49 U.S.C. Subtitle VII before the Department, or sections 46106 through 46108 of 49 U.S.C. Subtitle VII before a U.S. District Court, as the case may be, to compel compliance therewith; or to civil penalties pursuant to the provisions of section 46301 of 49 U.S.C. Subtitle VII; or, in the case of a willful violation, to criminal penalties pursuant to the provisions of section 46316 of 49 U.S.C. Subtitle VII; or other lawful sanctions including revocation of operating authority. | |||
| 46:46:8.0.1.4.20.1.3.1 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | A | Subpart A—Introduction | § 298.1 Purpose. | FMC | This part prescribes regulations implementing Title XI of the Merchant Marine Act, 1936, as amended, governing Federal ship financing assistance (46 App. U.S.C. 1271 et seq. ). This part uses “you” and “we” throughout. You and your refer to the applicant for Title XI financing assistance unless we note or imply otherwise. We, us, and our refer to the Maritime Administration, the Secretary of the Maritime Administration, or the Secretary of Transportation, as applicable. | ||||
| 46:46:8.0.1.4.20.1.3.2 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | A | Subpart A—Introduction | § 298.2 Definitions. | FMC | [65 FR 45152, July 20, 2000, as amended at 67 FR 61282, Sept. 30, 2002] | For the purpose of this part: Act means the Merchant Marine Act, 1936, as amended (46 App. U.S.C. 1101 through 1294). Actual Cost of a Vessel or Shipyard Project means, as of any specified date, the aggregate, as determined by us, of all amounts paid by or for the account of the Obligor on or before that date and all amounts which the Obligor is then obligated to pay from time to time thereafter, for the construction, reconstruction or reconditioning of such Vessel or Shipyard Project. Advanced Shipbuilding Technology means: (1) Numerically controlled machine tools, robots, automated process control equipment, computerized flexible manufacturing systems, associated computer software, and other technology for improving shipbuilding and related industrial production which advance the state-of-the-art; and (2) Novel techniques and processes designed to improve shipbuilding quality, productivity, and practice, and to promote sustainable development, including engineering design, quality assurance, concurrent engineering, continuous process production technology, energy efficiency, waste minimization, design for recyclability or parts reuse, inventory management, upgraded worker skills, and communications with customers and suppliers; and (3) Other elements contributing to a shipyard's efficiency or productivity assisting it to more effectively operate in the shipbuilding industry. Citizen of the United States means a person who, if an individual, is a Citizen of the United States by birth, naturalization or as otherwise authorized by law or, if other than an individual, meets the requirements of Section 2 of the Shipping Act, 1916, as amended (46 App. U.S.C. 802), as further described at 46 CFR 221.3(c). Closing means a meeting of various participants or their representatives in a Title XI financing, at which a commitment to issue Guarantees is executed, or at which all or part of the Obligations are authenticated and issued and the proceeds are made available for a purpose set forth in section 1104(a) o… | |||
| 46:46:8.0.1.4.20.1.3.3 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | A | Subpart A—Introduction | § 298.3 Applications. | FMC | [65 FR 45152, July 20, 2000, as amended at 68 FR 62538, Nov. 5, 2003; 69 FR 61451, Oct. 19, 2004] | (a) Process and certification. When you apply for a commitment to execute Guarantees, you must: (1) Complete Form MA-163 and send it to the Secretary, Maritime Administration, U.S. Department of Transportation, 400 Seventh Street, SW., Washington, DC 20590. [Note: MARAD will accept electronic options (such as facsimile and Internet) for transmission of required information (excluding closing documents and documents submitted in connection with defaults) to MARAD, if practicable.] (2) Certify the application in the manner that Form MA 163 prescribes. (b) Required information. You must include all required information on Form MA 163 or in attached exhibits and schedules submitted with the application. You must also include the following regarding the Vessel or Vessels, if applicable: (1) Any demise charters, (2) Time charters in excess of six months, (3) Contracts of affreightment, (4) Drilling contracts, and/or (5) Other contractual arrangements. (c) Declaration of Lobbying form. You must also file the Declaration of Lobbying form as required by 31 U.S.C. 1352 with the initial application as part of the formal submission. (d) Attachments. Each exhibit, schedule, and attachment must contain a statement, on the first page clearly identifying the document as an attachment to the application. You must state on each attachment the: (1) Name of the applicant; and (2) Date of the application. (e) Amendment. You must mark “Amendment,” on any amendment of data contained in the application. Each first page must contain a statement clearly identifying the document as an amendment to your application and must include the: (1) Name of the applicant; (2) Date of application; and (3) Certification required on Form MA 163. (f) Application time schedule. You must submit each application to us at least four (4) months prior to the anticipated date by which you require a Letter Commitment. (1) We may consider applications with less than four (4) months notice, prior to the anticipated date by which you … | |||
| 46:46:8.0.1.4.20.2.3.1 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | B | Subpart B—Eligibility | § 298.10 Citizenship. | FMC | (a) Applicability. Before you receive a legal or beneficial interest in a Vessel financed under Title XI of the Act which is operating in or will be operated in the U.S. coastwise trade, you and any other Person, (including the shipowner and any bareboat charterer), must establish your United States citizenship, within the definition of “Citizen of the United States” in § 298.2. (b) Prior to Letter Commitment. Before we issue the Letter Commitment, you and any Person identified in paragraph (a) of this section, who is required to establish United States citizenship must establish United States citizenship in the form and manner stated in 46 CFR part 355. (c) Commitment Closing. (1) Within 10 days before every Commitment Closing, unless we waive this requirement for good cause, you and all Persons identified with the project who have previously established United States citizenship in accordance with paragraphs (a) and (b) of this section, must submit pro forma Supplemental Affidavits of Citizenship which we have approved for Closing as to form and substance, and (2) On the date of the Closing, three (3) executed copies of Supplemental Affidavits of Citizenship that: (i) Show evidence of the continuing United States citizenship of the Persons in paragraph (a) of this section; and (ii) Bear the date of the Closing. (d) Additional information. If we request additional material essential to clarify or support evidence of U.S. citizenship, you, the Obligor, or any Person identified in paragraph (a) of this section must submit the additional information. | ||||
| 46:46:8.0.1.4.20.2.3.10 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | B | Subpart B—Eligibility | § 298.19 Financing Eligible Export Vessels. | FMC | (a) Notification to Secretary of Defense. (1) We will provide prompt notice of our receipt of an application for a loan Guarantee for an Eligible Export Vessel to the Secretary of Defense. (2) During the 30-day period, beginning on the date on which the Secretary of Defense receives such notice, the Secretary of Defense may disapprove the loan guarantee if the Secretary of Defense makes an assessment that the Vessel's potential use may cause harm to United States national security interests. (3) The Secretary of Defense may not disapprove a loan Guarantee under this section solely on the basis of the type of vessel to be constructed with the loan Guarantee. The authority of the Secretary of Defense to disapprove a loan Guarantee under this section may not be delegated to any official other than a civilian officer of the Department of Defense appointed by the President, by and with the advice and consent of the Senate. We will not approve a loan guarantee disapproved by the Secretary of Defense. (b) Vessel eligibility. We may not approve a Guarantee for an Eligible Export Vessel unless: (1) We find that the construction, reconstruction, or reconditioning of the Vessel will aid in the transition of United States shipyards to commercial activities or will preserve shipbuilding assets that would be essential in time of war or national emergency; (2) The owner of the Vessel agrees with us that the Vessel shall not be transferred to any country designated by the Secretary of Defense as a country whose interests are hostile to the interests of the United States; and (3) We determine that the countries in which the shipowner, its charterers, guarantors, or other financial interests supporting the transaction, if any, have their chief executive offices or have located a substantial portion of their assets, present an acceptable financial or legal risk to our collateral interests. Our determination will be based on confidential risk assessments provided by the Inter-Agency Country Risk Assessment System and will … | ||||
| 46:46:8.0.1.4.20.2.3.2 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | B | Subpart B—Eligibility | § 298.11 Vessel requirements. | FMC | When you apply for a Guarantee, the Vessel for which you intend to receive financing for construction, reconstruction, or reconditioning must meet the following criteria: (a) United States Construction. A Vessel, including an Eligible Export Vessel, financed by an Obligation Guarantee must be constructed in the United States. United States construction means that the Vessel is assembled in a shipyard geographically located within the United States. (1) A U.S.-flag Vessel must meet the applicable United States Coast Guard requirements. (2) An Eligible Export Vessel must be constructed in accordance with the requirements of the International Maritime Organization and must meet the applicable: (i) Laws, rules, and regulations of its country of documentation, (ii) Treaties, conventions on international agreements to which that country is a signatory, and (iii) Laws of the ports it serves. (b) Actual Cost. We must approve your estimated Actual Cost for the construction, reconstruction, or reconditioning of a Vessel as a condition for issuance of the Letter Commitment. The estimated cost of the Vessel may include escalation for the anticipated construction period of the Vessel. We may contact the shipyard directly and may require you to have the shipyard that has contracted to build the Vessel to submit additional technical data, backup cost details, and other evidence if we have insufficient data. (c) Class, condition, and operation. The Vessel must be constructed, maintained, and operated so as to meet the highest classification, certification, rating, and inspection standards for vessels of the same age and type imposed by: (1) The American Bureau of Shipping (ABS), or (2) Another classification society that also meets the inspection standards of the United States Coast Guard with respect to the documentation of U.S.-flag vessels, or (3) In the case of an Eligible Export Vessel, such standards as may be imposed by a member of the International Association of Classification Societies (IACS), classifi… | ||||
| 46:46:8.0.1.4.20.2.3.3 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | B | Subpart B—Eligibility | § 298.12 Applicant and operator's qualifications. | FMC | (a) Operator's qualifications. We will not issue a Letter Commitment without a prior determination that you, the bareboat charterer, or other Person identified in the application as the operator of the Vessel(s) or Shipyard Project, possesses the necessary experience, ability and other qualifications to properly operate and maintain the Vessel(s) or Shipyard Project which serve as security for the Guarantees. You must also comply with all requirements of this part. (b) Identity and ownership of applicant. In order for us to assess the likelihood that the project will be successful, we need information about you and the proposed project. To permit this assessment, you must provide the following information in your application for Title XI guarantees: (1) Incorporated companies. If you or any bareboat charterer is an incorporated company, you must submit the following identifying information: (i) Name of company, place and date of incorporation, and tax identification number, or if appropriate, international identification number of the company; (ii) Address of principal place of business; and (iii) Certified copy of certificate of incorporation and bylaws. (2) Partnerships, limited partnerships, limited liability companies, joint ventures, associations, unincorporated companies. If you or any bareboat charterer is a partnership, limited partnership, limited liability company, joint venture, association, or unincorporated company, you must submit the following identifying information: (i) Name of entity, place and date of formation, and tax identification number, or if appropriate, international identification number of entity; (ii) Address of principal place of business; and (iii) Certified copy of certificate of formation, partnership agreement or other documentation forming the entity. (3) Other entities. For any entity that does not fit the descriptions in paragraphs (b)(1) and (b)(2) of this section, we will specify the information that the entity must submit regarding its identity and owne… | ||||
| 46:46:8.0.1.4.20.2.3.4 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | B | Subpart B—Eligibility | § 298.13 Financial requirements. | FMC | [65 FR 45152, July 20, 2000, as amended at 68 FR 62538, Nov. 5, 2003; 69 FR 61451, Oct. 19, 2004; 88 FR 86611, Dec. 14, 2023] | (a) In general. To be eligible for guarantees, you and/or your parent organization (when applicable), and any other participants in the project having a significant financial or contractual relationship with you must submit information, respectively, on their financial condition. You must submit this information at the time of the application. You must supplement this information if we require it in subsequent requests. You must submit information satisfactory to us to show that financial resources are available to support the Title XI project. (b) Cost of the project. You must submit the following cost information with respect to the project: (1) Vessel financing Guarantees. A detailed statement of the estimated Actual Cost of construction, reconstruction, or reconditioning of the Vessel(s) including those items which would normally be capitalized as Vessel construction costs. Net interest during construction is the total estimated construction period interest on non-equity funds less estimated earnings from the escrow fund, if such fund is to be established prior to Vessel(s) delivery. (2) Foreign components. (i) You must exclude each item of foreign components and services from Actual Cost, unless we specifically grant a waiver for the item. We will not grant a waiver for major foreign components of the hull and superstructure. (ii) In deciding whether to grant a waiver for foreign components and services, we will consider your certification, to be reviewed by us, stating that: (A) A foreign item or service is not available in the United States on a timely or price-competitive basis, or (B) The domestic item or service is not of sufficient quality. (iii) Although excluded from Actual Cost, foreign components of the hull and superstructure can be regarded as owner-furnished equipment that may be used in satisfying your equity requirements imposed by paragraph (f) of this section. (3) Costs incurred by written contracts. If any of the costs have been incurred by written contracts such as shipya… | |||
| 46:46:8.0.1.4.20.2.3.5 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | B | Subpart B—Eligibility | § 298.14 Economic soundness. | FMC | (a) Economic evaluation. We shall not issue a Letter Commitment for guarantees unless we find that the proposed project, regarding the Vessel(s) or Shipyard Project for which you seek Title XI financing or refinancing, will be economically sound. The economic soundness and your ability to repay the Obligations will be the primary basis for our approval of a Letter Commitment. We will consider the value of the collateral for which we will issue the Obligations as only a secondary consideration in determining your ability to repay the Obligations. (b) Basic feasibility factors. In making the economic soundness findings, we shall consider all relevant factors, including, but not limited to: (1) The need in the particular segment of the maritime industry for new or additional capacity, including any impact on existing equipment for which a guarantee under this title is in effect; (2) The market potential for the employment of the Vessel or utilization of the Shipyard Project of a General Shipyard Facility over the life of the guarantee; (3) Projected revenues and expenses associated with employment of the Vessel or utilization of the Shipyard Project of a General Shipyard Facility; (4) Any charters, contracts of affreightment, transportation agreements, or similar agreements or undertakings relevant to the employment of the Vessel or utilization of the Shipyard Project of a General Shipyard Facility; (5) For inland waterways, the need for technical improvements including but not limited to increased fuel efficiency, or improved safety; and (6) Other relevant criteria. (c) Project feasibility. To demonstrate the economic feasibility of the project over the Guarantee period, you must submit the following information: (1) Purpose. A detailed purpose for the obligations to be guaranteed. (2) Necessary exhibits. Necessary exhibits to support your project feasibility as supplements to the application. (3) Relevant market information. Information regarding the relevant market including a written narra… | ||||
| 46:46:8.0.1.4.20.2.3.6 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | B | Subpart B—Eligibility | § 298.15 Investigation fee. | FMC | (a) In general. Before we issue a Letter Commitment, you shall pay us an investigation fee. The Letter Commitment will state the fee which is based on the formula in paragraph (b) of this section. (1) The investigation fee covers the cost of the investigation of the project described in the application and the participants in the project, the appraisal of properties offered as security, Vessel inspection during construction, reconstruction, or reconditioning (where applicable) and other administrative expenses. (2) If, for any reason, we disapprove the application, you shall pay one-half of the investigation fees. (b) Base Fee. (1) The investigation fee shall be one-half ( 1/2 ) of one percent on Obligations to be issued up to and including $10,000,000, plus (2) One-eighth ( 1/8 ) of one percent on all Obligations to be issued in excess of $10,000,000. (c) Credit for filing fee. You will receive credit for the $5,000 filing fee that you paid upon filing the original application (described in § 298.3) towards the investigation fee. | ||||
| 46:46:8.0.1.4.20.2.3.7 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | B | Subpart B—Eligibility | § 298.16 Substitution of participants. | FMC | (a) You may request our permission to substitute participants to a Mortgage and/or Security Agreement in a financing that is receiving assistance authorized by Title XI of the Act. (b) A non-refundable fee of $3,000 is due, payable at the time of the request. The fee defrays all costs of processing and reviewing a joint application by a mortgagor and/or Obligor and a proposed transferee of a Vessel or Shipyard Project, which is security for Title XI debt, if the proposed transferee is to assume the Mortgage and/or the Security Agreement. | ||||
| 46:46:8.0.1.4.20.2.3.8 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | B | Subpart B—Eligibility | § 298.17 Evaluation of applications. | FMC | (a) In evaluating project applications, we shall also consider whether the application provides for: (1) The capability of the Vessel(s) serving as a naval and military auxiliary in time of war or national emergency. (2) The financing of the Vessel(s) within one year after delivery. (3) The acquisition of Vessel(s) currently financed under Title XI by assumption of the total obligation(s). (4) The Guarantees extend for less than the normal term for that class of vessel. (5) In the case of an Eligible Shipyard, the capability of the shipyard to engage in naval vessel construction in time of war or national emergency. (6) In the case of Shipyard Project, the Guarantees extend for less than the technological life of the asset. (b) In determining the amount of equity which you must provide, we will consider, among other things, the following: (1) Your financial strength; (2) Adequacy of collateral; and (3) The term of the Guarantees. | ||||
| 46:46:8.0.1.4.20.2.3.9 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | B | Subpart B—Eligibility | § 298.18 Financing Shipyard Projects. | FMC | (a) Initial criteria. We may issue Guarantees to finance a Shipyard Project at a General Shipyard Facility. We may approve such Guarantees after we consider whether the Guarantees will result in shipyard modernization and support increased productivity. (b) Detailed statement. You must provide a detailed statement, with the Guarantee application, which will provide the basis for our consideration. (c) Required conditions. We shall approve your application for loan guarantees under this section if we determine the following: (1) The term for such Guarantees will not exceed the reasonable economic useful life of the collective assets which comprise this Shipyard Project; (2) There is sufficient collateral to secure the Guarantee; and (3) Your application will not prevent us from guaranteeing debt for a Shipyard Project that, in our sole opinion, will serve a more desirable use of appropriated funds. In making this determination, we will consider: (i) The types of vessels which will be built by the shipyard, (ii) The productivity increases which will be achieved, (iii) The geographic location of the shipyard, (iv) The long-term viability of the shipyard, (v) The soundness of the financial transaction, (vi) Any financial impact on other Title XI transactions, and (vii) The furtherance of the goals of the Shipbuilding Act. | ||||
| 46:46:8.0.1.4.20.3.3.1 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | C | Subpart C—Guarantees | § 298.20 Term, redemptions, and interest rate. | FMC | (a) In general. The maturity date of the Obligations must be satisfactory to us and must not exceed the anticipated physical and economic life of the Vessel or Vessels or Shipyard Project, and may be less than but no more than: (1) Twenty-five years from the date of delivery from the shipbuilder of a single new Vessel which is to be security for Guarantees; (2) Twenty-five years from the date of delivery from the shipyard of the last of multiple Vessels which are to be security for the Guarantees but that the amount of the Guarantees will relate to the amount of the depreciated actual cost of the multiple Vessels as of the Closing; (3) The later of twenty-five years from the date of original delivery of a reconstructed, or reconditioned Vessel which is to be security for the Guarantees, or at the expiration of the remaining useful life of the Vessel, as we determine; or (4) The technological life of the Shipyard Project. (b) Required redemptions. Where multiple Vessels or multiple Shipyard Project assets are to be used as security for the Guarantees, as set forth in paragraph (a) of this section, we may require payments of principal prior to maturity (redemptions) regarding all related Obligations, as we may deem necessary to maintain adequate security for the Guarantees. (c) Interest rate. We will make a determination as to the reasonableness of the interest rate of each Obligation, taking into account the range of interest rates prevailing in the private market for similar loans and the risks that we assume. | ||||
| 46:46:8.0.1.4.20.3.3.2 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | C | Subpart C—Guarantees | § 298.21 Limits. | FMC | [65 FR 45152, July 20, 2000, as amended at 67 FR 61282, Sept. 30, 2002; 88 FR 86612, Dec. 14, 2023] | (a) Actual Cost basis. We will issue a guarantee on an amount of the Obligation satisfactory to us based on the economic soundness of the transaction. The Obligation amount may be less than but not more than 75 percent or 87 1/2 percent, whichever is applicable, under the provisions of section 1104A(b)(2) or section 1104B(b)(2) of the Act of the Actual Cost of the Vessel or Vessels or Shipyard Project asset(s). (1) If minimum horsepower of the main engine is a requirement for Guarantees up to 87 1/2 percent of the Actual Cost, the standard for the horsepower will be continuous rated horsepower. (2) Where we refinance existing debt, the amount of new Obligations we issue for the existing debt may not exceed the lesser of: (i) The amount of outstanding debt being refinanced (whether or not receiving assistance under Title XI); or (ii) Seventy-five or 87 1/2 percent, whichever is applicable, of the Depreciated Actual Cost of the Vessel or Shipyard Project with respect to which the new Obligations are being issued. (b) Actual Cost items. Actual Cost is comprised essentially of those items which would customarily be capitalized as Vessel or Shipyard Project construction costs such as designing, engineering, constructing (including performance bond premiums that we approve), inspecting, outfitting and equipping. (1) Cost items include those items usually specified in Vessel or Shipyard Project construction contracts, e.g., changes and extras, cost of owner furnished equipment, shoreside spare parts and commitment fees and interest on the Obligations or other borrowings incurred during the construction period (excluding interest paid on subordinated debt considered to be equity), and less income realized from investment of Escrow Fund deposits during the construction period. (2) Commissions (which represent a portion of the total shipyard contract price) may be included in the foreign equipment and services amount of the Actual Cost of an export project, provided: (i) A majority of the work done by t… | |||
| 46:46:8.0.1.4.20.3.3.3 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | C | Subpart C—Guarantees | § 298.22 Amortization of Obligations. | FMC | [65 FR 45152, July 20, 2000, as amended at 67 FR 61282, Sept. 30, 2002; 88 FR 86612, Dec. 14, 2023] | (a) Generally, after delivery or completion of Shipyard Project, and until maturity of the Obligations, provisions of the Trust Indenture or other part of the Documentation require you to make periodic payment of principal and interest on the 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. | |||
| 46:46:8.0.1.4.20.3.3.4 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | C | Subpart C—Guarantees | § 298.23 Refinancing. | FMC | (a) We may approve guarantees of Obligations to be secured by one or more Vessels or a Shipyard Project issued to refinance existing Title XI debt for either Vessels or for Shipyard Project and existing non-Title XI debt, so long as the existing debt has been previously issued for one of the purposes set forth in sections 1104(a)(1) through (4) of the Act. Section 1104 (a) (1) of the Act requires that, if the existing indebtedness was incurred more than one year after the delivery or redelivery of the related Vessel or Shipyard Project, the proceeds of such Obligations will be applied to the construction, reconstruction or reconditioning of other Vessels or Shipyard Project or as provided in § 298.24. (b) We shall require any security lien on the Vessel(s) or Shipyard Project to be discharged immediately before we place a Mortgage or other security interest on any of the above assets. You must satisfy all necessary eligibility requirements as set forth in subpart B of this part, including economic soundness. | ||||
| 46:46:8.0.1.4.20.3.3.5 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | C | Subpart C—Guarantees | § 298.24 Financing a Vessel more than a year after delivery. | FMC | (a) We may approve Guarantees for a Vessel which has been delivered (or redelivered in the case of reconstruction or reconditioning of a Vessel) more than one year prior to the issuance of the Guarantees only if: (1) The issuance of the Guarantees would otherwise satisfy the requirements of the Act and the regulations in this part, and (2) The proceeds of the Obligation financing such existing Vessel are used to finance: (i) The construction, reconstruction, or reconditioning of a different Vessel within one year of that Vessel's delivery or redelivery, as the case may be, or (ii) Facilities or equipment pertaining to marine operations. Such facilities or equipment must be of a specialized nature, used principally for servicing vessels and in handling waterborne cargo in the close proximity of the berthing area, excluding over-the-road equipment (other than chassis and containers), permanent or semipermanent structures and real estate, as well as new or less than one year old. (b) At the Closing of Guarantees covered by this section, you must deposit the proceeds of the Obligation into an Escrow Fund established to pay for the cost unless you demonstrate to our satisfaction that all such costs have been paid. | ||||
| 46:46:8.0.1.4.20.3.3.6 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | C | Subpart C—Guarantees | § 298.25 Excess interest or other consideration. | FMC | We shall not execute Guarantees if any agreement in the Documentation directly or indirectly provides for: (a) The payment to an Obligee of interest, or other compensation for services which have not been performed, in a manner that such compensation or payment is being provided as interest in excess of the rate approved by us; or (b) Grants of security to an Obligee in addition to the Guarantees. | ||||
| 46:46:8.0.1.4.20.3.3.7 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | C | Subpart C—Guarantees | § 298.26 Lease payments. | FMC | You must obtain our approval of the amount and conditions of lease or charter hire payments if the payment of principal and interest on Obligations would be dependent, in any way, upon the lease or charter hire payments for a Vessel or Shipyard Project. | ||||
| 46:46:8.0.1.4.20.3.3.8 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | C | Subpart C—Guarantees | § 298.27 Advances. | FMC | (a) In general. (1) In accordance with section 207 and Title XI of the Act, we have the discretion to make or commit to make an advance or payment of funds to, or on behalf of the owner, or operator or directly to any other person or entity for items, including, but not limited to: (i) Principal, (ii) Interest, (iii) Insurance, and (iv) Other vessel-related expenses or fees. (2) We will make advances or payments only to protect, preserve or improve the collateral held as our security for Title XI debt. (3) When requesting an advance, you must demonstrate that: (i) Your problems are short term (less than two years) by using market and cash flow analysis and other projections. (ii) An advance(s), would assist you over temporary difficulties; and (iii) There is adequate collateral for the advance. (b) Filing requirements. (1) You shall apply for an advance or other payment as early as is reasonably possible. (2) Principal and interest payments. We must receive a request for an advance for principal and interest payments at least 30 days before the initial payment date. (3) Insurance payments. We must receive a request for an advance of insurance payments at least 30 days before a renewal or termination date. (4) Extenuating circumstances. We may consider requests for assistance with less notice, upon written documentation of extenuating circumstances. (5) Supporting data. Any requests for assistance must be accompanied by supporting data regarding: (i) Need for the advance, (ii) Financial assistance you sought from other sources, (iii) The measures that you are taking and have taken to alleviate the situation, (iv) Financial projections, (v) Proposed term of the repayment, (vi) Current and projected market conditions, (vii) Information on other available collateral, (viii) Liens and other creditor information, and (ix) Any other information which we may request. | ||||
| 46:46:8.0.1.4.20.4.3.1 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | D | Subpart D—Documentation | § 298.30 Nature and content of Obligations. | FMC | (a) Single page. An Obligation, in the form of a note, bond of any type, or other debt instrument, when engraved, printed or lithographed on a single sheet of paper must include on its face the: (1) Name of the Obligor, (2) Principal sum, (3) Rate of interest, (4) Date of maturity, and (5) Guarantee of the United States, authenticated by the Indenture Trustee, if any. (b) Several pages. If the Obligation is typewritten, printed or reproduced by other means on several pages of paper, the Guarantee of the United States and the authentication certificate of the Indenture Trustee, if any, may appear at the end of the typewritten Obligation. (c) Rights and responsibilities. The instrument which is evidence of indebtedness shall also contain all information necessary to apprise the Obligees of their rights and responsibilities including, but not limited to: (1) Time and manner for payment of principal and interest, (2) Redemptions, (3) Default procedure, and (4) Notification (in case of registered Obligations) of sale or other transfer of the instruments. | ||||
| 46:46:8.0.1.4.20.4.3.10 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | D | Subpart D—Documentation | § 298.39 Exemptions. | FMC | We may exempt an applicant from any requirement of this part, unless required by statute or other regulations, in exceptional cases, on written findings that: (a) The case materially involves factors not considered in the promulgation of this part; (b)(1) A national emergency makes it necessary to approve the exemption, or (2) The exemption will substantially relieve the financial liability of the United States; (c) The exemption will not substantially impact effective regulation of the Title XI program, consistent with the objectives of this part; (d) The exemption will not be unjustly discriminatory; and (e) For Eligible Export Vessels, such exemption would assist in creating financing terms that would be compatible with export credit terms for the sale of vessels built in shipyards other than those in the United States. | ||||
| 46:46:8.0.1.4.20.4.3.2 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | D | Subpart D—Documentation | § 298.31 Mortgage. | FMC | (a) In general. Under normal circumstances, a Guarantee shall not be endorsed on any Obligation until we receive satisfactory evidence that we hold a Mortgage in one or more Vessels or a Mortgage or other security interest in the Shipyard Project. During construction of a new Vessel or any Shipyard Project, a security interest may be perfected by a filing under the Uniform Commercial Code. (b) Ensuring validity of security interest. In order to ensure that our Mortgages or other security interests are valid and enforceable, we shall require that the Obligor obtain legal opinions, in form and substance satisfactory to us, from independent, outside legal counsel satisfactory to us, including foreign independent outside legal Counsel for Eligible Export Vessels, which opinions shall state, among other things, that the Mortgage or other security interest(s) are valid and enforceable: (1) In the country in which the Vessel is documented (or, in the case of a security interest, in jurisdictions acceptable to us); (2) In the United States; and (3) For vessels operating on specified trade routes, in the country or countries involved in this service, unless we determine that those destinations are too numerous, in which case, we will instead require an opinion of foreign validity and enforceability in the Vessel's primary port of operation. (c) Alternative forms of security. In the case where a Mortgage or security interest on the financed assets may not be available or enforceable, we will require alternative forms of security. (d) Mortgage in our favor. The Security Agreement shall provide that upon delivery of a new Vessel or upon final completion of the Shipyard Project, or at the time Guarantees are issued with respect to an existing Vessel or the Shipyard Project, a Mortgage on the Vessel and a Mortgage or other security interest on the Shipyard Project will be executed in our favor, unless we determine that a Mortgage or a security interest is not available or enforceable in accordance with paragraph … | ||||
| 46:46:8.0.1.4.20.4.3.3 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | D | Subpart D—Documentation | § 298.32 Required provisions in documentation. | FMC | (a) Performance under shipyard and related contracts. Generally, shipyard and related contracts must contain provisions for: (1) Furnishing by the shipyard or contractor of the Shipyard Project of satisfactory insurance and a satisfactory performance bond where Obligations are issued during the construction period, except that if the shipyard or contractor of the Shipyard Project demonstrates to our satisfaction that it has sufficient financial resources and operational capacity to complete the project, posting of a bond will not be required; (2) Allowing access to the Vessel or Shipyard Project, as well as all related work projects being performed by the contractor and subcontractors, to our representative, at all reasonable times, to inspect performance of the work and to observe trials and other tests for the purpose of determining that the Vessel or Shipyard Project is being constructed, reconstructed, or reconditioned in accordance with contract plans and specifications approved by us; (3) Submitting to us, upon request, one set of shipyard plans, in form and substance satisfactory to us, for the Vessel or Shipyard Project as built; (4) Making periodic payments for the work in accordance with an agreed schedule, submitted by the shipyard or contractor, as appropriate, in a form acceptable to us, based on percentage of completion, after such percentage and satisfactory performance are certified by the Obligor, shipyard or contractor, as appropriate, and our representative as to each payment; (5) Prohibiting the use of proceeds from the sale of Obligations for the payment of work performed outside the shipyard, unless we consent in writing to such use; and (6) Requiring that all components of the hull and superstructure of a U.S.-documented Vessel and an Eligible Export Vessel shall be assembled in the United States. (7) If Obligation will not be issued during the construction period of the Vessel and Shipyard Project, requiring that shipyard-related contracts shall generally include the provisions spec… | ||||
| 46:46:8.0.1.4.20.4.3.4 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | D | Subpart D—Documentation | § 298.33 Escrow fund. | FMC | [65 FR 45152, July 20, 2000, as amended at 67 FR 61282, Sept. 30, 2002] | (a) Escrow Fund Deposits. At the time of the sale of the Obligations, the Obligor shall deposit with the Depository in an escrow fund (the “Escrow Fund”) all of the proceeds of that sale unless the Obligor is entitled to withdraw funds under paragraph (b) of this section. The Obligor must also deposit into the Escrow Fund on the Closing date an amount equal to six months interest at the rate borne by the Obligations, unless we find the existence of adequate consideration or accept other consideration in lieu of the interest deposit. (b) Escrow Fund Withdrawals. You, as Obligor, may make a written request for us to disburse funds from the Escrow Fund. Within a reasonable time thereafter, we shall disburse directly to the Indenture Trustee, any Paying Agent for such Obligations, or any other Person entitled to payment any amount which you are obligated to pay or have paid, on account of the items and amounts or any other item approved by us, provided that we are satisfied with the accuracy and completeness of the information contained in the following submissions: (1) A responsible officer of the Obligor shall deliver an officer's certificate, in form and substance satisfactory to us, stating that: (i) There is no default under the construction contract or the Security Agreement; (ii) There have been no occurrences which have or would adversely and materially affect the condition of the Vessel, its hull or any of its component parts, or the Shipyard Project; (iii) The amounts of the request are in accordance with the construction contract including the approved disbursement schedule and each item in these amounts is properly included in our approved estimate of Actual Cost; (iv) With respect to the request, once the contractor is paid there will be no liens or encumbrances on the applicable Vessel, its hull or component parts, or the Shipyard Project for which the withdrawal is being requested except for those already approved by us; and (v) If the Vessel or Shipyard Project has already been delivered or… | |||
| 46:46:8.0.1.4.20.4.3.5 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | D | Subpart D—Documentation | § 298.34 [Reserved] | FMC | |||||
| 46:46:8.0.1.4.20.4.3.6 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | D | Subpart D—Documentation | § 298.35 Title XI Reserve Fund and Financial Agreement. | FMC | [65 FR 45152, July 20, 2000, as amended at 67 FR 61282, Sept. 30, 2002; 88 FR 86612, Dec. 14, 2023] | (a) Purpose. In order to provide us with further security and to ensure payment of the interest and principal due on the Obligations, we will require the Company to enter into a Title XI Reserve Fund and Financial Agreement (Agreement) at the first Closing at which the Company issues Obligations. We may waive or modify provisions of the Agreement based on our evaluation of the aggregate security for the Guarantees. (b) Financial covenants. There will be two sets of covenants. One set of covenants will be imposed regardless of the Company's financial condition (primary covenants). The other set of covenants will be imposed only if the Company does not meet specific financial conditions (supplemental covenants). The primary and supplemental covenants are to be set forth in the Agreement. Covenants shall be imposed on the Company as follows: (1) Primary covenants. So long as Guarantees are in effect the Company shall not, without our prior written consent: (i) Make any distribution of earnings, except as may be permitted as follows: (A) From retained earnings in an amount specified in paragraph (b)(1)(i)(C) of this section, provided that, in the fiscal year in which the distribution of earnings is made there is no operating loss to the date of such payment of such distribution of earnings, and there was no operating loss in the immediately preceding three fiscal years, or there was a one-year operating loss during the immediately preceding three fiscal years, but such loss was not in the immediately preceding fiscal year, and there was positive net income for the three year period; (B) If distributions of earnings may not be made under paragraph (b)(1)(i)(A) of this section, a distribution can be made in an amount equal to the total operating net income for the immediately preceding three fiscal year period, provided that: ( 1 ) There were no two successive years of operating losses; ( 2 ) There is no operating loss to the date of such distribution in the fiscal year in which such distribution is made; … | |||
| 46:46:8.0.1.4.20.4.3.7 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | D | Subpart D—Documentation | § 298.36 Guarantee Fee. | FMC | (a) Rates in general. (1) For annual periods, beginning with the date of the Security Agreement and prior to the delivery date of a Vessel or Shipyard Project, we shall charge a Guarantee Fee set at a rate of not less than 1/4 of 1 percent and not more than 1/2 of 1 percent of the excess of the average principal amount of the Obligations estimated to be outstanding during the annual periods covered by said Guarantee Fee over the average principal amount, if any, on deposit in the Escrow Fund during said annual period (Average Principal Amount of Obligations Outstanding). (2) For annual periods beginning with the delivery date of a Vessel or Shipyard Project, the Guarantee Fee shall be set at an annual rate of not less than 1/2 of 1 percent and not more than 1 percent of the Average Principal Amount of Obligations Outstanding during the annual periods covered by the Guarantee Fee. You will be responsible for payment of the Guarantee Fee. (b) Rate calculation. (1) The Guarantee Fee rate generally shall vary inversely with the ratio of Equity to Long-Term Debt (Variable Rate) of the Person who we consider to be the primary source of credit in the transaction (Credit Source), for example, (i) The long term time charterer (where the charter hire represents the source of payment of interest and principal with respect to the Obligations), (ii) The guarantor of the Obligations, (iii) The Obligor, or (iv) The bareboat charterer. (2) Where the Variable Rate is used, we may make such adjustments to the computation of Equity and Long-Term Debt considered necessary to reflect more accurately the financial condition of the Credit Source. (3) We shall base our determination of Equity and Long-Term Debt on information contained in forms or statements on file with us prior to the date on which the Guarantee Fee is to be paid. (4) With our consent, you may include in Equity and exclude from Long-Term Debt, any subordinated indebtedness representing loans from any credit source. (5) We may establish a fixed r… | ||||
| 46:46:8.0.1.4.20.4.3.8 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | D | Subpart D—Documentation | § 298.37 Examination and audit. | FMC | (a)(1) We shall have the right to examine and audit the books, records (including original logs, cargo manifests and similar records) and books of account, which pertain directly to the project, of the Obligor, bareboat charterer, time charterer or any other Person who has an agreement with respect to control of, or a financial interest in, a Vessel or Shipyard Project, as well as records of a Related Party and domestic agents connected with such Persons, and shall have full, free and complete access to these items at all reasonable times. (2) We shall have the right to full, free and complete access, at all reasonable times, to each Vessel or Shipyard Project for which Guarantees are in force. (3) When a Vessel is in port or undergoing repairs, we may make photostatic or other copies of any books, records and other relevant documents or papers being examined or audited. (b) The Person in control of the premises where we conduct the examination or audit must furnish, without charge, adequate office space and other facilities that we reasonably require in performing the examination, audit or inspection. | ||||
| 46:46:8.0.1.4.20.4.3.9 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | D | Subpart D—Documentation | § 298.38 Partnership agreements and limited liability company agreements. | FMC | Partnership and limited liability company agreements must be in form and substance satisfactory to us prior to any Guarantee Closing, especially relating, but not limited to: (a) Duration of the entity; (b) Adequate partnership or limited liability company funding requirements and mechanisms; (c) Dissolution of the entity and withdrawal of a general partner or member; (d) The termination, amendment, or other modification of the entity without our prior written consent; and (e) Distribution of funds or ownership interest. | ||||
| 46:46:8.0.1.4.20.5.3.1 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | E | Subpart E—Defaults and Remedies, Reporting Requirements, Applicability of Regulations | § 298.40 Defaults. | FMC | (a) In General. Provisions concerning the existence and declaration of a default and demand for payment of the Obligations (described in paragraphs (b) and (c) of this section) shall be included in the Security Agreement and in other parts of the Documentation. (b) Principal and interest Payment Default. Unless we have assumed the Obligor's rights and duties under the Obligation and agreements and have made any payments in default under terms in the Obligation or related agreements, the following procedures regarding principal and interest payment default shall apply: (1) No demand shall be made for payment under the Guarantees unless the default shall have continued for 30 days (Payment Default). (2) After the expiration of said 30-day period, demand for payment of all amounts due under the Guarantees must be made no later than 60 days afterward. (3) After demand for payment is made by or on behalf of the Obligees, we shall make payment under the Guarantees, except if we determine that a Payment Default has not occurred or that such Payment Default has been remedied prior to demand being made. (c) Security Default. If a default occurs under the Security Agreement which is other than a Payment Default (Security Default), section 1105(b) of the Act allows us, in our sole discretion, to declare such default a Security Default, and we may notify the Obligee or agent of the Obligee of such Security Default, stating that demand for payment under the Guarantees must be made no later than 60 days after the date of such notification. (d) Payment of Guarantees. If we receive notice of demand for payment of the Guarantees, we shall, no later than 30 days after the date of such demand (provided that we shall not have, upon such terms as may be provided in the Obligations or related agreements, prior to that demand, assumed the Obligor's rights and duties under the Obligation and agreements and shall have made any payments in default), make payment to the Obligees, Indenture Trustee or any other agent of the un… | ||||
| 46:46:8.0.1.4.20.5.3.2 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | E | Subpart E—Defaults and Remedies, Reporting Requirements, Applicability of Regulations | § 298.41 Remedies after default. | FMC | (a) In general. The Security Agreement or other parts of the Documentation shall include provisions governing remedies after a default, which relate to our rights and duties, the rights and duties of the Obligor, and other appropriate Persons. (b) Action by the Secretary. (1) We may take the Vessel or Shipyard Project and hold, lease, charter, operate or use the Vessel or Shipyard Project, accounting only for the net profits to the Obligor after a default has occurred and is continuing and before making payment required under the Guarantees. (2) After making payment required under the Guarantees, we may initiate or otherwise participate in legal proceedings of every type, or take any other action considered appropriate, to protect rights and interests granted to us under: (i) Sections 1105(c), 1105(e) and 1108(b) of the Act, (ii) The Security Agreement, (iii) Other applicable provisions of law, and (iv) The Documentation. (c) Security proceeds to Secretary. Our interest in proceeds realized from the disposition of or collection regarding the security granted to us in consideration for the Guarantees (except all proceeds from the sale, requisition, charter or other disposition of property purchased by us at a foreclosure or other public sale, which proceeds shall belong to and vest exclusively in us), shall be an amount equal to, but not in excess of, the sum of (in order of priority of application of the proceeds): (1) All moneys due and unpaid and secured by the Mortgage or Security Agreement; (2) All advances, including interest thereon, by us, under the Security Agreement and all our reasonable charges and expenses; (3) The accrued and unpaid interest on the Secretary's Note; (4) The accrued and unpaid balance of the principal of the Secretary's Note; and (5) To the extent of any collaterization by the Obligor of other debt due to us from the Obligor under other Title XI financings, such other Title XI debt. (d) Security proceeds to Obligor. You shall be entitled to the proceeds from the s… | ||||
| 46:46:8.0.1.4.20.5.3.3 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | E | Subpart E—Defaults and Remedies, Reporting Requirements, Applicability of Regulations | § 298.42 Reporting requirements—financial statements. | FMC | (a) In general. The financial statements of the Company shall be audited at least annually, in accordance with generally accepted auditing standards, by independent certified public accountants licensed to practice by the regulatory authority of a State or other political subdivision of the United States or, licensed public accountants licensed to practice by the regulatory authority or other political subdivision of the United States on or before December 31, 1970. (b) Eligible Export Vessels. In the case of Eligible Export Vessels, the accounts of the Company shall be audited at least annually, and unless otherwise agreed to by us, we shall require that the financial statements be in accordance with generally accepted accounting principles, by accountants as described in paragraph (a) of this section or by independent public accountants licensed to practice by the regulatory authority or other political subdivision of a foreign country, provided such accountants are satisfactory to us. The accountants performing such audits may be the regular auditors of the Company. (c) Reports of Company and other Persons. Except as we require otherwise, the Company must file a semiannual financial report and an annual financial report, prepared in accordance with generally accepted accounting principles, with us as specified in the Documentation. You must include: (1) The balance sheet and a statement of paid-in-capital and retained earnings at the close of the required reporting period, (2) A statement of income for the period, and (3) Any other statement that we consider necessary to accurately reflect the Company's financial condition and the results of its operations. (d) Required form. We will specify in a letter to the Company the form required for reporting and the number of copies that you must submit (e) Other Persons. We may after providing the Company notice, also require the Company to submit financial statements of any other Person, directly or indirectly participating in the project, if the fin… | ||||
| 46:46:8.0.1.4.20.5.3.4 | 46 | Shipping | II | D | 298 | PART 298—OBLIGATION GUARANTEES | E | Subpart E—Defaults and Remedies, Reporting Requirements, Applicability of Regulations | § 298.43 Applicability of the regulations. | FMC | (a) The regulations in this part are effective August 21, 2000, and apply to all applications made, Letter Commitments, Commitments to Guarantee Obligations or Guarantees issued or entered into on or after August 21, 2000, under section 1104(a) of the Merchant Marine Act, 1936, as amended. (b) The regulations in this part do not apply to any applications made, Letter Commitments, Commitments to Guarantee Obligations, or Guarantees issued under those regulations in effect before August 21, 2000. See 46 CFR, parts 200 to 499, edition revised as of October 1, 1996 and 46 CFR, parts 200 to 499, edition revised as of October 1, 1999 for regulations that apply to applications made, Letter Commitments, Commitments to Guarantee Obligations, or Guarantees issued before August 21, 2000. |
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section_id TEXT PRIMARY KEY,
title_number INTEGER,
title_name TEXT,
chapter TEXT,
subchapter TEXT,
part_number TEXT,
part_name TEXT,
subpart TEXT,
subpart_name TEXT,
section_number TEXT,
section_heading TEXT,
agency TEXT,
authority TEXT,
source_citation TEXT,
amendment_citations TEXT,
full_text TEXT
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CREATE INDEX idx_cfr_title ON cfr_sections(title_number);
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CREATE INDEX idx_cfr_agency ON cfr_sections(agency);