The Fishing Capacity Reduction Initiative (FCRI); Final Program Notice and Announcement of Availability of Federal Assistance

DEPARTMENT OF COMMERCE

[Docket No. 95106161159-6230-04; I.D. 082096I]

RIN 0648-ZA16

The Fishing Capacity Reduction Initiative (FCRI); Final Program

Notice and Announcement of Availability of Federal Assistance

AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA), Commerce.

ACTION: Final program notice.

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SUMMARY: NMFS issues this notice to respond to comments on the proposed

FCRI, describe the final program requirements, and announce the

availability of Federal assistance. The Department of Commerce

(Commerce) has made $25 million available for a grant program for

fishermen who hold Northeast multispecies limited access groundfish

fishery permits, and who scrap or make their vessels permanently

ineligible to participate in any fishery and surrender all associated

Federal fish harvesting permits. The FCRI's objectives are to provide

grants to eligible fishermen adversely impacted by the groundfish

fishery disaster, and to aid the long-term viability of the groundfish

fishery resource through the reduction of active harvesting capacity at

the lowest cost.

DATES: Applications must be postmarked by October 28, 1996.

ADDRESSES: Application forms may be obtained from, and completed

applications sent to, the Northeast Financial Services Branch, National

Marine Fisheries Service, One Blackburn Drive, Gloucester, MA 01930-

2298.

FOR FURTHER INFORMATION CONTACT: Leo Erwin, NMFS, (508) 281-9203.

SUPPLEMENTARY INFORMATION:

I. Background

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

the FCRI. 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.

The IFA requires that before providing financial assistance under a

fishing capacity reduction program, the Secretary determine that

adequate conservation and management measures are in place in that

fishery. On May 15, 1996, the Secretary approved Amendment 7 to the

Northeast Multispecies Groundfish Management Plan, which implements

several major measures designed to rebuild overfished groundfish

resources. The Secretary hereby determines, therefore, that the

measures contained in Amendment 7 are adequate conservation and

management measures for purposes of implementing a fishing capacity

reduction program.

On June 4, 1996, NMFS published a Federal Register notice (61 FR

28177) announcing the proposed FCRI and requesting comments on a number

of issues including eligibility, scoring methods, vessel reuse,

scrapping, and program mission. The background for this program is

provided in the June 4, 1996, notice and is not repeated here.

II. Comments and Responses

Fifteen comments were received from the following entities: U.S.

Coast Guard Station, Portland, ME; Atlantic Trawlers Fishing, Inc.;

Associated Fisheries of Maine, The Groundfish Group; Athearn Marine

Agency, Inc.; Endangered Seas Campaign, World Wildlife Fund

International; Atlantic Salmon of Maine; Chairman, Board of

Supervisors, Cochise County, AZ; Environmental Defense Fund;

Conservation Law Foundation; New England Fishery Management Council;

and five individuals. Similar comments have been combined.

Comment 1: Two commenters suggested NMFS should not proceed with

the $25 million program until the agency had established appropriate

means to evaluate whether the Fishing Capacity Reduction Demonstration

Program (FCRDP) achieved its objective and was able to ensure that a

larger program would not cause substantial damage to other fisheries.

Response 1: The objectives of the FCRDP were to demonstrate that

such a program could be successfully designed and implemented, and that

the fishing industry was interested in participating in the program.

Under the $2 million FCRDP, NMFS successfully removed 11 vessels and 26

permits from the fishery, and received bids from fishermen worth over

$52 million. Clearly the objectives of the program were met. With

respect to harming other fisheries, NMFS relies on sound conservation

and management plans to protect fishery resources. Many New England

fisheries are under limited entry schemes, which means that anyone

wishing to enter one of those fisheries must purchase an existing

permitted vessel. A fisherman participating in the FCRI may only enter

the groundfish fishery if he purchases a vessel that is already

permitted for that fishery. However, the FCRI does not restrict a

participant's privilege to fish. Participants are free to purchase a

permitted groundfish vessel, or fish with a different vessel in an open

access fishery. Finally, under the FCRDP, NMFS removed 15 limited

access permits from other fisheries and anticipates that the larger

program will provide substantial spillover benefits to the non-

groundfish fisheries because vessel owners are required to surrender

all Federal fishing permits.

Comment 2: Several commenters believed that the program's design to

remove active fishing capacity has no long-term utility and should be

changed to remove potential fishing capacity.

Response 2: NMFS believes that focusing the program on reducing

active fishing capacity is an appropriate design to aid in the long-

term viability of the groundfish fishery resource. The program gauges

active fishing capacity in terms of a vessel's performance, as measured

by its groundfish revenues. In this manner, the program should target

those vessels associated with higher

[[Page 44301]]

landings. Potential or latent fishing capacity is difficult to measure,

particularly since the skill of individual vessel captains plays a key

role. However, NMFS recognizes that latent fishing capacity is a

concern and may address it in future programs.

Comment 3: Several comments reflected the view that using revenues

as a measure of capacity does not necessarily mean that the boats with

the most capacity will be removed.

Response 3: NMFS believes using revenues as a measure of capacity

is simple and provides a cost-effective standard. Measuring fishing

capacity can involve many complicated variables and NMFS remains

convinced that the program objective of removing active fishing

capacity at the least cost is best achieved by using revenues as a

measure of capacity.

Comment 4: A number of comments discussed the various scoring

proposals. Comments were fairly evenly divided in support of Scoring

Alternatives I and III. No comments supported Alternative II.

Response 4: NMFS outlined three alternative scoring proposals in

the proposed program notice and, based on the comments received, sees

no compelling reason to change the scoring method used in the

demonstration program. NMFS believes Alternative I, which was used in

the demonstration program, is the most effective way to remove active

groundfish capacity at the least cost.

Comment 5: One commenter wanted NMFS to prohibit eligibility of

corporations owned by Fishery Management Council members.

Response 5: NMFS agrees and has incorporated this prohibition into

the final program.

Comment 6: A fisherman commented that he would like to see a clear

statement that recipients of FCRI financial assistance are not giving

up their rights to fish.

Response 6: NMFS agrees that the FCRI is not intended to eliminate

a participant's privilege to fish, and has incorporated this comment

into the final program.

Comment 7: NMFS received the most comments on the issues associated

with vessel reuse, mandatory scrapping, and the transfer of fishing

vessels abroad. Some commenters supported a continuation of the

mandatory scrapping requirement; some wanted foreign transfers

prohibited because of vessel tracking and enforcement concerns, while

others wanted NMFS to allow vessels to be reused for any activity.

Response 7: At the time of implementation of the pilot program,

mandatory scrapping or sinking were the only ways for NMFS to ensure

that fishing vessels did not reenter another fishery. Subsequently,

Congress amended the IFA to provide NMFS with statutory authority to

ensure that vessels do not reenter any fishery after receiving a FCRI

grant. The IFA now allows for vessel reuse and specifically identifies

vessel transfers to nonprofit organizations for purposes of research,

education, and training. The IFA also authorizes the Secretary to allow

other appropriate non-fishing uses. As described in the proposed

program notice, NMFS proposed allowing vessels to also be reused for

humanitarian, safety, or law enforcement purposes, and requested

comments on allowing foreign transfers to public and private entities.

Based on the comments, NMFS will allow vessel transfers to a U.S.

public entity, a U.S. nonprofit organization, and foreign national

governments for research (including fisheries research), education,

training, humanitarian, safety, or law enforcement purposes. Transfers

to foreign private entities will not be allowed due to tracking and

enforcement problems.

Comment 8: One fishing group strongly opposed releasing any

information on applicants until after the selection process is over.

Response 8: NMFS intends to provide legal notice of the names of

vessels and their owners for which a successful investigation has been

completed. During program implementation, all scores and bids will be

treated as proprietary information and will only be disclosed to

Federal officials who are responsible for the FCRI or otherwise when

required by court order or other applicable law, such as the Freedom of

Information Act (FOIA). The amount of the bids of successful applicants

will be released after completion of the program, and not prior to

selection. The FOIA prohibits NMFS from releasing commercial or

financial information that is privileged or confidential.

Comment 9: One commenter argued that in view of the Nation's

financial status and cuts in various programs such as Medicare, Social

Security, and education programs, the Federal government should not be

spending $25 million on a vessel and permit buy out.

Response 9: The FCRI is an integral part of the Administration's

response to the groundfish disaster in New England. The FCRI is

specifically aimed at providing economic assistance to people, in this

case fishermen and their families, who have been harmed as a result of

the fishery disaster. The funds being used for the FCRI are statutorily

restricted to provide financial assistance to fishermen adversely

impacted by fishing resource disasters and cannot be used for other

purposes.

Comment 10: One commenter worried that the FCRI would dislocate

highly skilled fishermen with no provisions for retraining.

Response 10: As stated earlier in this notice, the FCRI is intended

to provide fishermen with an alternative to remaining in the fishery.

The program is not intended to force people into unemployment. The FCRI

is a voluntary program. Fishermen choose to submit bids and relinquish

their permits and vessels. Presumably, the fishermen who participate in

the program have thought through the pros and cons of offering their

vessels and permits.

Comment 11: One commenter was concerned that no environmental

impact statement on the FCRI had been prepared.

Response 11: NMFS has prepared an Environmental Assessment (EA) of

the FCRI. An EA is required for compliance with the National

Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4371 et seq., which

is a condition for the grant. The purpose of an EA is to determine

whether significant impacts on the quality of the human environment

could result from the proposed action. The environmental analysis in

this EA provides the basis for this determination and must evaluate the

intensity or severity of the impact of an action and the significance

of an action with respect to society as a whole, the affected region

and interests, and the locality. If the action is determined not to be

significant, the EA and resulting finding of no significant impact

would be the final environmental documents required by NEPA. An

Environmental Impact Statement (EIS) must be prepared only if the

proposed action may cause a significant impact to the quality of the

human environment. With respect to the FCRI, the EA prepared by NMFS

found that the proposed action would not have a significant impact on

the quality of the human environment. Therefore, no EIS was prepared.

Comment 12: One commenter suggested NMFS should match landings

slips with tax records as a way to validate groundfish landings because

some boats may have slipped by last time.

Response 12: NMFS will continue to use every means available to

validate landings and, as in the pilot program, landings that cannot be

verified will not be allowed.

Comment 13: One commenter expressed concern that fishing vessels

should be ``fishable'' at the time of grant award closing.

[[Page 44302]]

Response 13: NMFS agrees with this comment and has incorporated a

relevant provision into the final program.

Comment 14: One commenter stated that the pilot program allowed

fishermen to receive more than the fair market value of their vessel,

which then allowed for the fisherman to purchase a better vessel and

continue fishing.

Response 14: The FCRI does not use a fair market value test or

vessel survey because the fair market value of the vessel would not

capture the full value of the fisherman's bid. The bid includes the

vessel's worth and the value of the associated permits. Each

fisherman's bid is scored in relation to the groundfish revenues

associated with the vessel being offered. All bids receive a score and

are ranked against all other bids. Successful applicants are not

prevented from purchasing another fishing vessel just as they can

today. However, the net effect is that, because there is a moratorium

on new vessels entering the fishery, there would be one less vessel and

permit in the fishery.

III. Definitions

Eligible multispecies limited access permit means those limited

access permits defined in the regulations implementing the Northeast

Multispecies Fishery Management Plan, as amended by Amendment 7, 50 CFR

651.4(b). To be eligible, a permit must be free of all permit sanctions

or Notice of Permit Sanction, at the time of application and at grant

award closing. Owners of permits who have been issued a permit sanction

or a Notice of Permit Sanction are not eligible for consideration

because compensation of fishermen who violate fishery regulations would

contravene the program's objective to aid the long-term viability of

the fishery resource.

Fisherman means any natural or legal person who (1) owns a fishing

vessel with an eligible multispecies limited access permit, (2) has

less than $2,000,000 in net revenues from commercial fishing annually,

and (3) is a U.S. citizen or permanent resident alien.

Qualifying period means the calendar years of 1991, 1992, 1993 and

1994.

Regulated groundfish species means 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.

U.S. citizen means a U.S. citizen for the purpose of documenting

vessels in the U.S. coastwise trade. Coastwise trade documentation

requires: (1) All sole proprietors to be U.S. citizens, (2) 75 percent

of all partners (and 100 percent of all general partners) in a

partnership to be U.S. citizens, and (3) 75 percent of all owners of a

corporation (as well as its chief executive officer and the minority of

its directors necessary to constitute a quorum) to be U.S. citizens. 46

CFR 67, Subpart C.

IV. FCRI Program Overview

The objectives of the FCRI are to provide grants to eligible

fishermen adversely impacted by the groundfish fishery disaster, and to

aid the long-term viability of the fishery resource through the

reduction of active fishing capacity at the lowest cost. All fishing

vessels with an eligible valid multispecies limited access permit may

apply. The FCRI allows the applicant to establish a price for offered

vessels and permits that will be scored in a competitive manner.

Although the FCRI is designed to remove vessels and permits from the

groundfish fishery, successful applicants do not forfeit their

privilege to fish.

A successful applicant with an undocumented vessel will be required

to scrap the vessel. Sinking will also be allowed, so long as it is

conducted in compliance with all applicable Federal, state, and local

environmental laws and regulations. A successful applicant with a

documented vessel will be required to scrap or sink the vessel or

transfer it to a U.S. public entity, a U.S. nonprofit organization, or

a foreign national government for research (including fisheries

research), education, training, humanitarian, safety, or law

enforcement purposes. If a vessel is transferred to an eligible entity,

NMFS will require that the title include a provision that the vessel be

scrapped by that entity once it has served the purpose for which it was

transferred. Before any vessel may be transferred, NMFS will require

that the vessel's Coast Guard document has a permanent restriction

prohibiting that vessel from holding a fishery endorsement. NMFS

reserves the right to approve all vessel transfers.

Vessel Transfers

Recognizing that limited Federal funding is available for this

program, the fishermen may leverage these monies with non-Federal

resources. NMFS will allow vessels to be either donated or sold to a

U.S. public entity, a U.S. nonprofit organization, or a foreign

national government. The ability to sell their vessels should allow

fishermen to submit lower bids, and consequently exit the fishery at a

lower cost to the government. Because the fishermen will have been

partially compensated by the government through the purchase of their

permits, acquiring entities may be able to purchase the vessels at

below market value, allowing these entities to obtain vessels that

otherwise would have been beyond their limited budgets. In engaging in

these transfers, fishermen have the opportunity to receive the best

value for the loss of their vessels and permits. Vessel transfers will

benefit all parties and enhance the government's ability to remove the

greatest capacity at the least cost.

Regardless of the manner in which a vessel is disposed of or

transferred, all Federal fishing permits associated with that vessel

must be surrendered at the time of grant award closing.

V. How to Apply

A. Eligible Applications

Applications for FCRI grants will only be considered from eligible

fishermen, as defined in this notice, who are owners of eligible

vessels, which meet the conditions stated below. Federal Government

agencies or employees, including full-time, part-time, and intermittent

personnel, and Fishery Management Council members (or corporations

owned by them) and employees are not eligible to submit an application.

For a vessel to be eligible for the FCRI, it must meet the

following conditions:

1. Have an eligible multispecies limited access fishing permit.

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 FCRI. Although pending or assessed civil

penalties for state or Federal fisheries violations do not disqualify a

vessel owner from application, all outstanding and/or pending

investigations, charges, and penalties must be resolved within a

reasonable period of time prior to grant award closing. The Secretary

retains discretion to determine the applicant's integrity and

responsibility to receive Federal assistance funds and to comply with

the terms and conditions of the FCRI award, and may deny funding or

impose special award conditions pursuant to any pending or outstanding

state or Federal fishery violation.

2. Be active and functioning. Successful applicants will be

required to show proof that their vessel made at least two (2) fishing

trips (of any duration for any species) during the 60 days prior to the

date for the submission of applications for FCRI assistance and that

the vessel is capable of fishing for groundfish in Federal waters under

its

[[Page 44303]]

own power at the time of application and grant award closing.

3. Have derived 65 percent or more of its gross annual revenues

from the sale of regulated groundfish species in each of the 3 years

during the qualifying period. This means that in 1991, 1992, 1993, and

1994, successful applicants must be able to prove that 65 percent or

more of the gross revenues (for the vessel involved) in each of the 3

years chosen during the qualifying period was from the sale of

regulated groundfish species.

B. Submission of Applications

Applicants are limited to one bid per vessel under the FCRI. If the

amount of a bid is predicated upon a transfer for money to a third

party, but that transfer is not approved, applicants may not submit a

new bid.

Vessel owners will be given 60 days from the date of filing for

public inspection at the Office of the Federal Register of this final

FCRI notice to submit a FCRI application form. 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. NMFS will provide applicants with proof of receipt.

The anticipated time required to process applications is 120 days from

the date of this notice.

All multispecies limited access fishing permit holders will be

mailed a copy of the FCRI application form along with a copy of this

Federal Register notice. FCRI application forms are also available at

the NMFS Regional Office (See ADDRESSES).

VI. 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

Vessel performance will be determined by averaging the annual

revenues from the sale of regulated groundfish species harvested by

that vessel for the highest 3 years during the qualifying period.

Applicants may only use revenues from those years in which 65 percent

or more of gross revenues were derived from the sale of regulated

groundfish species.

Step C. Determine Vessel Score

A vessel score will be calculated using the following formula:

[GRAPHIC] [TIFF OMITTED] TN28AU96.734

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 FCRI; these costs include satisfying vessel liens,

vessel scrapping or vessel transfer costs, and tax liabilities.

Applicants will also need to consider whether they are willing to

accept a bid that was predicated upon a transfer agreement that may not

subsequently be approved. 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 any removable gear and equipment for

private disposition, as long as it was not purchased under another

Federal grant. In that situation, the equipment must be disposed of in

accordance with the original grant terms.

VII. Ranking of Applications

Applications will be ranked, starting with the lowest score. The

Assistant Administrator for Fisheries, NOAA, will determine which

applications are eligible for further consideration 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 reserves the right to

reject any or all applications if it is determined by NMFS that such

action is in the best interests of the program or if revisions to the

program are warranted in the future. NMFS may also solicit additional

applications. If additional applications are solicited, all

applications submitted previously and not determined to be eligible

will be considered rejected. NMFS will notify eligible applicants in

writing. However, eligible applicants are not guaranteed funding by

simply having a competitive bid; they will be subject to a thorough

investigation as described in section VII.

VIII. 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 of regulated species. NMFS will require proof

that 65 percent or more of a vessel's gross revenues came from the sale

of regulated groundfish species in 3 years during the qualifying

period. Landing slips or sales tickets may be used to verify claimed

revenues.

c. Proof of gross revenues for highest 3 years. Vessel owners must

be able to prove the annual gross revenues from the sale of fish for

the vessel involved for the 3 years used on the application.

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 active and functioning fishing vessel. NMFS

will require documentation that the vessel made at least two fishing

trips (of any

[[Page 44304]]

duration for any species) within 60 days prior to October 28, 1996.

NMFS will also ascertain that the vessel is capable of fishing for

groundfish in Federal waters under its own power at the time of grant

award closing.

NMFS will provide legal notice of names of vessels and their owners

for which an investigation has been successfully completed, and in

order to facilitate vessel transfers, may provide copies of the

published legal notices to interested eligible entities. Publication of

the legal notice does not obligate NOAA to make an award. NOAA may also

establish a World Wide Web Internet site prior to termination of the

application period in order to facilitate communication between

potential participants in vessel transfer agreements.

Proprietary information submitted by applicants will only be

disclosed to Federal officials who are responsible for the FCRI or

otherwise when required by court order or other applicable law, such as

the Freedom of Information Act (FOIA). The FOIA prohibits NMFS from

releasing commercial or financial information that is privileged or

confidential.

IX. 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. NMFS

reserves the right to approve all transfers. If a bid is submitted that

relies upon an unapproved transfer, and that transfer is subsequently

disapproved, an applicant cannot submit another bid. NOAA also reserves

the right to terminate financial assistance as a result of any

enforcement actions that NMFS regards as indicating a lack of grantee

integrity and responsibility to receive Federal assistance funds and

comply with the terms and conditions of the FCRI award.

X. Grant Award Procedures

After NMFS Financial Services Division and the NOAA Grants

Management Division have reviewed and approved the terms of eligible

and validated applications, then applicants will be notified in writing

of the award and a grant award closing date will be set. Applicants may

be required to have an attorney present at the grant award closing. To

the extent necessary, attorneys will be required to pay grant funds to

vessel lienors in return for lien releases. Should vessel liens exceed

the amount of the FCRI award, attorneys must obtain funds from

applicants and exchange them for lien releases. If a vessel is going to

be scrapped, 75 percent of the award will be available at the grant

award closing. The remaining 25 percent will be available only when

applicants have made arrangements for vessel scrapping and other

prescrapping dispositions acceptable to NMFS. If these arrangements

have been made by the time of grant award 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 grant award 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 U.S.

If these arrangements have been made by the grant award 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 FCRI award

agreement, including any outstanding and/or pending investigation,

charge, or penalty relating to a violation of state or Federal

fisheries laws. As a precaution against insured vessel losses, NOAA

reserves the right to reduce financial assistance awards by the amount

recovered by the applicant through insurance claims.

XI. Administrative Requirements

A. Primary Applicant Certification

Applicants whose applications are recommended 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.

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 Commerce. 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. FCRI 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 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.

3. A false statement on the application is grounds for denial or

termination of funds and grounds for possible

[[Page 44305]]

punishment by a fine or imprisonment (18 U.S.C. 1001).

4. Financial management certification/preaward accounting survey.

Applicants, at the discretion of the NOAA Grants Officer, 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.

5. Past performance. Unsatisfactory performance under prior Federal

awards may result in an application not being considered for funding.

6. 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.

7. 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.

8. 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.

Catalogue of Federal Domestic Assistance

The FCRI is listed in the ``Catalogue of Federal Domestic

Assistance'' under No. 11.452, unallied Industry Projects.

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 (PRA). The collection of this information has

been approved by OMB under 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 for documenting 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 NMFS (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.

The Assistant General Counsel for Legislation and Regulation of the

Department certified to the Chief Counsel for Advocacy of the Small

Business Administration that this notice would not have a significant

economic impact on a substantial number of small entities. As of August

20, 1996, 1,664 fishermen held multispecies limited access permits,

representing the entire universe of fishermen potentially eligible to

participate in the FCRI. The FCRI is expected to result in the

elimination of approximately 80 vessels, along with their associated

permits.

There is no doubt that the FCRI will have a significant economic

impact, as defined under the Regulatory Flexibility Act (RFA), on those

fishermen who participate in this program. The FCRI, however, will not

affect a ``substantial number'' of small entities, defined as more than

20 percent of the business entities which are potentially eligible for

participation in the program. Indeed, assuming 80 fishermen are

ultimately bought out, these fishermen would represent only 4.8 percent

of the small entities potentially affected by the FCRI. Therefore, the

impacts of the notice are not significant within the meaning of the

RFA. They are not likely to lead to a reduction in the annual gross

revenues by more than 5 percent or an increase in total costs of

production by more than 5 percent, nor would this action result in any

greater compliance costs.

Dated: August 22, 1996.

Charles Karnella,

Acting Assistant Administrator for Fisheries, National Marine Fisheries

Service.

[FR Doc. 96-21875 Filed 8-23-96; 1:01 pm]

BILLING CODE 3510-22-P