[Federal Register Volume 64, Number 90 (Tuesday, May 11, 1999)]
[Notices]
[Pages 25289-25294]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11879]
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
[Docket No. 990408090-9090-01; I.D. 022399C]
RIN 0648-ZA63
Halibut and Sablefish Fisheries Quota-Share Loan Program; Final
Program Notice and Announcement of Availability of Federal Financial
Assistance
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
[[Page 25290]]
Atmospheric Administration, Department of Commerce.
ACTION: Announcement of availability of Federal financial assistance
and request for public comment concerning future credit authority.
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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. 99-11879 Filed 05-10-99; 8:45 am]
BILLING CODE 3510-22-F
