2010-7264. Fisheries Finance Program; Final Program Notice and Announcement of Availability of Federal Financial Assistance

AGENCY:

National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration, Department of Commerce.

ACTION:

Announcement of availability of Federal financial assistance.

SUMMARY:

NMFS announces the availability of long-term direct loans made under the Fisheries Finance Program (FFP). The FFP provides financing for the purchase of used vessels or the reconstruction of vessels (limited to reconstructions that do not add to fishing capacity); refinancing for existing debt obligations; financing or refinancing fisheries shoreside facilities or aquacultural facilities; and the purchase or refinancing of Individual Fishing Quota (IFQ) in the North Pacific. FFP loans are not issued for purposes which could contribute to over capitalization of the fishing industry.

DATES:

All loan funds available for FY 2010 must be obligated before September 30, 2010.

ADDRESSES:

Applicants may obtain information and send loan applications to the nearest Financial Services Branch (FSB). FSB locations and contact information are:

1. Northwest Financial Services Branch, F/MB53, National Marine Fisheries Service, National Oceanic and Atmospheric Administration, 7600 Sand Point Way NW, (BIN C15700), Seattle, WA 98115, Branch Chief: Scott Houghtaling, Phone: [phone].

2. Northeast Financial Services Branch, F/MB51, National Marine Fisheries Service, National Oceanic and Atmospheric Administration, 55 Great Republic Drive, Suite 02-700, Gloucester, MA 01930-2209, Branch Chief: Ron Linsky, Phone: [phone].

3.Southeast Financial Services Branch, National Marine Fisheries Service, F/MB52, National Oceanic and Atmospheric Administration, 263 13th Avenue South, St. Petersburg, FL 33702-2432, Branch Chief: Shawn Berry, Phone: [phone].

In addition, information is available at www.nmfs.noaa.gov/​mb/​financial_​services/​ffp.htm

SUPPLEMENTARY INFORMATION:

I. Introduction

A. Background

The FFP's primary statutory authority is found in Title XI of the Merchant Marine Act, 1936, as amended and now recodified at 46 U.S.C. 53701, et seq (Title XI). 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 IFQ financing.

Title XI 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) which requires estimated net loan losses (FCRA cost) to be appropriated at the time Congress authorizes annual loan ceilings.

The amount of annual FCRA credit authority available is a ratio of the FCRA cost rate and the FCRA cost appropriated. The current cost rate estimate based on the historical performance of FFP's loan programs is zero. Consequently, no loan subsidy is required. For Fiscal Year 2010 (FY10), however, there is appropriated $59,000,000.00 in loan authority for the traditional loan program and $16,000,000.00 for the IFQ loan program.

It is estimated that these credit authorities will fund approximately 31 traditional loans and 54 IFQ loans. Applications will generally be reviewed in the order they are received. The FFP's traditional priorities are:

1. Aquacultural facilities construction, reconstruction, reconditioning, and acquisition

2. Fisheries shoreside facilities construction, reconstruction, reconditioning, and acquisition;

3. Fishing vessel reconstruction, reconditioning and acquisition. The FFP rule, however, prohibits loans that increase existing harvesting capacity, as does the FFP's loan authority appropriations language. FFP loans may not consequently originally finance either vessel construction or reconstruction that increases vessel harvesting capacity. The FFP will not make vessel loans in fisheries listed as overfished or subject to overfishing in the recent Status of the U.S. Fisheries, published by the National Marine Fisheries Service, at the time of application.

B. Catalog of Federal Domestic Assistance

The FFP is listed in the “Catalog of Federal Domestic Assistance” under number 11.415: Fisheries Finance Program.

II. Eligible Applicants

An applicant, either an individual or a business entity must be a citizen of the United States as described in 46 U.S.C. 104, or an entity who is a citizen for the purpose of documenting a vessel in the coastwise trade under 46 U.S.C. 50501.

Applicants for an IFQ loan must be eligible to hold the IFQ in the North Pacific fishery that is subject of the loan.

III. Loan Terms and Conditions

1. Down payment. Applicants for financing the purchase of traditional loan assets or IFQ (rather than refinancing) must fund 20 percent of the purchase cost from funds other than loan proceeds. Applications for refinancing a traditional loan can not exceed 80 percent of the project's depreciated actual cost. For IFQ applicants 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 cost is being refinanced (rather than financed) is lower than its original purchase price, applicants may be required to provide an additional down payment.

2. Loan amount. There is no maximum or minimum loan amount

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 January 15, 2010, have been approximately 6.09 percent for a 15-year maturity. Interest is simple interest and the rate is fixed.

4. Maturity. Loan maturity may not exceed 25 years, but may be shorter depending on the useful life of the assets being financed and credit and other considerations.

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

6. Security. For IFQ loans, the loan QS will, in every case, be the primary security for the loan. For traditional loans, the FFP will require, at a minimum, a pledge of the property being financed or refinanced or adequate substitute collateral. NMFS may require additional collateral to ensure the security position of the primary collateral. NMFS may require all parties with significant ownership interests (eg. the applicant, a corporation or partnership) to personally guarantee the loan repayment. Some credit risks may require additional security.

7. Application fee. The application fee is 0.5 percent of the loan amount for which an applicant applies. Half the application fee is fully earned at the time NMFS accepts the application. The other half is fully earned only when NMFS issues an approval in principle letter approving an application. Once it has issued an approval in principle letter, NMFS will not return the second half of the application fee.

IV. 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 may be 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 in 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, “Payers Request for Taxpayer Identification Number.” Tax-exempt organizations and corporations (with the exception of medical corporations) are excluded from this requirement. 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 U.S.C., 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. An audit of a Program loan may be conducted at any time. Auditors, selected at the discretion of the Department of Commerce's Office of Inspector General, shall have access to any and all books, documents, papers and records of the obligor or any other party to a financing, that the auditor(s) deem pertinent, whether written, printed, recorded, produced or reproduced by any mechanical, magnetic or other process or medium.

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. 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.

Dated: March 26, 2010.

John Oliver,

Deputy Assistant Administrator For Operations, National Marine Fisheries Service.