(a) Third Priority. To the extent that appropriated funds are available after applying the first priority, tank vessels, in Sec. 296.20, and the second priority, Participating Fleet Vessels, in Sec. 296.21, the third priority is for any other vessel that is eligible to be included in an MSP Operating Agreement under Sec. 296.11(a), and that, during the period of that MSP Operating Agreement, will be:
(1) Owned and operated by one or more persons that are Section 2 Citizens; or
(2) Owned by a person that is eligible to document the vessel under 46 U.S.C. chapter 121 and operated by a person that is a Section 2 Citizen.
(b) Fourth Priority. To the extent that appropriations are available after applying the first priority in Sec. 296.20, the second priority in Sec. 296.21, and the third priority in paragraph (a) of this section, the fourth priority is for any other vessel that is eligible to be included in an MSP Operating Agreement under Sec. 296.11(a).