[Federal Register Volume 61, Number 108 (Tuesday, June 4, 1996)]
[Notices]
[Pages 28177-28181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13953]
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
[Docket No. 950616159-6146-03; I.D. 052496C]
RIN 0648-ZA16
Fishing Capacity Reduction Program (FCRP)
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Notice of proposed program and request for comments.
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SUMMARY: NMFS issues this notice to describe the proposed FCRP
requirements and to solicit comments on the proposal. The proposed FCRP
is a $25 million program designed to provide grants to the owners of
fishing vessels participating in the Northeast multispecies limited
access groundfish fishery who are willing to scrap or make their
vessels permanently ineligible to participate in any of the fisheries
of the United States and to surrender all associated Federal fish
harvesting permits.
DATES: Comments must be submitted on or before July 1, 1996.
ADDRESSES: Comments should be sent to the Financial Services Division,
National Marine Fisheries Service, 1315 East West Hwy., Silver Spring,
MD 20910.
FOR FURTHER INFORMATION CONTACT: Michael Grable, (301) 713-2390, fax
(301) 589-2686.
SUPPLEMENTARY INFORMATION:
I. Background
Under the provisions of Public Law 103-211, the Emergency
Supplemental Appropriations Act of 1994, $2 million was made available
as part of the Northeast Fisheries Assistance Program for a pilot FCRP,
which was called the Fishing Capacity Reduction Demonstration Program
(pilot program). The purpose of this program was to test an approach
for permanently reducing the fishing capacity in the Northeast
multispecies groundfish fishery. On October 11, 1995, NOAA announced
[[Page 28178]]
that 114 vessel owners, with vessels worth over $52 million and
representing 31 percent of the active groundfish capacity, applied to
participate in the pilot program. Under the pilot program, NOAA has
made grant awards to 11 vessel owners totaling $1.89 million. In
addition to the 11 Federal multispecies limited access fishing permits
surrendered under the pilot program, an additional 15 limited access
fishing permits for the summer flounder, ocean quahog, squid, mackerel,
and butterfish fisheries were retired as well. Overall, the pilot
program has proven that a vessel removal program can be successfully
designed and implemented, and that there is substantial interest within
the fishing industry to participate in such a program.
As a result of the August 2, 1995, declaration of a fishery
resource disaster by the Secretary of Commerce (Secretary), $25 million
in emergency disaster assistance has been made available to NOAA for an
expanded fishing capacity reduction program. The authority for this
program is contained in section 308(d) of the Interjurisdictional
Fisheries Act (IFA) of 1986 (16 U.S.C. 4107(d)), as amended.
Recent amendments to the IFA require that as a condition of
awarding assistance under this program, the Secretary shall prohibit
the vessel from being used for fishing and require that the vessel be
(a) scrapped or otherwise disposed of in a manner approved by the
Secretary; or (b) donated to a nonprofit organization and thereafter
used only for purposes of research, education, or training; or (c) used
for another non-fishing purpose, provided the Secretary determines that
adequate measures are in place to ensure that the vessel cannot reenter
any fishery. The amendments to the IFA also state that any vessel
prohibited from fishing under this program will be permanently
ineligible to hold a fishery endorsement.
NMFS has preliminarily determined that the only effective way to
ensure that a vessel cannot reenter any state or Federal fishery is to
require that a vessel's Coast Guard document has a permanent
restriction prohibiting that vessel from holding a fishery endorsement.
Consequently, successful applicants with undocumented vessels would be
required to scrap their vessels. Like the pilot program, voluntary
sinking will be allowed as long as it is conducted in compliance with
all applicable Federal, state and local environmental laws and
regulations.
For documented vessels that obtain the necessary fishery
endorsement restriction, NMFS is considering allowing the transfer of a
vessel to a public entity or nonprofit organization for research
(including fisheries research), education, training, humanitarian,
safety, or law enforcement purposes, but will entertain comments on
other appropriate reuses. If a vessel is transferred, NMFS is proposing
that the entity to which the vessel is transferred will be required to
scrap it once the vessel has served the purpose for which it was
transferred to that entity. NMFS also specifically requests comment on
the possibilities of vessel reuse and the transfer of vessels to
private and public foreign entities, as well as domestic entities, for
the limited purposes set forth in the amended IFA.
II. Definitions
Regulated groundfish species--those species that are regulated
under the Northeast Multispecies Fishery Management Plan and are
limited to cod, haddock, pollock, yellowtail flounder, winter flounder,
gray sole, American plaice, windowpane flounder, white hake and
redfish.
Valid multispecies limited access permit--those limited access
permits defined in the regulations implementing the Northeast
Multispecies Fishery Management Plan, as amended by Amendment 7, 50 CFR
part 651.4(b). To be valid, a permit must be free of all permit
sanctions, pending or otherwise, at the time that the application is
submitted, and at the time of closing.
III. Proposed Program
The purpose of the FCRP is to reduce permanently the maximum
effective fishing capacity within the groundfish fishery through the
removal of fishing vessels and limited access fishing permits. Like the
pilot program, the FCRP is a voluntary market based program intended to
remove the greatest amount of effective capacity at the lowest cost and
targeted at full-time groundfish vessels. It will also allow the
applicant to establish a price for offered vessels and permits that
will be scored in a competitive manner. Unlike the pilot program, NMFS
is proposing that all fishing vessels with a valid multispecies limited
access permit be eligible.
Based on comments received during the pilot program, NMFS is
considering changes to the scoring method used in determining a vessel
owner's score. Outlined below are the three alternatives currently
under consideration:
Alternative I. This alternative would use the same eligibility
requirements and formula as the pilot program. Only vessels that
derived 65 percent or more of their gross revenues from the sale of
regulated groundfish species during any 3 of the 4 years between 1991
and 1994 would be eligible. The performance of a vessel would continue
to be measured by the average gross revenues from the sale of regulated
groundfish species during the 3 years selected.
Alternative II. Under this alternative, the 65 percent regulated
species threshold would be dropped, allowing any vessel with a valid
multispecies limited access permit to be eligible, regardless of the
percentage of their income generated from the sale of regulated
groundfish species. The performance of a vessel would continue to be
measured by the average annual gross revenues from the sale of
regulated groundfish species.
Alternative III. This alternative would retain the 65 percent
regulated species threshold, but allow vessel owners to use all gross
revenues, as opposed to gross revenues from the sale of regulated
groundfish species, when calculating vessel performance.
NMFS is particularly interested in receiving comments on the
alternatives discussed above.
The following sections describe the proposed requirements and the
application, scoring, ranking, and selection processes NMFS intends to
follow under the FCRP.
IV. How To Apply
A. Eligible Applicants
Applications for FCRP financial assistance will only be considered
from owners of eligible fishing vessels, in accordance with the
procedures set forth in this notice. An owner may be an individual who
is a citizen or national of the United States, or a citizen of the
Northern Mariana Islands, or a corporation, partnership, association
(non profit or otherwise), trust, or other nongovernmental entity, if
such an entity is a citizen within the meaning of section 802 of the
Shipping Act, 1916, as amended (46 U.S.C. App. 802). Federal Government
agencies or employees, including full-time, part-time, and intermittent
personnel, and Fisheries Management Council members and employees are
not eligible to submit an application. Vessel owners may not have
earned more than $2,000,000 in net revenues from commercial fishing in
any of the 3 years between 1991-1994 chosen by the applicant to
determine eligibility.
For a vessel to be eligible for the FCRP, it must meet the
following conditions:
1. Have a valid multispecies limited access fishing permit free of
any permit
[[Page 28179]]
sanctions, pending or otherwise, both at time of application and at
closing. Vessel owners will be required to surrender such permits along
with all other Federal fishing permits issued to that vessel if awarded
financial assistance under the FCRP.
2. Be active and functioning at the time the vessel owner submits
an application, which means that a vessel must have made at least two
fishing trips (of any duration for any species) during the 2-month
period prior to the final date for the submission of applications for
FCRP assistance, and be capable of fishing for groundfish in Federal
waters under its own power at the time of application.
3. Depending on which alternative is chosen, one of the following
would apply:
Alternative I. Have derived 65 percent or more of its gross annual
revenues from the sale of regulated groundfish species in any 3 of the
4 years between 1991 and 1994. This means that successful applicants
must be able to prove that 65 percent or more of the gross revenues
(for the vessel involved) in any 3 years between 1991, 1992, 1993, and
1994, was from the sale of regulated groundfish species.
Alternative II. There would be no 65 percent regulated species
threshold. Vessel owners would not be required to show that they
generated a certain level of revenues from the sale of regulated
groundfish species.
Alternative III. Vessel owners must satisfy the 65 percent
threshold requirement, as in Alternative I.
B. Submission of Applications
Vessel owners will be given 60 days from the date of publication in
the Federal Register of the final FCRP Notice to submit an FCRP
application form. The form may request the following information: Owner
and vessel name, vessel number, gross revenues from all landings, and
gross revenues from groundfish landings only. Proof of eligibility need
not be submitted with the application. Applicants will be required to
submit one signed original application. No facsimile applications will
be accepted. Proof of receipt may be obtained by sending an application
by certified mail, return receipt requested. The anticipated time
required to process applications is 120 days from the closing date of
the solicitation.
All multispecies limited access fishing permit holders will be
mailed a copy of the application form along with a copy of the Federal
Register notice announcing the availability of funds under the FCRP.
Applications will also be made available at the NMFS Regional Office at
One Blackburn Drive, Gloucester, MA 01930-2298.
V. Application Review and Scoring
All timely submitted and completed applications will be assigned a
score calculated by the following method:
Step A--Identify Bid
The bid is the dollar amount submitted by the applicant in the
application.
Step B--Calculate Vessel Performance
Depending on which alternative is chosen, vessel performance would
be calculated by one of the following methods:
Alternative I. Vessel performance would be determined by averaging
the annual revenues from the sale of regulated groundfish species
harvested by that vessel for any 3 of the 4 years during the qualifying
period (1991, 1992, 1993, 1994). Applicants could only use revenues
from those years in which 65 percent or more of gross revenues was
derived from the sale of regulated groundfish species.
Alternative II. Vessel performance would be determined by averaging
the annual revenues from the sale of regulated groundfish species
harvested by that vessel for any 3 of the 4 years during the qualifying
period, regardless of the percentage this represented of a vessel's
gross revenues.
Alternative III. Vessel performance would be determined by
averaging the annual gross revenues from the sale of all fish harvested
by that vessel for any 3 of the 4 years during the qualifying period.
Applicants could only use gross revenues from those years in which 65
percent or more of the gross revenues were derived from the sale of
regulated groundfish species.
Step C--Determine Vessel Score
Depending on which alternative is chosen, a vessel score would be
calculated using one of the following formulas:
Alternative I
[GRAPHIC] [TIFF OMITTED] TN04JN96.009
Gross revenues may only be used from those years in which an
applicant can prove that 65 percent or more of the revenues were
derived from the sale of regulated groundfish species.
Alternative II
[GRAPHIC] [TIFF OMITTED] TN04JN96.010
No 65 percent regulated species threshold requirement.
Alternative III
[GRAPHIC] [TIFF OMITTED] TN04JN96.011
Gross revenues may only be used from those years in which an
applicant can prove that 65 percent or more of the revenues were
derived from the sale of regulated groundfish species.
Determining a bid amount is extremely important, since this will be
a key factor in the success of an
[[Page 28180]]
applicant. If the bid is too high in relation to the vessel's overall
performance, the bid may not be competitive. In the pilot program,
successful applicants submitted bids that resulted in scores between
0.494 and 0.725. Applicants will need to carefully consider all costs
involved with receiving financial assistance under the FCRP, including
satisfying vessel liens, vessel scrapping, vessel transfer costs, and
tax consequences. Applicants may wish to consider selling vessel gear
and equipment separately as a way of reducing the amount of a bid.
Vessel owners may retain removable gear and equipment for private
disposition.
VI. Ranking of Applications
Applications will be ranked, starting with the lowest score. The
Assistant Administrator for Fisheries, NOAA, will determine which
applications are eligible with competitive bids based on the ranking of
the applications. NMFS may initially find eligible more applications
than it can fund but will investigate all such applications in order of
their ranking. NMFS will reserve the right to reject any or all
applications and may solicit additional applications. If additional
applications are solicited, all applications submitted previously and
not determined to be eligible with competitive bids will be considered
rejected. NMFS will notify eligible applicants with competitive bids in
writing. However, eligible applicants are not guaranteed funding by
simply having a competitive bid; they will be subject to a thorough
investigation described in section VII.
VII. Investigation of Applications
A representative from the NMFS Financial Services Division will
contact eligible applicants with competitive bids regarding the
following:
1. Ensuring that applicants meet all eligibility requirements and
can document all claims made in their applications.
2. Determining what debts exist against the vessel offered in the
application, including any outstanding civil penalties or fines.
3. Determining how applicants will satisfy all vessel liens before
scrapping or transferring the vessels. Eligible applicants will have to
provide written evidence of vessel lienors' willingness to satisfy
vessel liens for specific amounts.
4. Ensuring availability of documentation required to support
eligible applications, including the following:
a. Multispecies limited access fishing permit. The applicant may
provide a copy of the permit to NMFS, but the actual permit must be
surrendered at the time of grant award closing.
b. Proof of landings. Depending on which alternative is chosen,
NMFS may require proof that 65 percent or more of a vessel's gross
revenues came from the sale of regulated groundfish species in 3 of the
4 years during the qualifying period. Landing slips or sales tickets
may be used to verify claimed revenues.
c. Proof of gross revenues. Depending on which alternative is
chosen, vessel owners may be required to prove the annual gross
revenues from the sale of all species for the 3 years selected from the
qualifying period of 1991 through 1994. Documentation to support income
may include, but is not limited to, individual or corporate tax
returns, or fish sale receipts accompanied by vessel settlement
reports. NMFS may require sworn affidavits from the reporting party
regarding the accuracy of the information contained in supporting
documentation. Sales that cannot be substantiated will not be included
in the calculation of either gross revenues or revenues from regulated
groundfish species.
d. Documentation of fishing capability. Documentation that vessel
made at least two fishing trips (of any duration for any species)
during the 2-month period prior to the final date of the submission of
application for FCRP assistance.
NMFS will provide legal notice of the names of vessels and their
owners for which an investigation has been successfully completed.
Proprietary information submitted by applicants will only be disclosed
to Federal officials who are responsible for the FCRP or otherwise when
required by court order or other applicable law. This information is
subject to the Freedom of Information Act.
VIII. Establishment of Award Terms
Representatives from the NMFS Financial Services Division will
establish the programmatic terms of each financial assistance award for
eligible applications validated during the investigation process. These
terms will be binding on the applicants and will control the
applicant's post award rights and obligations. Terms of the award will
address such matters as how the outstanding liens on the vessels will
be satisfied and how the vessel covered in the application will be
scrapped or transferred to an eligible entity for an eligible use.
Award terms will also include provisions to ensure that applicants do
not violate fisheries laws and regulations prior to closing. At their
own expense, applicants may choose to retain closing attorneys to
represent their interests. To the extent necessary, closing attorneys
will be required to pay grant funds to vessel lienors in return for
lien releases. Should vessel liens exceed the amount of the FCRP award,
attorneys must obtain funds from applicants and exchange them for lien
releases.
IX. Award Closing Procedures
After the NMFS Financial Services Division has established the
award terms for each eligible and validated application, and the NOAA
Grants Management Division has reviewed and approved these applications
for compliance with the administrative requirements in section X,
applicants will be notified in writing of the award by the grants
officer and a closing date will be set. Applicants may be required to
have an attorney present at the closing. If a vessel is going to be
scrapped, 75 percent of the award will be available at the closing. The
remaining 25 percent will be available only when applicants provide
proof of vessel scrapping. If these arrangements have been made by the
time of closing, 100 percent of the award may be available at that
time. Vessel scrapping must occur promptly. If a vessel is going to be
transferred to an eligible entity, the transfer must also occur at the
closing and 75 percent of the award will be available at that time. The
remaining 25 percent will be available when the applicant shows proof
that the transferred vessel has a permanent restriction on its
certificate of documentation prohibiting that vessel from participating
in the fisheries of the United States. If these arrangements have been
made by closing, 100 percent of the award may be available at that
time. NMFS reserves the right to terminate financial assistance
negotiations with an applicant if, in the opinion of NMFS, there are
material adverse changes in an applicant's ability to meet the terms
and conditions of a FCRP award agreement.
X. Administrative Requirements
A. Primary Applicant Certification
Applicants whose applications are selected for funding will be
required to submit a completed Standard Form 424B, ``Assurances--Non-
Construction Programs'' and Form CD-511, ``Certification Regarding
Debarment, Suspension and Other Responsibility Matters; Drug-Free
Workplace Requirements and Lobbying,'' and the
[[Page 28181]]
following explanations are hereby provided:
1. 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 prescribed above applies;
2. Drug-free workplace. Grantees (as defined at 15 CFR 26.605) are
subject to 15 CFR part 26, subpart F, ``Governmentwide Requirements for
Drug-Free Workplace (Grants),'' and the related section of the
certification form prescribed above applies;
3. 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, or the single family
maximum mortgage limit for affected programs, whichever is greater; and
4. Anti-lobbying disclosure. Any applicant who has paid or will pay
for lobbying using any funds must submit an SF-LLL, ``Disclosure of
Lobbying Activities,'' as required under 15 CFR part 28, Appendix B.
5. Lower tier certifications. Applicants shall require applicants/
bidders for subgrants, contracts, subcontracts, or other lower tier
covered transactions at any tier under the award to submit, if
applicable, a completed Form CD-512, ``Certifications Regarding
Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier
Covered Transactions and Lobbying'' and disclosure form SF-LLL,
``Disclosure of Lobbying Activities.'' Form CD-512 is intended for the
use of recipients and should not be transmitted to the Department of
Commerce (Department). SF-LLL submitted by any tier recipient or
subrecipient should be submitted to the Department in accordance with
the instructions contained in the award document.
B. Other Requirements
1. Federal policies and procedures. FCRP grant recipients and
subrecipients are subject to all Federal laws and Federal and
Department policies, regulations, and procedures applicable to Federal
financial assistance awards. Federal assistance funds cannot be used to
pay for a Federal debt.
2. Name check review. Applicants are subject to a name check review
process. Name checks are intended to reveal if any key individuals
associated with the recipient have been convicted of, or are presently
facing, criminal charges such as fraud, theft, perjury, or other
matters that significantly reflect on the recipient's management,
honesty, or financial integrity. A false statement on the application
is grounds for denial or termination of funds and grounds for possible
punishment by a fine or imprisonment (18 U.S.C. 1001).
3. Financial management certification/preaward accounting survey.
At the discretion of the NOAA Grants Officer, applicants may be
required to have their financial management systems certified by an
independent public accountant as being in compliance with Federal
standards specified in the applicable Office of Management and Budget
(OMB) Circulars prior to execution of the award. Any first-time
applicant for Federal grant funds may be subject to a pre-award
accounting survey by the Department prior to execution of the award.
4. Past performance. Unsatisfactory performance under prior Federal
awards may result in an application not being considered for funding.
5. Delinquent Federal debts. No award of Federal funds shall be
made to an applicant or to its subrecipients who have an outstanding
delinquent Federal debt or fine until either:
a. The delinquent account is paid in full,
b. A negotiated repayment schedule is established and at least one
payment is received, or
c. Other arrangements satisfactory to the Department are made.
6. Buy American-made equipment or products. Applicants are hereby
notified that they are encouraged, to the extent feasible, to purchase
American-made equipment and products with funding under this program.
7. Pre-award activities. If applicants incur any costs prior to an
award being made, they do so solely at their own risk of not being
reimbursed by the Government. Notwithstanding any verbal or written
assurance that may have been received, there is no obligation on the
part of the Department to cover pre-award costs.
Classification
This action has been determined to be not significant for purposes
of E.O. 12866.
Applications under this program are subject to E.O. 12372,
``Intergovernmental Review of Federal Programs.''
This notice contains a collection-of-information requirement
subject to the Paperwork Reduction Act. The collection of this
information has been approved by the OMB (OMB control number 0648-
0289). Public reporting burden for preparation of the grant application
is estimated to be 1 hour per response including the time for reviewing
instructions, gathering and maintaining the data needed, and completing
and reviewing the collection of information. An additional 15 hour
reporting burden is estimated for those applicants who are accepted by
NMFS, including time needed to document the income claims on their
applications, how outstanding liens on their vessels will be satisfied,
and how the vessels will be scrapped. Send comments regarding this
burden estimate or any other aspect of this collection of information,
including suggestions for reducing this burden, to Michael Grable,
Financial Services Division (see addresses). Notwithstanding any other
provision of the 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 PRA,
unless that collection of information displays a currently valid OMB
control number.
Dated: May 29, 1996.
Gary Matlock,
Program Management Officer, National Marine Fisheries Service.
[FR Doc. 96-13953 Filed 5-30-96; 4:21 pm]
BILLING CODE 3510-22-W
