50 CFR § 600.1000-600.1017 - Magnuson-Stevens Act Provisions - Fishing Capacity Reduction Framework

142 50 CFR Ch. VI (10–1–22 Edition) § 600.930 conducting similar consultation and recommendation processes to ensure coordination of such efforts. (d) Coordination with Councils. NMFS will coordinate with each Council to identify the types of actions on which Councils intend to comment pursuant to section 305(b)(3) of the Magnuson Stevens Act. For such actions NMFS will share pertinent information with the Council, including copies of NMFS’ EFH Conservation Recommendations. § 600.930 Council comments and rec ommendations to Federal and state agencies. Under section 305(b)(3) of the Magnu son-Stevens Act, Councils may com ment on and make recommendations to the Secretary and any Federal or state agency concerning any activity or pro posed activity authorized, funded, or undertaken by the agency that, in the view of the Council, may affect the habitat, including EFH, of a fishery re source under its authority. Councils must provide such comments and rec ommendations concerning any activity that, in the view of the Council, is like ly to substantially affect the habitat, including EFH, of an anadromous fish ery resource under Council authority. (a) Establishment of procedures. Each Council should establish procedures for reviewing Federal or state actions that may adversely affect the habitat, in cluding EFH, of a species under its au thority. Each Council may receive in formation on actions of concern by methods such as directing Council staff to track proposed actions, recom mending that the Council’s habitat committee identify actions of concern, or entering into an agreement with NMFS to have the appropriate Re gional Administrator notify the Coun cil of actions of concern that would ad versely affect EFH. Federal and state actions often follow specific timetables which may not coincide with Council meetings. Therefore, Councils should consider establishing abbreviated pro cedures for the development of Council recommendations. (b) Early involvement. Councils should provide comments and recommenda tions on proposed state and Federal ac tions of concern as early as practicable in project planning to ensure thorough consideration of Council concerns by the action agency. Each Council should provide NMFS with copies of its com ments and recommendations to state and Federal agencies. Subpart L—Fishing Capacity Reduction Framework AUTHORITY: 16 U.S.C. 1861a(b)–(e). SOURCE: 65 FR 31443, May 18, 2000, unless otherwise noted. § 600.1000 Definitions. In addition to the definitions in the Magnuson-Stevens Fishery Conserva tion and Management Act (Magnuson Stevens Act) and in § 600.10 of this title, the terms used in this subpart have the following meanings: Address of Record means the business address of a person, partnership, or cor poration. Addresses listed on permits or other NMFS records are presumed to be business addresses, unless clearly in dicated otherwise. Bid means the price a vessel owner or reduction fishery permit holder re quests for reduction of his/her fishing capacity. It is an irrevocable offer in response to the invitation to bid in § 600.1009. Borrower means, individually and col lectively, each post-reduction fishing permit holder and/or fishing vessel owner fishing in the reduction fishery. Business plan means the document containing the information specified in § 600.1003(n) and required to be sub mitted with a request for a financed program. Business week means a 7-day period, Saturday through Friday. Controlling fishery management plan or program (CFMP) means either any fish ery management plan or any state fish ery management plan or program, in cluding amendments to the plan or pro gram, pursuant to which a fishery is managed. Delivery value means: (1) For unprocessed fish, all com pensation that a fish buyer pays to a fish seller in exchange for fee fish; and (2) For processed fish, all compensa tion that a fish buyer would have paid to a fish seller in exchange for fee fish 143 Fishery Conservation and Management § 600.1000 if the fee fish had been unprocessed fish instead of processed fish. Delivery value encompasses fair mar ket value, as defined herein, and in cludes the value of all in-kind com pensation or all other goods or services exchanged in lieu of cash. It is synony mous with the statutory term ‘‘ex-ves sel value’’ as used in section 312 of the Magnuson Act. Deposit principal means all collected fee revenue that a fish buyer deposits in a segregated account maintained at a federally insured financial institu tion for the sole purpose of aggregating collected fee revenue before sending the fee revenue to NMFS for repaying a reduction loan. Fair market value means the amount that a buyer pays a seller in an arm’s length transaction or, alternatively, would pay a seller if the transaction were at arm’s length. Fee means the amount that fish buy ers deduct from the delivery value under a financed reduction program. The fee is the delivery value times the reduction fishery’s applicable fee rate under section 600.1013. Fee fish means all fish harvested from a reduction fishery involving a fi nanced program during the period in which any amount of the reduction loan remains unpaid. The term fee fish excludes fish harvested incidentally while fishing for fish not included in the reduction fishery. Final development plan means the doc ument NMFS prepares, under § 600.1006(b) and based on the prelimi nary development plan the requester submits, for a subsidized program. Financed means funded, in any part, by a reduction loan. Fish buyer means the first ex-vessel party who: (1) In an arm’s—length transaction, purchases fee fish from a fish seller; (2) Takes fish on consignment from a fish seller; or (3) Otherwise receives fish from a fish seller in a non arm’s-length trans action. Fish delivery means the point at which a fish buyer first purchases fee fish or takes possession of fee fish from a fish seller. Fishing capacity reduction specifica tions means the minimum amount of fishing capacity reduction and the maximum amount of reduction loan principal specified in a business plan. Fish seller means the party who har vests and first sells or otherwise deliv ers fee fish to a fish buyer. Fishery Management Plan (FMP) means any Federal fishery manage ment plan, including amendments to the plan, that the Secretary of Com merce approves or adopts pursuant to section 303 of the Magnuson-Stevens Act. Fund means the Fishing Capacity Re duction Fund, and each subaccount for each program, established in the U.S. Treasury for the deposit into, and dis bursement from, all funds, including all reduction loan capital and all fee revenue, involving each program. Implementation plan means the plan in § 600.1008 for carrying out each pro gram. Implementation regulations mean the regulations in § 600.1008 for carrying out each program. Net delivery value means the delivery value minus the fee. Post-bidding referendum means a ref erendum that follows bidding under § 600.1009. Post-reduction means after a program reduces fishing capacity in a reduction fishery. Pre-bidding referendum means a ref erendum that occurs at any time after a request for a financed program but before a proposal under § 600.1008 of an implementation plan and implementa tion regulations. Preliminary development plan means the document specified in § 600.1005(g) and required to be submitted with a re quest for a subsidized program. Processed fish means fish in any form different from the form in which the fish existed at the time the fish was first harvested, unless any such dif ference in form represents, in the re duction fishery involved, the standard ex-vessel form upon which fish sellers and fish buyers characteristically base the delivery value of unprocessed fish. Program means each instance of re duction under this subpart, in each re duction fishery—starting with a re quest and ending, for a financed pro gram, with full reduction loan repay ment. 144 50 CFR Ch. VI (10–1–22 Edition) § 600.1001 Reduction means the act of reducing fishing capacity under any program. Reduction amendment means any amendment, or, where appropriate, framework adjustment, to a CFMP that may be necessary for a program to meet the requirements of this subpart. Reduction amendment specifications mean the reduction amendment to a CFMP specified in a business plan. Reduction contract means the invita tion to bid under § 600.1009, together with each bidder’s irrevocable offer and NMFS’ conditional or non-conditional acceptance of each such bid under § 600.1009. Reduction cost means the total dollar amount of all reduction payments to fishing permit owners, fishing vessel owners, or both, in a reduction fishery. Reduction fishery means the fishery or portion of a fishery to which a program applies. The reduction fishery must specify each included species, as well as any limitations by gear type, fishing vessel size, geographic area, and any other relevant factor(s). Reduction loan means a loan, under section 1111 and section 1112 of Title XI of the Merchant Marine Act, 1936, as amended (46 U.S.C. 1279f and g App.), for financing any portion, or all, of a fi nanced program’s reduction cost and repayable by a fee under, and in ac cordance with, § 600.1012, § 600.1013, and § 600.1014. Reduction payment means the Federal Government’s fishing capacity reduc tion payment to a fishing permit owner, fishing vessel owner, or both, under a reduction contract. Addition ally, it is payment for reduction to each bidder whose bid NMFS accepts under § 600.1009. In a financed program each reduction payment constitutes a disbursement of a reduction loan’s pro ceeds and is for either revoking a fish ing permit or both revoking a fishing permit and withdrawing a vessel from fishing either by scrapping or title re striction. Reduction permit means any fishing permit revoked in a program in ex change for a reduction payment under a reduction contract. Reduction vessel means any fishing vessel withdrawn from fishing either by scrapping or title restriction in ex change for a reduction payment under a reduction contract. Referendum means the voting process under § 600.1010 for approving the fee system for repaying a reduction loan. Request means a request, under § 600.1001, for a program. Requester means a Council for a fish ery identified in § 600.1001(c) or a state governor for a fishery identified in § 600.1001(d), or a majority of permit holders in the fishery. Scrap means to completely and per manently reduce a fishing vessel’s hull, superstructures, and other fixed struc tural components to fragments having value, if any, only as raw materials for reprocessing or for other non-fisheries use. Subsidized means wholly funded by anything other than a reduction loan. Treasury percentage means the annual percentage rate at which NMFS must pay interest to the U.S. Treasury on any principal amount that NMFS bor rows from the U.S. Treasury in order to generate the funds with which to later disburse a reduction loan’s principal amount. Unprocessed fish means fish in the same form as the fish existed at the time the fish was harvested, unless any difference in form represents, in the re duction fishery involved, the standard ex-vessel form upon which fish sellers and fish buyers characteristically base the delivery value of unprocessed fish. Vote means a vote in a referendum. [65 FR 31443, May 18, 2000, as amended at 75 FR 62328, Oct. 8, 2010] § 600.1001 Requests. (a) A Council, the Governor of a State under whose authority a pro posed reduction fishery is subject, or a majority of permit holders in the fish ery may request that NMFS conduct a program in that fishery. Each request shall be in writing. Each request shall satisfy the requirements of § 600.1003 or § 600.1005, as applicable, and enable NMFS to make the determinations re quired by § 600.1004 or § 600.1006, as ap plicable. (b) NMFS cannot conduct a program in any fishery subject to the jurisdic tion of a Council or a state unless NMFS first receives a request from the 145 Fishery Conservation and Management § 600.1003 Council or the governor to whose juris diction the fishery is subject. (c) For a fishery subject to the juris diction of a Council, only that Council can or must make the request. If the fishery is subject to the jurisdiction of two or more Councils, those Councils must make a joint request. No Council may make a request, or join in making a request, until after the Council con ducts a public hearing about the re quest. (d) For a fishery subject to the juris diction of a State, only the Governor of that State can make the request. If the fishery is subject to the jurisdiction of two or more states, the Governors of those States shall make a joint re quest. No Governor of a State may make a request, or join in making a re quest, until the State conducts a public hearing about the request. (e) For a fishery under the direct management authority of the Sec retary, NMFS may conduct a program on NMFS’ own motion by fulfilling the requirements of this subpart that rea sonably apply to a program not initi ated by a request. (f) Where necessary to accommodate special circumstances in a particular fishery, NMFS may waive, as NMFS deems necessary and appropriate, com pliance with any specific requirements under this subpart not required by statute. [65 FR 31443, May 18, 2000, as amended at 75 FR 62328, Oct. 8, 2010] § 600.1002 General requirements. (a) Each program must be: (1) Necessary to prevent or end over fishing, rebuild stocks of fish, or achieve measurable and significant im provements in the conservation and management of the reduction fishery; (2) Accompanied by the appropriate environmental, economic and/or socio economic analyses, in accordance with applicable statutes, regulations, or other authorities; and (3) Consistent with the CFMP, in cluding any reduction amendment, for the reduction fishery. (b) Each CFMP for a reduction fish ery must: (1) Prevent the replacement of fish ing capacity removed by the program through a moratorium on new en trants, restrictions on vessel upgrades, and other effort control measures, tak ing into account the full potential fish ing capacity of the fleet; (2) Establish a specified or target total allowable catch or other meas ures that trigger closure of the fishery or adjustments to reduce catch; and (3) Include, for a financed program in a reduction fishery involving only a portion of a fishery, appropriate provi sions for the post-reduction allocation of fish between the reduction fishery and the rest of the fishery that both protect the borrower’s reduction in vestment in the program and support the borrower’s ability to repay the re duction loan. (c) The Secretary may not make a fishing capacity reduction program payment with respect to a reduction vessel that will not be scrapped unless the Secretary certifies that the vessel will not be used for fishing in the waters of the U.S., a foreign nation, or on the high seas. [65 FR 31443, May 18, 2000, as amended at 75 FR 62328, Oct. 8, 2010] § 600.1003 Content of a request for a fi nanced program. A request for a financed program shall: (a) Specify the reduction fishery. (b) Project the amount of the reduc tion and specify what a reduction of that amount achieves in the reduction fishery. (c) Specify whether the program is to be wholly or partially financed and, if the latter, specify the amount and de scribe the availability of all funding from sources other than a reduction loan. (d) Project the availability of all Federal appropriation authority or other funding, if any, that the financed program requires, including the time at which funding from each source will be available and how that relates to the time at which elements of the re duction process are projected to occur. (e) Demonstrate how the program meets, or will meet after an appro priate reduction amendment, the re quirements in § 600.1002(a). 146 50 CFR Ch. VI (10–1–22 Edition) § 600.1003 (f) Demonstrate how the CFMP meets, or will meet after an appro priate reduction amendment, the re quirements in § 600.1002(b). (g) If a reduction amendment is nec essary, include an actual reduction amendment or the requester’s endorse ment in principle of the reduction amendment specifications in the busi ness plan. Endorsement in principle is non-binding. (h) Request that NMFS conduct, at the appropriate time, a referendum under § 600.1010 of this subpart. (i) List the names and addresses of record of all fishing permit or fishing vessel owners who are currently au thorized to harvest fish from the reduc tion fishery, excluding those whose au thority is limited to incidentally har vesting fish from the reduction fishery during directed fishing for fish not in the reduction fishery. The list shall be based on the best information available to the requester. The list shall take into account any limitation by type of fishing gear operated, size of fishing vessel operated, geographic area of op eration, or other factor that the pro posed program involves. The list may include any relevant information that NMFS may supply to the requester. (j) Specify the aggregate total allow able catch in the reduction fishery dur ing each of the preceding 5 years and the aggregate portion of such catch harvested by the parties listed under paragraph (i) of this section. (k) Specify the criteria for deter mining the types and number of fishing permits or fishing permits and fishing vessels that are eligible for reduction under the program. The criteria shall take into account: (1) The characteristics of the fishery; (2) Whether the program is limited to a particular gear type within the re duction fishery or is otherwise limited by size of fishing vessel operated, geo graphic area of operation, or other fac tor; (3) Whether the program is limited to fishing permits or involves both fishing permits and fishing vessels; (4) The reduction amendment re quired; (5) The needs of fishing communities; (6) Minimizing the program’s reduc tion cost; and (7) All other relevant factors. (l) Include the requester’s assessment of the program’s potential impact on fisheries other than the reduction fish ery, including an evaluation of the likely increase in participation or ef fort in such other fisheries, the general economic impact on such other fish eries, and recommendations that could mitigate, or enable such other fisheries to mitigate, any undesirable impacts. (m) Include any other information or guidance that would assist NMFS in developing an implementation plan and implementation regulations. (n) Include a business plan, prepared by, or on behalf of, knowledgeable and concerned harvesters in the reduction fishery, that: (1) Specifies a detailed reduction methodology that accomplishes the maximum sustained reduction in the reduction fishery’s fishing capacity at the least reduction cost and in the minimum period of time, and otherwise achieves the program result that the requester specifies under paragraph (b) of this section. The methodology shall: (i) Establish the appropriate point for NMFS to conduct a pre-bidding ref erendum and be sufficiently detailed to enable NMFS to readily: (A) Design, propose, and adopt a timely and reliable implementation plan, (B) Propose and issue timely and reli able implementation regulations, (C) Invite bids, (D) Accept or reject bids, and (E) Complete a program in accord ance with this subpart, and (ii) Address, consistently with this subpart: (A) The contents and terms of invita tions to bid, (B) Bidder eligibility, (C) The type of information that bid ders shall supply, (D) The criteria for accepting or re jecting bids, (E) The terms of bid acceptances, (F) Any referendum procedures in ad dition to, but consistent with, those in § 600.1010, and (G) All other technical matters nec essary to conduct a program; (2) Projects and supports the reduc tion fishery’s annual delivery value during the reduction loan’s repayment 147 Fishery Conservation and Management § 600.1004 period based on documented analysis of actual representative experience for a reasonable number of past years in the reduction fishery; (3) Includes the fishing capacity re duction specifications upon which both the pre-bidding referendum and the bidding under § 600.1009 will be based. The reduction loan’s maximum prin cipal amount cannot, at the interest rate projected to prevail at the time of reduction, exceed the principal amount that can be amortized in 20 years by 5 percent of the projected delivery value; (4) States the reduction loan’s repay ment term and the fee rate, or range of fee rates, prospectively necessary to amortize the reduction loan over its re payment term; (5) Analyzes and demonstrates the ability to repay the reduction loan at the minimum reduction level and at various reduction-level increments rea sonably greater than the minimum one, based on the: (i) Best and most representative his torical fishing revenue and expense data and any other relevant produc tivity measures available in the reduc tion fishery, and (ii) Projected effect of the program on the post-reduction operating eco nomics of typical harvesters in the re duction fishery, with particular empha sis on the extent to which the reduc tion increases the ratio of delivery value to fixed cost and improves harvesting’s other relevant produc tivity measures; (6) Demonstrates how the business plan’s proposed program meets, or will meet after an appropriate reduction amendment, the requirements in § 600.1002(a); (7) Demonstrates how the CFMP meets, or will meet after an appro priate reduction amendment, the re quirements in § 600.1002(b); (8) Includes, if a reduction amend ment is necessary, the reduction amendment specifications upon which the pre-bidding referendum will be based; (9) Includes an assessment of the pro gram’s potential impact on fisheries other than the reduction fishery, in cluding an evaluation of the likely in crease in participation or effort in such other fisheries, the general economic impact on such other fisheries, and rec ommendations that could mitigate, or enable such other fisheries to mitigate, any undesirable impacts; (10) Specifies the names and address es of record of all fish buyers who can, after reduction, reasonably be expected to receive deliveries of fee fish. This shall be based on the best information available, including any information that NMFS may be able to supply to the business planners; (11) Specifies, after full consultation with fish buyers, any special cir cumstances in the reduction fishery that may require the implementing regulations to contain provisions in ad dition to, or different from, those con tained in § 600.1013 and/or § 600.1014 in order to accommodate the cir cumstances of, and practices in, the re duction fishery while still fulfilling the intent and purpose of § 600.1013 and/or § 600.1014—including, but not limited to: (i) In the case of reduction fisheries in which state data confidentiality laws or other impediments may nega tively affect the efficient and effective conduct of the same, specification of who needs to take what action to re solve any such impediments, and (ii) In the case of reduction fisheries in which some fish sellers sell unproc essed, and other fish sellers sell proc essed fish to fish buyers, specification of an accurate and efficient method of establishing the delivery value of proc essed fish; and (12) Demonstrates by a survey of po tential voters, or by any other con vincing means, a substantial degree of potential voter support for the business plan and confidence in its feasibility. (o) Include the requester’s statement of belief that the business plan, the CFMP, the reduction amendment spec ifications, and all other request aspects constitute a complete, realistic, and practical prospect for successfully completing a program in accordance with this subpart. § 600.1004 Accepting a request for, and determinations about initiating, a financed program. (a) Accepting a request. Once it re ceives a request, NMFS will review any request for a financed program to de termine whether the request conforms 148 50 CFR Ch. VI (10–1–22 Edition) § 600.1005 with the requirements of § 600.1003. If the request does not conform, NMFS will return the request with guidance on how to make the request conform. If the request conforms, NMFS shall ac cept it and publish a notice in the FED ERAL REGISTER requesting public com ments on the request. Such notice shall state the name and address of record of each eligible voter, as well as the basis for having determined the eligibility of those voters. This shall constitute no tice and opportunity to respond about adding eligible voters, deleting ineli gible voters, and/or correcting any vot er’s name and address of record. If, in NMFS’ discretion, the comments re ceived in response to such notice war rants it, or other good cause warrants it, NMFS may modify such list by pub lishing another notice in the FEDERAL REGISTER. (b) Determination about initiating a fi nanced program. After receipt of a con forming request for a financed pro gram, NMFS will, after reviewing and responding to any public comments re ceived in response to the notice pub lished in the FEDERAL REGISTER under paragraph (a) of this section, initiate the program if NMFS determines that: (1) The program meets, or will meet after an appropriate reduction amend ment, the requirements in § 600.1002(a); (2) The CFMP meets, or will meet after an appropriate reduction amend ment, the requirements in § 600.1002(b); (3) The program, if successfully im plemented, is cost effective; (4) The reduction requested con stitutes a realistic and practical pros pect for successfully completing a pro gram in accordance with this subpart and the borrower is capable of repaying the reduction loan. This includes ena bling NMFS to readily design, propose, and adopt a timely and reliable imple mentation plan as well as propose and issue timely and reliable implementa tion regulations and otherwise com plete the program in accordance with this subpart; and (5) The program accords with all other applicable law. § 600.1005 Content of a request for a subsidized program. A request for a subsidized program shall: (a) Specify the reduction fishery. (b) Project the amount of the reduc tion and specify what a reduction of that amount achieves in the reduction fishery. (c) Project the reduction cost, the amount of reduction cost to be funded by Federal appropriations, and the amount, if any, to be funded by other sources. (d) Project the availability of Federal appropriations or other funding, if any, that completion of the program re quires, including the time at which funding from each source will be avail able and how that relates to the time at which elements of the reduction process are projected to occur. (e) List the names and addresses of record of all fishing permit or fishing vessel owners who are currently au thorized to harvest fish from the reduc tion fishery, excluding those whose au thority is limited to incidentally har vesting fish from the reduction fishery during directed fishing for fish not in the reduction fishery. The list shall be based on the best information available to the requester, including any infor mation that NMFS may supply to the requester, and take into account any limitation by type of fishing gear oper ated, size of fishing vessel operated, ge ographic area of operation, or other factor that the proposed program in volves. (f) Specify the aggregate total allow able catch in the reduction fishery dur ing each of the preceding 5 years and the aggregate portion of such catch harvested by the parties listed under paragraph (e) of this section. (g) Include a preliminary develop ment plan that: (1) Specifies a detailed reduction methodology that accomplishes the maximum sustained reduction in the reduction fishery’s fishing capacity at the least cost and in a minimum period of time, and otherwise achieves the program result that the requester specifies under paragraph (b) of this section. The methodology shall: (i) Be sufficiently detailed to enable NMFS to prepare a final development plan to serve as the basis for NMFS to readily design, propose, and adopt a timely and reliable implementation plan and propose and issue timely and 149 Fishery Conservation and Management § 600.1006 reliable implementation regulations, and (ii) Include: (A) The contents and terms of invita tions to bid, (B) Eligible bidders, (C) The type of information that bid ders shall supply, (D) The criteria for accepting or re jecting bids, and (E) The terms of bid acceptances; (2) Specifies the criteria for deter mining the types and numbers of fish ing permits or fishing permits and fish ing vessels that are eligible for reduc tion under the program. The criteria shall take into account: (i) The characteristics of the fishery, (ii) Whether the program is limited to a particular gear type within the re duction fishery, or is otherwise limited by size of fishing vessel operated, geo graphic area of operation, or other fac tor, (iii) Whether the program is limited to fishing permits or involves both fishing permits and fishing vessels, (iv) The reduction amendment re quired, (v) The needs of fishing communities, and (vi) The need to minimize the pro gram’s reduction cost; and (3) Demonstrates the program’s cost effectiveness. (h) Demonstrate how the program meets, or will meet after an appro priate reduction amendment, the re quirements in § 600.1002(a). (i) Demonstrate how the CFMP meets, or will meet after an appro priate reduction amendment, the re quirements in § 600.1002(b)(1) and (2). (j) Specify any other information or guidance that assists NMFS in pre paring a final development plan and a proposed implementation plan and pro posed implementation regulations. (k) Include the requester’s statement of belief that the program constitutes a reasonably realistic and practical pros pect for successfully completing a pro gram in accordance with this subpart. § 600.1006 Accepting a request for, and determinations about conducting, a subsidized program. (a) Accepting a request. NMFS will re view any request for a subsidized pro gram submitted to NMFS to determine whether the request conforms with the requirements of § 600.1005. If the request does not conform, NMFS will return it with guidance on how to make the re quest conform. If the request conforms, NMFS shall accept it and publish a no tice in the FEDERAL REGISTER request ing public comments about the request. (b) Final development plan. After re ceipt of a conforming request, NMFS will prepare a final development plan if NMFS determines that the reduction requested constitutes a realistic and practical prospect for successfully completing a program in accordance with this subpart. This includes ena bling NMFS to readily design, propose, and adopt a timely and reliable imple mentation plan as well as propose and issue timely and reliable implementa tion regulations and otherwise com plete the program in accordance with this subpart. NMFS will, as far as pos sible, base the final development plan on the requester’s preliminary develop ment plan. Before completing the final development plan, NMFS will consult, as NMFS deems necessary, with the re quester, Federal agencies, state and re gional authorities, affected fishing communities, participants in the re duction fishery, conservation organiza tions, and other interested parties in preparing the final development plan. (c) Reaffirmation of the request. After completing the final development plan, NMFS will submit the plan to the re quester for the requester’s reaffirma tion of the request. Based on the final development plan, the reaffirmation shall: (1) Certify that the final develop ment plan meets, or will meet after an appropriate reduction amendment, the requirements in § 600.1002(a); (2) Certify that the CFMP meets, or will meet after an appropriate reduc tion amendment, the requirements in § 600.1002(b)(1) and (2); and (3) Project the date on which the re quester will forward any necessary re duction amendment and, if the re quester is a Council, proposed regula tions to implement the reduction amendment. The requester shall base any necessary reduction amendment on the final development plan. (d) Determinations about conducting a subsidized program. After NMFS’ receipt 150 50 CFR Ch. VI (10–1–22 Edition) § 600.1007 of the requester’s reaffirmation, any required reduction amendment, and any proposed regulations required to implement the amendment, NMFS will initiate the program if NMFS deter mines that: (1) The program meets, or will meet after an appropriate reduction amend ment, the requirements in § 600.1002(a); (2) The CFMP meets, or will meet after an appropriate reduction amend ment, the requirements in § 600.1002(b)(1) and (2); and (3) The program is reasonably capa ble of being successfully implemented; (4) The program, if successfully im plemented, will be cost effective; and (5) The program is in accord with all other applicable provisions of the Mag nuson-Stevens Act and this subpart. § 600.1007 Reduction amendments. (a) Each reduction amendment may contain provisions that are either de pendent upon or independent of a pro gram. Each provision of a reduction amendment is a dependent provision unless the amendment expressly des ignates the provision as independent. (b) Independent provisions are effec tive without regard to any subsequent program actions. (c) Dependent provisions are initially effective for the sole limited purpose of enabling initiation and completion of the pre-reduction processing stage of a program. (d) All dependent provisions of a re duction amendment for a financed pro gram are fully in force and effect for all other purposes only when NMFS ei ther: (1) For bidding results that conform to the fishing capacity reduction speci fications and are not subject to any other condition, notifies bidders, under § 600.1009(e)(3), that reduction contracts then exist between the bidders and the United States; or (2) For bidding results that do not conform to the fishing capacity reduc tion specifications or are subject to any other condition, notifies bidders whose bids NMFS had conditionally ac cepted, under § 600.1010 (d)(8)(iii), that the condition pertaining to the reduc tion contracts between them and the United States is fulfilled. (e) If NMFS does not, in accordance with this subpart and any special pro visions in the implementation regula tions, subsequently make all reduction payments that circumstances, in NMFS’ judgment, reasonably permit NMFS to make and, thus, complete a program, no dependent provisions shall then have any further force or effect for any purpose and all final regula tions involving such dependent provi sions shall then be repealed. § 600.1008 Implementation plan and implementation regulations. (a) As soon as practicable after decid ing to initiate a program, NMFS will prepare and publish, for a 60-day public comment period, a proposed implemen tation plan and implementation regu lations. During the public comment pe riod, NMFS will conduct a public hear ing of the proposed implementation plan and implementation regulations in each state that the program affects. (b) To the greatest extent prac ticable, NMFS will base the implemen tation plan and implementation regu lations for a financed program on the business plan. The implementation plan for a financed program will de scribe in detail all relevant aspects of implementing the program, including: (1) The reduction fishery; (2) The reduction methodology; (3) The maximum reduction cost; (4) The maximum reduction loan amount, if different from the max imum reduction cost; (5) The reduction cost funding, if any, other than a reduction loan; (6) The minimum acceptable reduc tion level; (7) The potential amount of the fee; (8) The criteria for determining the types and number of fishing permits or fishing permits and fishing vessels eli gible to participate in the program; (9) The invitation to bid and bidding procedures; (10) The criteria for determining bid acceptance; (11) The referendum procedures; and (12) Any relevant post-referendum re duction procedures other than those in the implementation regulations or this subpart. 151 Fishery Conservation and Management § 600.1009 (c) NMFS will base each implementa tion plan and implementation regula tions for a subsidized program on the final development plan. The implemen tation plan will describe in detail all relevant aspects of implementing the program, including: (1) The reduction fishery; (2) The reduction methodology; (3) The maximum reduction cost; (4) The reduction-cost funding, if any, other than Federal appropria tions; (5) The criteria for determining the types and number of fishing permits or fishing permits and fishing vessels eli gible to participate in the program; (6) The invitation to bid and bidding procedures; (7) The criteria for determining bid acceptance; and (8) Any relevant post-bidding pro gram procedures other than those in the implementation regulations or this subpart. (d) The implementation regulations will: (1) Specify, for invitations to bid, bids, and reduction contracts under § 600.1009: (i) Bidder eligibility, (ii) Bid submission requirements and procedures, (iii) A bid opening date, before which a bidder may not bid, and a bid closing date, after which a bidder may not bid, (iv) A bid expiration date after which the irrevocable offer contained in each bid expires unless NMFS, before that date, accepts the bid by mailing a writ ten acceptance notice to the bidder at the bidder’s address of record, (v) The manner of bid submission and the information each bidder shall sup ply for NMFS to deem a bid responsive, (vi) The conditions under which NMFS will accept or reject a bid, (vii) The manner in which NMFS will accept or reject a bid, and (viii) The manner in which NMFS will notify each bidder of bid accept ance or rejection; (2) Specify any other special ref erendum procedures or criteria; and (3) Specify such other provisions, in addition to and consistent with those in this subpart, necessary to regulate the individual terms and conditions of each program and reduction loan. This includes, but is not limited to: (i) Provisions for the payment of costs and penalties for non-payment, non-collection, non-deposit, and/or non-disbursement of the fee in accord ance with § 600.1013 and § 600.1014, (ii) Prospective fee rate determina tions, and (iii) Any other aspect of fee payment, collection, deposit, disbursement, ac counting, record keeping, and/or re porting. (e) NMFS will issue final implemen tation regulations and adopt a final implementation plan within 45 days of the close of the public-comment period. (f) NMFS may repeal the final imple mentation regulations for any program if: (1) For a financed program, the bid ding results do not conform to the fish ing capacity reduction specifications or a post-bidding referendum does not subsequently approve an industry fee system based on the bidding results; (2) For a subsidized program, NMFS does not accept bids; and (3) For either a financed program or a subsidized program, if NMFS is un able to make all reduction payments due to a material adverse change. § 600.1009 Bids. (a) Each invitation to bid, bid, bid ac ceptance, reduction contract, and bid der—or any other party in any way af fected by any of the foregoing—under this subpart is subject to the terms and conditions in this section: (1) Each invitation to bid constitutes the entire terms and conditions of a re duction contract under which: (i) Each bidder makes an irrevocable offer to the United States of fishing ca pacity for reduction, and (ii) NMFS accepts or rejects, on be half of the United States, each bidder’s offer; (2) NMFS may, at any time before the bid expiration date, accept or re ject any or all bids; (3) For a financed program in which bidding results do not conform to the fishing capacity reduction specifica tions, NMFS’ acceptance of any bid is subject to the condition that the indus try fee system necessary to repay the 152 50 CFR Ch. VI (10–1–22 Edition) § 600.1009 reduction loan is subsequently ap proved by a successful post-bidding ref erendum conducted under § 600.1010. Ap proval or disapproval of the industry fee system by post-bidding referendum is an event that neither the United States nor the bidders can control. Dis approval of the industry fee system by an unsuccessful post-bidding ref erendum fully excuses both parties from any performance and fully dis charges all duties under any reduction contract; (4) For a financed program in one re duction fishery that is being conducted under appropriate implementation reg ulations simultaneously with another financed program in another reduction fishery, where the acceptance of bids for each financed program is condi tional upon successful post-bidding referenda approving industry fee sys tems for both financed programs, NMFS’ acceptance of all bids is, in ad dition to any condition under para graph (a)(3) of this section, also subject to the additional conditions that both referenda approve the industry fee sys tems required for both financed pro grams—all as otherwise provided in paragraph (a)(3) of this section; (5) Upon NMFS’ acceptance of the bid and tender of a reduction payment, the bidder consents to: (i) The revocation, by NMFS, of any reduction permit, and (ii) Where the program also involves the withdrawal of reduction vessels from fishing: (A) Title restrictions imposed by the U.S. Coast Guard on any reduction ves sel that is Federally documented to forever prohibit and effectively prevent any future use of the reduction vessel for fishing: (1) In any area subject to the juris diction of the United States, or any state, territory, commonwealth, or possession of the United States, or (2) On the high seas, or (3) In the waters of a foreign nation; or (B) Scrapping of all reduction vessels involved in a fishing capacity reduc tion program, unless the reduction pro gram vessel has been certified by the Secretary, and the requirements estab lished under § 600.1002(c) are met. Where reduction vessel scrapping is involved and the reduction vessel’s owner does not comply with the owner’s obligation under the reduction contract to scrap the reduction vessel, the Secretary may take such measures as necessary to cause the reduction vessel’s prompt scrapping. The scrapping will be at the reduction vessel owner’s risk and ex pense. Upon completion of scrapping, NMFS will take such action as may be necessary to recover from the reduc tion vessel owner any cost, damages, or other expense NMFS incurred in the scrapping of the reduction vessel. (6) Money damages not being an ade quate remedy for a bidder’s breach of a reduction contract, the United States is, in all particulars, entitled to spe cific performance of each reduction contract. This includes, but is not lim ited to, the scrapping of a reduction vessel; (7) Any reduction payment is avail able, upon timely and adequately docu mented notice to NMFS, to satisfy liens, as allowed by law, against any reduction permit/and or reduction ves sel; provided, however, that: (i) No reduction payment to any bid der either relieves the bidder of respon sibility to discharge the obligation which gives rise to any lien or relieves any lien holder of responsibility to pro tect the lien holder’s interest, (ii) No reduction payment in any way gives rise to any liability of the United States for the obligation underlying any lien, (iii) No lien holder has any right or standing, not otherwise provided by law, against the United States in con nection with the revocation of any re duction permit or the title restriction or scrapping of any reduction vessel under this subpart, and (iv) This subpart does not provide any lien holder with any right or standing to seek to set aside any rev ocation of any reduction permit or the title restriction or scrapping of any re duction vessel for which the United States made, or has agreed to make, any reduction payment. A lien holder is limited to recovery against the hold er of the reduction permit or the owner of the reduction vessel as otherwise provided by law; and (8) Each invitation to bid may specify such other terms and conditions as 153 Fishery Conservation and Management § 600.1010 NMFS believes necessary to enforce specific performance of each reduction contract or otherwise to ensure com pleting each program. This includes, but is not limited to, each bidder’s cer tification, subject to the penalties in § 600.1017, of the bidder’s full authority to submit each bid and to dispose of the property involved in the bid in the manner contemplated by each invita tion to bid. (b) NMFS will not invite bids for any program until NMFS determines that: (1) Any necessary reduction amend ment is fully and finally approved and all provisions except those dependent on the completion of reduction are im plemented; (2) The final implementation plan is adopted and the final implementation regulations are issued; (3) All required program funding is approved and in place, including all Federal appropriation and apportion ment authority; (4) Any reduction loan involved is fully approved; (5) Any non-Federal funding involved is fully available at the required time for NMFS disbursement as reduction payments; and (6) All other actions necessary to dis burse reduction payments, except for matters involving bidding and post-bid ding referenda, are completed. (c) After making the affirmative de terminations required under paragraph (b) of this section, NMFS will publish a FEDERAL REGISTER notice inviting eli gible bidders to offer to the United States, under this subpart, fishing ca pacity for reduction. (d) NMFS may extend a bid closing date and/or a bid expiration date for a reasonable period. NMFS may also issue serial invitations to bid if the re sult of previous bidding, in NMFS’ judgment, warrant this. (e) After the bid expiration date, NMFS will: (1) Analyze responsive bids; (2) Determine which bids, if any, NMFS accepts; and (3) Notify, by U.S. mail at each bid der’s address of record, those bidders whose bids NMFS accepts that a reduc tion contract now exists between them and the United States—subject, where appropriate, to the conditions provided for elsewhere in this subpart. (f) NMFS will keep confidential the identity of all bidders whose bids NMFS does not accept. In financed pro grams where bidding results do not conform to the fishing capacity reduc tion specifications, NMFS also will keep confidential the identity of all bidders whose bids NMFS does accept until after completing a successful post-bidding referendum under § 600.1010. [65 FR 31443, May 18, 2000, as amended at 75 FR 62329, Oct. 8, 2010] § 600.1010 Referenda. (a) Referendum success. A referendum is successful if at least a majority of the permit holders in the fishery who participate in the fishery cast ballots in favor of an industry fee system. (b) Pre-bidding referendum—(1) Initial referendum. An initial pre-bidding ref erendum shall be conducted for each fi nanced program. The business plan shall, subject to this subpart, deter mine the chronological relationship of the initial pre-bidding referendum to other pre-bidding aspects of the reduc tion process sequence. The initial pre bidding referendum shall be based on the fishing capacity reduction speci fications. If the initial pre-bidding ref erendum precedes the adoption of any necessary reduction amendment, the initial pre-bidding referendum shall also be based on the reduction amend ment specifications. If the initial pre bidding referendum follows the adop tion of any necessary reduction amend ment, the initial pre-bidding ref erendum shall also be based on the adopted reduction amendment; (2) Successful initial pre-bidding ref erendum. If the initial pre-bidding ref erendum is successful, the reduction process will proceed as follows: (i) If the initial pre-bidding ref erendum follows reduction amendment adoption, no second pre-bidding ref erendum shall be conducted, (ii) If the initial pre-bidding ref erendum precedes reduction amend ment adoption, a second pre-bidding referendum shall be conducted if, in NMFS’ judgment, the reduction 154 50 CFR Ch. VI (10–1–22 Edition) § 600.1010 amendment subsequently adopted dif fers, in any respect materially affect ing the borrower’s reduction invest ment in the program and the bor rower’s ability to repay the reduction loan, from the reduction amendment specifications upon which the initial pre-bidding referendum successfully oc curred. The sole purpose of any second pre-bidding referendum shall be to de termine whether the voters authorize an industry fee system despite any such difference between the reduction amendment specifications and a subse quently adopted reduction amendment. (3) Unsuccessful initial pre-bidding ref erendum. If the initial pre-bidding ref erendum is unsuccessful, the reduction process will either cease or NMFS may suspend the process pending an appro priate amendment of the business plan and the request. (c) Post-bidding referendum. A post bidding referendum shall occur only if, in NMFS’ judgment, the result of bid ding under § 600.1009 does not conform, in any material respect, to the fishing capacity reduction specifications and such result justifies, in NMFS’ judg ment, conducting a post-bidding ref erendum. Bidding that results in reduc ing fishing capacity in any amount not less than the minimum fishing capac ity reduction amount for any reduction loan amount not more than the max imum reduction loan amount, and oth erwise achieves all material require ments of the fishing capacity reduction specifications, shall conform to the fishing capacity reduction specifica tions. The sole purpose of any post-bid ding referendum shall be to determine whether voters authorize an industry fee system for bidding that results in reducing fishing capacity in any amount materially less than the min imum amount in the fishing capacity reduction specifications. (d) NMFS will conduct referenda in accordance with the following: (1) Eligible voters. The parties eligible to vote in each referendum are the par ties whose names are listed as being el igible to vote in the notice published in the FEDERAL REGISTER under § 600.1004(a); (2) Ballot issuance. NMFS will mail, by U.S. certified mail, return receipt requested, a ballot to each eligible voter. Each ballot will bear a randomly derived, 5-digit number assigned to each eligible voter. Each ballot will contain a place for the voter to vote for or against the proposed industry fee system and a place, adjacent to the 5 digit number, for the signature of the fishing permit or fishing vessel owner to whom the ballot is addressed or, if the fishing permit or fishing vessel owner is an organization, the person having authority to vote and cast the ballot on the organization’s behalf. Each ballot will contain a place for the person signing the ballot to print his or her name. NMFS will enclose with each ballot a specially-marked, postage paid, pre-addressed envelope that each voter shall use to return the ballot to NMFS; (3) Voter certification. Each ballot will contain a certification, subject to the penalties set forth in § 600.1017, that the person signing the ballot is the fishing permit or fishing vessel owner to whom the ballot is addressed or, if the fishing permit or fishing vessel owner is an or ganization, the person having author ity to vote and cast the ballot on the organization’s behalf; (4) Information included on a ballot. Each ballot mailing will: (i) Summarize the referendum’s na ture and purpose, (ii) Specify the date by which NMFS must receive a ballot in order for the ballot to be counted as a qualified vote, (iii) Identify the place on the ballot for the voter to vote for or against the proposed industry fee system, the place on the ballot where the voter shall sign the ballot, and the purpose of the re turn envelope, (iv) For each pre-bidding referendum, state: (A) The fishing capacity reduction specifications, (B) The reduction loan’s repayment term, and (C) The fee rate, or range of fee rates, prospectively necessary to amortize the reduction loan over the loan’s term, (v) For each initial pre-bidding ref erendum that precedes reduction amendment adoption, state the reduc tion amendment specifications, 155 Fishery Conservation and Management § 600.1011 (vi) For each initial pre-bidding ref erendum that follows reduction amend ment adoption, summarize the mate rial aspects of the reduction amend ment adopted, (vii) For each second pre-bidding ref erendum, summarize how the adopted reduction amendment materially dif fers from the reduction amendment specifications upon which a successful initial pre-bidding referendum occurred and how this material difference af fects the borrower’s reduction invest ment in the program and the bor rower’s ability to repay the reduction loan, (viii) For each post-bidding ref erendum, specify the actual bidding re sults that do not conform to the fish ing capacity reduction specifications, and (ix) State or include whatever else NMFS deems appropriate; (5) Enclosures to accompany a ballot. Each ballot mailing will include: (i) A specially-marked, postage-paid, and pre-addressed envelope that a voter must use to return the original of a ballot to NMFS by whatever means of delivery the voter chooses, and (ii) Such other materials as NMFS deems appropriate; (6) Vote qualification. A completed ballot qualifies to be counted as a vote if the ballot: (i) Is physically received by NMFS on or before the last day NMFS specifies for receipt of the ballot, (ii) Is cast for or against the proposed industry fee system, (iii) Is signed by the voter, (iv) Is the original ballot NMFS sent to the voter bearing the same 5-digit number that NMFS assigned to the voter, and (v) Was returned to NMFS in the spe cially-marked envelope that NMFS provided for the ballot’s return; (6) Vote tally and notification. NMFS will: (i) Tally all ballots qualified to be counted as referendum votes, (ii) Notify, by U.S. mail at the ad dress of record, all eligible voters who received ballots of: (A) The number of potential voters, (B) The number of actual voters who returned a ballot, (C) The number of returned ballots that qualified to be counted as ref erendum votes, (D) The number of votes for and the number of votes against the industry fee system, and (E) Whether the referendum was suc cessful and approved the industry fee system or unsuccessful and disapproved the industry fee system, and (iii) If a successful referendum is a post-bidding referendum, NMFS will, at the same time and in the same man ner, also notify the bidders whose bids were conditionally accepted that the condition pertaining to the reduction contracts between them and the United States is fulfilled; (7) Conclusiveness of referendum deter minations. NMFS’ determinations about ballot qualifications and about all other referendum matters, including, but not limited to, eligible voters and their addresses of record, are conclu sive and final as of the date NMFS makes such determinations. No matter respecting such determinations shall impair, invalidate, avoid, or otherwise render unenforceable any referendum, reduction contract, reduction loan, or fee payment and collection obligation under § 600.1013 and § 600.1014 necessary to repay any reduction loan; (8) Ballot confidentiality. NMFS will not voluntarily release the name of any party who voted. NMFS will re strict the availability of all voter in formation to the maximum extent al lowed by law; and (9) Conclusive authorization of industry fee system. Each successful referendum conclusively authorizes NMFS’ imposi tion of an industry fee system—includ ing the fee payment, collection, and other provisions regarding fee payment and collection under § 600.1013 and § 600.1014—to repay the reduction loan for each financed program that NMFS conducts under this subpart. [65 FR 31443, May 18, 2000, as amended at 75 FR 62329, Oct. 8, 2010] § 600.1011 Reduction methods and other conditions. (a) Reduction permits or reduction per mits and reduction vessels. Each program may involve either the surrender and revocation of reduction permits or both 156 50 CFR Ch. VI (10–1–22 Edition) § 600.1011 the surrender and revocation of reduc tion permits and the withdrawal from fishing either by title restriction or by scrapping of reduction vessels. No fi nanced program may, however, require such title restriction or scrapping of reduction vessels unless the business plan voluntarily includes the same. (b) Reduction permit revocation and surrender. Each reduction permit is, upon NMFS’ tender of the reduction payment for the reduction permit, for ever revoked. Each reduction permit holder shall, upon NMFS’ tender of the reduction payment, surrender the original reduction permit to NMFS. The reduction permit holder, upon NMFS’ tender of the reduction pay ment, forever relinquishes any claim associated with the reduction permit and with the fishing vessel that was used to harvest fishery resources under the reduction permit that could qualify the reduction permit holder or the fish ing vessel owner for any present or fu ture limited access system fishing per mit in the reduction fishery. (c) Reduction vessel title restriction or scrapping. For each program that in volves reduction vessel title restriction or scrapping: (1) Each reduction vessel that is sub ject to title restriction only and is thus not required to be scrapped, is, upon NMFS’ tender of the reduction pay ment, forever prohibited from any fu ture use for fishing in any area subject to the jurisdiction of the United States or any State, territory, possession, or commonwealth of the United States. NMFS will request that the U.S. Coast Guard permanently restrict each such reduction vessel’s title to exclude the reduction vessel’s future use for fishing in any such area; (2) Each reduction vessel owner whose reduction vessel is required to be scrapped shall, upon NMFS’ tender of the reduction payment, immediately cease all further use of the reduction vessel and arrange, without delay and at the reduction vessel owner’s ex pense, to scrap the reduction vessel to NMFS’ satisfaction, including ade quate provision for NMFS to document the physical act of scrapping; and (3) Each reduction vessel owner, upon NMFS’ tender of the reduction pay ment, forever relinquishes any claim associated with the reduction vessel and with the reduction permit that could qualify the reduction vessel owner or the reduction permit holder for any present or future limited access system fishing permit in the reduction fishery. (d) Fishing permits in a non-reduction fishery. A financed program that does not involve the withdrawal from fish ing or scrapping of reduction vessels may not require any holder of a reduc tion permit in a reduction fishery to surrender any fishing permit in any non-reduction fishery or restrict or re voke any fishing permit other than a reduction permit in the reduction fish ery, except those fishing permits au thorizing the incidental harvesting of species in any non-reduction fishery during, and as a consequence of, di rected fishing for species in the reduc tion fishery. (e) Reduction vessels disposition. Where a business plan requires the withdrawal from fishing of reduction vessels as well as the revocation of reduction per mits: (1) Each reduction vessel that is not documented under Federal law must in every case always be scrapped, without regard to whether a program is a fi nanced program or a subsidized pro gram; (2) No financed program may require any disposition of a reduction vessel documented under Federal law other than the title restriction in paragraph (b) of this section unless the business plan volunteers to do otherwise; and (3) Any subsidized program may re quire the scrapping of reduction vessels documented under Federal law. (f) Reduction payments. NMFS will disburse all reduction payments in the amount and in the manner prescribed in reduction contracts, except reduc tion payments that a bidder’s reduc tion-contract nonperformance prevents NMFS from disbursing. In financed programs, the reduction loan’s prin cipal amount is the total amount of all reduction payments that NMFS dis burses from the proceeds of a reduction loan. Any reduction payment that NMFS, because of a bidder’s reduction contract nonperformance, disburses but subsequently recovers, shall reduce 157 Fishery Conservation and Management § 600.1013 the principal amount of the reduction loan accordingly. (g) Effect of reduction-contract non performance. No referendum, no reduc tion contract, no reduction loan, and no fee payment and collection obliga tion under § 600.1013 and § 600.1014 nec essary to repay any reduction loan, shall be impaired, invalidated, avoided, or otherwise rendered unenforceable by virtue of any reduction contract’s non performance. This is without regard to the cause of, or reason for, nonperform ance. NMFS shall endeavor to enforce the specific performance of all reduc tion contracts, but NMFS’ inability, for any reason, to enforce specific per formance for any portion of such reduc tion contracts shall not relieve fish sellers of their obligation to pay, and fish buyers of their obligation to col lect, the fee necessary to fully repay the full reduction loan balance that re sults from all reduction payments that NMFS actually makes and does not re cover. (h) Program completion. Other than the payment and collection of the fee that repays a reduction loan and any other residual matters regarding reduc tion payments and the disposition of reduction permits and reduction ves sels, a program shall be completed when NMFS tenders or makes all re duction payments under all reduction contracts that circumstances, in NMFS’ judgment, reasonably permit NMFS to make. § 600.1012 Reduction loan. (a) Obligation. The borrower shall be obligated to repay a reduction loan. The borrower’s obligation to repay a reduction loan shall be discharged by fish sellers paying a fee in accordance with § 600.1013. Fish buyers shall be ob ligated to collect the fee in accordance with § 600.1013 and to deposit and dis burse the fee revenue in accordance with § 600.1014. (b) Principal amount, interest rate, re payment term, and penalties for non-pay ment or non-collection. The reduction loan shall be: (1) In a principal amount that shall be determined by subsequent program events under this subpart, but which shall not exceed the maximum prin cipal amount in the fishing capacity reduction specifications; (2) At an annual rate, that shall be determined by subsequent events, of simple interest on the reduction loan’s principal balance that shall equal 2 percent plus the Treasury percentage; (3) Repayable over the repayment term specified in the business plan or otherwise determined by subsequent events; and (4) Subject to such provisions as im plementation regulations shall specify for the payment of costs and penalties for non-payment, non-collection, non deposit, and/or non-disbursement in ac cordance with § 600.1013 and § 600.1014. (c) Effect of prospective interest rate. Any difference between a prospective interest rate projected, for the purpose of any aspect of reduction planning or processing under this subpart, before the U.S. Treasury determines the Treasury percentage and an interest rate first known after the U.S. Treas ury determines the Treasury percent age shall not void, invalidate, or other wise impair any reduction contract, any reduction loan repayment obliga tion, or any other aspect of the reduc tion process under this subpart. Should any such difference result in a reduc tion loan that cannot, at the maximum fee rate allowed by law, be repaid, as previously projected, within the max imum maturity, any amount of the re duction loan remaining unpaid at ma turity shall be repaid after maturity by continuing fee payment and collection under this subpart at such maximum fee rate until the reduction loan’s un paid principal balance and accrued in terest is fully repaid. The above not withstanding, at the discretion of the Secretary, the reduction contract can be voided if a material adverse change affects the reduction contract, reduc tion loan obligation, or any other as pect of the reduction process under this subpart. § 600.1013 Fee payment and collection. (a) Amount. The fee amount is the de livery value times the fee rate. (b) Rate. NMFS will establish the fee rate. The fee rate may not exceed 5 per cent of the delivery value. NMFS will 158 50 CFR Ch. VI (10–1–22 Edition) § 600.1013 establish the initial fee rate by calcu lating the fee revenue annually re quired to amortize a reduction loan over the reduction loan’s term, pro jecting the annual delivery value, and expressing such fee revenue as a per centage of such delivery value. Before each anniversary of the initial fee rate determination, NMFS will recalculate the fee rate reasonably required to en sure reduction loan repayment. This will include any changed delivery value projections and any adjustment re quired to correct for previous delivery values higher or lower than projected. (c) Payment and collection. (1) The full fee is due and payable at the time of fish delivery. Each fish buyer shall col lect the fee at the time of fish delivery by deducting the fee from the delivery value before paying, or promising to pay, the net delivery value. Each fish seller shall pay the fee at the time of fish delivery by receiving from the fish buyer the net delivery value, or the fish buyer’s promise to pay the net de livery value, rather than the delivery value. Regardless of when the fish buyer pays the net delivery value, the fish buyer shall collect the fee at the time of fish delivery; (2) In the event of any post-delivery payment for fee fish—including, but not limited to bonuses—whose amount depends on conditions that cannot be known until after fish delivery, that ei ther first determines the delivery value or later increases the previous delivery value, the fish seller shall pay, and the fish buyer shall collect, at the time the amount of such post-delivery payment first becomes known, the fee that would otherwise have been due and payable as if the amount of the post delivery payment had been known, and as if the post-delivery payment had consequently occurred, at the time of initial fish delivery; (3)(i) Each fish seller shall be deemed to be, for the purpose of the fee collec tion, deposit, disbursement, and ac counting requirements of this subpart, both the fish seller and the fish buyer, and shall be responsible for all require ments and liable for any penalties under this subpart applicable to fish sellers and/or fish buyers, each time that a fish seller sells fee fish to: (A) Any party whose place of busi ness is not located in the United States, who does not take delivery or possession of the fee fish in the United States, who is not otherwise subject to this subpart, or to whom or against whom NMFS cannot otherwise apply or enforce this subpart, (B) Any party who is a general food service wholesaler or supplier, a res taurant, a retailer, a consumer, some other type of end-user, or some other party not engaged in the business of buying fish from fish sellers for the purpose of reselling the fish, either with or without processing the fish, or (C) Any other party who the fish sell er has good reason to believe is a party not subject to this subpart or to whom or against whom NMFS cannot other wise apply or enforce this subpart, (ii) In each such case the fish seller shall, with respect to the fee fish in volved in each such case, discharge, in addition to the fee payment require ments of this subpart, all the fee col lection, deposit, disbursement, ac counting, record keeping, and report ing requirements that this subpart oth erwise imposes on the fish buyer, and the fish seller shall be subject to all the penalties this subpart provides for a fish buyer’s failure to discharge such requirements; (4) Fee payment begins on the date NMFS specifies under the notification procedures of paragraph (d) of this sec tion and continues without interrup tion at the fee rates NMFS specifies in accordance this subpart until NMFS determines that the reduction loan is fully repaid. If a reduction loan is, for any reason, not fully repaid at the ma turity of the reduction loan’s original amortization period, fee payment and collection shall continue until the re duction loan is fully repaid, notwith standing that the time required to fully repay the reduction loan exceeds the reduction loan’s initially permis sible maturity. (d) Notification. (1) At least 30 days before the effective date of any fee or of any fee rate change, NMFS will pub lish a FEDERAL REGISTER notice estab lishing the date from and after which the fee or fee rate change is effective. NMFS will then also send, by U.S. mail, an appropriate notification to 159 Fishery Conservation and Management § 600.1014 each affected fish seller and fish buyer of whom NMFS has notice; (2) When NMFS determines that a re duction loan is fully repaid, NMFS will publish a FEDERAL REGISTER notice that the fee is no longer in effect and should no longer be either paid or col lected. NMFS will then also send, by U.S. mail, notification to each affected fish seller and fish buyer of whom NMFS has knowledge; (3) If NMFS fails to notify a fish sell er or a fish buyer by U.S. mail, or if the fish seller or fish buyer otherwise does not receive the notice, of the date fee payments start or of the fee rate in ef fect, each fish seller is, nevertheless, obligated to pay the fee at the fee rate in effect and each fish buyer is, never theless, obligated to collect the fee at the fee rate in effect. (e) Failure to pay or collect. (1) If a fish buyer refuses to collect the fee in the amount and manner that this subpart requires, the fish seller shall then ad vise the fish buyer of the fish seller’s fee payment obligation and of the fish buyer’s fee collection obligation. If the fish buyer still refuses to properly col lect the fee, the fish seller, within the next 7 calendar days, shall forward the fee to NMFS. The fish seller at the same time shall also advise NMFS in writing of the full particulars, includ ing: (i) The fish buyer’s and fish seller’s name, address, and telephone number, (ii) The name of the fishing vessel from which the fish seller made fish de livery and the date of doing so, (iii) The quantity and delivery value of each species of fee fish that the fish seller delivered, and (iv) The fish buyer’s reason, if known, for refusing to collect the fee in accordance with this subpart; (2) If a fish seller refuses to pay the fee in the amount and manner that this subpart requires, the fish buyer shall then advise the fish seller of the fish buyer’s collection obligation and of the fish seller’s payment obligation. If the fish seller still refuses to pay the fee, the fish buyer shall then either deduct the fee from the delivery value over the fish seller’s protest or refuse to buy the fee fish. The fish buyer shall also, within the next 7 calendar days, advise NMFS in writing of the full particu lars, including: (i) The fish buyer’s and fish seller’s name, address, and telephone number, (ii) The name of the fishing vessel from which the fish seller made or at tempted to make fish delivery and the date of doing so, (iii) The quantity and delivery value of each species of fee fish the fish seller delivered or attempted to deliver, (iv) Whether the fish buyer deducted the fee over the fish seller’s protest or refused to buy the fee fish, and (v) The fish seller’s reason, if known, for refusing to pay the fee in accord ance with this subpart. (f) Implementation regulations at vari ance with this section. If any special cir cumstances in a reduction fishery re quire, in NMFS’s judgment, fee pay ment and/or collection provisions in addition to, or different from, those in this section in order to accommodate the circumstances of, and practices in, a reduction fishery while still fulfilling the intent and purpose of this section, NMFS may, notwithstanding this sec tion, include such provisions in the im plementation regulations for such re duction fishery. § 600.1014 Fee collection deposits, dis bursements, records, and reports. (a) Deposit accounts. Each fish buyer that this subpart requires to collect a fee shall maintain a segregated ac count at a federally insured financial institution for the sole purpose of de positing collected fee revenue and dis bursing the fee revenue directly to NMFS in accordance with paragraph (c) of this section. (b) Fee collection deposits. Each fish buyer, no less frequently than at the end of each business week, shall de posit, in the deposit account estab lished under paragraph (a) of this sec tion, all fee revenue, not previously de posited, that the fish buyer collects through a date not more than two cal endar days before the date of deposit. Neither the deposit account nor the principal amount of deposits in the ac count may be pledged, assigned, or used for any purpose other than aggre gating collected fee revenue for dis bursement to the Fund in accordance with paragraph (c) of this section. The 160 50 CFR Ch. VI (10–1–22 Edition) § 600.1014 fish buyer is entitled, at any time, to withdraw deposit interest, if any, but never deposit principal, from the de posit account for the fish buyer’s own use and purposes. (c) Deposit principal disbursement. On the last business day of each month, or more frequently if the amount in the account exceeds the account limit for insurance purposes, the fish buyer shall disburse to NMFS the full amount of deposit principal then in the deposit account. The fish buyer shall do this by check made payable to the Fund sub account to which the deposit principal relates. The fish buyer shall mail each such check to the Fund subaccount lockbox that NMFS establishes for the receipt of the disbursements for each program. Each disbursement shall be accompanied by the fish buyer’s settle ment sheet completed in the manner and form that NMFS specifies. NMFS will specify the Fund subaccount lockbox and the manner and form of settlement sheet by means of the noti fication in § 600.1013(d). (d) Records maintenance. Each fish buyer shall maintain, in a secure and orderly manner for a period of at least 3 years from the date of each trans action involved, at least the following information: (1) For all deliveries of fee fish that the fish buyer buys from each fish sell er: (i) The date of delivery, (ii) The seller’s identity, (iii) The weight, number, or volume of each species of fee fish delivered, (iv) The identity of the fishing vessel that delivered the fee fish, (v) The delivery value of each species of fee fish, (vi) The net delivery value, (vii) The identity of the party to whom the net delivery value is paid, if other than the fish seller, (viii) The date the net delivery value was paid, and (ix) The total fee amount collected; (2) For all fee collection deposits to and disbursements from the deposit ac count: (i) The dates and amounts of depos its, (ii) The dates and amounts of dis bursements to the Fund’s lockbox ac count, and (iii) The dates and amounts of dis bursements to the fish buyer or other parties of interest earned on deposits. (e) Annual report. In each year, on the date to be specified in each implemen tation regulation, succeeding the year during which NMFS first implemented a fee, each fish buyer shall submit to NMFS a report, on or in the form NMFS specifies, containing the fol lowing information for the preceding year, or whatever longer period may be involved in the first annual report, for all fee fish each fish buyer purchases from fish sellers: (1) Total weight, number, or volume bought; (2) Total delivery value paid; (3) Total fee amounts collected; (4) Total fee collection amounts de posited by month; (5) Dates and amounts of monthly disbursements to each Fund lockbox account; (6) Total amount of interest earned on deposits; and (7) Depository account balance at year-end. (f) State records. If landing records that a state requires from fish sellers contain some or all of the data that this section requires and state con fidentiality laws or regulations do not prevent NMFS’ access to the records maintained for the state, then fish buy ers can use such records to meet appro priate portions of this section’s record keeping requirements. If, however, state confidentiality laws or regula tions make such records unavailable to NMFS, then fish buyers shall maintain separate records for NMFS that meet the requirements of this section. If any state law or regulation prohibits fish buyers, or fish sellers where appro priate, from keeping, for the purpose of complying with any requirement of this section, separate records that in volve some or all of the same data ele ments as the landing records that the fish buyers also keep, for state pur poses and under state law or regula tion, then a financed reduction pro gram will not be possible. (g) Audits. NMFS or its agents may audit, in whatever manner NMFS be lieves reasonably necessary for the duly diligent administration of reduc tion loans, the financial records of fish 161 Fishery Conservation and Management § 600.1017 buyers and fish sellers in each reduc tion fishery in order to ensure proper fee payment, collection, deposit, dis bursement, accounting, record keeping, and reporting. Fish buyers and fish sellers shall make all records of all program transactions involving post reduction fish harvests, fish deliveries, and fee payments, collections, deposits, disbursements, accounting, record keeping, and reporting available to NMFS or NMFS’ agents at reasonable times and places and promptly provide all requested information reasonably related to these records that such fish sellers and fish buyers may otherwise lawfully provide. Trip tickets (or simi lar accounting records establishing the pounds of fee fish that each fish buyer buys from each fish seller each time that each fish buyer does so and each price that each fish buyer then pays to each fish seller for the fee fish) are es sential audit documentation. (h) Confidentiality of records. NMFS and NMFS’ auditing agents shall main tain the confidentiality of all data to which NMFS has access under this sec tion and shall neither release the data nor allow the data’s use for any pur pose other than the purpose of this sub part; provided, however, that NMFS may aggregate such data so as to pre clude their identification with any fish buyer or any fish seller and use them in the aggregate for other purposes). (i) Refunds. When NMFS determines that a reduction loan is fully repaid, NMFS will refund any excess fee re ceipts, on a last-in/first-out basis, to the fish buyers. Fish buyers shall re turn the refunds, on a last-in/first-out basis, to the fish sellers who paid the amounts refunded. (j) Implementation regulations at vari ance with this section. If any special cir cumstances in a reduction fishery re quire, in NMFS’s judgment, fee collec tion deposit, disbursement, or records provisions in addition to, or different from, those in this section in order to accommodate the circumstances of, and practices in, a reduction fishery while still fulfilling the intent and pur pose of this section, NMFS may, not withstanding this section, include such provisions in the implementation regu lations for such reduction fishery. § 600.1015 Late charges. The late charge to fish buyers for fee payment, collection, deposit, and/or disbursement shall be one and one-half (1.5) percent per month, or the max imum rate permitted by state law, for the total amount of the fee not paid, collected, deposited, and/or disbursed when due to be paid, collected, depos ited, and/or disbursed. The full late charge shall apply to the fee for each month or portion of a month that the fee remains unpaid, uncollected, undeposited, and/or undisbursed. § 600.1016 Enforcement. In accordance with applicable law or other authority, NMFS may take ap propriate action against each fish sell er and/or fish buyer responsible for non-payment, non-collection, non-de posit, and/or non-disbursement of the fee in accordance with this subpart to enforce the collection from such fish seller and/or fish buyer of any fee (in cluding penalties and all costs of col lection) due and owing the United States on account of the loan that such fish seller and/or fish buyer should have, but did not, pay, collect, deposit, and/or disburse in accordance with this subpart. All such loan recoveries shall be applied to reduce the unpaid balance of the loan. § 600.1017 Prohibitions and penalties. (a) The following activities are pro hibited, and it is unlawful for any party to: (1) Vote in any referendum under this subpart if the party is ineligible to do so; (2) Vote more than once in any ref erendum under this subpart; (3) Sign or otherwise cast a ballot on behalf of a voter in any referendum under this subpart unless the voter has fully authorized the party to do so and doing so otherwise comports with this subpart; (4) Interfere with or attempt to hinder, delay, buy, or otherwise unduly or unlawfully influence any eligible voter’s vote in any referendum under this subpart; (5) Submit a fraudulent, unauthor ized, incomplete, misleading, unen forceable by specific performance, or 162 50 CFR Ch. VI (10–1–22 Edition) § 600.1017 inaccurate bid in response to an invita tion to bid under this subpart or, in any other way, interfere with or at tempt to interfere with, hinder, or delay, any invitation to bid, any bid submitted under any invitation to bid, any reduction contract, or any other reduction process in connection with any invitation to bid; (6) Revoke or attempt to revoke any bid under this subpart; (7) Fail to comply with the terms and conditions of any invitation to bid, bid, or reduction contract under this sub part, including NMFS’ right under such reduction contracts to specific per formance; (8) Fail to fully and properly pay and collect any fee due payable, and col lectible under this subpart or otherwise avoid, decrease, interfere with, hinder, or delay any such payment and collec tion, (9) Convert, or otherwise use for any purpose other than the purpose this subpart intends, any paid or collected fee; (10) Fail to fully and properly deposit on time the full amount of all fee rev enue collected under this subpart into a deposit account and disburse the full amount of all deposit principal to the Fund’s lockbox account—all as this subpart requires; (11) Fail to maintain full, timely, and proper fee payment, collection, deposit, and/or disbursement records or make full, timely, and proper reports of such information to NMFS-all as this sub part requires; (12) Fail to advise NMFS of any fish seller’s refusal to pay, or of any fish buyer’s refusal to collect, any fee due and payable under this subpart; (13) Refuse to allow NMFS or agents that NMFS designates to review and audit at reasonable times all books and records reasonably pertinent to fee payment, collection, deposit, disburse ment, and accounting under this sub part or otherwise interfere with, hinder, or delay NMFS or it agents in the course of their activities under this subpart; (14) Make false statements to NMFS, any of the NMFS’ employees, or any of NMFS’ agents about any of the mat ters in this subpart; (15) Obstruct, prevent, or unreason ably delay or attempt to obstruct, pre vent, or unreasonably delay any audit or investigation NMFS or its agents conduct, or attempt to conduct, in con nection with any of the matters in this subpart; and/or (16) Otherwise materially interfere with the efficient and effective conduct of reduction and the repayment of re duction loans under this subpart. (b) Any party who violates one or more of the prohibitions of paragraph (a) of this section is subject to the full range of penalties the Magnuson-Ste vens Act and 15 CFR part 904 provide— including, but not limited to: civil pen alties, sanctions, forfeitures, and pun ishment for criminal offenses—and to the full penalties and punishments oth erwise provided by any other applicable law of the United States. (c) Additionally, NMFS may take any and all appropriate actions, includ ing the communication of action at law, against each party responsible for the non-payment, non-collection, non deposit, and/or non-disbursement in ac cordance with § 600.1013 and/or § 600.1014 to enforce the United States’ receipt from such party of any fee—including penalties and all costs of collection— due and owing the United States on ac count of the reduction loan that such party should have, but did not, pay, collect, deposit, and/or disburse in ac cordance with § 600.1013 and/or § 600.1014. All such reduction loan recoveries shall be applied to reduce the unpaid bal ances of reduction loans. Subpart M—Specific Fishery or Program Fishing Capacity Re duction Regulations AUTHORITY: 5 U.S.C. 561, 16 U.S.C. 1801 et seq., 16 U.S.C. 1861a(b) through (e), 46 App. U.S.C. 53735, section 144(d) of Division B of Pub. L. 106–554, section 2201 of Pub. L. 107–20, and section 205 of Pub. L. 107–117, Pub. L. 107–206, Pub. L. 108–7, Pub. L. 108–199, and Pub. L. 108–447. SOURCE: 69 FR 53361, Sept. 1, 2004, unless otherwise noted.