Merchant Marine Act and Magnuson-Stevens Act Provisions; Fishing Vessel, Fishing Facility and Individual Fishing Quota and Harvesting Rights Lending Program Regulations, 24228-24232 [2018-11207]
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§ 376.12
[Corrected]
2. On page 16224, in the third column,
in amendment 17, the instruction
‘‘Amend § 376.12 by revising paragraphs
(f), (g), and (l) to read as follows:’’ is
corrected to read ‘‘Amend § 376.12 by
revising the section heading and
paragraphs (f), (g), and (l) to read as
follows:’’.
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.
§ 390.5
DEPARTMENT OF TRANSPORTATION
DATES:
■
Federal Motor Carrier Safety
Administration
49 CFR Parts 370, 371, 373, 375, 376,
378, 379, 380, 382, 387, 390, 391, 395,
396, and 398
[Docket No. FMCSA–2012–0376]
RIN 2126–AB47
Electronic Documents and Signatures;
Correction
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§ 395.15
SUMMARY: FMCSA corrects the
electronic documents and signatures
final rule published on April 16, 2018
that amended FMCSA regulations to
allow the use of electronic records and
signatures to satisfy FMCSA’s regulatory
requirements. This document corrects
an amendatory instruction, removes two
extra commas at the end of two phrases,
and adds ‘‘of this section’’ to a cross
reference in a paragraph. Finally,
FMCSA rescinds its January 4, 2011,
interpretations and regulatory guidance.
DATES: This correction is effective June
15, 2018. As of June 15, 2018, the
document published at 76 FR 411 on
Jan.4, 2011, is withdrawn.
FOR FURTHER INFORMATION CONTACT: Mr.
David Miller, Office of Policy, Federal
Motor Carrier Safety Administration,
1200 New Jersey Avenue SE,
Washington, DC 20590–0001, (202) 366–
5011, david.miller@dot.gov.
If you have questions on viewing or
submitting material to the docket,
contact Docket Services, telephone (202)
366–9826.
SUPPLEMENTARY INFORMATION: In FR Doc.
2018–07749, appearing on page 16210
in the Federal Register of Monday,
April 16, 2018, the following corrections
are made:
■ 1. In the preamble, on page 16218, in
the second column, under the heading
‘‘49 CFR 390.31,’’ following the
sentence that reads ‘‘The requirement
that the Agency be able to inspect
records applies regardless of whether
the copy is in paper or electronic form’’,
add a new paragraph to read as follows:
‘‘In consideration of the final rule on
electronic documents and signatures,
the Agency rescinds Questions 1
through 13 (76 FR 411, Jan.4, 2011)
(https://www.fmcsa.dot.gov/regulations/
title49/section/390.31).’’
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[Corrected]
4. On page 16226, in the third column,
in § 390.5T, the phrase ‘‘1701–1710,,’’ is
corrected to read ‘‘1701–1710,’’.
Federal Motor Carrier Safety
Administration (FMCSA), DOT.
ACTION: Final rule; correction and
withdrawal of regulatory guidance.
16:28 May 24, 2018
§ 390.5T
■
AGENCY:
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[Corrected]
3. On page 16226, in the third column,
in § 390.5, the phrase ‘‘1701–1710,,’’ is
corrected to read ‘‘1701–1710,’’.
■
[Corrected]
5. On page 16227, in the second
column, in § 395.15(b)(5) the phrase ‘‘in
paragraph (b)(4)’’ is corrected to read
‘‘in paragraph (b)(4) of this section’’.
■
Issued under the authority of delegation in
49 CFR 1.87: May 9, 2018.
Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2018–11127 Filed 5–24–18; 8:45 am]
BILLING CODE 4910–EX–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 253
[Docket No. 170404355–8455–02]
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: Final rule; response to
comments.
AGENCY:
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
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This final rule is effective June
25, 2018.
Earl
Bennett, at 301–427–8765 or via email
at earl.bennett@noaa.gov.
FOR FURTHER INFORMATION CONTACT:
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.
SUPPLEMENTARY INFORMATION:
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.
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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,
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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
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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
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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
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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 entrylevel fishers—One commenter urged
NOAA to continue fostering the growth
and success of smaller-scale and entrylevel 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 smallerscale 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
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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
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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.
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
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.
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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.
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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-ofinformation 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
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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 § 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
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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
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
2. Section 253.31 is added to read as
follows:
■
§ 253.31
Harvesting rights loans.
amozie on DSK3GDR082PROD with RULES
(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
VerDate Sep<11>2014
16:28 May 24, 2018
Jkt 244001
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;
PO 00000
Frm 00014
Fmt 4700
Sfmt 9990
(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
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]]>Agencies
[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.
-----------------------------------------------------------------------
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
