[Federal Register Volume 65, Number 59 (Monday, March 27, 2000)]
[Notices]
[Pages 16179-16181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7503]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

[Docket No. 000314073-0073-01; I.D. 120399C]
RIN 0648-ZA83


Fisheries Finance Program; Program Notice and Announcement of 
Federal Financial Assistance Availability

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

ACTION: Notice of Federal financial assistance availability.

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SUMMARY: NMFS announces the availability of $28.7 million in Fisheries 
Finance Program (FFP) loans during fiscal year (FY) 2000. This notice 
establishes FY 2000 loan application priorities.

DATES: Effective March 27, 2000.

ADDRESSES:
    (1) Applicants in the Alaska, 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.

FOR FURTHER INFORMATION CONTACT: Michael L. Grable, 301-713-2390, fax 
301-713-1306, E-mail [email protected].

SUPPLEMENTARY INFORMATION:

I. Introduction

    (1) Notice purpose. The notice's purpose is to:
    (a) Announce that the FFP has a $28.7 loan ceiling for FY 2000;
    (b) Establish loan application priorities for the $23.7 million 
loan ceiling not dedicated to any specific loan purpose; and
    (c) Establish an application selection basis for the $5 million 
loan ceiling dedicated to purchasing halibut and sablefish individual 
fishing quota (IFQ).
    (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 financed property's economically 
useful life. Interest rates, which are fixed, are the U.S. Treasury's 
borrowing cost 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 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, as does the FY 2000 appropriations act. 
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 vessel loans for all eligible purposes because this does not 
increase harvesting capacity. Additionally, FFP loans remain available 
for originally financing vessel purchase and/or reconditioning;
    (b) Fisheries shoreside facilities construction, reconstruction, 
reconditioning, and acquisition;
    (c) Aquacultural facilities construction, reconstruction, 
reconditioning, and acquisition;
    (d) IFQ acquisition. So far, only entry level or small boat 
fishermen in the halibut and sablefish fisheries are 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. Fishery 
Management Councils must also request these loans; 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) Federal Credit Reform Act (FCRA) cost effect on loan ceilings. 
Congress annually authorizes FFP loan ceilings. Since 1972, 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:

 
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         FCRA Cost Appropriation                    FCRA Cost Rate                       Loan Ceiling
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$0.1 million............................                                  1%                         $10 million
$0.1 million............................                                  2%                          $5 million
$0.1 million............................                                  5%                          $2 million
$0.1 million............................                                 10%                          $1 million

[[Page 16180]]

 
$0.1 million............................                                 20%                        $0.5 million
$0.1 million............................                                 50%                        $0.2 million
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    The FFP uses FCRA cost appropriations as lending capital, borrowing 
the balance from the U.S. Treasury. If, for example, the FFP had a $0.1 
million FCRA cost appropriation at a 1 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 FFP's own loan from the Treasury.
    (5) FFP's FY 2000 loan ceiling. The President's FY 2000 budget 
established a 1 percent FCRA cost rate for the FFP loan ceiling that 
the budget requested (which did not include IFQ loans).
    Congress enacted a FY 2000 FCRA cost appropriation of $0.338 
million and dedicated $0.1 million of it to IFQ loans, leaving the 
undedicated $0.238 million balance available for the FFP's other 
lending purposes. OMB reduced the apportioned FCRA cost to $0.337 
million.
    The President's budgets have not, through FY 2000, requested IFQ 
loan ceilings. OMB, however, established a 2- percent FCRA cost rate 
for the first FCRA cost appropriation that Congress dedicated to IFQ 
loans. This FCRA cost rate has since applied to all FCRA cost 
appropriations that Congress dedicated to IFQ loans (fiscal years 1998 
and 1999).
    Consequently, the FFP's apportioned loan ceiling for FY 2000 is as 
follows:

 
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                                                                          FCRA Cost                      x  FCRA                       = Loan
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Loan Purpose..................................................                 Appropriation                     Cost Rate                       Ceiling
IFQ...........................................................                  $0.1 million                     2 percent                    $5 million
Other Purposes................................................                $0.237 million                     1 percent                 $23.7 million
Totals........................................................                $0.337 million                             -                 $28.7 million
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    (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. $5 Million Ceiling For IFQ Loans During FY 2000

    Backlogged IFQ applications from FY 1999 far exceed this $5 million 
loan ceiling. NMFS will not, consequently, accept new IFQ loan 
applications during FY 2000. Instead, NMFS will select $5 million worth 
of backlogged applications for processing. This accords with NMFS' 
previous Federal Register notice (64 FR 25289, May 11, 1999). NMFS will 
use for FY 2000 selection the same random process it used for FY 1999 
selection. NMFS' previous Federal Register notice requested, but did 
not receive, public comment about this.

III. $23.7 Million Ceiling For Other Loan Purposes During FY 2000 
(1) Priority lending purposes. These are the priority lending 
purposes for this $23.7 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. This includes: 
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 1999 loan applications. This includes about $10 
million in FFP loan applications backlogged from FY 1999; 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 $23.7 million loan ceiling:
    (a) Land based aquaculture in open systems;
    (b) Fisheries shoreside facilities; and
    (c) Fishing vessels.
    (3) Reserving FY 2000 loan ceiling. (a) Before April 17, 2000. 
Before this date, NMFS will reserve the entire $23.7 million loan 
ceiling for applications that involve the priority lending purposes.
    (b) After April 17, 2000. If any of the $23.7 million loan ceiling 
remains unreserved after this date, the unreserved amount will then be 
available to reserve for applications involving any FFP lending 
purpose.
    (c) Fishing Capacity Reduction Exclusion. Because this is the 
highest FFP lending priority, NMFS may at any time during FY 2000 
consider reserving for this purpose any or all of the $23.7 FFP loan 
ceiling not previously reserved for another purpose. NMFS will do so 
only for accepted fishing capacity reduction requests whose further 
processing requires FY 2000 loan approval.
    (4) Application fee. 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).
    (5) Losing loan ceiling reservations. NMFS intends to ensure that 
it obligates this entire $23.7 million loan ceiling before October 1, 
2000. 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.
    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 either then 
advise the

[[Page 16181]]

applicant that it may submit an application and application fee or add 
the applicant to a 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 FY 2001 loan priorities and loan ceilings, NMFS will 
consider as FY 2001 application candidates all parties on the FY 2000 
waiting list for whom NMFS did not reserve FY 2000 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 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 creditworthiness.
    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.

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 contains a collection-of-information requirement 
subject to the Paperwork Reduction Act. OMB approved the required 
collection of information under 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 16, 2000.
Penelope D. Dalton,
Assistant Administrator for Fisheries, National Marine Fisheries 
Service.
[FR Doc. 00-7503 Filed 3-24-00; 8:45 am]
BILLING CODE 3510-22-F