83 FR 24228 - Merchant Marine Act and Magnuson-Stevens Act Provisions; Fishing Vessel, Fishing Facility and Individual Fishing Quota and Harvesting Rights Lending Program Regulations
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration Federal Register Volume 83, Issue 102 (May 25, 2018)
National Oceanic and Atmospheric Administration
Federal Register Volume 83, Issue 102 (May 25, 2018)
| Page Range | 24228-24232 | |
| FR Document | 2018-11207 |
[Federal Register Volume 83, Number 102 (Friday, May 25, 2018)] [Rules and Regulations] [Pages 24228-24232] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-11207] ======================================================================= ----------------------------------------------------------------------- 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
![24228 Federal Register / Vol. 83, No. 102 / Friday, May 25, 2018 / Rules and Regulations
DEPARTMENT OF TRANSPORTATION § 376.12 [Corrected] section to the existing FFP regulations
■ 2. On page 16224, in the third column, to implement this statutory change. The
Federal Motor Carrier Safety in amendment 17, the instruction net effect of this change to the
Administration ‘‘Amend § 376.12 by revising paragraphs regulations will be to provide additional
(f), (g), and (l) to read as follows:’’ is authority for the program to lend, and
49 CFR Parts 370, 371, 373, 375, 376, corrected to read ‘‘Amend § 376.12 by providing FFP financing to additional
378, 379, 380, 382, 387, 390, 391, 395, revising the section heading and fisheries while leaving the original IFQ
396, and 398 paragraphs (f), (g), and (l) to read as authority to Fishery Management
follows:’’. Councils to use as needed.
[Docket No. FMCSA–2012–0376] DATES: This final rule is effective June
§ 390.5 [Corrected]
25, 2018.
■ 3. On page 16226, in the third column,
RIN 2126–AB47 FOR FURTHER INFORMATION CONTACT: Earl
in § 390.5, the phrase ‘‘1701–1710,,’’ is
Electronic Documents and Signatures; corrected to read ‘‘1701–1710,’’. Bennett, at 301–427–8765 or via email
Correction at earl.bennett@noaa.gov.
§ 390.5T [Corrected]
SUPPLEMENTARY INFORMATION: Under the
AGENCY: Federal Motor Carrier Safety ■ 4. On page 16226, in the third column, authority of Chapter 537 of Title 46 of
Administration (FMCSA), DOT. in § 390.5T, the phrase ‘‘1701–1710,,’’ is the United States Code, 46 U.S.C. 53701,
corrected to read ‘‘1701–1710,’’. et seq., the FFP may provide long-term
ACTION: Final rule; correction and
withdrawal of regulatory guidance. § 395.15 [Corrected] financing to the commercial fishing and
■ 5. On page 16227, in the second aquaculture industries for fishing
SUMMARY: FMCSA corrects the vessels, fisheries facilities, aquaculture
column, in § 395.15(b)(5) the phrase ‘‘in
electronic documents and signatures facilities, and certain designated
paragraph (b)(4)’’ is corrected to read
final rule published on April 16, 2018 individual fishing quota (IFQs). Section
‘‘in paragraph (b)(4) of this section’’.
that amended FMCSA regulations to 302 of the Coast Guard Authorization
allow the use of electronic records and Issued under the authority of delegation in Act of 2015 (Pub. L. 114–120) amended
signatures to satisfy FMCSA’s regulatory 49 CFR 1.87: May 9, 2018.
Chapter 537, providing the FFP with the
requirements. This document corrects Larry W. Minor, authority to finance the purchase of
an amendatory instruction, removes two Associate Administrator for Policy. harvesting rights in a fishery that is
extra commas at the end of two phrases, [FR Doc. 2018–11127 Filed 5–24–18; 8:45 am] federally managed under a limited
and adds ‘‘of this section’’ to a cross BILLING CODE 4910–EX–P access system. This amendment is
reference in a paragraph. Finally, codified at 46 U.S.C. 53702(b)(4)(B). On
FMCSA rescinds its January 4, 2011, October 31, 2017, NMFS published a
interpretations and regulatory guidance. DEPARTMENT OF COMMERCE proposed rule to add a new section to
DATES: This correction is effective June the existing FFP regulations to
15, 2018. As of June 15, 2018, the National Oceanic and Atmospheric implement this statutory change and
document published at 76 FR 411 on Administration requested public comment (82 FR
Jan.4, 2011, is withdrawn. 50363). NMFS received eight responses,
50 CFR Part 253 of which two were not related to the
FOR FURTHER INFORMATION CONTACT: Mr.
David Miller, Office of Policy, Federal [Docket No. 170404355–8455–02] rulemaking five were in support and
Motor Carrier Safety Administration, one was neutral. The net effect of this
RIN 0648–BG80 final rule is to provide additional
1200 New Jersey Avenue SE,
Washington, DC 20590–0001, (202) 366– authority for the program to lend, while
Merchant Marine Act and Magnuson-
5011, david.miller@dot.gov. leaving the original IFQ authority to
Stevens Act Provisions; Fishing
Fishery Management Councils (FMCs)
If you have questions on viewing or Vessel, Fishing Facility and Individual
to use as needed.
submitting material to the docket, Fishing Quota and Harvesting Rights
contact Docket Services, telephone (202) Lending Program Regulations Existing IFQ Loan Authority
366–9826.
AGENCY: National Marine Fisheries 46 U.S.C. 53706 authorizes the FFP to
SUPPLEMENTARY INFORMATION: In FR Doc. Service (NMFS), National Oceanic and finance or refinance the purchase of
2018–07749, appearing on page 16210 Atmospheric Administration (NOAA), individual fishing quotas in accordance
in the Federal Register of Monday, Commerce. with section 303(d)(4) of the Magnuson-
April 16, 2018, the following corrections Stevens Fishery Conservation and
ACTION: Final rule; response to
are made: Management Act (MSA), now codified
comments.
■ 1. In the preamble, on page 16218, in at 16 U.S.C. 1853a(g). Under this
the second column, under the heading SUMMARY: NMFS’ Fisheries Finance provision of the MSA, an FMC may
‘‘49 CFR 390.31,’’ following the Program (FFP) provides long-term submit, and NMFS may approve and
sentence that reads ‘‘The requirement financing to the commercial fishing and implement, a loan program to aid in (1)
that the Agency be able to inspect aquaculture industries for fishing the acquisition of IFQ by fishermen who
records applies regardless of whether vessels, fisheries facilities, aquaculture fish from ‘‘small vessels,’’ and (2) the
the copy is in paper or electronic form’’, facilities, and certain designated first time purchase of IFQ by ‘‘entry
add a new paragraph to read as follows: individual fishing quota (IFQ). Section level fishermen.’’ Therefore, under this
amozie on DSK3GDR082PROD with RULES
‘‘In consideration of the final rule on 302 of the Coast Guard Authorization authority, the FFP cannot initiate or
electronic documents and signatures, Act of 2015 included new authority to implement a lending program to finance
the Agency rescinds Questions 1 finance the purchase of harvesting rights or refinance the purchase of IFQ until
through 13 (76 FR 411, Jan.4, 2011) in a fishery that is federally managed the appropriate FMC submits a request
(https://www.fmcsa.dot.gov/regulations/ under a limited access system. Through to NMFS and provides guidance for the
title49/section/390.31).’’ this final rule, the FFP adds a new requisite criteria.
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rights rule, by reserving $59 million of Islands Crab) be allowed to obtain loans requirements, and meet all requirements
loan authority for loans for those under the harvesting rights authority. to hold the harvesting rights under the
historical purposes and using the Response—NMFS agrees. We note applicable FMP at the time of loan
current balance of $41 million in loan that the Coast Guard Authorization Act closing. The FFP may require additional
authority for loans for harvesting rights. of 2015 does not establish ownership lending conditions and security terms
An additional commenter similarly limitations or include the same such as loan guarantees or security
requested that the final rule not cause a limitations that apply to the IFQ lending interests in other collateral to bring
redistribution away from, or additional programs, and it places no restriction on credit risk to acceptable levels.
limitations on, lending for historical the application of this new authority to Affiliated businesses, the borrower’s
uses in the Northwest Halibut/Sablefish any federally-managed limited access principals or majority shareholders,
Loan Program. fisheries. Furthermore, Section 302 of persons or entities with a financial
Response—NMFS generally agrees the Coast Guard Authorization Act of interest in the borrower, or any
with these comments. As explained in 2015 says the new lending authority is individuals holding community
the proposed rule, Section 302 of the ‘‘[i]n addition to the other eligible property rights may also be required to
Coast Guard Authorization Act of 2015 purposes and uses of direct loan provide a guaranty.
imposes no limitations on the extent of obligations provided for in’’ 46 U.S.C. In addition, all loan applicants are
financing to be provided by the FFP for Chapter 537, which includes the subject to background and credit
the purchase of harvesting rights. authority for the IFQ lending programs investigations, which may include, but
However, it does require that the in 46 U.S.C. 53706, meaning the new are not limited to, reviews for
Secretary make a minimum of $59 authority is intended to operate in unresolved fishing violations, criminal
million available each fiscal year for addition to the IFQ lending authority. background checks, delinquent debt
historical uses, as defined at 46 U.S.C. 46 U.S.C. 53702. Therefore, NMFS will investigations, and credit reports. Like
53701(8). 46 U.S.C. 53702(b)(3). NMFS consider applications from all fishers other FFP loan programs, lending for
anticipates that the balance of annual and owners of harvesting rights, harvesting rights is subject to a statutory
direct loan authority—currently $41 including those who presently loan limit of up to 80 percent of the
million—may be available to finance or participate in the existing IFQ loan actual cost of the transaction, set as the
refinance the purchase of harvesting fisheries or participate (or would purchase price or, in the case of
rights in federally managed fisheries participate except for certain refinancing, the current market value.
under a limited access system. This limitations) in the IFQ loan programs. The FFP retains sole discretion to
action will allow NMFS to fully use the As provided for in the new regulations, determine the transaction’s actual cost
program’s loan authority either for NMFS will accept and consider any or current market value.
historical purposes or for any input the North Pacific Fishery Harvesting rights loan amounts can
authorized new purposes should it be Management Council might have carry up to a 25-year term and can be
determined that demand or lack of regarding the availability of the new used to either purchase new rights or
demand in either area would result in harvesting rights loans in the existing refinance the debt associated with the
unused loan authority. The loan IFQ loan fisheries. The existing IFQ loan prior purchase(s) of harvesting rights. In
program currently operates on a ‘‘first fisheries (Northwest Halibut/Sablefish addition to maintaining a 20 percent
come, first served’’ basis. The loan and Bering Sea and Aleutian Islands minimum equity stake, borrowers
projects that are proposed with Crab) programs will also continue as refinancing existing debt will only
complete documentation and provided by 50 CFR 253.28 and 50 CFR receive the lesser of the outstanding
commitment fee earliest, are the first 253.30, respectively. amount of debt to be refinanced or 80
approved. However, for the harvesting Fostering smaller-scale and entry- percent of the current market value of
rights program, $41 million will be level fishers—One commenter urged the harvesting right.
reserved for harvesting rights loans until NOAA to continue fostering the growth If a borrower seeking refinancing fails
later in the lending year, to facilitate the and success of smaller-scale and entry- to have the requisite 20 percent equity
receipt and processing of harvesting level fishing communities, as is the case stake (measured as the difference
rights proposals. NMFS understands under the current IFQ loan programs, between the current market value of the
that early in the program’s and to prioritize sustainable fish farmers primary collateral and the amount of the
implementation it may take more time and wild-caught fishing communities loan), that borrower will need to pay
to complete harvesting rights loan when selecting beneficiaries of its grants down debt to meet the required level. In
approvals, and loan scheduling should and aid programs. addition, under FFP standards,
support that. However, in keeping with Response—While this rule does not borrowers are only eligible for
the direction in the Coast Guard affect grant programs, NMFS will refinancing if their initial purchase
Authorization Act of 2015, NMFS will continue to follow its statutory and would have been eligible for financing.
generally reserve $59 million for regulatory obligations with respect to The program will refinance harvesting
traditional loans until later in the the FFP, and will continue to provide rights acquired prior to this regulation if
lending year, prior to obligating the loans to applicants who meet all of the the buyer’s original purchase would
funds to loans for harvesting rights. statutory and regulatory requirements of have been eligible for FFP financing
Limitations in IFQ Loan Programs— the FFP, including loans for smaller- under the terms of this action.
One comment letter noted that IFQ loan scale and entry-level fishers under the Prospective borrowers may apply for
programs contain certain restrictive current IFQ loan programs. a loan through any of the NOAA
provisions, relating to entry-level and Fisheries Service regional FFP offices
small vessel fishermen, that were not Harvesting Rights Lending (St. Petersburg, FL; Gloucester, MA;
amozie on DSK3GDR082PROD with RULES
included in the statute or proposed rule Lending for harvesting rights will Seattle, WA). They must pay the
for the harvesting rights program, and follow existing FFP lending procedures appropriate application fee, set by 46
suggested that participants, specifically and guidelines. Borrowers must be U.S. U.S.C. 53713(b) as one-half of one
including crew, in these existing IFQ citizens or entities eligible to document percent of the loan amount requested,
loan fisheries (Northwest Halibut/ a vessel for coastwise trade under 46 which is made up of two parts. Half is
Sablefish and Bering Sea and Aleutian U.S.C. 50501, meet all general FFP the ‘‘filing fee,’’ and is nonrefundable
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![24232 Federal Register / Vol. 83, No. 102 / Friday, May 25, 2018 / Rules and Regulations
long-term, fixed rate financing provides Fishery Conservation and Management (ii) The borrower meets all other
only a positive economic impact. Act (16 U.S.C. 1802). applicable lending requirements; and
Importantly, the FFP does not regulate (b) Loan requirements and limitations. (iii) The refinancing is in an amount
or manage the affairs of its borrowers, These loan requirements and limitations up to 80 percent of the harvesting rights’
and the regulations impose no apply to individuals or entities who current market value, as determined at
additional compliance, operating or seek to finance or refinance the the sole discretion of the Program, and
other fees or costs on small entities acquisition of harvesting rights. subject to the limitation that the
other than a financing relationship (1) The borrower must meet all Program will not disburse any amount
would require. regulatory and statutory requirements to that exceeds the outstanding principal
As a result of this certification, an hold the harvesting rights at the time balance, plus accrued interest (if any), of
initial regulatory flexibility analysis is any such loan or refinancing loan would the existing harvesting rights’ debt being
not required and none has been close. refinanced or its fair market value,
prepared. (2) NMFS will accept and consider whichever is less.
the input of a Regional Fishery
List of Subjects in 50 CFR Part 253 Management Council at any time (2) In the event that the current
regarding the availability of loans in a market value of harvesting rights and
Aquaculture, Community principal loan balance do not meet the
development groups, Direct lending, fishery under the Council’s authority.
(i) The Council may submit an 80 percent requirement in paragraph
Financial assistance, Fisheries, Fishing, (c)(1)(iii) of this section, borrowers
explanation to NMFS, in writing, as to
Individual fishing quota, Harvesting seeking refinancing may be required to
why the availability of financing for
rights (privileges). provide additional down payment.
harvesting rights in a fishery would
Dated: May 21, 2018. harm the achievement of the goals and (d) Maturity. Loan maturity may not
Samuel D. Rauch III, objectives of the Fishery Management exceed 25 years, but may be shorter
Deputy Assistant Administrator for Plan applicable to the fishery. If NMFS depending on credit and other
Regulatory Programs, National Marine accepts the Council’s reasoning, considerations.
Fisheries Service. harvesting rights loans will not be (e) Repayment. Repayment will be by
For the reasons set forth in the provided, or will cease to be provided, equal quarterly installments of principal
preamble, NMFS amends 50 CFR part in that fishery. and interest.
253, subpart B, as follows: (ii) If NMFS determines that (f) Security. Although harvesting
harvesting rights loans will not be right(s) will be the primary collateral for
PART 253—FISHERIES ASSISTANCE provided in a fishery, NMFS will a loan, the Program may require
PROGRAMS publish a notice in the Federal Register additional security pledges to maintain
notifying the public that new loans will the priority of the Program’s security
■ 1. The authority citation for part 253 not be made in that fishery. interest. The Program, at its option, may
continues to read as follows: (iii) In such a scenario, pending also require all parties with significant
Authority: 46 U.S.C. 53701 and 16 U.S.C. applications will be returned and loan ownership interests to personally
4101 et seq. fees returned as exceptional guarantee loan repayment for any
circumstances justify the action. borrower that is a corporation,
Subpart B—Fisheries Finance Program (3) The harvesting rights to be partnership, or other entity, including
financed must be issued in a manner in collateral to secure the guarantees. Some
■ 2. Section 253.31 is added to read as which they can be individually projects may require additional security,
follows: identified such that a valid and specific collateral, or credit enhancement as
security interest can be recorded. This determined, in the sole discretion, by
§ 253.31 Harvesting rights loans.
determination shall be solely made by the Program.
(a) Specific definitions. For the the Program.
purposes of this section, the following (c) Refinancing. (1) The Program may (g) Program credit standards.
definitions apply: refinance any existing debts associated Harvesting rights loans, regardless of
(1) Harvesting right(s) means any with harvesting rights a borrower purpose, are subject to all Program
privilege to harvest fish in a fishery that currently holds, provided that: general credit standards and
is federally managed under a limited (i) The harvesting rights being requirements. Collateral, guarantee and
access system. refinanced would have been eligible for other requirements may be adjusted to
(2) Limited access system has the Program financing at the time the individual credit risks.
same meaning given to that term in borrower purchased them, if Program [FR Doc. 2018–11207 Filed 5–24–18; 8:45 am]
section 3 of the Magnuson-Stevens financing had been available; BILLING CODE 3510–22–P
amozie on DSK3GDR082PROD with RULES
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Document Created: 2018-05-25 02:12:56
Document Modified: 2018-05-25 02:12:56
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule; response to comments. | |
| Dates | This final rule is effective June 25, 2018. | |
| Contact | Earl Bennett, at 301-427-8765 or via email at earl.bennett[email protected] | |
| FR Citation | 83 FR 24228 | |
| RIN Number | 0648-BG80 | |
| CFR Associated | Aquaculture; Community Development Groups; Direct Lending; Financial Assistance; Fisheries; Fishing; Individual Fishing Quota and Harvesting Rights (privileges) |
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