Federal Register / Vol. 61, No. 85 / Wednesday, May 1, 1996 / Rules and Regulations 19171

19. In subpart C, the following

sections are redesignated as set forth in

the following table:

Old section subpart C

New section subpart C

385.50 ........................................... 385.30

385.51 ........................................... 385.31

385.52 ........................................... 385.32

385.53 ........................................... 385.33

385.54 ........................................... 385.34

§ 385.31 [Amended]

20. In newly designated § 385.31(c),

remove the reference ‘‘§ 385.22(a)’’ and

add, in its place, the reference

‘‘§ 385.15(a)’’.

Issued in Washington DC, on this 15th day

of April, 1996.

Charles A. Hunnicutt,

Assistant Secretary for Aviation and

International Affairs.

[FR Doc. 96–10742 Filed 4–30–96; 8:45 am]

BILLING CODE 4910–62–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

15 CFR Part 902

50 CFR Parts 253 and 255

[Docket No. 960319086–6086–01; I.D.

021696A]

RIN 0648–AF48

Fisheries Obligation Guarantee

Program and Interjurisdictional

Fisheries Act Program; Consolidation

and Simplification of Regulations

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Final rule.

SUMMARY: NMFS amends the Fisheries

Obligation Guarantee (FOG) Program

and Interjurisdictional Fisheries Act

(IFA) Program regulations to

consolidate, clarify and simplify them

in accordance with the National

Performance Review (NPR). This final

rule also amends reference to Paperwork

Reduction Act (PRA) informationcollection requirements to reflect the

consolidation.

EFFECTIVE DATE: May 1, 1996.

ADDRESSES: Michael L. Grable, Chief,

Financial Services Division, National

Marine Fisheries Service, 1315 EastWest Highway, Silver Spring, MD

20910.

FOR FURTHER INFORMATION CONTACT:

Michael L. Grable, (301) 713–2390.

SUPPLEMENTARY INFORMATION: The FOG

Program provides long-term debt to the

fisheries and aquacultural industries.

The IFA Program promotes and

encourages state activities in support of

the management of interjurisdictional

fisheries resources identified in

interstate or Federal fishery

management plans. The two regulations

governing these programs are

consolidated and revised to comply

with the NPR’s clarity and simplicity

objectives. The revision reduces the

regulations to about 45 percent of their

former size. It replaces outdated,

confusing, burdensome, duplicative, or

superfluous provisions with clear

policies that efficiently effect statutory

intent. It adds the minimum provisions

needed to make the regulations current.

The revision is extensive, so the revised

regulations are republished in their

entirety.

Section 3506(c)(B)(i) of the PRA

requires that agencies inventory and

display a current control assigned by the

Director, Office of Management and

Budget (OMB), for each agency

information collection. Section 902.1(b)

identifies the location of NOAA

regulations for which OMB approval

numbers have been issued. This final

rule eliminates recordkeeping and

recording requirements previously

contained in § 255.4.

Classification

This rule refers to collection of

information requirements that have

been approved by OMB under the

Paperwork Reduction Act (PRA).

Applications for the Fisheries

Obligation Guarantee Program have

been approved under OMB Control No.

0648–0012, with an estimated response

time of 8 hours per application.

Applications for financial assistance

under the Interjurisdictional Fisheries

Act Program use standard Federal

application procedures approved under

OMB Control Numbers 0348–0043,

0348–0044, and 0348–0046.

The estimated response time above

includes 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 the

collection of information to NMFS at the

ADDRESSES above, and to OMB at the

Office of Information and Regulatory

Affairs, Office of Management and

Budget, Washington, D.C. 20503

(Attention: NOAA Desk Officer).

Notwithstanding any other provision

of law, no person is required to respond

to, nor shall any person be subject to a

penalty for failure to comply with a

collection of information, subject to the

requirements of the PRA, unless that

collection of information displays a

currently valid OMB Control Number.

This rule consolidates and simplifies

existing regulations and is

administrative in nature. No useful

purpose would be served by prior notice

and opportunity for comment.

Accordingly, under 5 U.S.C. 553(b)(B),

the Assistant Administrator for

Fisheries, NOAA, for good cause finds

that prior notice and opportunity for

comment is unnecessary. Also, because

this rule is administrative in nature and

not a substantive rule under 5 U.S.C.

533(d), it will be immediately effective

upon publication.

This final rule has been determined to

be not significant for the purposes of

E.O. 12866.

Under NOAA Administrative Order

205–11, 7.01, dated December 17, 1990,

the Under Secretary for Oceans and

Atmosphere has delegated authority to

sign material for publication in the

Federal Register to the Assistant

Administrator For Fisheries, NOAA.

List of Subjects

50 CFR Part 253

Disaster assistance, Fisheries, Grant

programs-business, Intergovernmental

relations, Reporting and recordkeeping

requirements, Research.

50 CFR Part 255

Fisheries, Fishing vessels, Loan

programs-business, Reporting and

recordkeeping requirements.

Catalog of Federal Domestic Assistance

numbers CFDA No. 11.415 and CFDA No.

11.407, respectively.

Dated: April 23, 1996.

Gary Matlock,

Program Management Officer, National

Marine Fisheries Service.

For the reasons set out in the

preamble, 15 CFR chapter IX and 50

CFR chapter II are amended as follows:

15 CFR CHAPTER IX

PART 902—NOAA INFORMATION

COLLECTION REQUIREMENTS UNDER

THE PAPERWORK REDUCTION ACT:

OMB CONTROL NUMBERS

1. The authority citation for part 902

continues to read as follows:

Authority: 44 U.S.C. 3501 et seq.

2. In § 902.1, paragraph (b) the table,

is amended by adding in the left column

under 50 CFR, in numerical order, the
19172 Federal Register / Vol. 61, No. 85 / Wednesday, May 1, 1996 / Rules and Regulations

entry ‘‘253.15’’ and in the right column,

in corresponding position, the control

number ‘‘0012’’.

50 CFR CHAPTER II

3. Part 253 is revised to read as

follows:

PART 253—FISHERIES ASSISTANCE

PROGRAMS

Subpart A—General

Sec.

253.1 Purpose.

Subpart B—Fisheries Obligation Guarantee

Program

253.10 Definitions.

253.11 Guarantee policy.

253.12 Guaranteed note, U.S. note, and

security documents.

253.13 Ability and experience

requirements.

253.14 Economic and financial

requirements.

253.15 Miscellaneous.

253.16 Fees.

253.17 Demand and payment.

253.18 Program operating guidelines.

253.19 Default and liquidation.

Subpart C—Interjurisdictional Fisheries

253.20 Definitions.

253.21 Apportionment.

253.22 State projects.

253.23 Other funds.

253.24 Administrative requirements.

Authority: 46 U.S.C. 1271–1279 and 16

U.S.C. 4101 et seq.

Subpart A—General

§ 253.1 Purpose.

(a) The regulations in this part pertain

to fisheries assistance programs. Subpart

B of these rules governs the Fisheries

Obligation Guarantee Program, which

guarantees the repayment of certain

long-term fisheries and aquacultural

debts. This allows those debts to be

placed in the same private investment

market that buys U.S. Treasury

securities, where interest rates are lower

and maturities are longer. The Program

does all credit work and holds and

services all credit collateral. The

Program’s guarantee fee makes it selfsupporting.

(b) Subpart C implements Title III of

Public Law 99–659 (16 U.S.C. 4100 et

seq.), which has two objectives:

(1) To promote and encourage State

activities in support of the management

of interjurisdictional fishery resources

identified in interstate or Federal fishery

management plans; and

(2) To promote and encourage

management of interjurisdictional

fishery resources throughout their range.

(3) The scope of this part includes

guidance on making financial assistance

awards to States or Interstate

Commissions to undertake projects in

support of management of

interjurisdictional fishery resources in

both the exclusive economic zone (EEZ)

and State waters, and to encourage

States to enter into enforcement

agreements with either the Department

of Commerce or the Department of the

Interior.

Subpart B—Fisheries Obligation

Guarantee Program

§ 253.10 Definitions.

The terms used in this subpart have

the following meanings:

Act means Title XI of the Merchant

Marine Act, 1936, as amended.

Actual cost means project cost (less a

10-percent salvage value), depreciated

(excluding land) on a straightline basis

at 1-year intervals over the project

property’s useful life including

architectural, engineering, inspection,

delivery, outfitting, and interest costs, as

well as the cost of any consulting

contract the Division requires.

Applicant means the one applying for

a guarantee (the prospective notemaker).

Application means an application for

a guarantee.

Application fee means 0.5 percent of

the dollar amount of an application.

Aquacultural facility means land,

land structures, water structures, water

craft built in the U.S., and equipment

for hatching, caring for, or growing fish

under controlled circumstances and for

its unloading, receiving, holding,

processing, or distribution for

commercial purposes.

CCF means Capital Construction

Fund.

Citizen means a citizen or national of

the U.S. who is otherwise also a citizen

for the purpose of documenting a vessel

in the coastwise trade under section 2

of the Shipping Act, 1916, as amended.

Contributory project means any

project that contributes to developing

the U.S. fishing industry by: Causing

any vessel to catch less overutilized

species than before; applying new

technology; improving safety or fuel

efficiency; making project property

more efficient, productive, or

competitive; potentially increasing

fisheries exports; helping develop an

underutilized fishery; or enhancing

financial stability, financial

performance, growth, productivity, or

any other business attribute.

Demand means a noteholder’s request

that the guarantor pay a guaranteed

note’s full principal and interest

balance.

Division means the Financial Services

Division, National Marine Fisheries

Service, National Oceanic and

Atmospheric Administration, U.S.

Department of Commerce.

Dual Use CCF means a CCF agreement

whose qualified vessel is project

property and whose deposits are

pledged to repayment of the U.S. note.

Facility means a fisheries facility or

aquacultural facility.

Financing means the first permanent

debt placed on project property for

financing its project cost.

Fish means all forms of aquatic

animal and plant life, except marine

mammals and birds.

Fishery facility means land, land

structures, water craft that do not fish,

and equipment used for transporting,

unloading, receiving, holding,

processing, or distributing fish for

commercial purposes (including any

fishery facility for passenger fishing).

Fishing means catching wild fish for

commercial purposes (including

passenger fishing).

Guarantee means the guarantor’s

contractual promise, backed by the full

faith and credit of the United States, to

repay a guaranteed note if a notemaker

fails to repay it as agreed.

Guarantee fee means 1 percent of a

guaranteed note’s average annual

unpaid principal balance.

Guaranteed note means a promissory

note from a notemaker to a noteholder

whose repayment the guarantor

guarantees.

Guarantor means the U.S., acting,

under the Act, by and through the

Secretary of Commerce.

Industry means the fisheries and/or

aquacultural industry.

Noteholder means a guaranteed note

payee.

Notemaker means a guaranteed note

payor.

Passenger fishing means carrying in

vessels for commercial purposes

passengers who catch fish.

Program means the Fisheries

Obligation Guarantee Program.

Project means the construction of new

project property or the refurbishing or

purchase of used project property

including architectural, engineering,

inspection, delivery, outfitting, and

interest costs, as well as the cost of any

consulting contract the Division

requires.

Project property means the vessel or

facility involved in a project whose

actual cost is eligible under the Act for

guarantee and controls the dollar

amount of a guaranteed note.

Property means the project property

and all other property pledged as

security for a U.S. note.

Qualified means acceptable, in the

Division’s credit risk judgment, and

otherwise meeting the Division’s

requirements for guarantee.
Federal Register / Vol. 61, No. 85 / Wednesday, May 1, 1996 / Rules and Regulations 19173

Refinancing means newer debt that

either replaces older debt or reimburses

applicants for previous expenditures.

Refinancing/assumption fee means

0.25 percent of the principal amount of

a guaranteed note to be refinanced or

assumed.

Refurbishing means any

reconstruction, reconditioning, or other

improvement of used project property

involving more than routine repair or

maintenance.

Security documents mean all

collateral securing the U.S. note’s

repayment and all other assurances,

undertakings, and contractual

arrangements associated with the U.S.

note.

Underutilized fishery means:

(1) For a vessel, any fish species

harvested below its sustainable yield.

(2) For a fisheries facility, any facility

using that species or any for which

aggregate facilities are inadequate to

best use harvests of that or any other

species.

U.S. means the United States of

America and, for citizenship purposes,

includes the Commonwealth of Puerto

Rico; American Samoa; the U.S. Virgin

Islands; Guam; the Republic of the

Marshal Islands; the Federated States of

Micronesia; the Commonwealth of the

Northern Mariana Islands; any other

commonwealth, territory, or possession

of the United States; or any political

subdivision of any of them.

U.S. note means a promissory note

payable by the notemaker to the

guarantor.

Useful life means the period during

which project property will, as

determined by the Division, remain

economically productive.

Vessel means any vessel documented

under U.S. law and used for fishing.

Wise use means the wise use of

fisheries resources and their

development, advancement,

management, conservation, and

protection.

§ 253.11 Guarantee policy.

(a) A guarantee financing or

refinancing up to 80 percent of a

project’s actual cost shall be available to

any qualified citizen otherwise eligible

under the Act and these rules, except:

(1) Vessel construction. The Program

will not finance this project cost. The

Program will only refinance this project

cost for an existing vessel whose

previous construction cost has already

been financed (or otherwise paid).

Refinancing this project cost for a vessel

that already exists is not inconsistent

with wise use, but financing it may be.

(2) Vessel refurbishing that materially

increases an existing vessel’s harvesting

capacity. The Program will not finance

this project cost. The Program will only

refinance this project cost for a vessel

whose previous refurbishing cost has

already been financed (or otherwise

paid). Refinancing this project cost is

not inconsistent with wise use, but

financing it may be.

(3) Purchasing a used vessel or used

fishery facility. The Program will neither

finance nor refinance this project cost

(except for a used vessel or fishery

facility that the Program purchased and

is reselling), unless the used vessel or

fishery facility will be refurbished in the

United States and will be a contributory

project or it will be used in an

underutilized fishery.

(b) Every project, other than those

specified in paragraphs (a) (1) and (2) of

this section, is consistent with wise use

and every project, other than those

specifically precluded in paragraphs (a)

(1) and (2) of this section, may be

financed, as well as refinanced.

§ 253.12 Guaranteed note, U.S. note, and

security documents.

(a) Guaranteed note—(1) Principal.

This may not exceed 80 percent of

actual cost, but may, in the Division’s

credit judgment, be less.

(2) Maturity. This may not exceed 25

years, but shall not exceed the project

property’s useful life and may, in the

Division’s credit judgment, be less.

(3) Interest rate. This may not exceed

the amount the Division deems

reasonable.

(4) Prepayment penalty. The Division

will allow a reasonable prepayment

penalty, but the guarantor will not

guarantee a notemaker’s payment of it.

(5) Form. This will be the simple

promissory note (with the guarantee

attached) the Division prescribes,

promising only to pay principal,

interest, and prepayment penalty.

(6) Sole security. The guaranteed note

and the guarantee will be the

noteholder’s sole security.

(b) U.S. note and security

documents—(1) Form. The U.S. note

and security documents will be in the

form the Division prescribes.

(2) U.S. note. This exists to evidence

the notemaker’s actual and contingent

liability to the guarantor (contingent if

the guarantor does not pay the

guaranteed note (including any portion

of it), on the notemaker’s behalf or if the

guarantor does not advance any other

amounts or incur any other expenses on

the notemaker’s behalf to protect the

U.S. or accommodate the notemaker;

actual if, and to the same monetary

extent that, the guarantor does).

Payment of the guaranteed note by

anyone but the guarantor will amortize

the original principal balance (and

interest accruing on it) of the U.S. note

to the same extent that it amortizes the

guaranteed note. The U.S note will,

among other things, contain provisions

for adding to its principal balance all

amounts the Program advances, or

expenses it incurs, to protect the U.S. or

accommodate the notemaker.

(3) Security documents. The Division

will, at a minimum, require a pledge of

all project property (or adequate

substitute collateral). The Division will

require such other security as it deems

the circumstances of each notemaker

and project require to protect the U.S.

All security documents will secure the

U.S. note. The security documents will,

among other things, contain provisions

for adding to the U.S. note all Program

advances, expenditures, and expenses

required to protect the U.S. or

accommodate the notemaker.

(4) Recourse. Significant Program

reliance, as a secondary means of

repayment, on the net worths of parties

other than the notemaker will ordinarily

require secured recourse against those

net worths. Recourse may be by a

repayment guarantee or irrevocable

letter of credit. Ordinarily, the Division

will require recourse against: All major

shareholders of a closely-held corporate

notemaker, the parent corporation of a

subsidiary corporate notemaker without

substantial pledged assets other than the

project property, and all major limited

partners. The Division may also require

recourse against others it deems

necessary to protect the U.S. The

principal parties in interest, who

ultimately stand most to benefit from

the project, should ordinarily be held

financially accountable for the project’s

performance. Where otherwise

appropriate recourse is unavailable, the

conservatively projected net liquidating

value of the notemaker’s assets pledged

to the Program must, in the Division’s

credit judgment, substantially exceed all

projected Program exposure.

(c) Dual-use CCF. For a vessel, the

Division may require annually

depositing some portion of the project

property’s net income into a dual-use

CCF. A dual-use CCF provides the

normal CCF tax-deferral benefits, but

also both gives the Program control of

CCF withdrawals and recourse against

CCF deposits and ensures an emergency

refurbishing reserve (tax-deferred) for

project property.

§ 253.13 Ability and experience

requirements.

A notemaker and the majority of its

principals must generally have the

ability, experience, resources, character,

reputation, and other qualifications the
19174 Federal Register / Vol. 61, No. 85 / Wednesday, May 1, 1996 / Rules and Regulations

Division deems necessary for

successfully operating the project

property and protecting the U.S. The

Program will ordinarily not provide

guarantees: For venture capital

purposes; to a notemaker whose

principals are all from outside the

industry; or for a notemaker the majority

of whose principals cannot document

successful industry ability and

experience of a duration, degree, and

nature consistent with protecting the

U.S.

§ 253.14 Economic and financial

requirements.

(a) Income and expense projections.

The Division’s conservative income and

expense projections for the project

property’s operation must prospectively

indicate net earnings that can service all

debt, properly maintain the project

property, and protect the U.S. against

the industry’s cyclical economics and

other risks of loss.

(b) Working capital. The Division’s

conservative assessment of an

applicant’s financial condition must

indicate initial working capital

prospectively sufficient to provide for

the project property to achieve net

earnings projections, fund all

foreseeable contingencies, and protect

the U.S. At the Division’s discretion,

some portion of projected working

capital needs may be met by something

other than current assets minus current

liabilities (i.e., by a line or letter of

credit, noncurrent assets readily capable

of generating working capital, a

guarantor with sufficient financial

resources, etc.).

(c) Audited financial statements.

These will ordinarily be required for

any notemaker with large or financially

extensive operations whose financial

condition the Division believes it cannot

otherwise assess with reasonable

certainty.

(d) Consultant services. Infrequently,

expert consulting services may be

necessary to help the Division assess a

project’s economic, technical, or

financial feasibility. The Division will

select and employ the necessary

consultant, but require the applicant to

reimburse the Division. A subsequently

approved application will not be closed

until the applicant reimburses the

Division. This cost may, at the

Division’s discretion, be included in a

guaranteed note’s amount. For a

declined application, the Division may

reimburse itself from the remaining 25

percent of the application fee.

§ 253.15 Miscellaneous.

(a) Applicant. Only the legal title

holder of project property (or the lessee

of an appropriate long-term financing

lease) may apply for a guarantee.

Applicants must submit an

‘‘Application for Fisheries Obligation

Program Guarantee’’ to the appropriate

NMFS Regional Financial Services

Branch to be considered for a

guaranteed loan.

(b) Investigation and approval. The

Division shall do a due diligence

investigation of every application it

accepts and determine if, in the

Division’s sole judgment, the

application is eligible and qualified.

Applications the Division deems

ineligible or unqualified will be

declined. The Division will approve

eligible and qualified applications based

on the applicability of the information

obtained during the application and

investigation process to the

programmatic goals and financial

requirements of the program and under

terms and conditions that, in the

Division’s sole discretion, protect the

U.S. The Division will state these terms

and conditions in its approval in

principal letter.

(c) Insurance. All property and other

risks shall be continuously insured

during the term of the U.S. note.

Insurers must be acceptable to the

Division. Insurance must be in such

forms and amounts and against such

risks as the Division deems necessary to

protect the U.S. Insurance must be

endorsed to include the requirements

the U.S., as respects its interest only,

deems necessary to protect the U.S.

(e.g., the Program will ordinarily be an

additional insured as well as the sole

loss payee for the amount of its interest;

cancellation will require 20 days’

advance written notice; vessel

seaworthiness will be admitted, and the

Program will be adequately protected

against other insureds’ breaches of

policy warranties, negligence, omission,

etc.)

(d) Property inspections. The Division

will require adequate condition and

valuation inspection of all property as

the basis for assessing the property’s

worth and suitability for guarantee. The

Division may also require these at

specified periods during guarantee life.

These must be conducted by competent

and impartial inspectors acceptable to

the Division. Inspection cost will be at

an applicant’s expense. Those occurring

before application approval may be

included in actual cost.

(e) Guarantee terms and conditions.

The Division’s approval in principle

letter shall specify the terms and

conditions of the guarantor’s

willingness to guarantee. These shall be

incorporated in closing documents that

the Division prepares. Terms and

conditions are at the Division’s sole

discretion. An applicant’s

nonacceptance will result in

disqualification for guarantee.

(f) Noteholder. The Division will, as a

gratuitous service, request parties

interested in investing in guaranteed

notes to submit offers to fund each

prospective guaranteed note. The

Division and the applicant will, by

mutual consent, choose the responsive

bidder, which ordinarily will be the

prospective noteholder whose bid

represents the lowest net effective

annual cost of capital. Until the Division

has closed the guarantee, arrangements

between an applicant and a prospective

noteholder are a matter of private

contract between them, and the Program

is not responsible to either for

nonperformance by the other.

(g) Closing—(1) Approval in principle

letters. Every closing will be in strict

accordance with a final approval in

principle letter.

(2) Contracts. The guaranteed note,

U.S. note, and security documents will

ordinarily be on standard Program forms

that may not be altered without

Divisional approval. The Division will

ordinarily prepare all contracts, except

certain pledges involving real property,

which will be prepared by each

notemaker’s attorney at the direction

and approval of the Division’s attorney.

(3) Closing schedules. The Division

will ordinarily close guarantee

transactions with minimal services from

applicants’ attorneys, except where real

property pledges or other matters

appropriate for private counsel are

involved. Real property services

required from an applicant’s attorney

may include: Title search, mortgage and

other document preparation, execution

and recording, escrow and

disbursement, and a legal opinion and

other assurances. An applicant’s

attorney’s expense, and that of any other

private contractor required, is for

applicant’s account. Attorneys and other

contractors must be satisfactory to the

Division. The Division will attempt to

meet reasonable closing schedules, but

will not be liable for adverse interestrate fluctuations, loss of commitments,

or other consequences of being unable

to meet an applicant’s and a prospective

noteholder’s closing schedule. These

parties should work closely with the

Division to ensure a closing schedule

the Division can meet.

§ 253.16 Fees.

(a) Application fee. The Division will

not accept an application without the

application fee. Fifty percent of the

application fee is fully earned at

application acceptance, and is not
Federal Register / Vol. 61, No. 85 / Wednesday, May 1, 1996 / Rules and Regulations 19175

refundable. The rest is fully earned

when the Division issues an approval in

principal letter, and it is refundable

only if the Division declines an

application or an applicant requests

refund before the Division issues an

approval in principal letter.

(b) Guarantee fee. Each guarantee fee

will be due in advance and will be

based on the guaranteed note’s

repayment provisions for the

prospective year. The first annual

guarantee fee is due at guarantee

closing. Each subsequent one is due and

payable on the guarantee closing’s

anniversary date. Each is fully earned

when due, and shall not subsequently

be refunded for any reason.

(c) Refinancing or assumption fee.

This fee applies only to refinancing or

assuming existing guaranteed notes. It is

due upon application for refinancing or

assuming a guaranteed note. It is fully

earned when due and shall be

nonrefundable. The Division may waive

a refinancing or assumption fee’s

payment when the refinancing or

assumption’s primary purpose is to

protect the U.S.

(d) Where payable. Fees are payable

by check made payable to ‘‘NMFS/

FSFF.’’ Other than those collected at

application or closing, fees are payable

by mailing checks to: U.S. Department

of Commerce, National Oceanic and

Atmospheric Administration, National

Marine Fisheries Service, P.O. Box

73004, Chicago, Ill. 60673. To ensure

proper crediting, each check must

include the official case number the

Division assigns to each guarantee.

§ 253.17 Demand and payment.

Every demand must be delivered in

writing to the Division. Each must

include the noteholder’s certified record

of the date and amount of each payment

made on the guaranteed note and the

manner of its application. Should the

Division not acknowledge receipt of a

timely demand, the noteholder must

possess evidence of the demand’s timely

delivery.

§ 253.18 Program operating guidelines.

The Division may issue Program

operating guidelines, as the need arises,

governing national Program policy and

administrative issues not addressed by

these rules.

§ 253.19 Default and liquidation.

Upon default of the security

documents, the Division shall take such

remedial action (including, where

appropriate, liquidation) as it deems

best able to protect the U.S.’ interest.

Subpart C—Interjurisdictional

Fisheries

§ 253.20 Definitions.

The terms used in this subpart have

the following meanings:

Act means the Interjurisdictional

Fisheries Act of 1986, Public Law 99–

659 (Title III).

Adopt means to implement an

interstate fishery management plan by

State action or regulation.

Commercial fishery failure means a

serious disruption of a fishery resource

affecting present or future productivity

due to natural or undetermined causes.

It does not include either:

(1) The inability to harvest or sell raw

fish or manufactured and processed

fishery merchandise; or

(2) Compensation for economic loss

suffered by any segment of the fishing

industry as the result of a resource

disaster.

Enforcement agreement means a

written agreement, signed and dated,

between a state agency and either the

Secretary of the Interior or Secretary of

Commerce, or both, to enforce Federal

and state laws pertaining to the

protection of interjurisdictional fishery

resources.

Federal fishery management plan

means a plan developed and approved

under the Magnuson Fishery

Conservation and Management Act (16

U.S.C. 1801 et seq.).

Fisheries management means all

activities concerned with conservation,

restoration, enhancement, or utilization

of fisheries resources, including

research, data collection and analysis,

monitoring, assessment, information

dissemination, regulation, and

enforcement.

Fishery resource means finfish,

mollusks, and crustaceans, and any

form of marine or Great Lakes animal or

plant life, including habitat, other than

marine mammals and birds.

Interjurisdictional fishery resource

means:

(1) A fishery resource for which a

fishery occurs in waters under the

jurisdiction of one or more states and

the U.S. Exclusive Economic Zone; or

(2) A fishery resource for which an

interstate or a Federal fishery

management plan exists; or

(3) A fishery resource which migrates

between the waters under the

jurisdiction of two or more States

bordering on the Great Lakes.

Interstate Commission means a

commission or other administrative

body established by an interstate

compact.

Interstate compact means a compact

that has been entered into by two or

more states, established for purposes of

conserving and managing fishery

resources throughout their range, and

consented to and approved by Congress.

Interstate Fisheries Research Program

means research conducted by two or

more state agencies under a formal

interstate agreement.

Interstate fishery management plan

means a plan for managing a fishery

resource developed and adopted by the

member states of an Interstate Marine

Fisheries Commission, and contains

information regarding the status of the

fishery resource and fisheries, and

recommends actions to be taken by the

States to conserve and manage the

fishery resource.

Landed means the first point of

offloading fishery resources.

NMFS Regional Director means the

Director of any one of the five National

Marine Fisheries Service regions.

Project means an undertaking or a

proposal for research in support of

management of an interjurisdictional

fishery resource or an interstate fishery

management plan.

Research means work or investigative

study, designed to acquire knowledge of

fisheries resources and their habitat.

Secretary means the Secretary of

Commerce or his/her designee.

State means each of the several states,

the District of Columbia, the

Commonwealth of Puerto Rico,

American Samoa, the Virgin Islands,

Guam, or the Commonwealth of the

Northern Mariana Islands.

State Agency means any department,

agency, commission, or official of a state

authorized under the laws of the State

to regulate commercial fisheries or

enforce laws relating to commercial

fisheries.

Value means the monetary worth of

fishery resources used in developing the

apportionment formula, which is equal

to the price paid at the first point of

landing.

Volume means the weight of the

fishery resource as landed, at the first

point of landing.

§ 253.21 Apportionment.

(a) Apportionment formula. The

amount of funds apportioned to each

state is to be determined by the

Secretary as the ratio which the equally

weighted average of the volume and

value of fishery resources harvested by

domestic commercial fishermen and

landed within such state during the 3

most recent calendar years for which

data satisfactory to the Secretary are

available bears to the total equally

weighted average of the volume and

value of all fishery resources harvested

by domestic commercial fishermen and
19176 Federal Register / Vol. 61, No. 85 / Wednesday, May 1, 1996 / Rules and Regulations

landed within all of the states during

those calendar years.

(1) The equally weighted average

value is determined by the following

formula:

Volume of 

A percent

X State

Volume of all States =

Value of X

B percent

 State

Value of all States =

[ % %] A B+ = 2

State percentage used to

determine state' s share of

the total available funds

(2) Upon appropriation of funds by

Congress, the Secretary will take the

following actions:

(i) Determine each state’s share

according to the apportionment formula.

(ii) Certify the funds to the respective

NMFS Regional Director.

(iii) Instruct NMFS Regional Directors

to promptly notify states of funds’

availability.

(b) No state, under the apportionment

formula in paragraph (a) of this section,

that has a ratio of one-third of 1 percent

or higher may receive an apportionment

for any fiscal year that is less than 1

percent of the total amount of funds

available for that fiscal year.

(c) If a State’s ratio under the

apportionment formula in paragraph (b)

of this section is less than one-third of

1 percent, that state may receive funding

if the state:

(1) Is signatory to an interstate fishery

compact;

(2) Has entered into an enforcement

agreement with the Secretary and/or the

Secretary of the Interior for a fishery

that is managed under an interstate

fishery management plan;

(3) Borders one or more of the Great

Lakes;

(4) Has entered into an interstate

cooperative fishery management

agreement and has in effect an interstate

fisheries management plan or an

interstate fisheries research program; or

(5) Has adopted a Federal fishery

management plan for an

interjurisdictional fishery resource.

(d) Any state that has a ratio of less

than one-third of 1 percent and meets

any of the requirements set forth in

paragraphs (c) (1) through (5) of this

section may receive an apportionment

for any fiscal year that is not less than

0.5 percent of the total amount of funds

available for apportionment for such

fiscal year.

(e) No state may receive an

apportionment under this section for

any fiscal year that is more than 6

percent of the total amount of funds

available for apportionment for such

fiscal year.

(f) Unused apportionments. Any part

of an apportionment for any fiscal year

to any state:

(1) That is not obligated during that

year;

(2) With respect to which the state

notifies the Secretary that it does not

wish to receive that part; or

(3) That is returned to the Secretary

by the state, may not be considered to

be appropriated to that state and must

be added to such funds as are

appropriated for the next fiscal year.

Any notification or return of funds by a

state referred to in this section is

irrevocable.

§ 253.22 State projects.

(a) General—(1) Designation of state

agency. The Governor of each state shall

notify the Secretary of which agency of

the state government is authorized

under its laws to regulate commercial

fisheries and is, therefore, designated

receive financial assistance awards. An

official of such agency shall certify

which official(s) is authorized in

accordance with state law to commit the

state to participation under the Act, to

sign project documents, and to receive

payments.

(2) States that choose to submit

proposals in any fiscal year must so

notify the NMFS Regional Director

before the end of the third quarter of

that fiscal year.

(3) Any state may, through its state

agency, submit to the NMFS Regional

Director a completed NOAA Grants and

Cooperative Agreement Application

Package with its proposal for a project,

which may be multiyear. Proposals

must describe the full scope of work,

specifications, and cost estimates for

such project.

(4) States may submit a proposal for

a project through, and request payment

to be made to, an Interstate Fisheries

Commission. Any payment so made

shall be charged against the

apportionment of the appropriate

state(s). Submitting a project through

one of the Commissions does not

remove the matching funds requirement

for any state, as provided in paragraph

(c) of this section.

(b) Evaluation of projects. The

Secretary, before approving any

proposal for a project, will evaluate the

proposal as to its applicability, in

accordance with 16 U.S.C. 4104(a)(2).

(c) State matching requirements. The

Federal share of the costs of any project

conducted under this subpart, including

a project submitted through an Interstate

Commission, cannot exceed 75 percent

of the total estimated cost of the project,

unless:

(1) The state has adopted an interstate

fishery management plan for the fishery

resource to which the project applies; or

(2) The state has adopted fishery

regulations that the Secretary has

determined are consistent with any

Federal fishery management plan for the

species to which the project applies, in

which case the Federal share cannot

exceed 90 percent of the total estimated

cost of the project.

(d) Financial assistance award. If the

Secretary approves or disapproves a

proposal for a project, he or she will

promptly give written notification,

including, if disapproved, a detailed

explanation of the reason(s) for the

disapproval.

(e) Restrictions. (1) The total cost of

all items included for engineering,

planning, inspection, and unforeseen

contingencies in connection with any

works to be constructed as part of such

a proposed project shall not exceed 10

percent of the total cost of such works,

and shall be paid by the state as a part
Federal Register / Vol. 61, No. 85 / Wednesday, May 1, 1996 / Rules and Regulations 19177

of its contribution to the total cost of the

project.

(2) The expenditure of funds under

this subpart may be applied only to

projects for which a proposal has been

evaluated under paragraph (b) of this

section and approved by the Secretary,

except that up to $25,000 each fiscal

year may be awarded to a state out of

the state’s regular apportionment to

carry out an ‘‘enforcement agreement.’’

An enforcement agreement does not

require state matching funds.

(f) Prosecution of work. All work must

be performed in accordance with

applicable state laws or regulations,

except when such laws or regulations

are in conflict with Federal laws or

regulations such that the Federal law or

regulation prevails.

§ 253.23 Other funds.

(a) Funds for disaster assistance. (1)

The Secretary shall retain sole authority

in distributing any disaster assistance

funds made available under section

308(b) of the Act. The Secretary may

distribute these funds after he or she has

made a thorough evaluation of the

scientific information submitted, and

has determined that a commercial

fishery failure of a fishery resource

arising from natural or undetermined

causes has occurred. Funds may only be

used to restore the resource affected by

the disaster, and only by existing

methods and technology. Any fishery

resource used in computing the states’

amount under the apportionment

formula in § 253.21(a) will qualify for

funding under this section. The Federal

share of the cost of any activity

conducted under the disaster provision

of the Act shall be limited to 75 percent

of the total cost.

(2) In addition, pursuant to section

308(d) of the Act, the Secretary is

authorized to award grants to persons

engaged in commercial fisheries, for

uninsured losses determined by the

Secretary to have been suffered as a

direct result of a fishery resource

disaster. Funds may be distributed by

the Secretary only after notice and

opportunity for public comment of the

appropriate limitations, terms, and

conditions for awarding assistance

under this section. Assistance provided

under this section is limited to 75

percent of an uninsured loss to the

extent that such losses have not been

compensated by other Federal or State

programs.

(b) Funds for interstate commissions.

Funds authorized to support the efforts

of the three chartered Interstate Marine

Fisheries Commissions to develop and

maintain interstate fishery management

plans for interjurisdictional fisheries

will be divided equally among the

Commissions.

§ 253.24 Administrative requirements.

Federal assistance awards made as a

result of this Act are subject to all

Federal laws, Executive Orders, Office

of Management and Budget Circulars as

incorporated by the award; Department

of Commerce and NOAA regulations;

policies and procedures applicable to

Federal financial assistance awards; and

terms and conditions of the awards.

PART 255—[REMOVED]

4. Under the authority of 46 U.S.C.

1271–1279, part 255 is removed.

[FR Doc. 96–10664 Filed 4–30–96; 8:45 am]

BILLING CODE 3510–22–P

COMMODITY FUTURES TRADING

COMMISSION

17 CFR Part 1

Early Warning Reporting

Requirements, Minimum Financial

Requirements, Prepayment of

Subordinated Debt, Gross Collection

of Exchange-Set Margin for Omnibus

Accounts and Capital Charge on

Receivables From Foreign Brokers

AGENCY: Commodity Futures Trading

Commission.

ACTION: Final rules.

SUMMARY: Rule 1.12 of the Commodity

Futures Trading Commission

(Commission or CFTC) sets forth the

financial early warning reporting

requirements for futures commission

merchants (FCMs) and introducing

brokers (IBs), which are designed to

afford the Commission and industry

self-regulatory organizations (SROs)

sufficient advance notice of a firm’s

financial or operational problems to take

such protective or remedial action as

may be needed to assure the safety of

customer funds and the integrity of the

marketplace. The Commission has

determined to adopt amendments to

Commission Rule 1.12, applicable to

FCMs only, that will: amend paragraph

(g) to require the reporting of a

reduction in net capital of 20 percent or

more within two business days and a

planned reduction in excess adjusted

net capital of 30 percent or more two

business days prior thereto, and to make

that paragraph applicable to all FCMs,

rather than just those FCMs subject to

the risk assessment reporting

requirements of Commission Rule 1.15;

require reporting of a margin call that

exceeds an FCM’s excess adjusted net

capital which remains unanswered by

the close of business on the day

following the issuance of the call; and

require reporting by an FCM when-ever

its excess adjusted net capital is less

than six percent of the maintenance

margin required to support positions of

noncustomers carried by the FCM,

unless the noncustomer is itself subject

to the Commission’s minimum financial

requirements for an FCM or the

Securities and Exchange Commission’s

(SEC’s) minimum financial

requirements for a securities brokerdealer (BD).

The Commission has also determined

to adopt amendments to: Rules

1.17(a)(1)(i) and (ii) to (a) increase the

minimum required dollar amount of

adjusted net capital for FCMs from

$50,000 to $250,000, (b) increase the

minimum required dollar amount of

adjusted net capital for IBs from $20,000

to $30,000, and (c) make the amount of

adjusted net capital required by a

registered futures association for its

member FCMs and IBs an element of the

Commission’s minimum financial

requirements for FCMs and IBs; Rule

1.17(h)(2)(vii) with respect to the

procedure to obtain approval for

prepayment of subordinated debt; and

Rule 1.58, which governs gross

collection of exchange-set margins for

omnibus accounts, to make it applicable

to omnibus accounts carried by FCMs

for foreign brokers. The Commission

believes that these amendments will

conform the Commission’s rules with

those of SROs and therefore should not

require changes in the operations of

most firms. In addition, the Commission

has determined that the five percent

capital charge for unsecured receivables

from a foreign broker will not apply

where the receivables represent deposits

required to maintain futures or options

positions, the foreign broker has been

granted comparability relief under

Commission Rule 30.10, and the asset is

held in accordance with the relevant

grant of relief under Rule 30.10 at the

foreign broker, with another foreign

broker that has been granted

comparability relief under Commission

Rule 30.10, or at a depository in the

same jurisdiction as either foreign

broker in accordance with Commission

Rule 30.7.

EFFECTIVE DATE: May 31, 1996.

FOR FURTHER INFORMATION CONTACT: Paul

H. Bjarnason, Jr., Chief Accountant, or

Lawrence B. Patent, Associate Chief

Counsel, Division of Trading and

Markets, Commodity Futures Trading

Commission, 1155 21st Street, N.W.,

Washington, D.C. 20581; telephone

(202) 418–5459 or 418–5439.