Billing Code: 3510-22-F
[Docket No. 950616159-6146-03; I.D. 052496B]
RIN 0648-ZA16
Fishing Capacity Reduction Program (FCRP)
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Notice of proposed program and request for comments. SUMMARY: NMFS issues this notice to describe the proposed FCRP requirements and to solicit comments on the proposal. The proposed FCRP is a $25 million program designed to provide grants to the owners of fishing vessels participating in the Northeast multispecies limited access groundfish fishery who are willing to scrap or make their vessels permanently ineligible to participate in any of the fisheries of the United States and to surrender all associated Federal fish harvesting permits.
DATES: Comments must be submitted on or before [insert date 30 days after date of filing with the Office of the Federal Register].
ADDRESSES: Comments should be sent to the Financial Services Division, National Marine Fisheries Service, 1315 East West Hwy., Silver Spring, MD 20910.
FOR FURTHER INFORMATION CONTACT: Michael Grable, (301) 713-2390, fax (301) 589-2686.>
SUPPLEMENTARY INFORMATION:
I. Background
Under the provisions of Public Law 103-211, the Emergency Supplemental Appropriations Act of 1994, $2 million was made available as part of the Northeast Fisheries Assistance Program for a pilot FCRP, which was called the Fishing Capacity Reduction Demonstration Program (pilot program). The purpose of this program was to test an approach for permanently reducing the fishing capacity in the Northeast multispecies groundfish fishery. On October 11, 1995, NOAA announced that 114 vessel owners, with vessels worth over $52 million and representing 31 percent of the active groundfish capacity, applied to participate in the pilot program. Under the pilot program, NOAA has made grant awards to 11 vessel owners totaling $1.89 million. In addition to the 11 Federal multispecies limited access fishing permits surrendered under the pilot program, an additional 15 limited access fishing permits for the summer flounder, ocean quahog, squid, mackerel, and butterfish fisheries were retired as well. Overall, the pilot program has proven that a vessel removal program can be successfully designed and implemented, and that there is substantial interest within the fishing industry to participate in such a program.
As a result of the August 2, 1995, declaration of a fishery resource disaster by the Secretary of Commerce (Secretary), $25 million in emergency disaster assistance has been made available to NOAA for an expanded fishing capacity reduction program. The authority for this program is contained in section 308(d) of the Interjurisdictional Fisheries Act (IFA) of 1986 (16 U.S.C. 4107(d)), as amended.
Recent amendments to the IFA require that as a condition of awarding assistance under this program, the Secretary shall prohibit the vessel from being used for fishing and require that the vessel be (a) scrapped or otherwise disposed of in a manner approved by the Secretary; or (b) donated to a nonprofit organization and thereafter used only for purposes of research, education, or training; or (c) used for another non-fishing purpose, provided the Secretary determines that adequate measures are in place to ensure that the vessel cannot reenter any fishery. The amendments to the IFA also state that any vessel prohibited from fishing under this program will be permanently ineligible to hold a fishery endorsement.
NMFS has preliminarily determined that the only effective way to ensure that a vessel cannot reenter any state or Federal fishery is to require that a vesselþs Coast Guard document has a permanent restriction prohibiting that vessel from holding a fishery endorsement. Consequently, successful applicants with undocumented vessels would be required to scrap their vessels. Like the pilot program, voluntary sinking will be allowed as long as it is conducted in compliance with all applicable Federal, state and local environmental laws and regulations.
For documented vessels that obtain the necessary fishery endorsement restriction, NMFS is considering allowing the transfer of a vessel to a public entity or nonprofit organization for research (including fisheries research), education, training, humanitarian, safety, or law enforcement purposes, but will entertain comments on other appropriate reuses. If a vessel is transferred, NMFS is proposing that the entity to which the vessel is transferred will be required to scrap it once the vessel has served the purpose for which it was transferred to that entity. NMFS also specifically requests comment on the possibilities of vessel reuse and the transfer of vessels to private and public foreign entities, as well as domestic entities, for the limited purposes set forth in the amended IFA.
II. Definitions
Regulated groundfish species--those species that are regulated under the Northeast Multispecies Fishery Management Plan and are limited to cod, haddock, pollock, yellowtail flounder, winter flounder, gray sole, American plaice, windowpane flounder, white hake and redfish.
Valid multispecies limited access permit--those limited access permits defined in the regulations implementing the Northeast Multispecies Fishery Management Plan, as amended by Amendment 7, 50 CFR part 651.4(b). To be valid, a permit must be free of all permit sanctions, pending or otherwise, at the time that the application is submitted, and at the time of closing.
III. Proposed Program
The purpose of the FCRP is to reduce permanently the maximum effective fishing capacity within the groundfish fishery through the removal of fishing vessels and limited access fishing permits. Like the pilot program, the FCRP is a voluntary market based program intended to remove the greatest amount of effective capacity at the lowest cost and targeted at full-time groundfish vessels. It will also allow the applicant to establish a price for offered vessels and permits that will be scored in a competitive manner. Unlike the pilot program, NMFS is proposing that all fishing vessels with a valid multispecies limited access permit be eligible.
Based on comments received during the pilot program, NMFS is considering changes to the scoring method used in determining a vessel ownerþs score. Outlined below are the three alternatives currently under consideration:
Alternative I. This alternative would use the same eligibility requirements and formula as the pilot program. Only vessels that derived 65 percent or more of their gross revenues from the sale of regulated groundfish species during any 3 of the 4 years between 1991 and 1994 would be eligible. The performance of a vessel would continue to be measured by the average gross revenues from the sale of regulated groundfish species during the 3 years selected.
Alternative II. Under this alternative, the 65 percent regulated species threshold would be dropped, allowing any vessel with a valid multispecies limited access permit to be eligible, regardless of the percentage of their income generated from the sale of regulated groundfish species. The performance of a vessel would continue to be measured by the average annual gross revenues from the sale of regulated groundfish species.
Alternative III. This alternative would retain the 65 percent regulated species threshold, but allow vessel owners to use all gross revenues, as opposed to gross revenues from the sale of regulated groundfish species, when calculating vessel performance.
NMFS is particularly interested in receiving comments on the alternatives discussed above.
The following sections describe the proposed requirements and the application, scoring, ranking, and selection processes NMFS intends to follow under the FCRP.
IV. How to Apply
A. Eligible Applicants>
Applications for FCRP financial assistance will only be considered from owners of eligible fishing vessels, in accordance with the procedures set forth in this notice. An owner may be an individual who is a citizen or national of the United States, or a citizen of the Northern Mariana Islands, or a corporation, partnership, association (non profit or otherwise), trust, or other nongovernmental entity, if such an entity is a citizen within the meaning of section 802 of the Shipping Act, 1916, as amended (46 U.S.C. App. 802). Federal Government agencies or employees, including full-time, part-time, and intermittent personnel, and Fisheries Management Council members and employees are not eligible to submit an application. Vessel owners may not have earned more than $2,000,000 in net revenues from commercial fishing in any of the 3 years between 1991-1994 chosen by the applicant to determine eligibility.
For a vessel to be eligible for the FCRP, it must meet the following conditions:
1. Have a valid multispecies limited access fishing permit free of any permit sanctions, pending or otherwise, both at time of application and at closing. Vessel owners will be required to surrender such permits along with all other Federal fishing permits issued to that vessel if awarded financial assistance under the FCRP.
2. Be active and functioning at the time the vessel owner submits an application, which means that a vessel must have made at least two fishing trips (of any duration for any species) during the 2-month period prior to the final date for the submission of applications for FCRP assistance, and be capable of fishing for groundfish in Federal waters under its own power at the time of application.
3. Depending on which alternative is chosen, one of the following would apply:
Alternative I. Have derived 65 percent or more of its gross annual revenues from the sale of regulated groundfish species in any 3 of the 4 years between 1991 and 1994. This means that successful applicants must be able to prove that 65 percent or more of the gross revenues (for the vessel involved) in any 3 years between 1991, 1992, 1993, and 1994, was from the sale of regulated groundfish species.
Alternative II. There would be no 65 percent regulated species threshold. Vessel owners would not be required to show that they generated a certain level of revenues from the sale of regulated groundfish species.
Alternative III. Vessel owners must satisfy the 65 percent threshold requirement, as in Alternative I.
B. Submission of Applications
Vessel owners will be given 60 days from the date of publication in the Federal Register of the final FCRP Notice to submit an FCRP application form. The form may request the following information: Owner and vessel name, vessel number, gross revenues from all landings, and gross revenues from groundfish landings only. Proof of eligibility need not be submitted with the application. Applicants will be required to submit one signed original application. No facsimile applications will be accepted. Proof of receipt may be obtained by sending an application by certified mail, return receipt requested. The anticipated time required to process applications is 120 days from the closing date of the solicitation.
All multispecies limited access fishing permit holders will be mailed a copy of the application form along with a copy of the Federal Register notice announcing the availability of funds under the FCRP. Applications will also be made available at the NMFS Regional Office at One Blackburn Drive, Gloucester, MA 01930-2298.
V. Application Review and Scoring
All timely submitted and completed applications will be assigned a score calculated by the following method: Step A--Identify Bid
The bid is the dollar amount submitted by the applicant in the application.
Step B--Calculate Vessel Performance
Depending on which alternative is chosen, vessel performance would be calculated by one of the following methods:
Alternative I. Vessel performance would be determined by averaging the annual revenues from the sale of regulated groundfish species harvested by that vessel for any 3 of the 4 years during the qualifying period (1991, 1992, 1993, 1994). Applicants could only use revenues from those years in which 65 percent or more of gross revenues was derived from the sale of regulated groundfish species.
Alternative II. Vessel performance would be determined by averaging the annual revenues from the sale of regulated groundfish species harvested by that vessel for any 3 of the 4 years during the qualifying period, regardless of the percentage this represented of a vessel's gross revenues.
Alternative III. Vessel performance would be determined by averaging the annual gross revenues from the sale of all fish harvested by that vessel for any 3 of the 4 years during the qualifying period. Applicants could only use gross revenues from those years in which 65 percent or more of the gross revenues were derived from the sale of regulated groundfish species.
Step C--Determine Vessel Score
Depending on which alternative is chosen, a vessel score would be calculated using one of the following formulas: Alternative I
BID
SCORE = ______________________________________
(average annual revenues from sale of
regulated groundfish species from any
3 of 4 years during qualifying period)Gross revenues may only be used from those years in which an applicant can prove that 65 percent or more of the revenues were derived from the sale of regulated groundfish species.
Alternative II
BID
SCORE = _________________________________________
(average annual revenues from the sale of
regulated groundfish species for any 3 of
4 years during qualifying period)No 65 percent regulated species threshold requirement.
Alternative III
BID
SCORE = ________________________________________________
(average annual gross revenues for any 3 of 4 years
during qualifying period)Gross revenues may only be used from those years in which an applicant can prove that 65 percent or more of the revenues were derived from the sale of regulated groundfish species.
Determining a bid amount is extremely important, since this will be a key factor in the success of an applicant. If the bid is too high in relation to the vessel's overall performance, the bid may not be competitive. In the pilot program, successful applicants submitted bids that resulted in scores between 0.494 and 0.725. Applicants will need to carefully consider all costs involved with receiving financial assistance under the FCRP, including satisfying vessel liens, vessel scrapping, vessel transfer costs, and tax consequences. Applicants may wish to consider selling vessel gear and equipment separately as a way of reducing the amount of a bid. Vessel owners may retain removable gear and equipment for private disposition.
VI. Ranking of Applications
Applications will be ranked, starting with the lowest score. The Assistant Administrator for Fisheries, NOAA, will determine which applications are eligible with competitive bids based on the ranking of the applications. NMFS may initially find eligible more applications than it can fund but will investigate all such applications in order of their ranking. NMFS will reserve the right to reject any or all applications and may solicit additional applications. If additional applications are solicited, all applications submitted previously and not determined to be eligible with competitive bids will be considered rejected. NMFS will notify eligible applicants with competitive bids in writing. However, eligible applicants are not guaranteed funding by simply having a competitive bid; they will be subject to a thorough investigation described in section VII.
VII. Investigation of Applications
A representative from the NMFS Financial Services Division will contact eligible applicants with competitive bids regarding the following:
1. Ensuring that applicants meet all eligibility
requirements and can document all claims made in their
applications.
2. Determining what debts exist against the vessel offered
in the application, including any outstanding civil penalties or
fines.
3. Determining how applicants will satisfy all vessel liens
before scrapping or transferring the vessels. Eligible
applicants will have to provide written evidence of vessel
lienors' willingness to satisfy vessel liens for specific
amounts.
4. Ensuring availability of documentation required to
support eligible applications, including the following:
a. Multispecies limited access fishing permit. The
applicant may provide a copy of the permit to NMFS, but the
actual permit must be surrendered at the time of grant award
closing.
b. Proof of landings. Depending on which alternative
is chosen, NMFS may require proof that 65 percent or more of a
vessel's gross revenues came from the sale of regulated
groundfish species in 3 of the 4 years during the qualifying
period. Landing slips or sales tickets may be used to verify
claimed revenues.
c. Proof of gross revenues. Depending on which
alternative is chosen, vessel owners may be required to prove the
annual gross revenues from the sale of all species for the 3
years selected from the qualifying period of 1991 through 1994.
Documentation to support income may include, but is not limited
to, individual or corporate tax returns, or fish sale receipts
accompanied by vessel settlement reports. NMFS may require sworn
affidavits from the reporting party regarding the accuracy of the
information contained in supporting documentation. Sales that
cannot be substantiated will not be included in the calculation
of either gross revenues or revenues from regulated groundfish
species.
d. Documentation of fishing capability.
Documentation that vessel made at least two fishing trips (of any
duration for any species) during the 2-month period prior to the
final date of the submission of application for FCRP assistance.
NMFS will provide legal notice of the names of vessels and
their owners for which an investigation has been successfully
completed. Proprietary information submitted by applicants will
only be disclosed to Federal officials who are responsible for
the FCRP or otherwise when required by court order or other
applicable law. This information is subject to the Freedom of
Information Act.
VIII. Establishment of Award Terms Representatives from the NMFS Financial Services Division will establish the programmatic terms of each financial assistance award for eligible applications validated during the investigation process. These terms will be binding on the applicants and will control the applicant's post award rights and obligations. Terms of the award will address such matters as how the outstanding liens on the vessels will be satisfied and how the vessel covered in the application will be scrapped or transferred to an eligible entity for an eligible use. Award terms will also include provisions to ensure that applicants do not violate fisheries laws and regulations prior to closing. At their own expense, applicants may choose to retain closing attorneys to represent their interests. To the extent necessary, closing attorneys will be required to pay grant funds to vessel lienors in return for lien releases. Should vessel liens exceed the amount of the FCRP award, attorneys must obtain funds from applicants and exchange them for lien releases.
IX. Award Closing Procedures
After the NMFS Financial Services Division has established the award terms for each eligible and validated application, and the NOAA Grants Management Division has reviewed and approved these applications for compliance with the administrative requirements in section X, applicants will be notified in writing of the award by the grants officer and a closing date will be set. Applicants may be required to have an attorney present at the closing. If a vessel is going to be scrapped, 75 percent of the award will be available at the closing. The remaining 25 percent will be available only when applicants provide proof of vessel scrapping. If these arrangements have been made by the time of closing, 100 percent of the award may be available at that time. Vessel scrapping must occur promptly. If a vessel is going to be transferred to an eligible entity, the transfer must also occur at the closing and 75 percent of the award will be available at that time. The remaining 25 percent will be available when the applicant shows proof that the transferred vessel has a permanent restriction on its certificate of documentation prohibiting that vessel from participating in the fisheries of the United States. If these arrangements have been made by closing, 100 percent of the award may be available at that time. NMFS reserves the right to terminate financial assistance negotiations with an applicant if, in the opinion of NMFS, there are material adverse changes in an applicant's ability to meet the terms and conditions of a FCRP award agreement.
X. Administrative Requirements
A. Primary Applicant Certification
Applicants whose applications are selected for funding will be required to submit a completed Standard Form 424B, "Assurances--Non-Construction Programs" and Form CD-511, "Certification Regarding Debarment, Suspension and Other Responsibility Matters; Drug-Free Workplace Requirements and Lobbying," and the following explanations are hereby provided:
1. Nonprocurement debarment and suspension.
Prospective participants (as defined at 15 CFR 26.105) are
subject to 15 CFR part 26, "Nonprocurement Debarment and
Suspension," and the related section of the certification form
prescribed above applies;
2. Drug-free workplace. Grantees (as defined at 15
CFR 26.605) are subject to 15 CFR part 26, subpart F,
"Governmentwide Requirements for Drug-Free Workplace (Grants),"
and the related section of the certification form prescribed
above applies;
3. Anti-lobbying. Persons (as defined at 15 CFR
28.105) are subject to the lobbying provisions of 31 U.S.C. 1352,
"Limitation on use of appropriated funds to influence certain
Federal contracting and financial transactions," and the lobbying
section of the certification form prescribed above applies to
applications/bids for grants, cooperative agreements, and
contracts for more than $100,000, and loans and loan guarantees
for more than $150,000, or the single family maximum mortgage
limit for affected programs, whichever is greater; and
4. Anti-lobbying disclosure. Any applicant who has
paid or will pay for lobbying using any funds must submit an
SF-LLL, "Disclosure of Lobbying Activities," as required under 15
CFR part 28, Appendix B.
5. Lower tier certifications. Applicants shall
require applicants/bidders for subgrants, contracts,
subcontracts, or other lower tier covered transactions at any
tier under the award to submit, if applicable, a completed Form
CD-512, "Certifications Regarding Debarment, Suspension,
Ineligibility and Voluntary Exclusion-Lower Tier Covered
Transactions and Lobbying" and disclosure form SF-LLL,
"Disclosure of Lobbying Activities." Form CD-512 is intended for
the use of recipients and should not be transmitted to the
Department of Commerce (Department). SF-LLL submitted by any
tier recipient or subrecipient should be submitted to the
Department in accordance with the instructions contained in the
award document. B. Other Requirements
1. Federal policies and procedures. FCRP grant
recipients and subrecipients are subject to all Federal laws and
Federal and Department policies, regulations, and procedures
applicable to Federal financial assistance awards. Federal
assistance funds cannot be used to pay for a Federal debt.
2. Name check review. Applicants are subject to a
name check review process. Name checks are intended to reveal if
any key individuals associated with the recipient have been
convicted of, or are presently facing, criminal charges such as
fraud, theft, perjury, or other matters that significantly
reflect on the recipient's management, honesty, or financial
integrity. A false statement on the application is grounds for
denial or termination of funds and grounds for possible
punishment by a fine or imprisonment (18 U.S.C. 1001).
3. Financial management certification/preaward
accounting survey. At the discretion of the NOAA Grants
Officer, applicants may be required to have their financial
management systems certified by an independent public accountant
as being in compliance with Federal standards specified in the
applicable Office of Management and Budget (OMB) Circulars prior
to execution of the award. Any first-time applicant for Federal
grant funds may be subject to a pre-award accounting survey by
the Department prior to execution of the award.
4. Past performance. Unsatisfactory performance
under prior Federal awards may result in an application not being
considered for funding.
5. Delinquent Federal debts. No award of Federal
funds shall be made to an applicant or to its subrecipients who
have an outstanding delinquent Federal debt or fine until either:
a. The delinquent account is paid in full,
b. A negotiated repayment schedule is established and at
least one payment is received, or
c. Other arrangements satisfactory to the Department are
made.
6. Buy American-made equipment or products.
Applicants are hereby notified that they are encouraged, to the
extent feasible, to purchase American-made equipment and products
with funding under this program.
7. Pre-award activities. If applicants incur any
costs prior to an award being made, they do so solely at their
own risk of not being reimbursed by the Government.
Notwithstanding any verbal or written assurance that may have
been received, there is no obligation on the part of the
Department to cover pre-award costs.Classification
This action has been determined to be not significant for purposes of E.O. 12866.
Applications under this program are subject to E.O. 12372, "Intergovernmental Review of Federal Programs."
This notice contains a collection-of-information requirement subject to the Paperwork Reduction Act. The collection of this information has been approved by the OMB (OMB control number 0648-0289). Public reporting burden for preparation of the grant application is estimated to be 1 hour per response including the time for reviewing instructions, gathering and maintaining the data needed, and completing and reviewing the collection of information. An additional 15 hour reporting burden is estimated for those applicants who are accepted by NMFS, including time needed to document the income claims on their applications, how outstanding liens on their vessels will be satisfied, and how the vessels will be scrapped. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Michael Grable, Financial Services Division (see ADDRESSES). Notwithstanding any other provision of the 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.
Dated:
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