[Federal Register Volume 61, Number 168 (Wednesday, August 28, 1996)]
[Notices]
[Pages 44300-44305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21875]
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DEPARTMENT OF COMMERCE
[Docket No. 95106161159-6230-04; I.D. 082096I]
RIN 0648-ZA16
The Fishing Capacity Reduction Initiative (FCRI); Final Program
Notice and Announcement of Availability of Federal Assistance
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Final program notice.
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SUMMARY: NMFS issues this notice to respond to comments on the proposed
FCRI, describe the final program requirements, and announce the
availability of Federal assistance. The Department of Commerce
(Commerce) has made $25 million available for a grant program for
fishermen who hold Northeast multispecies limited access groundfish
fishery permits, and who scrap or make their vessels permanently
ineligible to participate in any fishery and surrender all associated
Federal fish harvesting permits. The FCRI's objectives are to provide
grants to eligible fishermen adversely impacted by the groundfish
fishery disaster, and to aid the long-term viability of the groundfish
fishery resource through the reduction of active harvesting capacity at
the lowest cost.
DATES: Applications must be postmarked by October 28, 1996.
ADDRESSES: Application forms may be obtained from, and completed
applications sent to, the Northeast Financial Services Branch, National
Marine Fisheries Service, One Blackburn Drive, Gloucester, MA 01930-
2298.
FOR FURTHER INFORMATION CONTACT: Leo Erwin, NMFS, (508) 281-9203.
SUPPLEMENTARY INFORMATION:
I. Background
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
the FCRI. 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.
The IFA requires that before providing financial assistance under a
fishing capacity reduction program, the Secretary determine that
adequate conservation and management measures are in place in that
fishery. On May 15, 1996, the Secretary approved Amendment 7 to the
Northeast Multispecies Groundfish Management Plan, which implements
several major measures designed to rebuild overfished groundfish
resources. The Secretary hereby determines, therefore, that the
measures contained in Amendment 7 are adequate conservation and
management measures for purposes of implementing a fishing capacity
reduction program.
On June 4, 1996, NMFS published a Federal Register notice (61 FR
28177) announcing the proposed FCRI and requesting comments on a number
of issues including eligibility, scoring methods, vessel reuse,
scrapping, and program mission. The background for this program is
provided in the June 4, 1996, notice and is not repeated here.
II. Comments and Responses
Fifteen comments were received from the following entities: U.S.
Coast Guard Station, Portland, ME; Atlantic Trawlers Fishing, Inc.;
Associated Fisheries of Maine, The Groundfish Group; Athearn Marine
Agency, Inc.; Endangered Seas Campaign, World Wildlife Fund
International; Atlantic Salmon of Maine; Chairman, Board of
Supervisors, Cochise County, AZ; Environmental Defense Fund;
Conservation Law Foundation; New England Fishery Management Council;
and five individuals. Similar comments have been combined.
Comment 1: Two commenters suggested NMFS should not proceed with
the $25 million program until the agency had established appropriate
means to evaluate whether the Fishing Capacity Reduction Demonstration
Program (FCRDP) achieved its objective and was able to ensure that a
larger program would not cause substantial damage to other fisheries.
Response 1: The objectives of the FCRDP were to demonstrate that
such a program could be successfully designed and implemented, and that
the fishing industry was interested in participating in the program.
Under the $2 million FCRDP, NMFS successfully removed 11 vessels and 26
permits from the fishery, and received bids from fishermen worth over
$52 million. Clearly the objectives of the program were met. With
respect to harming other fisheries, NMFS relies on sound conservation
and management plans to protect fishery resources. Many New England
fisheries are under limited entry schemes, which means that anyone
wishing to enter one of those fisheries must purchase an existing
permitted vessel. A fisherman participating in the FCRI may only enter
the groundfish fishery if he purchases a vessel that is already
permitted for that fishery. However, the FCRI does not restrict a
participant's privilege to fish. Participants are free to purchase a
permitted groundfish vessel, or fish with a different vessel in an open
access fishery. Finally, under the FCRDP, NMFS removed 15 limited
access permits from other fisheries and anticipates that the larger
program will provide substantial spillover benefits to the non-
groundfish fisheries because vessel owners are required to surrender
all Federal fishing permits.
Comment 2: Several commenters believed that the program's design to
remove active fishing capacity has no long-term utility and should be
changed to remove potential fishing capacity.
Response 2: NMFS believes that focusing the program on reducing
active fishing capacity is an appropriate design to aid in the long-
term viability of the groundfish fishery resource. The program gauges
active fishing capacity in terms of a vessel's performance, as measured
by its groundfish revenues. In this manner, the program should target
those vessels associated with higher
[[Page 44301]]
landings. Potential or latent fishing capacity is difficult to measure,
particularly since the skill of individual vessel captains plays a key
role. However, NMFS recognizes that latent fishing capacity is a
concern and may address it in future programs.
Comment 3: Several comments reflected the view that using revenues
as a measure of capacity does not necessarily mean that the boats with
the most capacity will be removed.
Response 3: NMFS believes using revenues as a measure of capacity
is simple and provides a cost-effective standard. Measuring fishing
capacity can involve many complicated variables and NMFS remains
convinced that the program objective of removing active fishing
capacity at the least cost is best achieved by using revenues as a
measure of capacity.
Comment 4: A number of comments discussed the various scoring
proposals. Comments were fairly evenly divided in support of Scoring
Alternatives I and III. No comments supported Alternative II.
Response 4: NMFS outlined three alternative scoring proposals in
the proposed program notice and, based on the comments received, sees
no compelling reason to change the scoring method used in the
demonstration program. NMFS believes Alternative I, which was used in
the demonstration program, is the most effective way to remove active
groundfish capacity at the least cost.
Comment 5: One commenter wanted NMFS to prohibit eligibility of
corporations owned by Fishery Management Council members.
Response 5: NMFS agrees and has incorporated this prohibition into
the final program.
Comment 6: A fisherman commented that he would like to see a clear
statement that recipients of FCRI financial assistance are not giving
up their rights to fish.
Response 6: NMFS agrees that the FCRI is not intended to eliminate
a participant's privilege to fish, and has incorporated this comment
into the final program.
Comment 7: NMFS received the most comments on the issues associated
with vessel reuse, mandatory scrapping, and the transfer of fishing
vessels abroad. Some commenters supported a continuation of the
mandatory scrapping requirement; some wanted foreign transfers
prohibited because of vessel tracking and enforcement concerns, while
others wanted NMFS to allow vessels to be reused for any activity.
Response 7: At the time of implementation of the pilot program,
mandatory scrapping or sinking were the only ways for NMFS to ensure
that fishing vessels did not reenter another fishery. Subsequently,
Congress amended the IFA to provide NMFS with statutory authority to
ensure that vessels do not reenter any fishery after receiving a FCRI
grant. The IFA now allows for vessel reuse and specifically identifies
vessel transfers to nonprofit organizations for purposes of research,
education, and training. The IFA also authorizes the Secretary to allow
other appropriate non-fishing uses. As described in the proposed
program notice, NMFS proposed allowing vessels to also be reused for
humanitarian, safety, or law enforcement purposes, and requested
comments on allowing foreign transfers to public and private entities.
Based on the comments, NMFS will allow vessel transfers to a U.S.
public entity, a U.S. nonprofit organization, and foreign national
governments for research (including fisheries research), education,
training, humanitarian, safety, or law enforcement purposes. Transfers
to foreign private entities will not be allowed due to tracking and
enforcement problems.
Comment 8: One fishing group strongly opposed releasing any
information on applicants until after the selection process is over.
Response 8: NMFS intends to provide legal notice of the names of
vessels and their owners for which a successful investigation has been
completed. During program implementation, all scores and bids will be
treated as proprietary information and will only be disclosed to
Federal officials who are responsible for the FCRI or otherwise when
required by court order or other applicable law, such as the Freedom of
Information Act (FOIA). The amount of the bids of successful applicants
will be released after completion of the program, and not prior to
selection. The FOIA prohibits NMFS from releasing commercial or
financial information that is privileged or confidential.
Comment 9: One commenter argued that in view of the Nation's
financial status and cuts in various programs such as Medicare, Social
Security, and education programs, the Federal government should not be
spending $25 million on a vessel and permit buy out.
Response 9: The FCRI is an integral part of the Administration's
response to the groundfish disaster in New England. The FCRI is
specifically aimed at providing economic assistance to people, in this
case fishermen and their families, who have been harmed as a result of
the fishery disaster. The funds being used for the FCRI are statutorily
restricted to provide financial assistance to fishermen adversely
impacted by fishing resource disasters and cannot be used for other
purposes.
Comment 10: One commenter worried that the FCRI would dislocate
highly skilled fishermen with no provisions for retraining.
Response 10: As stated earlier in this notice, the FCRI is intended
to provide fishermen with an alternative to remaining in the fishery.
The program is not intended to force people into unemployment. The FCRI
is a voluntary program. Fishermen choose to submit bids and relinquish
their permits and vessels. Presumably, the fishermen who participate in
the program have thought through the pros and cons of offering their
vessels and permits.
Comment 11: One commenter was concerned that no environmental
impact statement on the FCRI had been prepared.
Response 11: NMFS has prepared an Environmental Assessment (EA) of
the FCRI. An EA is required for compliance with the National
Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4371 et seq., which
is a condition for the grant. The purpose of an EA is to determine
whether significant impacts on the quality of the human environment
could result from the proposed action. The environmental analysis in
this EA provides the basis for this determination and must evaluate the
intensity or severity of the impact of an action and the significance
of an action with respect to society as a whole, the affected region
and interests, and the locality. If the action is determined not to be
significant, the EA and resulting finding of no significant impact
would be the final environmental documents required by NEPA. An
Environmental Impact Statement (EIS) must be prepared only if the
proposed action may cause a significant impact to the quality of the
human environment. With respect to the FCRI, the EA prepared by NMFS
found that the proposed action would not have a significant impact on
the quality of the human environment. Therefore, no EIS was prepared.
Comment 12: One commenter suggested NMFS should match landings
slips with tax records as a way to validate groundfish landings because
some boats may have slipped by last time.
Response 12: NMFS will continue to use every means available to
validate landings and, as in the pilot program, landings that cannot be
verified will not be allowed.
Comment 13: One commenter expressed concern that fishing vessels
should be ``fishable'' at the time of grant award closing.
[[Page 44302]]
Response 13: NMFS agrees with this comment and has incorporated a
relevant provision into the final program.
Comment 14: One commenter stated that the pilot program allowed
fishermen to receive more than the fair market value of their vessel,
which then allowed for the fisherman to purchase a better vessel and
continue fishing.
Response 14: The FCRI does not use a fair market value test or
vessel survey because the fair market value of the vessel would not
capture the full value of the fisherman's bid. The bid includes the
vessel's worth and the value of the associated permits. Each
fisherman's bid is scored in relation to the groundfish revenues
associated with the vessel being offered. All bids receive a score and
are ranked against all other bids. Successful applicants are not
prevented from purchasing another fishing vessel just as they can
today. However, the net effect is that, because there is a moratorium
on new vessels entering the fishery, there would be one less vessel and
permit in the fishery.
III. Definitions
Eligible multispecies limited access permit means those limited
access permits defined in the regulations implementing the Northeast
Multispecies Fishery Management Plan, as amended by Amendment 7, 50 CFR
651.4(b). To be eligible, a permit must be free of all permit sanctions
or Notice of Permit Sanction, at the time of application and at grant
award closing. Owners of permits who have been issued a permit sanction
or a Notice of Permit Sanction are not eligible for consideration
because compensation of fishermen who violate fishery regulations would
contravene the program's objective to aid the long-term viability of
the fishery resource.
Fisherman means any natural or legal person who (1) owns a fishing
vessel with an eligible multispecies limited access permit, (2) has
less than $2,000,000 in net revenues from commercial fishing annually,
and (3) is a U.S. citizen or permanent resident alien.
Qualifying period means the calendar years of 1991, 1992, 1993 and
1994.
Regulated groundfish species means 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.
U.S. citizen means a U.S. citizen for the purpose of documenting
vessels in the U.S. coastwise trade. Coastwise trade documentation
requires: (1) All sole proprietors to be U.S. citizens, (2) 75 percent
of all partners (and 100 percent of all general partners) in a
partnership to be U.S. citizens, and (3) 75 percent of all owners of a
corporation (as well as its chief executive officer and the minority of
its directors necessary to constitute a quorum) to be U.S. citizens. 46
CFR 67, Subpart C.
IV. FCRI Program Overview
The objectives of the FCRI are to provide grants to eligible
fishermen adversely impacted by the groundfish fishery disaster, and to
aid the long-term viability of the fishery resource through the
reduction of active fishing capacity at the lowest cost. All fishing
vessels with an eligible valid multispecies limited access permit may
apply. The FCRI allows the applicant to establish a price for offered
vessels and permits that will be scored in a competitive manner.
Although the FCRI is designed to remove vessels and permits from the
groundfish fishery, successful applicants do not forfeit their
privilege to fish.
A successful applicant with an undocumented vessel will be required
to scrap the vessel. Sinking will also be allowed, so long as it is
conducted in compliance with all applicable Federal, state, and local
environmental laws and regulations. A successful applicant with a
documented vessel will be required to scrap or sink the vessel or
transfer it to a U.S. public entity, a U.S. nonprofit organization, or
a foreign national government for research (including fisheries
research), education, training, humanitarian, safety, or law
enforcement purposes. If a vessel is transferred to an eligible entity,
NMFS will require that the title include a provision that the vessel be
scrapped by that entity once it has served the purpose for which it was
transferred. Before any vessel may be transferred, NMFS will require
that the vessel's Coast Guard document has a permanent restriction
prohibiting that vessel from holding a fishery endorsement. NMFS
reserves the right to approve all vessel transfers.
Vessel Transfers
Recognizing that limited Federal funding is available for this
program, the fishermen may leverage these monies with non-Federal
resources. NMFS will allow vessels to be either donated or sold to a
U.S. public entity, a U.S. nonprofit organization, or a foreign
national government. The ability to sell their vessels should allow
fishermen to submit lower bids, and consequently exit the fishery at a
lower cost to the government. Because the fishermen will have been
partially compensated by the government through the purchase of their
permits, acquiring entities may be able to purchase the vessels at
below market value, allowing these entities to obtain vessels that
otherwise would have been beyond their limited budgets. In engaging in
these transfers, fishermen have the opportunity to receive the best
value for the loss of their vessels and permits. Vessel transfers will
benefit all parties and enhance the government's ability to remove the
greatest capacity at the least cost.
Regardless of the manner in which a vessel is disposed of or
transferred, all Federal fishing permits associated with that vessel
must be surrendered at the time of grant award closing.
V. How to Apply
A. Eligible Applications
Applications for FCRI grants will only be considered from eligible
fishermen, as defined in this notice, who are owners of eligible
vessels, which meet the conditions stated below. Federal Government
agencies or employees, including full-time, part-time, and intermittent
personnel, and Fishery Management Council members (or corporations
owned by them) and employees are not eligible to submit an application.
For a vessel to be eligible for the FCRI, it must meet the
following conditions:
1. Have an eligible multispecies limited access fishing permit.
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 FCRI. Although pending or assessed civil
penalties for state or Federal fisheries violations do not disqualify a
vessel owner from application, all outstanding and/or pending
investigations, charges, and penalties must be resolved within a
reasonable period of time prior to grant award closing. The Secretary
retains discretion to determine the applicant's integrity and
responsibility to receive Federal assistance funds and to comply with
the terms and conditions of the FCRI award, and may deny funding or
impose special award conditions pursuant to any pending or outstanding
state or Federal fishery violation.
2. Be active and functioning. Successful applicants will be
required to show proof that their vessel made at least two (2) fishing
trips (of any duration for any species) during the 60 days prior to the
date for the submission of applications for FCRI assistance and that
the vessel is capable of fishing for groundfish in Federal waters under
its
[[Page 44303]]
own power at the time of application and grant award closing.
3. Have derived 65 percent or more of its gross annual revenues
from the sale of regulated groundfish species in each of the 3 years
during the qualifying period. This means that in 1991, 1992, 1993, and
1994, successful applicants must be able to prove that 65 percent or
more of the gross revenues (for the vessel involved) in each of the 3
years chosen during the qualifying period was from the sale of
regulated groundfish species.
B. Submission of Applications
Applicants are limited to one bid per vessel under the FCRI. If the
amount of a bid is predicated upon a transfer for money to a third
party, but that transfer is not approved, applicants may not submit a
new bid.
Vessel owners will be given 60 days from the date of filing for
public inspection at the Office of the Federal Register of this final
FCRI notice to submit a FCRI application form. 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. NMFS will provide applicants with proof of receipt.
The anticipated time required to process applications is 120 days from
the date of this notice.
All multispecies limited access fishing permit holders will be
mailed a copy of the FCRI application form along with a copy of this
Federal Register notice. FCRI application forms are also available at
the NMFS Regional Office (See ADDRESSES).
VI. 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
Vessel performance will be determined by averaging the annual
revenues from the sale of regulated groundfish species harvested by
that vessel for the highest 3 years during the qualifying period.
Applicants may only use revenues from those years in which 65 percent
or more of gross revenues were derived from the sale of regulated
groundfish species.
Step C. Determine Vessel Score
A vessel score will be calculated using the following formula:
[GRAPHIC] [TIFF OMITTED] TN28AU96.734
Determining a bid amount is extremely important, since this will be
a key factor in the success of an 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 FCRI; these costs include satisfying vessel liens,
vessel scrapping or vessel transfer costs, and tax liabilities.
Applicants will also need to consider whether they are willing to
accept a bid that was predicated upon a transfer agreement that may not
subsequently be approved. 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 any removable gear and equipment for
private disposition, as long as it was not purchased under another
Federal grant. In that situation, the equipment must be disposed of in
accordance with the original grant terms.
VII. Ranking of Applications
Applications will be ranked, starting with the lowest score. The
Assistant Administrator for Fisheries, NOAA, will determine which
applications are eligible for further consideration 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 reserves the right to
reject any or all applications if it is determined by NMFS that such
action is in the best interests of the program or if revisions to the
program are warranted in the future. NMFS may also solicit additional
applications. If additional applications are solicited, all
applications submitted previously and not determined to be eligible
will be considered rejected. NMFS will notify eligible applicants in
writing. However, eligible applicants are not guaranteed funding by
simply having a competitive bid; they will be subject to a thorough
investigation as described in section VII.
VIII. 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 of regulated species. NMFS will require proof
that 65 percent or more of a vessel's gross revenues came from the sale
of regulated groundfish species in 3 years during the qualifying
period. Landing slips or sales tickets may be used to verify claimed
revenues.
c. Proof of gross revenues for highest 3 years. Vessel owners must
be able to prove the annual gross revenues from the sale of fish for
the vessel involved for the 3 years used on the application.
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 active and functioning fishing vessel. NMFS
will require documentation that the vessel made at least two fishing
trips (of any
[[Page 44304]]
duration for any species) within 60 days prior to October 28, 1996.
NMFS will also ascertain that the vessel is capable of fishing for
groundfish in Federal waters under its own power at the time of grant
award closing.
NMFS will provide legal notice of names of vessels and their owners
for which an investigation has been successfully completed, and in
order to facilitate vessel transfers, may provide copies of the
published legal notices to interested eligible entities. Publication of
the legal notice does not obligate NOAA to make an award. NOAA may also
establish a World Wide Web Internet site prior to termination of the
application period in order to facilitate communication between
potential participants in vessel transfer agreements.
Proprietary information submitted by applicants will only be
disclosed to Federal officials who are responsible for the FCRI or
otherwise when required by court order or other applicable law, such as
the Freedom of Information Act (FOIA). The FOIA prohibits NMFS from
releasing commercial or financial information that is privileged or
confidential.
IX. 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. NMFS
reserves the right to approve all transfers. If a bid is submitted that
relies upon an unapproved transfer, and that transfer is subsequently
disapproved, an applicant cannot submit another bid. NOAA also reserves
the right to terminate financial assistance as a result of any
enforcement actions that NMFS regards as indicating a lack of grantee
integrity and responsibility to receive Federal assistance funds and
comply with the terms and conditions of the FCRI award.
X. Grant Award Procedures
After NMFS Financial Services Division and the NOAA Grants
Management Division have reviewed and approved the terms of eligible
and validated applications, then applicants will be notified in writing
of the award and a grant award closing date will be set. Applicants may
be required to have an attorney present at the grant award closing. To
the extent necessary, attorneys will be required to pay grant funds to
vessel lienors in return for lien releases. Should vessel liens exceed
the amount of the FCRI award, attorneys must obtain funds from
applicants and exchange them for lien releases. If a vessel is going to
be scrapped, 75 percent of the award will be available at the grant
award closing. The remaining 25 percent will be available only when
applicants have made arrangements for vessel scrapping and other
prescrapping dispositions acceptable to NMFS. If these arrangements
have been made by the time of grant award 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 grant award 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 U.S.
If these arrangements have been made by the grant award 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 FCRI award
agreement, including any outstanding and/or pending investigation,
charge, or penalty relating to a violation of state or Federal
fisheries laws. As a precaution against insured vessel losses, NOAA
reserves the right to reduce financial assistance awards by the amount
recovered by the applicant through insurance claims.
XI. Administrative Requirements
A. Primary Applicant Certification
Applicants whose applications are recommended 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 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.
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 Commerce. 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. FCRI 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 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.
3. A false statement on the application is grounds for denial or
termination of funds and grounds for possible
[[Page 44305]]
punishment by a fine or imprisonment (18 U.S.C. 1001).
4. Financial management certification/preaward accounting survey.
Applicants, at the discretion of the NOAA Grants Officer, 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.
5. Past performance. Unsatisfactory performance under prior Federal
awards may result in an application not being considered for funding.
6. 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.
7. 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.
8. 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.
Catalogue of Federal Domestic Assistance
The FCRI is listed in the ``Catalogue of Federal Domestic
Assistance'' under No. 11.452, unallied Industry Projects.
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 (PRA). The collection of this information has
been approved by OMB under 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 for documenting 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 NMFS (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.
The Assistant General Counsel for Legislation and Regulation of the
Department certified to the Chief Counsel for Advocacy of the Small
Business Administration that this notice would not have a significant
economic impact on a substantial number of small entities. As of August
20, 1996, 1,664 fishermen held multispecies limited access permits,
representing the entire universe of fishermen potentially eligible to
participate in the FCRI. The FCRI is expected to result in the
elimination of approximately 80 vessels, along with their associated
permits.
There is no doubt that the FCRI will have a significant economic
impact, as defined under the Regulatory Flexibility Act (RFA), on those
fishermen who participate in this program. The FCRI, however, will not
affect a ``substantial number'' of small entities, defined as more than
20 percent of the business entities which are potentially eligible for
participation in the program. Indeed, assuming 80 fishermen are
ultimately bought out, these fishermen would represent only 4.8 percent
of the small entities potentially affected by the FCRI. Therefore, the
impacts of the notice are not significant within the meaning of the
RFA. They are not likely to lead to a reduction in the annual gross
revenues by more than 5 percent or an increase in total costs of
production by more than 5 percent, nor would this action result in any
greater compliance costs.
Dated: August 22, 1996.
Charles Karnella,
Acting Assistant Administrator for Fisheries, National Marine Fisheries
Service.
[FR Doc. 96-21875 Filed 8-23-96; 1:01 pm]
BILLING CODE 3510-22-P