[Federal Register Volume 66, Number 44 (Tuesday, March 6, 2001)]
[Notices]
[Pages 13499-13501]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5434]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

[Docket No. 00314073-1042-02; I.D. 022701G]
RIN 0648-ZA83


Fisheries Finance Program; Program Notice

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

ACTION: Notice of Federal fisheries loan availability

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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.

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 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

[[Page 13500]]

vessel 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 Appropriation              Rate      Loan Ceiling
------------------------------------------------------------------------
$0.1 million                                       1%        $10 million
$0.1 million                                       2%         $5 million
$0.1 million                                       5%         $2 million
$0.1 million                                      10%         $1 million
$0.1 million                                      20%       $0.5 million
$0.1 million                                      50%       $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
Purpose                 Appropriation                       Cost Rate           Ceiling
-----------------------------------------------------------------------------------------
IFQ      $0.100 million............................                       2%        $05.0
                                                                                  million
Other    $0.187 million............................                       1%        $18.7
 Purpos                                                                           million
 es
Totals   $0.287 million............................                        -        $23.7
                                                                                  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. 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).

[[Page 13501]]

    (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.

    Dated: February 28, 2001.
William T. Hogarth,
Acting Assistant Administrator for Fisheries, National Marine Fisheries 
Service.
[FR Doc. 01-5434 Filed 3-5-01; 8:45 am]
BILLING CODE 3510-22-S