[Federal Register Volume 61, Number 85 (Wednesday, May 1, 1996)]
[Rules and Regulations]
[Pages 19171-19177]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10664]



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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.

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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) information-collection requirements to 
reflect the consolidation.

EFFECTIVE DATE: May 1, 1996.

ADDRESSES: Michael L. Grable, Chief, Financial Services Division, 
National Marine Fisheries Service, 1315 East-West 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 It replaces outdated, confusing, 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 
Sec. 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 Sec. 902.1, paragraph (b) the table, is amended by adding in 
the left column under 50 CFR, in numerical order, the

[[Page 19172]]

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


Sec. 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 self-supporting.
    (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


Sec. 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.

[[Page 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.


Sec. 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.


Sec. 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.


Sec. 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

[[Page 19174]]

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.


Sec. 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.


Sec. 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 
interest-rate 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.


Sec. 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

[[Page 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.


Sec. 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.


Sec. 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.


Sec. 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


Sec. 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.


Sec. 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

[[Page 19176]]

landed within all of the states during those calendar years.
    (1) The equally weighted average value is determined by the 
following formula:
[GRAPHIC] [TIFF OMITTED] TR01MY96.004

[GRAPHIC] [TIFF OMITTED] TR01MY96.005

[GRAPHIC] [TIFF OMITTED] TR01MY96.006

    (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.


Sec. 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

[[Page 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.


Sec. 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 Sec. 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.


Sec. 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