50 CFR § 253.1 - 253.54 - Fisheries Assistance Programs

71 SUBCHAPTER F—AID TO FISHERIES PART 253—FISHERIES ASSISTANCE PROGRAMS Subpart A—General Sec. 253.1 Purpose. Subpart B—Fisheries Finance Program 253.10 General definitions. 253.11 General FFP credit standards and re quirements. 253.12 Credit application. 253.13 Initial investigation and approval. 253.14 Loan documents. 253.15 Recourse against other parties. 253.16 Actual cost. 253.17 Insurance. 253.18 Closing. 253.19 Dual-use CCF. 253.20 Fees. 253.21 Demand by guaranteed noteholder and payment. 253.22 Program operating guidelines. 253.23 Default and liquidation. 253.24 Enforcement violations and adverse actions. 253.25 Other administrative requirements. 253.26 Traditional loans. 253.27 IFQ financing. 253.28 Halibut sablefish IFQ loans. 253.29 CDQ loans. 253.30 Crab IFQ loans. 253.31 Harvesting rights loans. 253.32–253.49 [Reserved] Subpart C—Interjurisdictional Fisheries 253.50 Definitions. 253.51 Apportionment. 253.52 State projects. 253.53 Other funds. 253.54 Administrative requirements. AUTHORITY: 46 U.S.C. 53701 and 16 U.S.C. 4101 et seq. SOURCE: 75 FR 78623, Dec. 16, 2010, unless otherwise noted. Subpart A—General § 253.1 Purpose. (a) The regulations in this part per tain to fisheries assistance programs. Subpart B of this part governs the Fisheries Finance Program (FFP or the Program), which makes capacity neu tral long-term direct fisheries and aquaculture loans. The FFP conducts all credit investigations, makes all credit determinations and holds and services all credit collateral. (b) Subpart C of this part implements Public Law 99–659 (16 U.S.C. 4100 et seq.), which has two objectives: (1) Promote and encourage State ac tivities in support of the management of interjurisdictional fishery resources identified in interstate or Federal fish ery management plans; and (2) Promote and encourage manage ment of interjurisdictional fishery re sources throughout their range. (3) The scope of this part includes guidance on making financial assist ance awards to States or Interstate Commissions to undertake projects in support of management of interjuris dictional fishery resources in both the executive economic zone (EEZ) and State waters, and to encourage States to enter into enforcement agreements with either the Department of Com merce or the Department of the Inte rior. Subpart B—Fisheries Finance Program § 253.10 General definitions. The terms used in this subpart have the following meanings: Act means Chapter 537 of Title 46 of the U.S. Code, (46 U.S.C. 53701–35), as may be amended from time to time. Actual cost means the sum of all amounts for a project paid by an obli gor (or related person), as well as all amounts that the Program determines the obligor will become obligated to pay, as such amounts are calculated by § 253.16. Applicant means the individual or en tity applying for a loan (the prospec tive obligor). Application means the documents pro vided to or requested by NMFS from an applicant to apply for a loan. Application fee means 0.5 percent of the dollar amount of financing re quested. Approval in principle letter (AIP) means a written communication from NMFS to the applicant expressing the 72 50 CFR Ch. II (10–1–23 Edition) § 253.10 agency’s commitment to provide fi nancing for a project, subject to all ap plicable regulatory and Program re quirements and in accordance with the terms and conditions contained in the AIP. Aquaculture facility means land, structures, appurtenances, labora tories, water craft built in the U.S., and any equipment used for the hatch ing, caring for, or growing fish, under controlled circumstances for commer cial purposes, as well as the unloading, receiving, holding, processing, or dis tribution of such fish. Capital Construction Fund (CCF), as described under 46 U.S.C. 53501–17, al lows owners of eligible vessels to re serve capital for replacement vessels, additional vessels, reconstruction of vessels, or reconstructed vessels, built in the United States and documented under the laws of the United States, for operation in the fisheries of the United States. Captain means a vessel operator or a vessel master. Charter fishing means fishing from a vessel carrying a ‘‘passenger for hire,’’ as defined in 46 U.S.C. 2101(21a), such passenger being engaged in rec reational fishing, from whom consider ation is provided as a condition of car riage on the vessel, whether directly or indirectly flowing to the owner, charterer, operator, agent, or any other person having an interest in the vessel. Citizen means a ‘‘citizen of the United States,’’ as described in 46 U.S.C. 104, or an entity who is a citizen for the purpose of documenting a vessel in the coastwise trade under 46 U.S.C. 50501. Crewman means any individual, other than a captain, a passenger for hire, or a fisheries observer working on a vessel that is engaged in fishing. Demand means a noteholder’s request that a debtor or guarantor pay a note’s full principal and interest balance. Facility means a fishery or an aqua culture facility. Fish means finfish, mollusks, crusta ceans and all other forms of aquatic animal and plant life, other than ma rine mammals and birds. Fisheries harvest authorization means any transferable permit, license or other right, approval, or privilege to engage in fishing. Fishery facility means land, land structures, water craft that do not en gage in fishing, and equipment used for transporting, unloading, receiving, holding, processing, preserving, or dis tributing fish for commercial purposes (including any water craft used for charter fishing). Fishing means: (1) The catching, taking, or har vesting of fish; (2) The attempted catching, taking, or harvesting of fish; (3) Any other activity which can rea sonably be expected to result in the catching, taking, or harvesting of fish; (4) Any operations at sea in support of, or in preparation for, any activity described in paragraphs (1) through (3) of this section. (5) Fishing does not include any sci entific research activity which is con ducted by a scientific research vessel. Fishing industry for the purposes of this part, means the broad sector of the national economy comprised of persons or entities that are engaged in or sub stantially associated with fishing, in cluding aquaculture, charter operators, guides, harvesters, outfitters, proc essors, suppliers, among others, with out regard to the location of their ac tivity or whether they are engaged in fishing for wild stocks or aquaculture. Guarantee means a guarantor’s con tractual promise to repay indebtedness if an obligor fails to repay as agreed. Guarantee fee means one percent of a guaranteed note’s average annual un paid principal balance. Guaranteed note means a promissory note from an obligor to a noteholder, the repayment of which the United States guarantees. IFQ means Individual Fishing Quota, which is a Federal permit under a lim ited access system to harvest a quan tity of fish, expressed by a unit or units representing a percentage of the total allowable catch of a fishery that may be received or held for exclusive use by a person. IFQ does not include community development quotas. Noteholder means a guaranteed note payee. Obligor means a party primarily lia ble for payment of the principal of or 73 Nat’l Marine Fish. Serv./NOAA, Comm. § 253.10 interest on an obligation, used inter changeably with the terms ‘‘note payor’’ or ‘‘notemaker.’’ Origination year means the year in which an application for a loan is ac cepted for processing. Program means the Fisheries Finance Program, Financial Services Division, National Marine Fisheries Service, Na tional Oceanic and Atmospheric Ad ministration, U.S. Department of Com merce. Project means: (1) The refinancing or construction of a new fishing vessel or the financing or refinancing of a fishery or aquaculture facility or the refurbishing or purchase of an existing vessel or facility, includ ing, but not limited to, architectural, engineering, inspection, delivery, out fitting, and interest costs, as well as the cost of any consulting contract the Program requires; (2) The purchase or refinance of any limited access privilege, IFQ, fisheries access right, permit, or other fisheries harvest authorization, for which the actual cost of the purchase of such au thorization would be eligible under the Act for direct loans; (3) Activities (other than fishing ca pacity reduction, as set forth in part 600.1000 of this title) that assist in the transition to reduced fishing capacity; (4) Technologies or upgrades designed to improve collection and reporting of fishery-dependent data, to reduce by catch, to improve selectivity or reduce adverse impacts of fishing gear, or to improve safety; or (5) Any other activity that helps de velop the U.S. fishing industry, includ ing, but not limited to, measures de signed or intended to improve a ves sel’s fuel efficiency, to increase fish eries exports, to develop an underuti lized fishery, or to enhance financial stability, financial performance, growth, productivity, or any other business attribute related to fishing or fisheries. RAM means the Restricted Access Management division in the Alaska Re gional Office of NMFS or the office that undertakes the duties of this divi sion to issue or manage quota shares. Refinancing means newer debt that either replaces older debt or reim burses applicants for previous expendi tures. Refinancing/assumption fee means a one time fee assessed on the principal amount of an existing FFP note to be refinanced or assumed. Refurbishing means any reconstruc tion, reconditioning, or other improve ment of existing vessels or facilities, but does not include routine repairs or activities characterized as mainte nance. Security documents mean all docu ments related to the collateral secur ing the U.S. Note’s repayment and all other assurances, undertakings, and contractual arrangements associated with financing or guarantees provided by NMFS. Underutilized fishery means any stock of fish (a) harvested below its optimum yield or (b) limited to a level of harvest or cultivation below that cor responding to optimum yield by the lack of aggregate facilities. U.S. means the United States of America and, for citizenship purposes, includes the fifty states, Common wealth of Puerto Rico, American Samoa, the Territory of the U.S. Vir gin Islands, Guam, the Republic of the Marshal Islands, the Federated States of Micronesia, the Commonwealth of the Northern Mariana Islands, and any other commonwealth, territory, or pos session of the United States, or any po litical subdivision of any of them. U.S. Note means a promissory note payable by the obligor to the United States. Useful life means the period during which project property will, as deter mined by the Program, remain eco nomically productive. Vessel means any vessel documented under U.S. law and used for fishing. Wise use means the development, ad vancement, management, conserva tion, and protection of fishery re sources, that is not inconsistent with the National Standards for Fishery Conservation and Management (16 U.S.C. 1851) and any other relevant cri teria, as may be specified in applicable statutes, regulations, Fishery Manage ment Plans, or NMFS guidance. 74 50 CFR Ch. II (10–1–23 Edition) § 253.11 § 253.11 General FFP credit standards and requirements. (a) Principal. Unless explicitly stated otherwise in these regulations or appli cable statutes, the amount of any loan may not exceed 80 percent of actual cost, as such term is described in § 253.16; provided that the Program may approve an amount that is less, in ac cordance with its credit determination. (b) Interest rate. Each loan’s annual interest rate will be 2 percent greater than the U.S. Department of Treas ury’s cost of borrowing public funds of an equivalent maturity at the time the loan closes. (c) Ability and experience requirements. An obligor and the majority of its prin cipals must demonstrate the ability, experience, resources, character, rep utation, and other qualifications the Program deems necessary for success fully operating the project property and protecting the Program’s interest in the project. (d) Lending restrictions. Unless it can document that unique or extraordinary circumstances exist, the Program will not provide financing: (1) For venture capital purposes; or (2) To an applicant who cannot docu ment successful fishing industry abil ity and experience of a duration, de gree, and nature that the Program deems necessary to successfully repay the requested loan. (e) Income and expense projections. The Program, using conservative income and expense projections for the project property’s operation, must determine that projected net earnings can service all debt, properly maintain the project property, and protect the Program’s in terest against risks of loss, including the industry’s cyclical economics. (f) Working capital. The Program must determine that a project has suf ficient initial working capital to achieve net earnings projections, fund all foreseeable contingencies, and pro tect the Program’s interest in the project. In making its determination, the Program will use a conservative as sessment of an applicant’s financial condition, and at the Program’s discre tion, some portion of projected work ing capital needs may be met by some thing other than current assets minus liabilities (i.e., by a line or letter of credit, non-current assets readily capa ble of generating working capital, a guarantor with sufficient financial re sources, etc.). (g) Audited financial statements. Au dited financial statements will ordi narily be required for any obligor with large or financially complex oper ations, as determined by the program, whose financial condition the Program believes cannot be otherwise assessed with reasonable certainty. (h) Consultant services. Expert con sulting services may be necessary to help the Program assess a project’s economic, technical, or financial feasi bility. The Program will notify the ap plicant if an expert is required. The Program will select and employ the necessary consultant, but require the applicant to reimburse the Program for any fees charged by the consultant. In the event that an application requires expert consulting services, the loan will not be closed until the applicant fully reimburses the Program for the consulting fees. This cost may, at the Program’s discretion, be included in the amount of the note. For a declined application, the Program may reim burse itself from the application fee as described in § 253.12, including any por tion known as the commitment fee that could otherwise be refunded to the applicant. (i) Property inspections. The Program may require adequate condition and valuation inspection of all property used as collateral as the basis for as sessing the property’s worth and suit ability for lending. The Program may also require these at specified periods during the life of the loan. These must be conducted by competent and impar tial inspectors acceptable to the Pro gram. Inspection cost(s) will be at an applicant’s expense. Those occurring before application approval may be in cluded in actual cost, as actual cost is described in § 253.16. (j) Collateral. The Program shall have first lien(s) on all primary project property pledged as collateral. The Program, at its discretion, may request additional collateral and will consider any additional collateral in its credit determinations. (k) No additional liens. All primary project property pledged as collateral, 75 Nat’l Marine Fish. Serv./NOAA, Comm. § 253.13 including any additional collateral, shall be free of additional liens, unless the Program, at the request of the ap plicant, expressly waives this require ment in writing. (l) General FFP credit standards apply. Unless explicitly stated otherwise in these rules, all FFP direct lending is subject to the above general credit standards and requirements found in §§ 253.12 through 253.30. The Program may adjust collateral, guarantee and other requirements to reflect indi vidual credit risks. (m) Adverse legal proceedings. The Program, at its own discretion, may decline or hold in abeyance any loan approval or disbursement(s) to any ap plicant found to have outstanding law suits, citations, hearings, liabilities, appeals, sanctions or other pending ac tions whose negative outcome could significantly impact, in the opinion of the Program, the financial cir cumstances of the applicant. § 253.12 Credit application. (a) Applicant. (1) An applicant must be a U.S. citizen and be eligible to doc ument a vessel in the coastwise trade: and (2) Only the legal title holder of project property, or its parent com pany (or the lessee of an appropriate long-term lease) may apply for a loan; and (3) An applicant and the majority of its principals must generally have the ability, experience, resources, char acter, reputation, and other qualifica tions the Program deems necessary for successfully operating, utilizing, or carrying out the project and protecting the Program’s interest; and (4) Applicants should apply to the ap propriate NMFS Regional Financial Services Branch to be considered. (b) Application fee. An application fee of 0.5 percent of the dollar amount of an application is due when the applica tion is formally accepted. Upon sub mission, 50 percent of the application fee, known as the ‘‘filing fee,’’ is non refundable; the remainder, known as the ‘‘commitment fee,’’ may be re funded if the Program declines an ap plication or an applicant withdraws its application before the Program issues an AIP letter, as described in § 253.13(e). The Program will not issue an AIP let ter if any of the application fee re mains unpaid. No portion of the appli cation fee shall be refunded once the Program issues an AIP letter. (c) False statement. A false statement on an application is grounds for denial or termination of funds, grounds for possible punishment by a fine or im prisonment as provided in 18 U.S.C. 1001 and an event of a security default. § 253.13 Initial investigation and ap proval. (a) The Program shall undertake a due diligence investigation of every ap plication it receives to determine if, in the Program’s sole judgment, the ap plication is both: (1) Eligible for a loan because it meets applicable loan requirements; and (2) Qualified for a loan because the project is deemed an acceptable credit risk. (b) The Program will approve eligible and qualified applicants by evaluating the information obtained during the application and investigation process. (c) Among other investigations, ap plicants may be subject to a back ground check, fisheries violations check and credit review. Background checks are intended to reveal if any key individuals associated with the ap plicant have been convicted of or are presently facing criminal charges such as fraud, theft, perjury, or other mat ters which significantly reflect on the applicant’s honesty or financial integ rity. (d) The Program, at its own discre tion, may decline or delay approval of any loans or disbursements to any ap plicant found to have outstanding cita tions, notices of violations, or other pending legal actions or unresolved claims. (e) The Program may place any terms and conditions on such approvals that the Program, in its sole discre tion, deems necessary and appropriate. (f) Credit decision. (1) The Program shall issue to approved applicants an AIP letter, which shall describe the terms and conditions of the loan, in cluding (but not limited to) loan amounts, maturities, additional collat eral, repayment sources or guarantees. 76 50 CFR Ch. II (10–1–23 Edition) § 253.14 Such terms and conditions are at the Program’s sole discretion and shall also be incorporated in security docu ments that the Program prepares. An applicant’s non-acceptance of any terms and conditions may result in an applicant’s disqualification. (2) Any application the Program deems ineligible or unqualified will be declined. § 253.14 Loan documents. (a) U.S. Note. (1) The U.S. Note will be in the form the Program prescribes. (2) The U.S. Note evidences the obli gor’s indebtedness to the United States. (i) For financing approved after Octo ber 11, 1996, the U.S. Note evidences the obligor’s actual indebtedness to the U.S.; and (ii) For financing originating before October 11, 1996, that continues to be associated with a Guaranteed Note, the U.S. Note shall evidence the obligor’s actual indebtedness to the U.S. upon the Program’s payment of any or all of the sums due under the Guaranteed Note or otherwise disbursed on the ob ligor’s behalf. (iii) The U.S. Note will, among other things, contain provisions to add to its principal balance all amounts the Pro gram advances or incurs, including ad ditional interest charges and costs in curred to protect its interest or accom modate the obligor. (3) The U.S. Note shall be assignable by the Program, at its sole discretion. (b) Security documents. (1) Each secu rity document will be in the form the Program prescribes. (2) The Program will, at a minimum, require the pledge of adequate collat eral, generally in the form of a security interest or mortgage against all prop erty associated with a project or secu rity as otherwise required by the Pro gram. (3) The Program will require such other security as it deems necessary and appropriate, given the cir cumstances of each obligor and the project. (4) The security documents will, among other things, contain provisions to secure the repayment of all addi tional amounts the Program advances or incurs to protect its interest or ac commodate the obligor, including addi tional interest charges and fees. § 253.15 Recourse against parties. (a) Form. Recourse by borrowers or guarantors may be by a repayment guarantee, irrevocable letter of credit, additional tangible or intangible col lateral, or other form acceptable to the Program. (b) Principals accountable. The prin cipal parties in interest, who ulti mately stand most to benefit from the project, will ordinarily be held finan cially accountable for the project’s per formance. The Program may require recourse against: (1) All major shareholders of a close ly-held corporate obligor; (2) The parent corporation of a sub sidiary corporate obligor; (3) The related business entities of the obligor if the Program determines that the obligor lacks substantial pledged assets other than the project property or is otherwise lacking in any credit factor required to approve the application; (4) Any or all major limited partners; (5) Non-obligor spouses of applicants or obligors in community property states; and/or (6) Against any others it deems nec essary to protect its interest. (c) Recourse against parties. Should the Program determine that a sec ondary means of repayment from other sources is necessary (including the net worth of parties other than the obli gor), the Program may require secured or unsecured recourse against any such secondary repayment sources. (d) Recourse unavailable. Where appro priate recourse is unavailable, the con servatively projected net liquidating value of the obligor’s assets (as such assets are pledged to the Program) must, in the Program’s credit judg ment, substantially exceed all pro jected Program exposure or other risks of loss. § 253.16 Actual cost. Actual cost shall be determined as follows: (a) The actual cost of a vessel shall be the sum of: (1) The total cost of the project de preciated on a straight-line basis, over 77 Nat’l Marine Fish. Serv./NOAA, Comm. § 253.18 the project property’s useful life, using a 10-percent salvage value; and (2) The current market value of ap purtenant limited access privileges or transferable limited access privileges vested in the name of the obligor, the subject vessel or their owners, provided that such privileges are utilized by or aboard the subject vessel and will be pledged as collateral for the subject FFP financing. (b) The actual cost of a facility shall be the sum of: (1) The total cost of the project, not including land, depreciated on a straightline basis over the Project Property’s useful life, using a 10-per cent salvage value; (2) The current market value of the land that will be pledged as collateral for the subject FFP financing, provided that such land is utilized by the facil ity; and (3) The net present value of the pay ments due under a long term lease of land or marine use rights, provided that they meet the following require ments: (i) The project property must be lo cated at such leased space or directly use such marine use rights; (ii) Such lease or marine use right must have a duration the Program deems sufficient; and (iii) The lease or marine use right must be assigned to the Program such that the Program may foreclose and transfer such lease to another party. (c) The actual cost of a transferable limited access privilege shall be deter mined as follows: (1) For financing the purchase of lim ited access privileges, the actual cost shall be the purchase cost. (2) For refinancing limited access privileges, the actual cost shall be the current market value. (d) The actual cost of any Project that includes any combination of items described in paragraphs (a), (b) or (c) of this section shall be the sum of such calculations. § 253.17 Insurance. (a) All insurable collateral property and other risks shall be continuously insured so long as any balance of prin cipal or interest on a Program loan or guarantee remains outstanding. (b) Insurers must be acceptable to the Program. (c) Insurance must be in such forms and amounts and against such risks the Program deems necessary to protect the United States’ interest. (d) Insurance must be endorsed to in clude the requirements the Program deems necessary and appropriate. (1) Normally and as appropriate, the Program will be named as an addi tional insured, mortgagee, or loss payee, for the amount of its interest; any waiver of this requirement must be in writing; (2) Cancellation will require adequate advance written notice; (3) The Program will be adequately protected against other insureds’ breaches of policy warranties, neg ligence, omission, etc., in the case of marine insurance, vessel seaworthiness will be required; (4) The insured must provide cov erage for any other risk or casualty the Program may require. § 253.18 Closing. (a) Approval in principle letters. Every closing will be in strict accordance with a final approval in principle let ter. (b) Contracts. Promissory notes, secu rity documents, and any other docu ments the Program may require will be on standard Program forms that may not be altered without Program writ ten approval. The Program will ordi narily prepare all contracts, except certain pledges involving real property or other matters involving local law, which will be prepared by each obli gor’s attorney at the direction and ap proval of the Program. (c) Additional requirements. At its dis cretion the Program may require serv ices from applicant’s attorneys, other contractors or agents. Real property services required from an applicant’s attorney or agent may include, but are not limited to: Title search, title insur ance, mortgage and other document preparation, document execution and recording, escrow and disbursement, and legal opinions and other assur ances. The Program will notify the ap plicant in advance if any such services 78 50 CFR Ch. II (10–1–23 Edition) § 253.19 are required of the applicant’s attor neys, contractors or other agents. Ap plicants are responsible for all attor ney’s fees, as well as those of any other private contractor. Attorneys and other contractors must be satisfactory to the Program. (d) Closing schedules. The Program will not be liable for adverse interest rate fluctuations, loss of commitments, or other consequences of an inability by any of the parties to meet the clos ing schedule. § 253.19 Dual-use CCF. The Program may require the pledge of a CCF account or annual deposits of some portion of the project property’s net income into a dual-use CCF. A dual-use CCF provides the normal CCF tax-deferral benefits, but also gives the Program control of CCF withdrawals, recourse against CCF deposits, ensures an emergency refurbishing reserve (tax-deferred) for project property, and provides additional collateral. § 253.20 Fees. (a) Application fee. See §§ 253.10 and 253.12(b). (b) Guarantee fee. For existing Guar anteed Loans, an annual guarantee fee will be due in advance and will be based on the guaranteed note’s repayment provisions for the prospective year. The first annual guarantee fee is due at guarantee closing. Each subsequent guarantee fee is due and payable on the guarantee closing’s anniversary date. Each is fully earned when due, and shall not subsequently be refunded for any reason. (c) Refinancing or assumption fee. The Program will assess a fee of one quar ter of one (1) percent of the note to be refinanced or assumed. This fee is due upon application for refinancing or as sumption of a guaranteed or direct loan. Upon submission, the fee shall be non-refundable. The Program may waive a refinancing or assumption fee’s payment when the refinancing or as sumption’s primary purpose will ben efit the United States. (d) Where payable. Fees are payable by check to ‘‘U.S. Department of Com merce/NOAA.’’ Other than those col lected at application or closing, fees are payable by mailing checks to the ‘‘U.S. Department of Commerce, Na tional Oceanic and Atmospheric Ad ministration, National Marine Fish eries Service,’’ to such address as the Program may designate. To ensure proper crediting, each check should in clude the official case number the Pro gram assigns. § 253.21 Demand by guaranteed noteholder and payment. Every demand by the guaranteed noteholder must be delivered in writing to the Program and must include the noteholder’s certified record of the date and amount of each payment made on the guaranteed note and the manner of its application. The only pe riod during which a guaranteed noteholder can make demand for a pay ment default begins on the thirty-first day of the payment default and con tinues through the ninetieth day of a payment default. The noteholder must possess evidence of the demand’s time ly delivery. § 253.22 Program operating guidelines. The Program may issue policy and administrative guidelines, as the need arises. § 253.23 Default and liquidation. Upon default under the terms of any note, guarantee, security agreement, mortgage, or other security document the Program shall take remedial ac tions including, but not limited to, where appropriate, retaking or arrest of collateral, foreclosure, restruc turing, debarment, referral for debt collection, or liquidation as it deems best able to protect the U.S. Govern ment’s interest. § 253.24 Enforcement violations and adverse actions. (a) Compliance with applicable law. All applicants and Program participants shall comply with applicable law. (b) Applicant disqualification. (1) Any issuance of any citation or Notice of Violation and Assessment by NMFS en forcement or other enforcement au thority may constitute grounds for the Program to: (i) Delay application or approval processing; (ii) Delay loan closing; 79 Nat’l Marine Fish. Serv./NOAA, Comm. § 253.26 (iii) Delay disbursement of loan pro ceeds; (iv) Disqualify an applicant or obli gor; or (v) Declare default. (2) The Program will not approve loans or disburse funds to any appli cant found to have an outstanding, final and unappealable fisheries fine or other unresolved penalty until either: Such fine is paid or penalty has been resolved; or the applicant enters into an agreement to pay the penalty and makes all payments or installments as they are due. Failure to pay or resolve any such fine or penalty in a reason able period of time will result in the applicant’s disqualification. (c) Foreclosure in addition to other pen alties. In the event that a person with an outstanding balance on a Program loan or guarantee violates any owner ship, lease, use, or other provision of applicable law, such person may be subject to foreclosure of property, in addition to any fines, sanctions, or other penalties. § 253.25 Other administrative require ments. (a) Debt Collection Act. In accordance with the provisions of the Debt Collec tion Improvement Act of 1996, a person may not obtain any Federal financial assistance in the form of a loan (other than a disaster loan) or loan guarantee if the person has an outstanding debt (other than a debt under the Internal Revenue Code of 1986) with any Federal agency which is in a delinquent status, as determined under standards pre scribed by the Secretary of the Treas ury. (b) Certifications. Applicants must submit a completed Form CD–511, ‘‘Certifications Regarding Debarment, Suspension and Other Responsibility Matters; Drug-Free Workplace Re quirements and Lobbying,’’ or its equivalent or successor form, if any. (c) Taxpayer identification. An appli cant classified for tax purposes as an individual, limited liability company, partnership, proprietorship, corpora tion, or legal entity is required to sub mit along with the application a tax payer identification number (TIN) (so cial security number, employer identi fication number as applicable, or reg istered foreign organization number). Recipients who either fail to provide their TIN or provide an incorrect TIN may have application processing or funding suspended until the require ment is met. (d) Audit inquiry. An audit of a Pro gram loan may be conducted at any time. Auditors, selected at the discre tion of the Program or other agency of the United States, shall have access to any and all books, documents, papers and records of the obligor or any other party to a financing that the auditor(s) deem(s) pertinent, whether written, printed, recorded, produced or repro duced by any mechanical, magnetic or other process or medium. (e) Paperwork Reduction Act. The ap plication requirements contained in these rules have been approved under OMB control number 0648–0012. The ap plications for the halibut/sablefish QS crew member eligibility certificate have been approved under OMB control number 0648–0272. Notwithstanding any other provisions of law, no person is re quired to respond to, nor shall any per son be subject to a penalty for failure to comply with, a collection of infor mation subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number. § 253.26 Traditional loans. (a) Eligible projects. Financing or refi nancing up to 80 percent of a project’s actual cost shall be available to any citizen who is determined to be eligible and qualified under the Act and these rules, except— (1) The Program will not finance the cost of new vessel construction. (2) The Program will not finance a vessel refurbishing project that materi ally increases an existing vessel’s har vesting capacity. (b) Financing or refinancing. (1) Projects, other than those specified in paragraphs (a) (1) and (a)(2) of this sec tion, may be financed, as well as refi nanced. (2) Notwithstanding paragraph (a)(1) of this section, the Program may refi nance the construction cost of a vessel whose construction cost has already been financed (or otherwise paid) prior to the submission of a loan application. 80 50 CFR Ch. II (10–1–23 Edition) § 253.27 (3) Notwithstanding paragraph (a)(2) of this section, the Program may refi nance the refurbishing cost of a vessel whose initial refurbishing cost has al ready been financed (or otherwise paid) prior to the submission of a loan appli cation. (4) The Program may finance or refi nance the purchase or refurbishment of any vessel or facility for which the Secretary has: (i) Accelerated and/or paid out standing debts or obligations; (ii) Acquired; or (iii) Sold at foreclosure. (c) Existing vessels and facilities. The Program may finance the purchase of an existing vessel or existing fishery facility if such vessel or facility will be refurbished in the United States and will be used in the fishing industry. (d) Fisheries modernization. Notwith standing any of this part, the Program may finance or refinance any: (1) Activities that assist in the tran sition to reduced fishing capacity; or (2) Technologies or upgrades designed to: (i) Improve collection and reporting of fishery-dependent data; (ii) Reduce bycatch; (iii) Improve selectivity; (iv) Reduce adverse impacts of fish ing gear; or (v) Improve safety. (e) Guaranty transition. Upon applica tion by the obligor, any guaranteed loans originated prior to October 11, 1996, may be refinanced as direct loans, regardless of the original purpose of the guaranteed loan. (f) Maturity. Maturity may not ex ceed 25 years, but shall not exceed the project property’s useful life. The Pro gram, at its sole discretion, may set a shorter maturity period. (g) Credit standards. Traditional loans are subject to all Program general credit standards and requirements. Col lateral, guarantee and other require ments may be adjusted in accordance with the Program’s assessment of indi vidual credit risks. § 253.27 IFQ financing. The Program may finance or refi nance the project cost of purchasing, including the reimbursement of obli gors for expenditures previously made for purchasing, individual fishing quotas in accordance with the applica ble sections of the Magnuson-Stevens Fishery Conservation and Management Act or any other statute. § 253.28 Halibut sablefish IFQ loans. (a) Specific definitions. For the pur poses of this section, the following definitions apply: (1) Entry-level fishermen means fish ermen who do not own any IFQ in the year they apply for a loan. (2) Fishermen who fish from small vessels means fishermen wishing to purchase IFQ for use on Category B, Category C, or Category D vessels, but who do not own, in whole or in part, any Category A or Category B vessels, as such vessels are defined in 50 CFR 679.40(a)(5) of this title. (3) Halibut sablefish quota share means a halibut or sablefish permit, the face amount of which is used as the basis for the annual calculation of a person’s halibut or sablefish IFQ, also abbreviated as ‘‘HSQS’’ or ‘‘halibut/sa blefish QS.’’ (4) Halibut/Sablefish IFQ means the annual catch limit of halibut or sable fish that may be harvested by a person who is lawfully allocated halibut or sa blefish quota share, a harvest privilege for a specific portion of the total allow able catch of halibut or sablefish. (b) Entry level fishermen. The Program may finance up to 80 percent of the cost of purchasing HSQS by an entry level fisherman who: (1) Does not own any halibut/sable fish QS during the origination year; (2) Applies for a loan to purchase a quantity of halibut/sablefish QS that is not greater than the equivalent of 8,000 lb. (3,628.7 kg) of IFQ during the origi nation year; (3) Possesses the appropriate transfer eligibility documentation duly issued by RAM for HSQS; (4) Intends to be present aboard the vessel, as may be required by applica ble regulations; and (5) Meets all other Program eligi bility, qualification, lending and credit requirements. (c) Fishermen fishing from small vessels. The Program may finance up to 80 per cent of the cost of purchasing HSQS by a fisherman who fishes from a small 81 Nat’l Marine Fish. Serv./NOAA, Comm. § 253.29 vessel, provided that any such fisher man shall: (1) Apply for a loan to purchase hal ibut or sablefish QS for use on vessel Categories B, C, or D, as defined under 50 CFR 679.40(a)(5) of this title; (2) Not own an aggregate quantity of halibut/sablefish QS (including the loan QS) of more than the equivalent of 50,000 lb. (22,679.6 kg) of IFQ during the origination year; (3) Not own, in whole or in part, di rectly or indirectly (including through stock or other ownership interest) any vessel of the type that would have been assigned Category A or Category B HSQS under 50 CFR 679.40(a)(5); (4) Possess the appropriate transfer eligibility documentation duly issued by the RAM for HSQS; (5) Intend to be present aboard the vessel, as may be required by applica ble regulations, as IFQ associated with halibut/sablefish QS financed by the loan is harvested; and (6) Meet all other Program eligi bility, qualification, lending and credit requirements. (d) Refinancing. (1) The Program may refinance any existing debts associated with HSQS an applicant currently holds, provided that— (i) The HSQS being refinanced would have been eligible for Program financ ing at the time the applicant purchased it, and (ii) The applicant meets the Pro gram’s applicable lending require ments. (2) The refinancing is in an amount up to 80 percent of HSQS’ current mar ket value; however, the Program will not disburse any amount that exceeds the outstanding principal balance, plus accrued interest (if any), of the exist ing HSQS debt being refinanced. (3) In the event that the current mar ket value of HSQS and principal loan balance do not meet the 80 percent re quirement in paragraph (d)(2) of this section, applicants seeking refinancing may be required to provide additional down payment. (e) Maturity. Loan maturity may not exceed 25 years, but may be shorter de pending on credit and other consider ations. (f) Repayment. Repayment will be by equal quarterly installments of prin cipal and interest. (g) Security. Although quota share(s) will be the primary collateral for a HSQS 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 sig nificant ownership interests to person ally guarantee loan repayment for any applicant that is a corporation, part nership, or other entity. Subject to the Program’s credit risk determination, some projects may require additional security, collateral, or credit enhance ment. (h) Crew member transfer eligibility cer tification. The Program will accept RAM certification as proof that appli cants are eligible to hold HSQS. The application of any person determined by RAM to be unable to receive such certification will be declined. Appli cants who fail to obtain appropriate transfer eligibility certification within 45 working days of the date of applica tion may lose their processing priority. (i) Program credit standards. HSQS loans, regardless of purpose, are sub ject to all Program general credit standards and requirements. Collat eral, guarantee and other requirements may be adjusted to individual credit risks. § 253.29 CDQ loans. (a) FFP actions. The Program may fi nance or refinance up to 80 percent of a project’s actual cost. (b) Eligible projects. Eligible projects include the purchase of all or part of ownership interests in fishing or proc essing vessels, shoreside fish processing facilities, permits, quota, and coopera tive rights in any of the Bering Sea and Aleutian Islands fisheries. (c) Eligible entities. The following communities, in accordance with appli cable law and regulations are eligible to participate in the loan program: (1) The villages of Akutan, Atka, False Pass, Nelson Lagoon, Nikolski, and Saint George through the Aleutian Pribilof Island Community Develop ment Association. (2) The villages of Aleknagik, Clark’s Point, Dillingham, Egegik, Ekuk, 82 50 CFR Ch. II (10–1–23 Edition) § 253.30 Ekwok, King Salmon/Savonoski, Levelock, Manokotak, Naknek, Pilot Point, Port Heiden, Portage Creek, South Naknek, Togiak, Twin Hills, and Ugashik through the Bristol Bay Eco nomic Development Corporation. (3) The village of Saint Paul through the Central Bering Sea Fishermen’s As sociation. (4) The villages of Chefornak, Chevak, Eek, Goodnews Bay, Hooper Bay, Kipnuk, Kongiganak, Kwigillingok, Mekoryuk, Napakiak, Napaskiak, Newtok, Nightmute, Oscarville, Platinum, Quinhagak, Scammon Bay, Toksook Bay, Tuntutuliak, and Tununak through the Coastal Villages Region Fund. (5) The villages of Brevig Mission, Diomede, Elim, Gambell, Golovin, Koyuk, Nome, Saint Michael, Savoonga, Shaktoolik, Stebbins, Tell er, Unalakleet, Wales, and White Mountain through the Norton Sound Economic Development Corporation. (6) The villages of Alakanuk, Emmonak, Grayling, Kotlik, Mountain Village, and Nunam Iqua through the Yukon Delta Fisheries Development Association. (7) Any new groups established by ap plicable law. (d) Loan terms. (1) CDQ loans may have terms up to thirty years, but shall not exceed the project property’s useful life. The Program, at its sole discre tion, may set a shorter maturity pe riod. (2) CDQ loans are subject to all Pro gram general credit standards and re quirements. Collateral, guarantee and other requirements may be adjusted to individual credit risks. § 253.30 Crab IFQ loans. (a) Specific definitions. For the pur poses of this section, the following definitions apply: (1) Crab means those crab species managed under the Fishery Manage ment Plan for Bering Sea/Aleutian Is land (BSAI) King and Tanner Crab. (2) Crab FMP means the Fishery Management Plan for BSAI King and Tanner Crab. (3) Crab quota share means a BSAI King and Tanner Crab permit, the base amount of which is used as a basis for the annual calculation of a person’s Crab IFQ, also abbreviated as ‘‘Crab QS.’’ (b) Crab captains or crewmen. The Pro gram may finance up to 80 percent of the cost of purchasing Crab QS by a citizen: (1) Who is or was: (i) A captain of a crab fishing vessel, or (ii) A crew member of a crab fishing vessel; (2) Who has been issued the appro priate documentation of eligibility by RAM; (3) Whose aggregate holdings of QS will not exceed any limit on Crab QS holdings that may be in effect in the Crab FMP implementing regulations or applicable statutes in effect at the time of loan closing; and will not hold either individually or collectively, based on the initial QS pool, as pub lished in 50 CFR part 680, Table 8; and (4) Who, at the time of initial appli cation, meets all other applicable eligi bility requirements to fish for crab or hold Crab QS contained in the Crab FMP implementing regulations or ap plicable statutes in effect at the time of loan closing. (c) Refinancing. (1) The Program may refinance any existing debts associated with Crab QS that an applicant cur rently holds, provided that: (i) The Crab QS being refinanced would have been eligible for Program financing at the time the applicant purchased it; (ii) The applicant meets the Pro gram’s applicable lending require ments; and (iii) The applicant would meet the re quirements found in the Crab FMP im plementing regulations at the time any such refinancing loan would close. (2) The Program may refinance an amount up to 80 percent of Crab QS’s current market value; however, the Program will not disburse any amount that exceeds the outstanding principal balance, plus accrued interest (if any), of the existing Crab QS debt being refi nanced. (3) In the event that the current mar ket value of Crab QS and current prin cipal balance do not meet the 80 per cent requirement in paragraph (c)(2) of 83 Nat’l Marine Fish. Serv./NOAA, Comm. § 253.31 this section, applicants seeking refi nancing may be required to provide ad ditional down payment. (d) Maturity. Loan maturity may not exceed 25 years, but may be shorter de pending on credit and other consider ations. (e) Repayment. Repayment schedules will be set by the loan documents. (f) Security. Although the quota share will be the primary collateral for a Crab QS loan, the Program may re quire 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 applicant that is a corporation, partnership, or other entity. Subject to the Program’s credit risk determina tion, some projects may require addi tional security, collateral, or credit en hancement. (g) Crew member transfer eligibility cer tification. The Program will accept RAM transfer eligibility certification as proof that applicants are eligible to hold Crab QS. The application of any person determined by RAM to be un able to receive such certification will be declined. Applicants who fail to ob tain appropriate transfer eligibility certification within 45 working days of the date of application may lose their processing priority. (h) Crab Quota Share Ownership Limi tation. A program obligor must comply with all applicable maximum amounts, as may be established by NMFS regula tions, policy or North Pacific Fishery Management Council action. (i) Program credit standards. Crab QS loans are subject to all Program gen eral credit standards and requirements. Collateral, guarantee and other re quirements may be adjusted to indi vidual credit risks. § 253.31 Harvesting rights loans. (a) Specific definitions. For the pur poses 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 lim ited 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 limita tions apply to individuals or entities who seek to finance or refinance the acquisition of harvesting rights. (1) The borrower must meet all regu latory 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 Man agement Council at any time regarding the availability of loans in a fishery under the Council’s authority. (i) The Council may submit an expla nation to NMFS, in writing, as to why the availability of financing for har vesting rights in a fishery would harm the achievement of the goals and objec tives of the Fishery Management Plan applicable to the fishery. If NMFS ac cepts the Council’s reasoning, har vesting rights loans will not be pro vided, or will cease to be provided, in that fishery. (ii) If NMFS determines that har vesting rights loans will not be pro vided in a fishery, NMFS will publish a notice in the FEDERAL REGISTER noti fying the public that new loans will not be made in that fishery. (iii) In such a scenario, pending ap plications will be returned and loan fees returned as exceptional cir cumstances justify the action. (3) The harvesting rights to be fi nanced must be issued in a manner in which they can be individually identi fied such that a valid and specific secu rity interest can be recorded. This de termination shall be solely made by the Program. (c) Refinancing. (1) The Program may refinance any existing debts associated with harvesting rights a borrower cur rently holds, provided that: (i) The harvesting rights being refi nanced would have been eligible for Program financing at the time the bor rower purchased them, if Program fi nancing had been available; (ii) The borrower meets all other ap plicable lending requirements; and (iii) The refinancing is in an amount up to 80 percent of the harvesting 84 50 CFR Ch. II (10–1–23 Edition) §§ 253.32–253.49 rights’ current market value, as deter mined at the sole discretion of the Pro gram, 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 mar ket value of harvesting rights and prin cipal 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 de pending on credit and other consider ations. (e) Repayment. Repayment will be by equal quarterly installments of prin cipal 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 sig nificant ownership interests to person ally guarantee loan repayment for any borrower that is a corporation, part nership, or other entity, including col lateral to secure the guarantees. Some projects may require additional secu rity, collateral, or credit enhancement as determined, in the sole discretion, by the Program. (g) Program credit standards. Har vesting rights loans, regardless of pur pose, are subject to all Program gen eral credit standards and requirements. Collateral, guarantee and other re quirements may be adjusted to indi vidual credit risks. [83 FR 24232, May 25, 2018] §§ 253.32–253.49 [Reserved] Subpart C—Interjurisdictional Fisheries § 253.50 Definitions. The terms used in this subpart have the following meanings: Act means the Interjurisdictional Fisheries Act of 1986, Public Law 99–659 (Title III). Adopt means to implement an inter state fishery management plan by State action or regulation. Commercial fishery failure means a se rious disruption of a fishery resource affecting present or future productivity due to natural or undetermined causes. It does not include either: (1) The inability to harvest or sell raw fish or manufactured and processed fishery merchandise; or (2) Compensation for economic loss suffered by any segment of the fishing industry as the result of a resource dis aster. Enforcement agreement means a writ ten agreement, signed and dated, be tween a state agency and either the Secretary of the Interior or Secretary of Commerce, or both, to enforce Fed eral and state laws pertaining to the protection of interjurisdictional fish ery resources. Federal fishery management plan means a plan developed and approved under the Magnuson Fishery Conserva tion and Management Act (16 U.S.C. 1801 et seq.). Fisheries management means all ac tivities concerned with conservation, restoration, enhancement, or utiliza tion of fisheries resources, including research, data collection and analysis, monitoring, assessment, information dissemination, regulation, and enforce ment. Fishery resource means finfish, mol lusks, and crustaceans, and any form of marine or Great Lakes animal or plant life, including habitat, other than ma rine mammals and birds. Interjurisdictional fishery resource means: (1) A fishery resource for which a fishery occurs in waters under the ju risdiction of one or more states and the U.S. Exclusive Economic Zone; or (2) A fishery resource for which an interstate or a Federal fishery manage ment plan exists; or (3) A fishery resource which migrates between the waters under the jurisdic tion of two or more States bordering on the Great Lakes. Interstate Commission means a com mission or other administrative body established by an interstate compact. Interstate compact means a compact that has been entered into by two or 85 Nat’l Marine Fish. Serv./NOAA, Comm. § 253.51 more states, established for purposes of conserving and managing fishery re sources throughout their range, and consented to and approved by Congress. Interstate Fisheries Research Program means research conducted by two or more state agencies under a formal interstate agreement. Interstate fishery management plan means a plan for managing a fishery resource developed and adopted by the member states of an Interstate Marine Fisheries Commission, and contains in formation regarding the status of the fishery resource and fisheries, and rec ommends actions to be taken by the States to conserve and manage the fishery resource. Landed means the first point of off loading fishery resources. NMFS Regional Director means the Di rector of any one of the five National Marine Fisheries Service regions. Project means an undertaking or a proposal for research in support of management of an interjurisdictional fishery resource or an interstate fish ery management plan. Research means work or investigative study, designed to acquire knowledge of fisheries resources and their habitat. Secretary means the Secretary of Commerce or his/her designee. State means each of the several states, the District of Columbia, the Commonwealth of Puerto Rico, Amer ican Samoa, the Virgin Islands, Guam, or the Commonwealth of the Northern Mariana Islands. State agency means any department, agency, commission, or official of a state authorized under the laws of the State to regulate commercial fisheries or enforce laws relating to commercial fisheries. Value means the monetary worth of fishery resources used in developing the apportionment formula, which is equal to the price paid at the first point of landing. Volume means the weight of the fish ery resource as landed, at the first point of landing. § 253.51 Apportionment. (a) Apportionment formula. The amount of funds apportioned to each state is to be determined by the Sec retary as the ratio which the equally weighted average of the volume and value of fishery resources harvested by domestic commercial fishermen and landed within such state during the 3 most recent calendar years for which data satisfactory to the Secretary are available bears to the total equally weighted average of the volume and value of all fishery resources harvested by domestic commercial fishermen and landed within all of the states during those calendar years. (1) The equally weighted average value is determined by the following formula: (2) Upon appropriation of funds by Congress, the Secretary will take the following actions: (i) Determine each state’s share ac cording to the apportionment formula. (ii) Certify the funds to the respec tive NMFS Regional Director. (iii) Instruct NMFS Regional Direc tors to promptly notify states of funds’ availability. (b) No state, under the apportion ment formula in paragraph (a) of this section, that has a ratio of one-third of 86 50 CFR Ch. II (10–1–23 Edition) § 253.52 1 percent or higher may receive an ap portionment for any fiscal year that is less than 1 percent of the total amount of funds available for that fiscal year. (c) If a State’s ratio under the appor tionment formula in paragraph (b) of this section is less than one-third of 1 percent, that state may receive funding if the state: (1) Is signatory to an interstate fish ery compact; (2) Has entered into an enforcement agreement with the Secretary and/or the Secretary of the Interior for a fish ery that is managed under an inter state fishery management plan; (3) Borders one or more of the Great Lakes; (4) Has entered into an interstate co operative fishery management agree ment and has in effect an interstate fisheries management plan or an inter state fisheries research Program; or (5) Has adopted a Federal fishery management plan for an interjurisdic tional fishery resource. (d) Any state that has a ratio of less than one-third of 1 percent and meets any of the requirements set forth in paragraphs (c)(1) through (5) of this section may receive an apportionment for any fiscal year that is not less than 0.5 percent of the total amount of funds available for apportionment for such fiscal year. (e) No state may receive an appor tionment under this section for any fis cal year that is more than 6 percent of the total amount of funds available for apportionment for such fiscal year. (f) Unused apportionments. Any part of an apportionment for any fiscal year to any state: (1) That is not obligated during that year; (2) With respect to which the state notifies the Secretary that it does not wish to receive that part; or (3) That is returned to the Secretary by the state, may not be considered to be appropriated to that state and must be added to such funds as are appro priated for the next fiscal year. Any notification or return of funds by a state referred to in this section is ir revocable. § 253.52 State projects. (a) General—(1) Designation of state agency. The Governor of each state shall notify the Secretary of which agency of the state government is au thorized under its laws to regulate commercial fisheries and is, therefore, designated receive financial assistance awards. An official of such agency shall certify which official(s) is authorized in accordance with state law to com mit the state to participation under the Act, to sign project documents, and to receive payments. (2) States that choose to submit pro posals in any fiscal year must so notify the NMFS Regional Director before the end of the third quarter of that fiscal year. (3) Any state may, through its state agency, submit to the NMFS Regional Director a completed NOAA Grants and Cooperative Agreement Application Package with its proposal for a project, which may be multiyear. Proposals must describe the full scope of work, specifications, and cost estimates for such project. (4) States may submit a proposal for a project through, and request pay ment to be made to, an Interstate Fish eries Commission. Any payment so made shall be charged against the ap portionment of the appropriate state(s). Submitting a project through one of the Commissions does not re move the matching funds requirement for any state, as provided in paragraph (c) of this section. (b) Evaluation of projects. The Sec retary, before approving any proposal for a project, will evaluate the proposal as to its applicability, in accordance with 16 U.S.C. 4104(a)(2). (c) State matching requirements. The Federal share of the costs of any project conducted under this subpart, including a project submitted through an Interstate Commission, cannot ex ceed 75 percent of the total estimated cost of the project, unless: (1) The state has adopted an inter state fishery management plan for the fishery resource to which the project applies; or (2) The state has adopted fishery reg ulations that the Secretary has deter mined are consistent with any Federal 87 Nat’l Marine Fish. Serv./NOAA, Comm. Pt. 259 fishery management plan for the spe cies to which the project applies, in which case the Federal share cannot exceed 90 percent of the total esti mated cost of the project. (d) Financial assistance award. If the Secretary approves or disapproves a proposal for a project, he or she will promptly give written notification, in cluding, if disapproved, a detailed ex planation of the reason(s) for the dis approval. (e) Restrictions. (1) The total cost of all items included for engineering, planning, inspection, and unforeseen contingencies in connection with any works to be constructed as part of such a proposed project shall not exceed 10 percent of the total cost of such works, and shall be paid by the state as a part of its contribution to the total cost of the project. (2) The expenditure of funds under this subpart may be applied only to projects for which a proposal has been evaluated under paragraph (b) of this section and approved by the Secretary, except that up to $25,000 each fiscal year may be awarded to a state out of the state’s regular apportionment to carry out an ‘‘enforcement agree ment.’’ An enforcement agreement does not require state matching funds. (f) Prosecution of work. All work must be performed in accordance with appli cable state laws or regulations, except when such laws or regulations are in conflict with Federal laws or regula tions such that the Federal law or reg ulation prevails. § 253.53 Other funds. (a) Funds for disaster assistance. (1) The Secretary shall retain sole author ity in distributing any disaster assist ance funds made available under sec tion 308(b) of the Act. The Secretary may distribute these funds after he or she has made a thorough evaluation of the scientific information submitted, and has determined that a commercial fishery failure of a fishery resource arising from natural or undetermined causes has occurred. Funds may only be used to restore the resource affected by the disaster, and only by existing methods and technology. Any fishery resource used in computing the states’ amount under the apportionment for mula in § 253.601(a) will qualify for funding under this section. The Federal share of the cost of any activity con ducted under the disaster provision of the Act shall be limited to 75 percent of the total cost. (2) In addition, pursuant to section 308(d) of the Act, the Secretary is au thorized to award grants to persons en gaged in commercial fisheries for unin sured losses determined by the Sec retary to have been suffered as a direct result of a fishery resource disaster. Funds may be distributed by the Sec retary only after notice and oppor tunity for public comment of the ap propriate limitations, terms, and con ditions for awarding assistance under this section. Assistance provided under this section is limited to 75 percent of an uninsured loss to the extent that such losses have not been compensated by other Federal or State Programs. (b) Funds for interstate commissions. Funds authorized to support the efforts of the three chartered Interstate Ma rine Fisheries Commissions to develop and maintain interstate fishery man agement plans for interjurisdictional fisheries will be divided equally among the Commissions. § 253.54 Administrative requirements. Federal assistance awards made as a result of this Act are subject to all Federal laws, Executive Orders, Office of Management and Budget Circulars as incorporated by the award; Depart ment of Commerce and NOAA regula tions; policies and procedures applica ble to Federal financial assistance awards; and terms and conditions of the awards. PART 259—CAPITAL CONSTRUC TION FUND TAX REGULATIONS Sec. 259.1 Definitions. 259.2 Applying for a Capital Construction Fund Agreement (‘‘Agreement’’). 259.3 Acquisition, construction, or recon struction. 259.4 Constructive deposits and with drawals; ratification of withdrawals (as qualified) made without first having ob tained Secretary’s consent; first tax year for which an Agreement is effective. 259.5 Maximum deposit amounts and time to deposit.