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Notice

Fisheries Finance Program; Program Notice

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Information about this document as published in the Federal Register.

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AGENCY:

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

ACTION:

Notice of Federal fisheries loan availability

SUMMARY:

The Fisheries Finance Program (FFP) has a $23.7 million loan authority in fiscal year 2001. NMFS now accepts loan applications from qualified applicants. Until April 1, 2001, NMFS reserves all loan funds for certain priority lending purposes. If any loan funds remain unreserved after April 1, 2001, they are available for non-priority lending purposes as well.

DATES:

Effective March 6, 2001.

ADDRESSES:

(1) Applicants in the Alaskan, Northwest, and Southwest Regions: Kimberly Ott, Northwest Financial Services Branch (F/SF23), 7600 Sand Point Way, NE (BIN C15700), Building 1, Seattle, WA 98115;

(2) Applicants in the Northeast Region: Leo Erwin, Northeast Financial Services Branch (F/SF21), One Blackburn Drive, Gloucester, MA 01930; and

(3) Applicants in the Southeast Region: Kell Freeman, Southeast Financial Services Branch (F/SF22), 9721 Executive Center Drive North, St. Petersburg, FL 33702.

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FOR FURTHER INFORMATION CONTACT:

Michael L. Grable, 301-713-2390, fax 301-713-1306, E-mail Michael.Grable@noaa.gov.

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SUPPLEMENTARY INFORMATION:

I. Introduction

(1) Notice purpose. The notice's purpose is to:

(a) Announce the availability of FFP loans;

(b) Describe the FFP’s lending purposes;

(c) Explain the amount of loan authority available in fiscal year 2001;

(d) Establish the basis for selecting backlogged loan applications for the $5 million FFP loan authority dedicated to purchasing halibut and sablefish individual fishing quota (IFQ);

(e) Establish priority lending purposes for which NMFS until April 1, 2001, reserves the $18.7 million non-dedicated loan authority;

(f) Establish non-priority lending purposes for which NMFS allows any of the $18.7 million unreserved on and after April 1, 2001 to be used; and

(g) Provide for a fiscal year 2002 waiting list for potential loan applicants for whom sufficient fiscal year 2001 loan authority is unavailable.

(2) FFP description. The FFP is a direct loan program under Title XI of the Merchant Marine Act, 1936, as amended. Debt maturities can be up to 25 years, but not longer than the financed property's economically useful life. Interest rates, which are fixed, equal the U.S. Treasury's borrowing cost at the time the loan is funded plus 2 percent. There are no prepayment penalties. Loans may equal 80 percent of financed property's depreciated cost, and may generally be either original financing or refinancing of existing loans.

FFP loans generally require experienced fisheries borrowers with strong primary and secondary means of repayment, including personal guarantees.

FFP loans generally have longer maturities and somewhat lower interest rates than private fisheries credit. This stretches the service of lower-cost FFP debt over a longer repayment period more consistent with cyclical fisheries economics.

For further FFP details, see the FFP's operating rules at 50 CFR part 253, subpart B.

(3) FFP lending purposes. These are the FFP's statutory lending purposes:

(a) Fishing vessel construction, reconstruction, reconditioning, and acquisition. The FFP rules, however, prohibit loans that increase existing harvesting capacity. FFP loans may not, consequently, originally finance either vessel construction or reconstruction that increases vessel harvesting capacity. Nevertheless, FFP loans remain available for refinancing existing Start Printed Page 13500vessel loans for all eligible purposes because this does not increase harvesting capacity. Additionally, FFP loans remain available for originally financing the purchase and/or reconditioning of used vessels;

(b) Fisheries shoreside facilities construction, reconstruction, reconditioning, and acquisition;

(c) Aquacultural facilities construction, reconstruction, reconditioning, and acquisition;

(d) IFQ acquisition. Only entry level or small boat fishermen in the halibut and sablefish fisheries are presently eligible for these loans. Eligibility in additional fisheries depends on Fishery Management Council requests;

(e) Fishing capacity reduction under section 312(b)-(e) of the Magnuson-Stevens Fishery Conservation and Management Act. Before we can make a loan for this purpose, a Fishery Management Council must request a fishing capacity reduction program, we must approve the requested program, and harvesters in the reduction fishery voting in a referendum must approve a landing fee for repaying the loan; and

(f) Acquiring pollock fishing vessels or shoreside facilities. This dedicated use of FFP loan ceilings was available in FY 1999 only to communities eligible to participate in the Western Alaska Community Development Program.

(4) What determines annual FFP loan ceilings. Congress annually authorizes FFP loan ceilings. Since 1992, Congress has done this by appropriating FCRA costs at rates projected in the President's annual budgets.

FCRA cost is the loan loss that the Office of Management and Budget (OMB) projects for different Federal loan categories. A loan ceiling is the amount that a stated FCRA cost appropriation produces at a stated FCRA cost rate. The following table shows, for example, the loan ceiling effect of different FCRA cost rates for a $0.1 million FCRA cost appropriation:

FCRA Cost AppropriationRateLoan Ceiling
$0.1 million1%$10 million
$0.1 million2%$5 million
$0.1 million5%$2 million
$0.1 million10%$1 million
$0.1 million20%$0.5 million
$0.1 million50%$0.2 million

The FFP uses FCRA cost appropriations as lending capital, and borrows the balance from the U.S. Treasury. If, for example, the FFP had a $0.1 million FCRA cost appropriation at a one percent FCRA cost rate, the FFP's lending capital would be the $0.1 million FCRA cost appropriation plus $9.9 million borrowed from the U.S. Treasury. The FFP would then make loans worth $10 million, using their repayment proceeds to repay (with interest) the Treasury’s loan to the FFP.

(5) FFP's FY 2001 loan ceiling. The President's FY 2001 budget established a 1 percent FCRA cost rate for all FFP loan authority that the budget requested. None of the President's budgets have ever requested loan authority for this loan purpose. When Congress first dedicated FCRA cost to this loan purpose, OMB established a 2 percent FCRA cost rate for these loans, and this FCRA cost rate has since applied to all subsequent FCRA cost appropriations dedicated to these loans (fiscal years 1998 and 1999).

Consequently, the FFP's apportioned loan ceiling for FY 2001 is:

Loan PurposeAppropriationCost RateCeiling
IFQ$0.100 million2%$05.0 million
Other Purposes$0.187 million1%$18.7 million
Totals$0.287 million-$23.7 million

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

II. Expected $5 Million Ceiling For IFQ Loans During FY 2001

Backlogged IFQ applications from fiscal 2000 exceed the $5 million loan ceiling for this purpose during fiscal year 2001. NMFS will not, consequently, accept new IFQ loan applications during FY 2001. Instead, NMFS will select $5 million worth of backlogged applications for processing. This accords with NMFS’ previous Federal Register notice (65 FR 16179, March 27, 2000). NMFS will use for FY 2001 selection the same random process it used for FY 1999 and FY 2000 selection. NMFS’ previous Federal Register notice requested, but did not receive, public comment about this.

III. Expected $18.7 Million Ceiling For Other Loan Purposes During FY 2001

(1) Priority lending purposes. These are the priority lending purposes for this $18.7 million loan ceiling:

(a) Fishing Capacity Reduction. This is the highest priority because harvesting overcapitalization is a major national fisheries problem;

(b) Supporting the existing FFP credit portfolio. These include: refinancing loans, assuming loans, and other loan servicing actions that protect the Government’s interest in the existing FFP portfolio and limit loan loss exposure;

(c) Backlogged FY 2000 loan applications. This includes about $4.0 million in FFP loan applications backlogged from FY 2000; and

(d) Marine and closed system aquaculture. This excludes land-based aquaculture not occurring in closed systems.

(2) Non-priority lending purposes. These are the non-priority lending purposes for this $18.7 million loan ceiling:

(a) Land based aquaculture in open systems;

(b) Fisheries shoreside facilities; and

(c) Fishing vessels.

(3) Reserving FY 2001 loan ceiling.

(a) Before April 1, 2001. Before this date, NMFS will reserve the entire $18.7 million loan ceiling for applications that involve the priority lending purposes;

(b) April 1 through September 30, 2001. If any of the $18.7 million loan ceiling remains unreserved after April 1, 2001, the unreserved amount will then be available to reserve for applications involving any FFP lending purpose; and

(c) Fishing Capacity Reduction Exclusion. Because this is the highest FFP lending priority, NMFS may at any time during FY 2001 consider reserving for this purpose any or all of the $18.7 million FFP loan ceiling not previously reserved for another purpose. NMFS will do so only for accepted fishing capacity reduction program requests whose further processing requires FY 2001 loan approval, but will not do so at the expense of applicants for other lending purposes who have already paid their application fee. There presently are no such requests.

(4) Application fee. Subject to loan ceiling availability, NMFS will reserve loan ceiling for an application only upon the applicant's payment of an application fee. Fifty percent of this fee is non-refundable (NMFS earns the remainder upon loan approval).

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(5) Losing loan ceiling reservations. NMFS intends to ensure that it obligates this entire fiscal year 2001 loan ceiling before October 1, 2001. If an applicant with a loan ceiling reservation does not comply with NMFS’ loan processing requirements promptly enough for NMFS to prospectively achieve this intention, NMFS may transfer the loan ceiling reservation to another applicant who can and will comply.

(6) Applications and waiting list. All potential applicants must first discuss their loan projects with the appropriate NMFS Regional Financial Services Branch (see ADDRESSES).

If a potential applicant appears to be ineligible for an FFP loan or unable to meet the FFP's loan risk criteria, NMFS will take no further action.

If, however, a potential applicant prospectively appears to be both eligible and able to meet the loan risk criteria, NMFS will then either advise the applicant that it may submit an application and application fee or add the applicant to the FFP waiting list for submitting future applications when lending priorities and/or unreserved loan ceilings permit.

NMFS will reserve sufficient loan ceiling for every applicant that submits an application and application fee after NMFS advises the applicant that it may do so.

Although NMFS advises a potential applicant that it may submit a loan application and application fee, only subsequent loan investigation and analysis will determine whether, and under what conditions, NMFS will approve a loan.

Subject to fiscal year 2002 loan priorities and loan ceilings, NMFS will consider as FY 2002 application candidates all parties on the FY 2001 waiting list for whom NMFS did not reserve FY 2001 loan ceiling. NMFS will do so in the chronological order in which parties were added to the waiting list.

All FFP loans are subject to the FFP operating rules. Potential applicants should see these rules (50 CFR part 253, subpart B) for further eligibility and qualification details.

IV. Administrative Requirements

The Debt Collection Improvement Act of 1996 bars additional Federal loans (other than disaster loans) to delinquent Federal borrowers (excluding debt under the Internal Revenue Code of 1986).

Loan applicants are subject to name-check reviews intended to reveal whether applicant principals have been convicted of, or are facing, criminal charges for fraud, theft, perjury, or other matters affecting the applicant's honesty, integrity, or credit-worthiness.

False application statements can result in loan denial, loan termination, and possible punishment by fines or imprisonment as provided in 18 U.S.C. 1001.

Applicants must complete a Form CD-511 because they are subject to 15 CFR part 26 (Federal assistance debarment) and the lobbying provisions of 31 U.S.C. 1352 (using appropriated funds to influence Federal financial transactions). NMFS will furnish this form when it advises potential applicants to submit their applications.

V. Classification

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

This notice is not significant for purposes of Executive Order 12866.

FFP applications are not subject to Executive Order 12372, “Intergovernmental Review of Federal Programs.”

This notice refers to collection-of-information requirements subject to the Paperwork Reduction Act. Applications for FFP loans have been approved by OMB under control number 0648-0012. Public reporting burden for this collection of information is estimated to average 11.5 hours per application, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Michael L. Grable (see the FOR FURTHER INFORMATION CONTACT section above).

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 Paperwork Reduction Act, unless that collection displays a currently valid OMB control number.

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Dated: February 28, 2001.

William T. Hogarth,

Acting Assistant Administrator for Fisheries, National Marine Fisheries Service.

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[FR Doc. 01-5434 Filed 3-5-01; 8:45 am]

BILLING CODE 3510-22-S