[Federal Register Volume 83, Number 102 (Friday, May 25, 2018)]
[Rules and Regulations]
[Pages 24228-24232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-11207]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 253

[Docket No. 170404355-8455-02]
RIN 0648-BG80


Merchant Marine Act and Magnuson-Stevens Act Provisions; Fishing 
Vessel, Fishing Facility and Individual Fishing Quota and Harvesting 
Rights Lending Program Regulations

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

ACTION: Final rule; response to comments.

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SUMMARY: NMFS' Fisheries Finance Program (FFP) provides long-term 
financing to the commercial fishing and aquaculture industries for 
fishing vessels, fisheries facilities, aquaculture facilities, and 
certain designated individual fishing quota (IFQ). Section 302 of the 
Coast Guard Authorization Act of 2015 included new authority to finance 
the purchase of harvesting rights in a fishery that is federally 
managed under a limited access system. Through this final rule, the FFP 
adds a new section to the existing FFP regulations to implement this 
statutory change. The net effect of this change to the regulations will 
be to provide additional authority for the program to lend, and 
providing FFP financing to additional fisheries while leaving the 
original IFQ authority to Fishery Management Councils to use as needed.

DATES: This final rule is effective June 25, 2018.

FOR FURTHER INFORMATION CONTACT: Earl Bennett, at 301-427-8765 or via 
email at [email protected].

SUPPLEMENTARY INFORMATION: Under the authority of Chapter 537 of Title 
46 of the United States Code, 46 U.S.C. 53701, et seq., the FFP may 
provide long-term financing to the commercial fishing and aquaculture 
industries for fishing vessels, fisheries facilities, aquaculture 
facilities, and certain designated individual fishing quota (IFQs). 
Section 302 of the Coast Guard Authorization Act of 2015 (Pub. L. 114-
120) amended Chapter 537, providing the FFP with the authority to 
finance the purchase of harvesting rights in a fishery that is 
federally managed under a limited access system. This amendment is 
codified at 46 U.S.C. 53702(b)(4)(B). On October 31, 2017, NMFS 
published a proposed rule to add a new section to the existing FFP 
regulations to implement this statutory change and requested public 
comment (82 FR 50363). NMFS received eight responses, of which two were 
not related to the rulemaking five were in support and one was neutral. 
The net effect of this final rule is to provide additional authority 
for the program to lend, while leaving the original IFQ authority to 
Fishery Management Councils (FMCs) to use as needed.

Existing IFQ Loan Authority

    46 U.S.C. 53706 authorizes the FFP to finance or refinance the 
purchase of individual fishing quotas in accordance with section 
303(d)(4) of the Magnuson-Stevens Fishery Conservation and Management 
Act (MSA), now codified at 16 U.S.C. 1853a(g). Under this provision of 
the MSA, an FMC may submit, and NMFS may approve and implement, a loan 
program to aid in (1) the acquisition of IFQ by fishermen who fish from 
``small vessels,'' and (2) the first time purchase of IFQ by ``entry 
level fishermen.'' Therefore, under this authority, the FFP cannot 
initiate or implement a lending program to finance or refinance the 
purchase of IFQ until the appropriate FMC submits a request to NMFS and 
provides guidance for the requisite criteria.

[[Page 24229]]

    NMFS currently administers two loan programs pursuant to the 
existing IFQ authority: the Northwest Halibut/Sablefish and Bering Sea 
and Aleutian Islands Crab IFQ loan programs. NMFS anticipates no 
changes to either of these existing loan programs as a result of this 
action. However, the availability of the new loan authority may affect 
fishers in the existing IFQ loan programs by providing an additional 
source of financing which would not be limited by existing quota share 
ownership.

New Loan Authority

    The new authority provided by Public Law 114-120 broadens the FFP's 
existing authority, and authorizes the Program to finance the purchase 
of harvesting rights in a fishery that is federally managed under a 
limited access system. NMFS interprets ``limited access system'' in 
accordance with section 3(27) of the MSA for purposes of this 
authority. The MSA defines ``limited access system'' as ``a system that 
limits participation in a fishery to those satisfying certain 
eligibility criteria or requirements contained in a fishery management 
plan or associated regulation.'' 16 U.S.C. 1802(27). Such definition 
includes, but is not limited to, IFQ fisheries.
    The new authority provided by Public Law 114-120 does not require 
FMCs to initiate a request to establish a loan program in a fishery 
that is federally managed under a limited access system in order for 
the FFP to provide financing in such a fishery. However, under the MSA, 
FMCs are primarily responsible for developing fishery management plans 
(FMPs) for fisheries within their authority that require conservation 
and management. It is possible that the availability of fisheries loans 
may have unanticipated effects on the achievement of FMP goals and 
objectives. Therefore, NMFS believes it appropriate to allow the FMCs 
to comment on the potential or actual effect of a loan program for 
harvesting rights in fisheries under their authority. An FMC may 
provide an explanation to NMFS at any time, in writing, why the 
potential or continuing availability of financing for harvesting rights 
in a fishery under its authority would harm the achievement of the 
goals and objectives of the FMP applicable to the fishery. If NMFS 
accepts the Council's reasoning, harvesting rights loans would not be 
provided, or would cease to be provided, in that fishery. In such a 
scenario, NMFS would publish a notice in the Federal Register notifying 
the public that new loans will not be made in that fishery. If there 
were already loan applications under consideration, the exceptional 
circumstances would justify NMFS returning any loan fees submitted with 
loan applications. The opportunity for FMC input will help ensure that 
loans made by the FFP do not undermine or conflict with the goals and 
objectives of specific FMPs.

Extent of Financing

    Section 302 of the Coast Guard Authorization Act of 2015 imposes no 
limitations on the extent of financing to be provided by the FFP for 
the purchase of harvesting rights. The new authority is also silent on 
any other limitations, such as those in the existing IFQ loan programs 
limiting quantities of quota share eligible for financing. However, it 
does reserve $59 million of direct loan authority for historical uses, 
defined at 46 U.S.C. 53701(8). Thus, NMFS anticipates that the balance 
of annual direct loan authority--currently $41 million--may be 
available to finance or refinance the purchase of harvesting rights in 
federally managed fisheries under a limited access system. This action 
will allow NMFS to fully use the program's loan authority either for 
historical purposes or for any authorized new purposes should it be 
determined that demand or lack of demand in either area would result in 
unused loan authority.

Response to Comments

    NMFS received eight comments during the comment period. Two of 
these comments were not directly responsive to the rule. One of these 
included statements asserting general regulatory overreach and 
shortcomings of the regulatory process. The other comment was directed 
at overall agency policies regarding aquaculture. A rule on financing 
harvesting rights is not the appropriate venue for comments on national 
regulatory or other general policies.
    The remaining six comments were either supportive of the new 
authority, or neutral. Of these, three mentioned support for allowing 
FMCs to comment on potential lending for harvesting rights in their 
respective fisheries. Two supported retaining protections for the 
traditional uses of the loan program and reserving the current funding 
level ($59 million) for such uses, taking into account annual demand 
for the loan authority. One also supported not applying additional loan 
program limitations to the new harvesting rights lending authority.
    Specific points raised in comments included: Requesting further 
guidance on what constitutes acceptable objections from FMCs for not 
allowing financing of harvesting rights in fisheries under their 
jurisdictions; assuring that traditional uses of the FFP loan program 
are protected; and not limiting the new harvesting rights authority or 
restricting lending to fisheries or borrowers outside of the fisheries 
in the existing IFQ loan programs.
    Adaptive Program Management--One commenter suggested that NOAA 
should apply adaptive program management controls to allow lending in 
excess of $59 million in years where demand for traditional loan uses 
is high, and in years when historic usage is lower, NOAA could allow 
lending in excess of the $41 million for harvesting rights.
    Response--NOAA concurs, and is planning to institute such 
flexibility.
    FMC Comments on Harvesting Rights Loans--Two commenters supported 
the provision allowing FMCs to provide input on the potential effects 
of harvesting rights loans on fisheries under their jurisdiction. One 
commenter suggested that while FMCs may have fisheries expertise, they 
may not have similar financial expertise that would help them predict 
potential effects of a loan program for fisheries under their 
jurisdiction. The commenter suggested that NMFS provide additional 
guidance as what constitutes an acceptable objection from a FMC that 
would justify a veto of a new loan program in a particular fishery.
    Response--First, to clarify for the commenter, the regulations give 
FMCs an opportunity to comment but do not give them veto power. The 
ultimate decision on any harvesting rights loan will be made by NMFS. 
NMFS considered whether to attempt to provide additional guidance as to 
what would constitute an acceptable objection from a FMC, but concluded 
that additional guidance is not possible or necessary at this time. 
Each FMP has its own goals and objectives, and each fishery has its own 
unique scientific and financial circumstances, and therefore, 
attempting to provide additional, practical general guidance for all 
fisheries is not feasible. NMFS will carefully consider any input it 
receives from a FMC as to why the FMC believes the availability of 
financing for harvesting rights in a fishery would harm the achievement 
of the goals and objectives of the FMP applicable to the fishery, and 
NMFS will reach a reasoned decision after considering all of the 
relevant information regarding the fishery.
    Historical Loan Purposes--Two commenters encouraged NMFS to protect 
the historical loan purposes in the implementation of the harvesting

[[Page 24230]]

rights rule, by reserving $59 million of loan authority for loans for 
those historical purposes and using the current balance of $41 million 
in loan authority for loans for harvesting rights. An additional 
commenter similarly requested that the final rule not cause a 
redistribution away from, or additional limitations on, lending for 
historical uses in the Northwest Halibut/Sablefish Loan Program.
    Response--NMFS generally agrees with these comments. As explained 
in the proposed rule, Section 302 of the Coast Guard Authorization Act 
of 2015 imposes no limitations on the extent of financing to be 
provided by the FFP for the purchase of harvesting rights. However, it 
does require that the Secretary make a minimum of $59 million available 
each fiscal year for historical uses, as defined at 46 U.S.C. 53701(8). 
46 U.S.C. 53702(b)(3). NMFS anticipates that the balance of annual 
direct loan authority--currently $41 million--may be available to 
finance or refinance the purchase of harvesting rights in federally 
managed fisheries under a limited access system. This action will allow 
NMFS to fully use the program's loan authority either for historical 
purposes or for any authorized new purposes should it be determined 
that demand or lack of demand in either area would result in unused 
loan authority. The loan program currently operates on a ``first come, 
first served'' basis. The loan projects that are proposed with complete 
documentation and commitment fee earliest, are the first approved. 
However, for the harvesting rights program, $41 million will be 
reserved for harvesting rights loans until later in the lending year, 
to facilitate the receipt and processing of harvesting rights 
proposals. NMFS understands that early in the program's implementation 
it may take more time to complete harvesting rights loan approvals, and 
loan scheduling should support that. However, in keeping with the 
direction in the Coast Guard Authorization Act of 2015, NMFS will 
generally reserve $59 million for traditional loans until later in the 
lending year, prior to obligating the funds to loans for harvesting 
rights.
    Limitations in IFQ Loan Programs--One comment letter noted that IFQ 
loan programs contain certain restrictive provisions, relating to 
entry-level and small vessel fishermen, that were not included in the 
statute or proposed rule for the harvesting rights program, and 
suggested that participants, specifically including crew, in these 
existing IFQ loan fisheries (Northwest Halibut/Sablefish and Bering Sea 
and Aleutian Islands Crab) be allowed to obtain loans under the 
harvesting rights authority.
    Response--NMFS agrees. We note that the Coast Guard Authorization 
Act of 2015 does not establish ownership limitations or include the 
same limitations that apply to the IFQ lending programs, and it places 
no restriction on the application of this new authority to any 
federally-managed limited access fisheries. Furthermore, Section 302 of 
the Coast Guard Authorization Act of 2015 says the new lending 
authority is ``[i]n addition to the other eligible purposes and uses of 
direct loan obligations provided for in'' 46 U.S.C. Chapter 537, which 
includes the authority for the IFQ lending programs in 46 U.S.C. 53706, 
meaning the new authority is intended to operate in addition to the IFQ 
lending authority. 46 U.S.C. 53702. Therefore, NMFS will consider 
applications from all fishers and owners of harvesting rights, 
including those who presently participate in the existing IFQ loan 
fisheries or participate (or would participate except for certain 
limitations) in the IFQ loan programs. As provided for in the new 
regulations, NMFS will accept and consider any input the North Pacific 
Fishery Management Council might have regarding the availability of the 
new harvesting rights loans in the existing IFQ loan fisheries. The 
existing IFQ loan fisheries (Northwest Halibut/Sablefish and Bering Sea 
and Aleutian Islands Crab) programs will also continue as provided by 
50 CFR 253.28 and 50 CFR 253.30, respectively.
    Fostering smaller-scale and entry-level fishers--One commenter 
urged NOAA to continue fostering the growth and success of smaller-
scale and entry-level fishing communities, as is the case under the 
current IFQ loan programs, and to prioritize sustainable fish farmers 
and wild-caught fishing communities when selecting beneficiaries of its 
grants and aid programs.
    Response--While this rule does not affect grant programs, NMFS will 
continue to follow its statutory and regulatory obligations with 
respect to the FFP, and will continue to provide loans to applicants 
who meet all of the statutory and regulatory requirements of the FFP, 
including loans for smaller-scale and entry-level fishers under the 
current IFQ loan programs.

Harvesting Rights Lending

    Lending for harvesting rights will follow existing FFP lending 
procedures and guidelines. Borrowers must be U.S. citizens or entities 
eligible to document a vessel for coastwise trade under 46 U.S.C. 
50501, meet all general FFP requirements, and meet all requirements to 
hold the harvesting rights under the applicable FMP at the time of loan 
closing. The FFP may require additional lending conditions and security 
terms such as loan guarantees or security interests in other collateral 
to bring credit risk to acceptable levels. Affiliated businesses, the 
borrower's principals or majority shareholders, persons or entities 
with a financial interest in the borrower, or any individuals holding 
community property rights may also be required to provide a guaranty.
    In addition, all loan applicants are subject to background and 
credit investigations, which may include, but are not limited to, 
reviews for unresolved fishing violations, criminal background checks, 
delinquent debt investigations, and credit reports. Like other FFP loan 
programs, lending for harvesting rights is subject to a statutory loan 
limit of up to 80 percent of the actual cost of the transaction, set as 
the purchase price or, in the case of refinancing, the current market 
value. The FFP retains sole discretion to determine the transaction's 
actual cost or current market value.
    Harvesting rights loan amounts can carry up to a 25-year term and 
can be used to either purchase new rights or refinance the debt 
associated with the prior purchase(s) of harvesting rights. In addition 
to maintaining a 20 percent minimum equity stake, borrowers refinancing 
existing debt will only receive the lesser of the outstanding amount of 
debt to be refinanced or 80 percent of the current market value of the 
harvesting right.
    If a borrower seeking refinancing fails to have the requisite 20 
percent equity stake (measured as the difference between the current 
market value of the primary collateral and the amount of the loan), 
that borrower will need to pay down debt to meet the required level. In 
addition, under FFP standards, borrowers are only eligible for 
refinancing if their initial purchase would have been eligible for 
financing. The program will refinance harvesting rights acquired prior 
to this regulation if the buyer's original purchase would have been 
eligible for FFP financing under the terms of this action.
    Prospective borrowers may apply for a loan through any of the NOAA 
Fisheries Service regional FFP offices (St. Petersburg, FL; Gloucester, 
MA; Seattle, WA). They must pay the appropriate application fee, set by 
46 U.S.C. 53713(b) as one-half of one percent of the loan amount 
requested, which is made up of two parts. Half is the ``filing fee,'' 
and is nonrefundable

[[Page 24231]]

when the FFP officially accepts the application. The other half, known 
as the ``commitment fee,'' becomes nonrefundable when the FFP executes 
and mails an Approval-in-Principle (AIP) letter to the applicant. The 
FFP may refund the commitment fee if the FFP declines the application 
or the application is withdrawn prior to the issuance of an AIP letter.

Summary and Explanation of Regulatory Changes

    NMFS did not make any changes from the proposed to final 
regulations in response to public comments. This action adds the 
following section, as explained here.

Harvesting Rights Loans (253.31)

    This new section provides regulatory provisions specific to the 
harvesting rights loans. At the time a borrower submits an application, 
he or she must satisfy the criteria listed in this new section in order 
to be eligible to receive financing under the program. The borrower 
must comply with any limitations on the quantity of harvesting rights 
that may be owned by one holder, as specified in the applicable FMP and 
implementing regulations. The FFP will not finance harvesting rights in 
excess of FMP-imposed ownership limitations. However, the FFP may 
finance harvesting rights in the existing IFQ loan program fisheries in 
excess of the ownership limitations in the current IFQ loan program 
regulations, though the FFP would accept comments on that from the 
applicable FMC, if the FMC chooses to comment.

Classification

    This final rule is published under the authority of, and is 
consistent with, Chapter 537 of Title 46 of the United States Code and 
the Magnuson-Stevens Act, as amended. The NMFS Assistant Administrator 
has determined that this final rule is consistent with Chapter 537 of 
Title 46 of the U.S. Code, the Magnuson-Stevens Act, as amended, and 
other applicable law.

NEPA

    NMFS has determined that this rule qualifies to be categorically 
excluded from further NEPA review. This action is consistent with 
categories of activities identified in CE G7 of the Companion Manual 
for NOAA Administrative Order 216-6A, and we have not identified any 
extraordinary circumstances that would preclude this categorical 
exclusion.

Executive Order 12866

    This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    This final rule does not duplicate, overlap, or conflict with any 
other relevant Federal rules.

Paperwork Reduction Act

    Notwithstanding any other provision of the law, no person is 
required to respond to, and no person shall be subject to 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.
    This final rule contains collections-of-information subject to the 
PRA, which have been approved by OMB under control number 0648-0012. 
The application requirements contained in these rules have been 
approved under OMB control number 0648-0012. Public reporting burden 
for placing an application for FFP financing is estimated to average 
eight hours per response, including the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. No comments were received regarding the 
paperwork aspects of this rule.

Regulatory Flexibility Act

    The Chief Counsel for Regulation of the Department of Commerce has 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA) that this rule will not have a significant 
economic impact on a substantial number of small entities.
    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, et seq., 
requires that, whenever an agency is required by 5 U.S.C. 553, or any 
other law, to publish general notice of proposed rulemaking for any 
proposed rule, or publishes a notice of proposed rulemaking for an 
interpretative rule involving the internal revenue laws of the United 
States, the agency shall prepare and make available for public comment 
an initial regulatory flexibility analysis. Such analysis shall 
describe the impact of the proposed rule on small entities. 5 U.S.C. 
603(a). However, where an agency can certify ``that the rule will not, 
if promulgated, have a significant economic impact on a substantial 
number of small entities'' then an agency need not undertake a full 
regulatory flexibility analysis. 5 U.S.C. 605(b).
    Participation in the FFP is entirely voluntary. This action imposes 
no mandatory requirements on any business. This rule will implement 
programs authorized by law. Specifically, the rule enacts regulatory 
additions to create a new lending purpose authorized by Section 302 of 
the Coast Guard Authorization Act of 2015 (Pub. L. 114-120) and will be 
implemented in accordance with 50 CFR part 253, subpart B. This action 
creates new Sec.  253.31.
    As defined by NMFS for RFA purposes, this rule may affect small 
fishing entities that have annual revenues of $11.0 million or less, 
including, but not limited to, vessel owners, vessel operators, 
individual fishermen, small corporations, and others engaged in 
commercial fishing activities regulated by NOAA. Borrowers under this 
authority may also include large businesses. Notably, because the FFP 
is a voluntary program that provides loans to qualified borrowers, non-
borrowers--large or small--would not be regulated by this rule.
    Although the FFP requires certain supporting documentation during 
the life of a loan, the requirements do not impose unusual burdens when 
compared to the burdens imposed by other lenders. Moreover, because the 
basic need for financing would continue to exist without the FFP, the 
individuals seeking financing would still need to comply with similar, 
if not identical, requirements imposed by another lender. Records 
required to participate in the FFP are usually within the normal 
records already maintained by fishermen. It should take fewer than 
eight hours per application to meet these requirements.
    The information required from borrowers, such as income tax 
returns, insurance policies, permits, licenses, etc., is already 
available to them. Depending on circumstances, the FFP may require 
other supporting documents, including financial statements, property 
descriptions, and other documents that can be acquired at reasonable 
cost if they are not already available.
    FFP lending is a source of long-term, fixed rate capital financing 
and imposes no regulatory requirements on anyone other than those 
applying for loans. FFP borrowers make a voluntary decision to use the 
available lending.
    These loan programs will only have positive impacts on borrowers. 
Because participation is voluntary and requires effort and the outlay 
of an application fee, borrowers for harvesting rights financing are 
assumed to have made a determination that using FFP financing provides 
a benefit, such that the FFP's

[[Page 24232]]

long-term, fixed rate financing provides only a positive economic 
impact. Importantly, the FFP does not regulate or manage the affairs of 
its borrowers, and the regulations impose no additional compliance, 
operating or other fees or costs on small entities other than a 
financing relationship would require.
    As a result of this certification, an initial regulatory 
flexibility analysis is not required and none has been prepared.

List of Subjects in 50 CFR Part 253

    Aquaculture, Community development groups, Direct lending, 
Financial assistance, Fisheries, Fishing, Individual fishing quota, 
Harvesting rights (privileges).

    Dated: May 21, 2018.
Samuel D. Rauch III,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.
    For the reasons set forth in the preamble, NMFS amends 50 CFR part 
253, subpart B, as follows:

PART 253--FISHERIES ASSISTANCE PROGRAMS

0
1. The authority citation for part 253 continues to read as follows:

    Authority:  46 U.S.C. 53701 and 16 U.S.C. 4101 et seq.

Subpart B--Fisheries Finance Program

0
2. Section 253.31 is added to read as follows:


Sec.  253.31  Harvesting rights loans.

    (a) Specific definitions. For the purposes of this section, the 
following definitions apply:
    (1) Harvesting right(s) means any privilege to harvest fish in a 
fishery that is federally managed under a limited access system.
    (2) Limited access system has the same meaning given to that term 
in section 3 of the Magnuson-Stevens Fishery Conservation and 
Management Act (16 U.S.C. 1802).
    (b) Loan requirements and limitations. These loan requirements and 
limitations apply to individuals or entities who seek to finance or 
refinance the acquisition of harvesting rights.
    (1) The borrower must meet all regulatory and statutory 
requirements to hold the harvesting rights at the time any such loan or 
refinancing loan would close.
    (2) NMFS will accept and consider the input of a Regional Fishery 
Management Council at any time regarding the availability of loans in a 
fishery under the Council's authority.
    (i) The Council may submit an explanation to NMFS, in writing, as 
to why the availability of financing for harvesting rights in a fishery 
would harm the achievement of the goals and objectives of the Fishery 
Management Plan applicable to the fishery. If NMFS accepts the 
Council's reasoning, harvesting rights loans will not be provided, or 
will cease to be provided, in that fishery.
    (ii) If NMFS determines that harvesting rights loans will not be 
provided in a fishery, NMFS will publish a notice in the Federal 
Register notifying the public that new loans will not be made in that 
fishery.
    (iii) In such a scenario, pending applications will be returned and 
loan fees returned as exceptional circumstances justify the action.
    (3) The harvesting rights to be financed must be issued in a manner 
in which they can be individually identified such that a valid and 
specific security interest can be recorded. This determination shall be 
solely made by the Program.
    (c) Refinancing. (1) The Program may refinance any existing debts 
associated with harvesting rights a borrower currently holds, provided 
that:
    (i) The harvesting rights being refinanced would have been eligible 
for Program financing at the time the borrower purchased them, if 
Program financing had been available;
    (ii) The borrower meets all other applicable lending requirements; 
and
    (iii) The refinancing is in an amount up to 80 percent of the 
harvesting rights' current market value, as determined at the sole 
discretion of the Program, and subject to the limitation that the 
Program will not disburse any amount that exceeds the outstanding 
principal balance, plus accrued interest (if any), of the existing 
harvesting rights' debt being refinanced or its fair market value, 
whichever is less.
    (2) In the event that the current market value of harvesting rights 
and principal loan balance do not meet the 80 percent requirement in 
paragraph (c)(1)(iii) of this section, borrowers seeking refinancing 
may be required to provide additional down payment.
    (d) Maturity. Loan maturity may not exceed 25 years, but may be 
shorter depending on credit and other considerations.
    (e) Repayment. Repayment will be by equal quarterly installments of 
principal and interest.
    (f) Security. Although harvesting right(s) will be the primary 
collateral for a loan, the Program may require additional security 
pledges to maintain the priority of the Program's security interest. 
The Program, at its option, may also require all parties with 
significant ownership interests to personally guarantee loan repayment 
for any borrower that is a corporation, partnership, or other entity, 
including collateral to secure the guarantees. Some projects may 
require additional security, collateral, or credit enhancement as 
determined, in the sole discretion, by the Program.
    (g) Program credit standards. Harvesting rights loans, regardless 
of purpose, are subject to all Program general credit standards and 
requirements. Collateral, guarantee and other requirements may be 
adjusted to individual credit risks.

[FR Doc. 2018-11207 Filed 5-24-18; 8:45 am]
 BILLING CODE 3510-22-P