Fishery conservation and management: share loan program,

SUMMARY: NMFS announces the availability of long-term loans for financing or refinancing the purchase cost of quota share (QS) in the halibut and sablefish fisheries off Alaska. Only entry-level fishermen or fishermen who fish from small vessels are eligible for these loans.

DATES: NMFS will accept for processing only applications submitted, by first-class U.S. mail, during an application open season that begins May 25, 1999, through June 8, 1999, (precludes applications submitted either before May 25, 1999, or after June 8, 1999. All loan funds available for FY 1999 must be obligated before September 30, 1999. Comments must be received by June 8, 1999.

ADDRESSES: Applicants should send loan applications to the Northwest Financial Services Branch, National Marine Fisheries Service, National Oceanic and Atmospheric Administration, U.S. Department of Commerce, 7600 Sand Point Way, NE (BIN C15700), Building No. 1, Seattle, WA 98115. Comments should be sent to Michael L. Grable, Chief, Financial Services Division, NMFS, 1315 East-West Highway, Silver Spring, MD 20910.

In addition, the application will be available to down load from the NMFS Home Page in the near future. It can be accessed through Adobe Acrobat Reader and will be located at:

www.nmfs.gov/sfa.

FOR FURTHER INFORMATION CONTACT: Kimberly Ott at

(206) 526-6122 (voice) or (206) 526-6306 (facsimile) or kimberly. ott@noaa.gov (e-mail).

SUPPLEMENTARY INFORMATION:

I. Introduction

A. Background

The Sustainable Fisheries Act (SFA) (Pub.L. 104-297) amended section 1104A(a)(7) of Title XI of the Merchant Marine Act (46 U.S.C. App. 1274) and section 303(d)(4) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) (16 U.S.C. 1801 et seq.) to authorize financing and refinancing the cost of loans available to entry-level fishermen and to fishermen who fish from small boats purchasing individual fishing quota (IFQ).

Although the SFA indicates that loans are available for purchasing IFQ, the basic fishing permit for the halibut and sablefish fisheries is termed ``QS'' rather than ``IFQ.'' In these fisheries, IFQ is an annual allocation of the pounds of fish that each QS holder may harvest. Consequently, NMFS interprets the SFA to allow loans for the cost of purchasing basic fishing permits rather than annual harvest allocations under those permits. These loans will finance the purchase of halibut and sablefish QS rather than IFQ.

Title XI of the Merchant Marine Act of 1936 (Act) is the credit authority under which NMFS will make these loans. This authority is subject to the Federal Credit Reform Act of 1990 (FCRA) (2 U.S.C. 661). This Act requires estimated net loan losses (FCRA cost) to be appropriated in cash at the time Congress authorizes annual loan ceilings.

Fiscal year (FY) 1999 appropriation for the U.S. Department of Commerce included a $100,000 advance to fund the FCRA cost of this loan program during its second year (October 1, 1998, through September 30, 1999).

The amount of annual FCRA credit authority available is a ratio of the FCRA cost rate and the FCRA cost appropriated. NMFS preliminarily estimates the FCRA cost rate of these loans to be 2 percent. Consequently, the loan cost of $100,000 appropriated for this FY 1999 FCRA will preliminarily support a $5,000,000 credit authority ($5,000,000 times 0.02 equals $100,000).

This credit authority may be enough to fund only about 40 to 50 loans. FY 1999 loan demand will, consequently, most likely exceed loan supply. For the credit authority available during FY 1999, NMFS will not accept FY 1999 applications submitted either before May 25, 1999, or after June 8, 1999.

FY 1998 applicants whose applications were not processed during FY 1998 do not have to reapply during FY 1999. NMFS will automatically treat these applications as if they had been resubmitted during the FY 1999 application open season (but they will be subject to the random selection of all applications). NMFS will, one week before the FY 1999 open season begins, send a confirmation of this to each FY 1998 applicant involved.

NMFS will, at least one week before the FY 1999 open season begins, send a new application form to everyone who (according to the NMFS database) has, since the FY 1998 open season ended, indicated an interest in applying for a loan.

All applications that are not selected for processing during FY 1999 will be held for processing during any subsequent year in which credit authority is available. Applications submitted during the FY 1999 open season (including the FY 1998 applications considered as constructively submitted during the FY 1999 open season) will then have the same priority that NMFS assigned to them during FY 1999. The status of all applications may be effected by policy changes published in subsequent notices.

All applications must be submitted by first-class U.S. mail. No other form of application submission is acceptable (including personal delivery, facsimile delivery, every form of express delivery, every other form of delivery other than U.S. mail, and every form of U.S. mail delivery other than first-class U.S. mail).

To reduce the open-season paperwork burden, applicants need complete only a small portion (Section A) of the application form at the time of initial application. Once an application's priority allows it to be processed, NMFS will request the applicant to complete the rest of the application.

These loans will, until further notice, continue to be available in any year for which adequate FCRA credit authority exists.

SFA amendments to sections 303(d)(4) and 304(d)(2) of the Magnuson- Stevens Act authorize the FCRA cost of IFQ lending to be funded up to 25 percent of the IFQ and Community Development Quota fee revenue from the IFQ fishery involved. Presumably, a portion of halibut and sablefish fees from this revenue source will, in the future, fund the annual FCRA cost of these loans for purchasing halibut and sablefish QS.

NMFS requests public comments during the open season concerning NMFS' plan for using future credit authority. In FY 1998 and FY 1999, the processing priority of applications was, or will be, determined by random selection from a pool of applicants who applied during the open seasons. NMFS plans to retain the pool of applicants who were not selected for processing in FY 1998 and FY 1999 in the randomly selected processing priority determined at the end of the FY 1999 open season and will draw exclusively from those applicants until the waiting list of applicants is exhausted. NMFS will accept, for credit authority available during years after FY 1999, applications submitted at any time after June 8, 1999. Applications submitted after June 8, 1999, will be retained in date order for processing following those applications received during the FY 1998 and FY 1999 open seasons. NMFS does not,

[Page 25291]after the FY 1999 open season ends, intend to have further open seasons for this type of loan application in this fishery.

B. Catalog of Federal Domestic Assistance

The Halibut and Sablefish Quota-Share Loan Program is part of the program listed in the ``Catalog of Federal Domestic Assistance'' under number 11.415: Fisheries Finance Program.

II. Definitions

Applicant means either an entry-level fisherman who applies for a loan or a fisherman who fishes from a small vessel who applies for a loan.

Application means a submission for a loan from an applicant.

Application form means NOAA Form 88-1 (bearing Office of Management and Budget (OMB) approval No. 0648-0012 and expiring on January 31, 2002).

Base year means the year in which an applicant applies for a loan and the loan is accepted for processing.

Entry-level fisherman means a fisherman who:

(1) Does not own any QS;

(2) Applies for a loan to purchase QS that involves an IFQ total not greater than 8,000 lb (3,628.7 kg) during the base year; and

(3) Will be a crew member aboard the vessel that harvests the IFQ for the loan QS.

Fisherman who fishes from a small vessel means a fisherman:

(1) Who applies for a loan to purchase halibut or sablefish QS previously assigned under Sec. 676.20(c)(2), sablefish QS previously assigned under Sec. 676.20(c)(3), halibut QS previously assigned under Sec. 676.20(c)(4), and/or halibut QS previously assigned under Sec. 676.20(c)(5);

(2) Whose aggregate ownership of QS (including the loan QS) will involve an IFQ not greater than 50,000 lb (22,679.6 kg) during the base year;

(3) Who will be a crew member aboard the vessel that harvests the IFQ for the aggregate QS such fisherman owns (including the loan QS) at the time the loan QS transfers to such fisherman;

(4) Who has, for at least a total of 150 days at any point in the past, been a crewman aboard any vessel in any U.S. commercial fishery; and

(5) Who does not own, in whole or in part, any vessel of the type involved in the previous assignment of halibut or sablefish QS under Sec. 676.20(c)(1) or (c)(2).

Halibut/sablefish means halibut, sablefish, or halibut and sablefish from the QS fishery off Alaska for halibut and/or the QS fishery off Alaska for sablefish.

IFQ means the annual catch limit of halibut/sablefish that may be harvested by a person who is lawfully allocated a harvest privilege for a specific portion of the total allowable catch of halibut/sablefish.

Loan means a program loan for financing or refinancing the cost of purchasing halibut/sablefish QS.

Loan QS means the QS purchased with the proceeds of a loan.

NMFS means the National Marine Fisheries Service, National Oceanic and Atmospheric Administration, U.S. Department of Commerce.

Notice date means the date this document is published in the Federal Register.

NWFSB means the Northwest Financial Services Branch (F/SF23), Northwest Regional Office of the National Marine Fisheries Service, see ADDRESSES.

Open season means the period beginning and ending on the dates specified under the DATES heading at the beginning of this document.

Program means the halibut/sablefish loan program described in this document.

QS means a halibut/sablefish permit, the face amount of which is used as a basis for the annual calculation of a person's IFQ.

RAM Program means the Restricted Access Management activities in the Alaska Regional Office of the National Marine Fisheries Service.

Section 676.20(c) means Sec. 676.20(c) of Title 50, Code of Federal Regulations (revised as of October 1, 1995).

Title XI means Title XI of the Merchant Marine Act, 1936 (the statutory credit authority under which lending the purchase cost of IFQ is but one of the eligible fisheries loan purposes).

III. Eligible Applicants

Any entry-level fisherman or fisherman who fishes from a small vessel and is a U.S. citizen is eligible to apply for a loan.

IV. Loan Purpose

(1) General. The loan purpose is financing or refinancing the cost of purchasing QS.

(2) Fishermen who fish from small vessels. The loan QS must be halibut or sablefish QS previously assigned under

Sec. 676.20(c)(2), sablefish QS previously assigned under

Sec. 676.20(c)(3), halibut QS previously assigned under

Sec. 676.20(c)(4), and/or halibut QS previously assigned under

Sec. 676.20(c)(5). Applicants must be eligible to receive (hold) the loan QS. The amount of QS any applicant will own at the time the loan QS transfers to the applicant may not have involved an aggregate IFQ greater than 50,000 lb (22,679.6 kg) during the base year. The IFQ for such QS during any year other than the base year is irrelevant.

If, for example, an applicant who owns QS that involved a 20,000-lb (9,071.8-kg) IFQ during the base year wants a loan to finance the purchase of additional QS, the loan QS may not have involved more than an additional 30,000-lb (13,607.8-kg) IFQ during the base year.

Applicants may not own, in whole or in part, any vessel of the type involved in the previous assignment of halibut or sablefish QS under Sec. 676.20(c)(1) or (c)(2).

Although CFR part 676 is not the CFR part that presently regulates halibut/sablefish, Sec. 676.20(c) is the section that the SFA requires NMFS to use for the matters involved in this document. NWFSB can provide applicants copies of Sec. 676.20(c) and explain how this section controls the loan QS.

Each applicant must be a crewman aboard the vessel that will harvest the total IFQ for all QS that the applicant owns at the time the loan QS transfers to applicant.

(3) Entry-level fishermen. The loan QS may be of any type for which the RAM Program will issue a QS certificate in the purchaser's name. The loan QS may not have involved an IFQ greater than 8,000 lb (3,628.7 kg) during the base year. The IFQ for such QS during any year other than the base year is irrelevant.

(4) Applicants' indirect QS or vessel ownership interests. NMFS will count against the poundage ceilings in paragraphs IV(2) and (3) of this document of whatever portion of QS interests and of the base-year IFQ applicants indirectly own by virtue of owning corporations, partnerships, or other forms of business organizations that directly own QS. For example, if an applicant owns one-third of the stock in a corporation that owns QS with a base-year IFQ of 30,000-lb (13,607.8- kg), NMFS will, for the purposes of the ceilings, regard the applicant as also owning QS with a base-year IFQ of 10,000 lb (4,535.9 kg).

NMFS will also, for the purpose of the vessel ownership restriction in paragraph IV(2) of this document, consider that applicants indirectly have an ownership interest in vessels which are owned by corporations, partnerships, or other forms of business organizations in which applicants own

[Page 25292]any corporate shares, partnership interests, or other interests. For example, if an applicant owns one share of stock in a corporation that owns a vessel of the type involved in the previous assignment of halibut or sablefish QS under Sec. 676.20(c)(1) or (c)(2), NMFS will consider the applicant to partly own such a vessel. Such an applicant will not be eligible for a loan.

(5) Refinancing. Applicant may refinance with the proceeds of loans any existing debts that previously financed the purchase cost of QS, provided that the QS purchases would themselves have been eligible for program financing if the program had been available at the time of QS purchase. In the instance of refinancing only, NMFS will consider loans in amounts up to 80 percent of QS' current market value (rather than original purchase cost), provided that loans will, in no event, be for an amount greater than the amount required to fully repay the QS debt being refinanced.

V. Loan Terms and Conditions

(1) Down payment. Applicants financing (rather than refinancing) QS purchase cost must fund 20 percent of the purchase cost from funds other than loan proceeds. If the current market value of QS whose purchase cost is being refinanced (rather than financed) is higher than its original purchase price, applicants may need less, or no, down payment. However, if the current value of QS whose purchase costs is being refinanced (rather than financed) is lower than its original purchase price, applicants may be required to provide additional down payment.

(2) Loan amount. The amount of a loan that finances (rather than refinances) QS purchase cost may not exceed 80 percent of QS purchase cost. Loan amounts may, however, exceed 80 percent if the current market value of QS whose purchase cost is being refinanced (rather than financed) is higher than its original purchase price.

(3) Interest rate. Each loan's annual interest rate will be 2 percent higher than the U.S. Treasury's cost of borrowing public funds of an equivalent maturity. For example, the annual loan interest rate would, on February 17, 1999, have been approximately 7.65 percent for a 20-year maturity. Interest is simple interest.

(4) Maturity. Loan maturity may not exceed 25 years, but may be shorter depending on credit and other considerations.

(5) Repayment. Repayment will be by equal quarterly installments of principal and interest.

(6) Security. The loan QS will, in every case, be the primary security for the loan. NMFS may require additional collateral to ensure the security position of the primary collateral. NMFS may require all parties with significant ownership interests in corporate or partnership applicants to personally guarantee loan repayment. Some credit risks may require additional security.

VI. Application

(1) Open Season. NMFS will accept for processing only those applications submitted during the open season. Applications previously filed, but not considered, in FY 1998 will automatically be considered to have been received during the open season (they need not be resubmitted to be included in the random selection process for the FY 1999 credit authority).

(2) Method of submission. NMFS will accept only those applications submitted by first-class U.S. mail. NMFS will not accept applications submitted by any other method (including, but not limited to any form of U.S. mail other than first class mail, any other delivery service, personal delivery, delivery by facsimile, etc.).

(3) Submission address. NMFS will accept only those applications addressed directly to NWFSB at the mailing address listed in the ADDRESSES section of this document.

(4) Date of submission. The date of each application's submission will be the date on which the U.S. Postal Service postmarks the envelope containing the application or other evidence of date sent.

(5) Processing Priority. Relative processing priority among applications submitted will be decided by random selection from among all applications submitted.

Processing priority does not mean that applications will be approved. It merely means that NWFSB will process applications in the order of their assigned processing priority.

(6) Application form. All applicants must use the application form. NMFS will not accept any other form of application. Open-season applicants need complete only Section A of the application. After the open season, NWFSB will contact each applicant whose processing priority makes the applicant's application eligible for processing as an FY 1999 loan and begin a standard due-diligence credit investigation. The application is available from NWFSB. NWFSB will send only Section A of the application to parties requesting the application for the purpose of submitting an open-season application. NWFSB can, upon request, do this by facsimile.

(7) Notification of processing priority. NWFSB will, within 7 working days after the last day of the open season, enumerate the processing priority of all open-season applications that NWFSB received. NWFSB will immediately thereafter notify each open-season applicant of the relative likelihood of its application being processed as an FY 1999 loan. NWFSB will then accomplish a due-diligence credit investigation for each application whose processing priority (and other factors) makes it eligible for processing as an FY 1999 loan.

(8) Application fee. The application fee is 0.5 percent of the loan amount for which a successful open-season applicant applies. Application fees will be due only for those open-season applications that NWFSB actually accepts for processing as FY 1999 loans. No application fee is due for any open-season application that NWFSB does not accept for processing as an FY 1999 loan. Although the application fee is due when the application is submitted, it is not payable until NMFS requests payment. NMFS will not request payment of the application fee until after it has accepted an application for processing as an FY 1999 loan. At that time an application review or interview will take place with the applicant and other necessary parties that affirms the applicant's compliance with basic loan eligibility and credit criteria. Half the application fee is fully earned at the time NMFS requests payment. NMFS will not return this half regardless of subsequent application disposition. The other half is fully earned only when NMFS issues an approval in a principle letter approving an application. Once it has issued an approval in a principle letter, NMFS will not return the second half of the application fee.

(9) Crew member transfer eligibility certificate. Crew member transfer eligibility certificates certify that parties are eligible to receive (hold) QS. The RAM Program issues these certificates to prospective QS purchasers. If, at the time of application, an applicant does not already have a crew member transfer eligibility certificate, NWFSB will advise the applicant how to apply for one. If applicants cannot get transfer eligibility certificates for the QS they intend to purchase, pursuing the loan application process further is pointless. Applicants who do not obtain appropriate transfer eligibility certificates promptly may lose their processing priority to applicants who do.

[Page 25293]VII. Loan Processing

NMFS will, to the maximum extent possible, process loan applications in the order of their relative priority. If, however, applicants cannot, in NWFSB's discretion, promptly comply with application processing requirements, they may lose their processing priority to applicants who can. NWFSB will, from time to time, specify compliance time requirements that are responsive to the administrative need to have all credit authority fully obligated before the end of FY 1999. Applicants must comply or lose their application priority to other applicants who will.

NWFSB will conduct a standard due-diligence credit investigation. This should be a relatively simple and quick process. Once NMFS has made a due-diligence credit decision, loan approval requires certain internal clearances that will add some time to processing, but NMFS will try to accelerate processing as much as possible. Upon formal loan approval, NMFS will issue an approval in a principle letter for the applicant's acceptance.

VIII. Loan Closing

NMFS will establish all loan terms and conditions, prepare all closing documents, close all loans, and record all security interests. NMFS should generally have no need for applicants to hire attorneys for any loan purpose, but applicants may do so if they wish. Generally, the only closing costs owed by applicants will be the cost of doing title/ lien searches on, or of recording security interests in, loan QS. NWFSB may need to do title/lien searches, and to record security interest, in several different jurisdictions. Closing costs must be paid by applicants at the loan closing.

IX. Title XI and 50 CFR Part 253

The general rules implementing Title XI are 50 CFR part 253, subpart B. Loans will be subject to so much of the other provisions of Title XI and of its implementing rules as can reasonably be applied to loans involving the purchase under this notice of QS (rather than the purchase of fishing vessels, fisheries shoreside facilities, or aquacultural facilities).

X. Administrative Requirements

(1) In accordance with the provisions of the Debt Collection Improvement Act of 1996, a person may not obtain any Federal financial assistance in the form of a loan (other than a disaster loan) or loan guarantee if the person has an outstanding debt (other than a debt under the Internal Revenue Code of 1986) with any Federal agency which is in a delinquent status, as determined under standards prescribed by the Secretary of the Treasury.

(2) Applicants are subject to a name-check review process. Name checks are intended to reveal if any key individuals associated with the applicant have been convicted of or are presently facing such criminal charges as fraud, theft, perjury, or other matters which significantly reflect on the applicant's management honesty or financial integrity.

(3) A false statement on an application is grounds for denial or termination of funds and grounds for possible punishment by a fine or imprisonment as provided in 18 U.S.C. 1001.

(4) Applicants must submit a completed Form CD-511, ``Certifications Regarding Debarment, Suspension and Other Responsibility Matters; Drug-Free Workplace Requirements and Lobbying,'' and the following explanations are hereby provided:

i. Nonprocurement Debarment and Suspension.

Prospective participants (as defined at 15 CFR 26.105) are subject to 15 CFR part 26, ``Nonprocurement Debarment and Suspension,'' and the related section of the certification form applies;

ii. Anti-Lobbying. Persons (as defined at 15 CFR 28.105) are subject to the lobbying provisions of 31 U.S.C. 1352, ``Limitation on use of appropriated funds to influence certain Federal contracting and financial transactions,'' and the lobbying section of the certification form prescribed above applies to applications/bids for grants, cooperative agreements, and contracts for more than $100,000, and loans and loan guarantees for more than $150,000 the certification form applies.

(5) An applicant classified for tax purposes as an individual, partnership, proprietorship, corporation, or medical corporation is required to submit a taxpayer identification number (TIN) (either social security number, employer identification number as applicable, or registered foreign organization number) on Form W-9, ``Payer's Request for Taxpayer Identification Number.'' Tax-exempt organizations and corporations (with the exception of medical corporations) are excluded from this requirement. Form W-9 shall be submitted to the Finance Officer within 60 days of the award of assistance. The TIN will be provided to the IRS by DoC on Form 1099-G, ``Statement for Recipients of Certain Government Payments.'' Recipients who either fail to provide their TIN or provide an incorrect TIN may have funding suspended until the requirement is met.

Disclosure of a Recipient's TIN is mandatory for Federal income tax reporting purposes under the authority of 26 USC, Section 6011 and 6109(d), and 26 CFR, Section 301.6109-1. This is to ensure the accuracy of income computation by the IRS. This information will be used to identify an individual who is compensated with DoC funds or paid interest under the Prompt Payment Act.

(6) Under the Inspector General Act of 1978, as amended, 5 U.S.C. App. I, section 1 et seq., an audit of the award of assistance may be conducted at any time. The Inspector General of the DoC, or any of his or her duly authorized representatives, shall have access to any pertinent books, documents, papers and records of the Recipient, whether written, printed, recorded, produced or reproduced by any mechanical, magnetic or other process or medium, in order to make audits, inspections, excerpts, transcripts or other examinations as authorized by law. When the OIG requires an audit on a DoC award, the OIG will usually make the arrangements to audit the award, whether the audit is performed by OIG personnel, an independent accountant under contract with the DoC, or any other Federal, state or local audit entity.

Classification

Neither the Administrative Procedure Act nor any other law requires prior notice and opportunity for public comment about this document (which concerns loans). Consequently, the Regulatory Flexibility Act does not require a regulatory flexibility analysis.

This notice is not significant for purposes of E.O. 12866.

This notice contains and refers to collection-of-information requirements subject to the Paperwork Reduction Act. The application requirements contained in the Notice have been approved under OMB control number 0648-0012. The applications for the crew member eligibility certificate referred to have been approved under OMB control number 0648-0272.

Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number.

[Page 25294]

Dated: May 5, 1999. Penelope D. Dalton, Assistant Administrator for Fisheries, National Marine Fisheries Service.

FR Doc. 99-11879Filed05-10-99; 8:45 amBILLING CODE 3510-22-F

Fishery conservation and management: share loan program,

Search in this disposition

Go to article

Document options

Sponsored Ads:

Citations:

Text:

Regulations