Merchant Marine Act and Magnuson-Stevens Act Provisions; Fishing Vessel, Fishing Facility and Individual Fishing Quota and Harvesting Rights Lending Program Regulations, 50363-50366 [2017-23570]

Download as PDF Federal Register / Vol. 82, No. 209 / Tuesday, October 31, 2017 / Proposed Rules BILLING CODE 4333–15–C References Cited A complete list of references cited in this document is available on the Internet at http://www.regulations.gov at Docket No. FWS–R6–ES–2016–0086 and upon request from the Montana Ecological Services Field Office (see FOR FURTHER INFORMATION CONTACT). Authors The primary authors of this document are the staff members of the Montana Ecological Services Field Office. Authority The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.). Dated: September 28, 2017. James W. Kurth, Acting Director, U.S. Fish and Wildlife Service. [FR Doc. 2017–23579 Filed 10–30–17; 8:45 am] BILLING CODE 4333–15–P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 253 [Docket No. 170404355–7355–01] RIN 0648–BG80 Merchant Marine Act and MagnusonStevens Act Provisions; Fishing Vessel, Fishing Facility and Individual Fishing Quota and Harvesting Rights Lending Program Regulations National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Proposed rule; request for comments. AGENCY: 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 (Pub. L. 114–120) included new authority to finance the purchase of harvesting rights in a fishery that is federally managed under a limited access system. The FFP proposes to add a new section to the existing FFP regulations to implement this statutory change. The net effect of this proposed change to the regulations will be to provide additional authority for the ethrower on DSK3G9T082PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 16:28 Oct 30, 2017 Jkt 244001 program to lend, while leaving the original IFQ authority to Fishery Management Councils to use as needed. DATES: Comments must be submitted in writing on or before November 30, 2017, ADDRESSES: You may submit comments, identified by NOAA–NMFS–2017–0064, by any one of the following methods: • Electronic Submission: Submit all electronic public comments via the Federal e-Rulemaking Portal. Go to www.regulations.gov/ #!docketDetail;D=NOAA-NMFS-20170064, click the ‘‘Comment Now!’’ icon, complete the required fields, and enter or attach your comments. • Mail: Paul Marx, Chief, Financial Services Division, NMFS, Attn: F/MB5, 1315 East-West Highway, SSMC3, Silver Spring, MD 20910. Instructions: Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered by NMFS. All comments received are a part of the public record and will generally be posted for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address, etc.), confidential business information, or otherwise sensitive information submitted voluntarily by the sender will be publicly accessible. NMFS will accept anonymous comments (enter ‘‘N/A’’ in the required fields if you wish to remain anonymous). Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to paul.marx@ noaa.gov and by email to oira_ submission@omb.eop.gov or fax to (202) 395–7285. FOR FURTHER INFORMATION CONTACT: Paul Marx, at 301–427–8771 or via email at paul.marx@noaa.gov. 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). This action would modify the existing Program regulations to reflect this statutory change. The net effect of this PO 00000 Frm 00040 Fmt 4702 Sfmt 4702 50363 change will be 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 MagnusonStevens 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. 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 effects to either of these existing loan programs as a result of this proposed action. 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 will interpret ‘‘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 E:\FR\FM\31OCP1.SGM 31OCP1 50364 Federal Register / Vol. 82, No. 209 / Tuesday, October 31, 2017 / Proposed Rules 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. ethrower on DSK3G9T082PROD with PROPOSALS 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. 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 any authorized new purposes should it be determined that demand or lack of demand in either area would result in unused loan authority. Proposed Harvesting Rights Lending Lending for harvesting rights would 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 VerDate Sep<11>2014 16:28 Oct 30, 2017 Jkt 244001 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 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 PO 00000 Frm 00041 Fmt 4702 Sfmt 4702 application is withdrawn prior to the issuance of an AIP letter. Summary and Explanation of Proposed Regulatory Changes This proposed action would add 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 ownership limitations. Classification This proposed 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 proposed rule is consistent with Chapter 537 of Title 46 of the U.S. Code, the Magnuson-Stevens Act, as amended, and other applicable law, subject to further consideration after public comment. In addition to public comment about the proposed rule’s substance, NMFS also seeks public comment on any ambiguity or unnecessary complexity from the language used in this proposed rule. NEPA NMFS has preliminarily 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. NMFS is accepting comments and information during the public comment period for the proposed rule relevant to our preliminary categorical exclusion determination. Executive Order 12866 This proposed rule has been determined to be not significant for purposes of Executive Order 12866. This proposed rule does not duplicate, overlap, or conflict with any other relevant Federal rules. E:\FR\FM\31OCP1.SGM 31OCP1 Federal Register / Vol. 82, No. 209 / Tuesday, October 31, 2017 / Proposed 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 proposed 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. Send comments regarding this burden estimate, or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS (see ADDRESSES) and by email to OIRA_ submission@omb.eop.gov or fax to (202) 395–7285. ethrower on DSK3G9T082PROD with PROPOSALS 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 proposed rule, if adopted, would 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, ‘‘[w]henever an agency is required by section 553 of this title [5 USCS § 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. Once final, this proposed rule VerDate Sep<11>2014 16:28 Oct 30, 2017 Jkt 244001 will implement programs authorized by law. Specifically, these rules enact 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 will create new § 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 long-term, fixed rate financing provides only a positive economic impact. PO 00000 Frm 00042 Fmt 4702 Sfmt 4702 50365 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: October 25, 2017. Samuel D. Rauch, III, Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service. For the reasons set forth in the preamble, NMFS proposes to amend 50 CFR part 253, subpart B, as follows: PART 253—FISHERIES ASSISTANCE PROGRAMS Subpart B—Fisheries Finance Program 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. 2. Section 253.31 is added to read as follows: ■ § 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). (3) [Reserved] (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. E:\FR\FM\31OCP1.SGM 31OCP1 ethrower on DSK3G9T082PROD with PROPOSALS 50366 Federal Register / Vol. 82, No. 209 / Tuesday, October 31, 2017 / Proposed Rules (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 (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 VerDate Sep<11>2014 16:28 Oct 30, 2017 Jkt 244001 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. 2017–23570 Filed 10–30–17; 8:45 am] BILLING CODE 3510–22–P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 660 [Docket No. 170817773–7905–1] RIN 0648–BG81 Fisheries Off West Coast States; Highly Migratory Fisheries; California Drift Gillnet Fishery; Implementation of a Federal Limited Entry Drift Gillnet Permit National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Proposed rule; request for comments. AGENCY: NMFS is proposing regulations under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (MSA) to implement a March 2017 recommendation by the Pacific Fishery Management Council (Council) to amend the Fishery Management Plan for U.S. West Coast Fisheries for Highly Migratory Species (HMS FMP). The proposed rule would bring the State of California’s limited entry (LE) drift gillnet (DGN) permit program under MSA authority. All current California DGN permit holders would be eligible to apply for, and receive, a Federal DGN permit, and no additional DGN permits would be created. The proposed rule is administrative in nature and is not anticipated to result in increased activity, effort, or capacity in the fishery. DATES: Comments on the proposed rule and supporting documents must be SUMMARY: PO 00000 Frm 00043 Fmt 4702 Sfmt 4702 submitted in writing on or before December 15, 2017. ADDRESSES: You may submit comments on this document, identified by NOAA– NMFS–2017–0052, by any of the following methods: • Electronic Submission: Submit all electronic public comments via the Federal e-Rulemaking Portal. Go to http://www.regulations.gov/ #!docketDetail;D=NOAA-NMFS-20170052, click the ‘‘Comment Now!’’ icon, complete the required fields, and enter or attach your comments. • Mail: Submit written comments to Lyle Enriquez, NMFS West Coast Region, 501 W. Ocean Blvd., Suite 4200, Long Beach, CA 90802. Include the identifier ‘‘NOAA–NMFS–2017–0052’’ in the comments. Instructions: Comments must be submitted by one of the above methods to ensure they are received, documented, and considered by NMFS. Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered. All comments received are a part of the public record and will generally be posted for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address, etc.) submitted voluntarily by the sender will be publicly accessible. Do not submit confidential business information, or otherwise sensitive or protected information. NMFS will accept anonymous comments (enter ‘‘N/A’’ in the required fields if you wish to remain anonymous). Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to the West Coast Regional Office and by email to OIRA_ Submission@omb.eop.gov or fax to (202) 395–5806. Copies of the draft Regulatory Impact Review and other supporting documents are available via the Federal eRulemaking Portal: http:// www.regulations.gov, docket NOAA– NMFS–2017–0052 or by contacting the Regional Administrator, Barry Thom, NMFS West Coast Region, 1201 NE Lloyd Blvd., Portland, OR 97232–2182, or RegionalAdministrator.WCRHMS@ noaa.gov. FOR FURTHER INFORMATION CONTACT: Lyle Enriquez, NMFS, West Coast Region, 562–980–4025, or Lyle.Enriquez@ noaa.gov. SUPPLEMENTARY INFORMATION: The HMS FMP was prepared by the Council and is implemented under the authority of E:\FR\FM\31OCP1.SGM 31OCP1

Agencies

[Federal Register Volume 82, Number 209 (Tuesday, October 31, 2017)]
[Proposed Rules]
[Pages 50363-50366]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-23570]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 253

[Docket No. 170404355-7355-01]
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: Proposed rule; request for 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 (Pub. L. 114-120) included new 
authority to finance the purchase of harvesting rights in a fishery 
that is federally managed under a limited access system. The FFP 
proposes to add a new section to the existing FFP regulations to 
implement this statutory change. The net effect of this proposed change 
to the regulations will be to provide additional authority for the 
program to lend, while leaving the original IFQ authority to Fishery 
Management Councils to use as needed.

DATES: Comments must be submitted in writing on or before November 30, 
2017,

ADDRESSES: You may submit comments, identified by NOAA-NMFS-2017-0064, 
by any one of the following methods:
     Electronic Submission: Submit all electronic public 
comments via the Federal e-Rulemaking Portal. Go to 
www.regulations.gov/#!docketDetail;D=NOAA-NMFS-2017-0064, click the 
``Comment Now!'' icon, complete the required fields, and enter or 
attach your comments.
     Mail: Paul Marx, Chief, Financial Services Division, NMFS, 
Attn: F/MB5, 1315 East-West Highway, SSMC3, Silver Spring, MD 20910.
    Instructions: Comments sent by any other method, to any other 
address or individual, or received after the end of the comment period, 
may not be considered by NMFS. All comments received are a part of the 
public record and will generally be posted for public viewing on 
www.regulations.gov without change. All personal identifying 
information (e.g., name, address, etc.), confidential business 
information, or otherwise sensitive information submitted voluntarily 
by the sender will be publicly accessible. NMFS will accept anonymous 
comments (enter ``N/A'' in the required fields if you wish to remain 
anonymous).
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
proposed rule may be submitted to [email protected] and by email to 
[email protected] or fax to (202) 395-7285.

FOR FURTHER INFORMATION CONTACT:  Paul Marx, at 301-427-8771 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). This action would modify the 
existing Program regulations to reflect this statutory change. The net 
effect of this change will be 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.
    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 
effects to either of these existing loan programs as a result of this 
proposed action.

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 will interpret ``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

[[Page 50364]]

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. 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 any authorized new purposes should it be determined that demand or 
lack of demand in either area would result in unused loan authority.

Proposed Harvesting Rights Lending

    Lending for harvesting rights would 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 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 Proposed Regulatory Changes

    This proposed action would add 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 ownership limitations.

Classification

    This proposed 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 proposed rule is consistent with Chapter 537 
of Title 46 of the U.S. Code, the Magnuson-Stevens Act, as amended, and 
other applicable law, subject to further consideration after public 
comment.
    In addition to public comment about the proposed rule's substance, 
NMFS also seeks public comment on any ambiguity or unnecessary 
complexity from the language used in this proposed rule.

NEPA

    NMFS has preliminarily 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. NMFS is accepting comments and information 
during the public comment period for the proposed rule relevant to our 
preliminary categorical exclusion determination.

Executive Order 12866

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

[[Page 50365]]

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 proposed 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.
    Send comments regarding this burden estimate, or any other aspect 
of this data collection, including suggestions for reducing the burden, 
to NMFS (see ADDRESSES) and by email to [email protected] or 
fax to (202) 395-7285.

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 proposed rule, if adopted, would 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, ``[w]henever an agency is required by section 553 of 
this title [5 USCS Sec.  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. Once final, this proposed 
rule will implement programs authorized by law. Specifically, these 
rules enact 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 will create 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 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: October 25, 2017.
Samuel D. Rauch, III,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.
    For the reasons set forth in the preamble, NMFS proposes to amend 
50 CFR part 253, subpart B, as follows:

PART 253--FISHERIES ASSISTANCE PROGRAMS

Subpart B--Fisheries Finance Program

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.

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).
    (3) [Reserved]
    (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.

[[Page 50366]]

    (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 (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. 2017-23570 Filed 10-30-17; 8:45 am]
 BILLING CODE 3510-22-P