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(continued)
(b) Early involvement. Councils should provide comments and recommendations on proposed state and Federal actions 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 comments and recommendations to state and Federal agencies.
Subpart L—Fishing Capacity Reduction Framework
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Authority: 16 U.S.C. 1861a(b)–(e).
Source: 65 FR 31443, May 18, 2000, unless otherwise noted.
§ 600.1000 Definitions.
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In addition to the definitions in the Magnuson-Stevens Fishery Conservation 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 corporation. Addresses listed on permits or other NMFS records are presumed to be business addresses, unless clearly indicated otherwise.
Bid means the price a vessel owner or reduction fishery permit holder requests 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 collectively, 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 submitted 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 fishery management plan or any state fishery management plan or program, including amendments to the plan or program, pursuant to which a fishery is managed.
Delivery value means:
(1) For unprocessed fish, all compensation that a fish buyer pays to a fish seller in exchange for fee fish; and
(2) For processed fish, all compensation that a fish buyer would have paid to a fish seller in exchange for fee fish if the fee fish had been unprocessed fish instead of processed fish.
Delivery value encompasses fair market value, as defined herein, and includes the value of all in-kind compensation or all other goods or services exchanged in lieu of cash. It is synonymous with the statutory term “ex-vessel 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 institution 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 buyers 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 financed 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 document NMFS prepares, under §600.1006(b) and based on the preliminary 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 transaction.
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 specifications 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 harvests and first sells or otherwise delivers fee fish to a fish buyer.
Fishery Management Plan (FMP) means any Federal fishery management plan, including amendments to the plan, that the Secretary of Commerce approves or adopts pursuant to section 303 of the Magnuson-Stevens Act.
Fund means the Fishing Capacity Reduction Fund, and each subaccount for each program, established in the U.S. Treasury for the deposit into, and disbursement 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 program.
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 referendum that follows bidding under §600.1009.
Post-reduction means after a program reduces fishing capacity in a reduction fishery.
Pre-bidding referendum means a referendum that occurs at any time after a request for a financed program but before a proposal under §600.1008 of an implementation plan and implementation regulations.
Preliminary development plan means the document specified in §600.1005(g) and required to be submitted with a request 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 difference in form represents, in the reduction 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 reduction under this subpart, in each reduction fishery—starting with a request and ending, for a financed program, with full reduction loan repayment.
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 invitation 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 financed program's reduction cost and repayable by a fee under, and in accordance with, §600.1012, §600.1013, and §600.1014.
Reduction payment means the Federal Government's fishing capacity reduction payment to a fishing permit owner, fishing vessel owner, or both, under a reduction contract. Additionally, 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 proceeds and is for either revoking a fishing permit or both revoking a fishing permit and withdrawing a vessel from fishing either by scrapping or title restriction.
Reduction permit means any fishing permit revoked in a program in exchange for a reduction payment under a reduction contract.
Reduction vessel means any fishing vessel withdrawn from fishing either by scrapping or title restriction in exchange 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 fishery identified in §600.1001(c), a state governor for a fishery identified in §600.1001(d), or the Secretary for a fishery identified in §600.1001(e).
Scrap means to completely and permanently reduce a fishing vessel's hull, superstructures, and other fixed structural 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 borrows 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 reduction 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.
§ 600.1001 Requests.
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(a) A Council or the Governor of a State under whose authority a proposed reduction fishery is subject may request that NMFS conduct a program in that fishery. Each request shall be in writing and shall be submitted to the Director, Office of Sustainable Fisheries, NMFS. Each request shall satisfy the requirements of §600.1003 or §600.1005, as applicable, and enable NMFS to make the determinations required by §600.1004 or §600.1006, as applicable.
(b) NMFS cannot conduct a program in any fishery subject to the jurisdiction of a Council or a state unless NMFS first receives a request from the Council or the governor to whose jurisdiction the fishery is subject.
(c) For a fishery subject to the jurisdiction 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 conducts a public hearing about the request.
(d) For a fishery subject to the jurisdiction 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 request. No Governor of a State may make a request, or join in making a request, until the State conducts a public hearing about the request.
(e) For a fishery under the direct management authority of the Secretary, NMFS may conduct a program on NMFS' own motion by fulfilling the requirements of this subpart that reasonably apply to a program not initiated by a request.
(f) Where necessary to accommodate special circumstances in a particular fishery, NMFS may waive, as NMFS deems necessary and appropriate, compliance with any specific requirements under this subpart not required by statute.
§ 600.1002 General requirements.
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(a) Each program must be: (1) Necessary to prevent or end overfishing, rebuild stocks of fish, or achieve measurable and significant improvements in the conservation and management of the reduction fishery;
(2) Accompanied by the appropriate environmental, economic and/or socioeconomic analyses, in accordance with applicable statutes, regulations, or other authorities; and
(3) Consistent with the CFMP, including any reduction amendment, for the reduction fishery.
(b) Each CFMP for a reduction fishery must: (1) Prevent the replacement of fishing capacity removed by the program through a moratorium on new entrants, restrictions on vessel upgrades, and other effort control measures, taking into account the full potential fishing capacity of the fleet;
(2) Establish a specified or target total allowable catch or other measures 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 provisions for the post-reduction allocation of fish between the reduction fishery and the rest of the fishery that both protect the borrower's reduction investment in the program and support the borrower's ability to repay the reduction loan.
§ 600.1003 Content of a request for a financed program.
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A request for a financed program shall:
(a) Specify the reduction fishery.
(b) Project the amount of the reduction 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 describe 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 reduction process are projected to occur.
(e) Demonstrate how the program meets, or will meet after an appropriate reduction amendment, the requirements in §600.1002(a).
(f) Demonstrate how the CFMP meets, or will meet after an appropriate reduction amendment, the requirements in §600.1002(b).
(g) If a reduction amendment is necessary, include an actual reduction amendment or the requester's endorsement in principle of the reduction amendment specifications in the business 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 authorized to harvest fish from the reduction fishery, excluding those whose authority is limited to incidentally harvesting 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 operation, or other factor that the proposed program involves. The list may include any relevant information that NMFS may supply to the requester.
(j) Specify the aggregate total allowable catch in the reduction fishery during 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 determining 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 reduction fishery or is otherwise limited by size of fishing vessel operated, geographic area of operation, or other factor;
(3) Whether the program is limited to fishing permits or involves both fishing permits and fishing vessels;
(4) The reduction amendment required;
(5) The needs of fishing communities;
(6) Minimizing the program's reduction 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 fishery, including an evaluation of the likely increase in participation or effort in such other fisheries, the general economic impact on such other fisheries, 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 referendum 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 reliable implementation regulations,
(C) Invite bids,
(D) Accept or reject bids, and
(E) Complete a program in accordance with this subpart, and
(ii) Address, consistently with this subpart:
(A) The contents and terms of invitations to bid,
(B) Bidder eligibility,
(C) The type of information that bidders shall supply,
(D) The criteria for accepting or rejecting bids,
(E) The terms of bid acceptances,
(F) Any referendum procedures in addition to, but consistent with, those in §600.1010, and
(G) All other technical matters necessary to conduct a program;
(2) Projects and supports the reduction fishery's annual delivery value during the reduction loan's repayment 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 reduction specifications upon which both the pre-bidding referendum and the bidding under §600.1009 will be based. The reduction loan's maximum principal 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 repayment term and the fee rate, or range of fee rates, prospectively necessary to amortize the reduction loan over its repayment term;
(5) Analyzes and demonstrates the ability to repay the reduction loan at the minimum reduction level and at various reduction-level increments reasonably greater than the minimum one, based on the:
(i) Best and most representative historical fishing revenue and expense data and any other relevant productivity measures available in the reduction fishery, and
(ii) Projected effect of the program on the post-reduction operating economics of typical harvesters in the reduction fishery, with particular emphasis on the extent to which the reduction increases the ratio of delivery value to fixed cost and improves harvesting's other relevant productivity 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 appropriate reduction amendment, the requirements in §600.1002(b);
(8) Includes, if a reduction amendment is necessary, the reduction amendment specifications upon which the pre-bidding referendum will be based;
(9) Includes an assessment of the program's potential impact on fisheries other than the reduction fishery, including an evaluation of the likely increase in participation or effort in such other fisheries, the general economic impact on such other fisheries, and recommendations that could mitigate, or enable such other fisheries to mitigate, any undesirable impacts;
(10) Specifies the names and addresses 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 circumstances in the reduction fishery that may require the implementing regulations to contain provisions in addition to, or different from, those contained in §600.1013 and/or §600.1014 in order to accommodate the circumstances of, and practices in, the reduction 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 negatively affect the efficient and effective conduct of the same, specification of who needs to take what action to resolve any such impediments, and
(ii) In the case of reduction fisheries in which some fish sellers sell unprocessed, and other fish sellers sell processed fish to fish buyers, specification of an accurate and efficient method of establishing the delivery value of processed fish; and
(12) Demonstrates by a survey of potential voters, or by any other convincing 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 specifications, 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.
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(a) Accepting a request. Once it receives a request, NMFS will review any request for a financed program to determine whether the request conforms 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 accept it and publish a notice in the Federal Register requesting public comments 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 notice and opportunity to respond about adding eligible voters, deleting ineligible voters, and/or correcting any voter's name and address of record. If, in NMFS' discretion, the comments received in response to such notice warrants it, or other good cause warrants it, NMFS may modify such list by publishing another notice in the Federal Register.
(b) Determination about initiating a financed program. After receipt of a conforming request for a financed program, NMFS will, after reviewing and responding to any public comments received in response to the notice published 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 amendment, the requirements in §600.1002(a);
(2) The CFMP meets, or will meet after an appropriate reduction amendment, the requirements in §600.1002(b);
(3) The program, if successfully implemented, is cost effective;
(4) The reduction requested constitutes a realistic and practical prospect for successfully completing a program in accordance with this subpart and the borrower is capable of repaying the reduction loan. This includes enabling NMFS to readily design, propose, and adopt a timely and reliable implementation plan as well as propose and issue timely and reliable implementation regulations and otherwise complete 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.
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A request for a subsidized program shall:
(a) Specify the reduction fishery.
(b) Project the amount of the reduction 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 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 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 authorized to harvest fish from the reduction fishery, excluding those whose authority is limited to incidentally harvesting 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 information that NMFS may supply to the requester, and take into account any limitation by type of fishing gear operated, size of fishing vessel operated, geographic area of operation, or other factor that the proposed program involves.
(f) Specify the aggregate total allowable catch in the reduction fishery during 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 development 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 reliable implementation regulations, and
(ii) Include:
(A) The contents and terms of invitations to bid,
(B) Eligible bidders,
(C) The type of information that bidders shall supply,
(D) The criteria for accepting or rejecting bids, and
(E) The terms of bid acceptances;
(2) Specifies the criteria for determining the types and numbers of fishing permits or fishing permits and fishing vessels that are eligible for reduction 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 reduction fishery, or is otherwise limited by size of fishing vessel operated, geographic area of operation, or other factor,
(iii) Whether the program is limited to fishing permits or involves both fishing permits and fishing vessels,
(iv) The reduction amendment required,
(v) The needs of fishing communities, and
(vi) The need to minimize the program's reduction cost; and
(3) Demonstrates the program's cost effectiveness.
(h) Demonstrate how the program meets, or will meet after an appropriate reduction amendment, the requirements in §600.1002(a).
(i) Demonstrate how the CFMP meets, or will meet after an appropriate reduction amendment, the requirements in §600.1002(b)(1) and (2).
(j) Specify any other information or guidance that assists NMFS in preparing a final development plan and a proposed implementation plan and proposed implementation regulations.
(k) Include the requester's statement of belief that the program constitutes a reasonably realistic and practical prospect for successfully completing a program in accordance with this subpart.
§ 600.1006 Accepting a request for, and determinations about conducting, a subsidized program.
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(a) Accepting a request. NMFS will review any request for a subsidized program 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 request conform. If the request conforms, NMFS shall accept it and publish a notice in the Federal Register requesting public comments about the request.
(b) Final development plan. After receipt 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 enabling NMFS to readily design, propose, and adopt a timely and reliable implementation plan as well as propose and issue timely and reliable implementation regulations and otherwise complete the program in accordance with this subpart. NMFS will, as far as possible, base the final development plan on the requester's preliminary development plan. Before completing the final development plan, NMFS will consult, as NMFS deems necessary, with the requester, Federal agencies, state and regional authorities, affected fishing communities, participants in the reduction fishery, conservation organizations, 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 requester for the requester's reaffirmation of the request. Based on the final development plan, the reaffirmation shall: (1) Certify that the final development 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 reduction amendment, the requirements in §600.1002(b)(1) and (2); and
(3) Project the date on which the requester will forward any necessary reduction amendment and, if the requester is a Council, proposed regulations 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 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 determines that:
(1) The program meets, or will meet after an appropriate reduction amendment, the requirements in §600.1002(a);
(2) The CFMP meets, or will meet after an appropriate reduction amendment, the requirements in §600.1002(b)(1) and (2); and
(3) The program is reasonably capable of being successfully implemented;
(4) The program, if successfully implemented, will be cost effective; and
(5) The program is in accord with all other applicable provisions of the Magnuson-Stevens Act and this subpart.
§ 600.1007 Reduction amendments.
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(a) Each reduction amendment may contain provisions that are either dependent upon or independent of a program. Each provision of a reduction amendment is a dependent provision unless the amendment expressly designates the provision as independent.
(b) Independent provisions are effective 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 reduction amendment for a financed program are fully in force and effect for all other purposes only when NMFS either:
(1) For bidding results that conform to the fishing capacity reduction specifications 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 reduction specifications or are subject to any other condition, notifies bidders whose bids NMFS had conditionally accepted, under §600.1010 (d)(8)(iii), that the condition pertaining to the reduction contracts between them and the United States is fulfilled.
(e) If NMFS does not, in accordance with this subpart and any special provisions in the implementation regulations, 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 regulations involving such dependent provisions shall then be repealed.
§ 600.1008 Implementation plan and implementation regulations.
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(a) As soon as practicable after deciding to initiate a program, NMFS will prepare and publish, for a 60-day public comment period, a proposed implementation plan and implementation regulations. During the public comment period, NMFS will conduct a public hearing of the proposed implementation plan and implementation regulations in each state that the program affects.
(b) To the greatest extent practicable, NMFS will base the implementation plan and implementation regulations for a financed program on the business plan. The implementation plan for a financed program 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 maximum reduction loan amount, if different from the maximum reduction cost;
(5) The reduction cost funding, if any, other than a reduction loan;
(6) The minimum acceptable reduction 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 eligible 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 reduction procedures other than those in the implementation regulations or this subpart.
(c) NMFS will base each implementation plan and implementation regulations for a subsidized program on the final development plan. The implementation 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 appropriations;
(5) The criteria for determining the types and number of fishing permits or fishing permits and fishing vessels eligible 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 program 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 written acceptance notice to the bidder at the bidder's address of record,
(v) The manner of bid submission and the information each bidder shall supply 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 acceptance or rejection;
(2) Specify any other special referendum 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 accordance with §600.1013 and §600.1014,
(ii) Prospective fee rate determinations, and
(iii) Any other aspect of fee payment, collection, deposit, disbursement, accounting, record keeping, and/or reporting.
(e) NMFS will issue final implementation regulations and adopt a final implementation plan within 45 days of the close of the public-comment period.
(f) NMFS may repeal the final implementation regulations for any program if:
(1) For a financed program, the bidding results do not conform to the fishing 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 unable to make all reduction payments due to a material adverse change.
§ 600.1009 Bids.
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(a) Each invitation to bid, bid, bid acceptance, reduction contract, and bidder—or any other party in any way affected 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 reduction contract under which:
(i) Each bidder makes an irrevocable offer to the United States of fishing capacity for reduction, and
(ii) NMFS accepts or rejects, on behalf of the United States, each bidder's offer;
(2) NMFS may, at any time before the bid expiration date, accept or reject any or all bids;
(3) For a financed program in which bidding results do not conform to the fishing capacity reduction specifications, NMFS' acceptance of any bid is subject to the condition that the industry fee system necessary to repay the reduction loan is subsequently approved by a successful post-bidding referendum conducted under §600.1010. Approval or disapproval of the industry fee system by post-bidding referendum is an event that neither the United States nor the bidders can control. Disapproval of the industry fee system by an unsuccessful post-bidding referendum fully excuses both parties from any performance and fully discharges all duties under any reduction contract;
(4) For a financed program in one reduction fishery that is being conducted under appropriate implementation regulations simultaneously with another financed program in another reduction fishery, where the acceptance of bids for each financed program is conditional upon successful post-bidding referenda approving industry fee systems for both financed programs, NMFS' acceptance of all bids is, in addition to any condition under paragraph (a)(3) of this section, also subject to the additional conditions that both referenda approve the industry fee systems required for both financed programs—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 vessel that is federally documented to forever prohibit and effectively prevent any future use of the reduction vessel for fishing in any area subject to the jurisdiction of the United States or any state, territory, commonwealth, or possession of the United States, or
(B) 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, 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 expense. Upon completion of scrapping, NMFS will take such action as may be necessary to recover from the reduction vessel owner any cost or expense NMFS incurred in causing the reduction vessel to be scrapped and any other damages NMFS may have incurred and such owner shall be liable to the United States for such cost, expenses, and damages;
(6) Money damages not being an adequate remedy for a bidder's breach of a reduction contract, the United States is, in all particulars, entitled to specific performance of each reduction contract. This includes, but is not limited to, the scrapping of a reduction vessel;
(7) Any reduction payment is available, upon timely and adequately documented notice to NMFS, to satisfy liens, as allowed by law, against any reduction permit/and or reduction vessel; provided, however, that:
(i) No reduction payment to any bidder either relieves the bidder of responsibility to discharge the obligation which gives rise to any lien or relieves any lien holder of responsibility to protect 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 connection with the revocation of any reduction 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 revocation of any reduction permit or the title restriction or scrapping of any reduction vessel for which the United States made, or has agreed to make, any reduction payment. A lien holder is limited to recovery against the holder 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 NMFS believes necessary to enforce specific performance of each reduction contract or otherwise to ensure completing each program. This includes, but is not limited to, each bidder's certification, 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 invitation to bid.
(b) NMFS will not invite bids for any program until NMFS determines that:
(1) Any necessary reduction amendment is fully and finally approved and all provisions except those dependent on the completion of reduction are implemented;
(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 apportionment 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 disburse reduction payments, except for matters involving bidding and post-bidding referenda, are completed.
(c) After making the affirmative determinations required under paragraph (b) of this section, NMFS will publish a Federal Register notice inviting eligible bidders to offer to the United States, under this subpart, fishing capacity 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 result 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 bidder's address of
record, those bidders whose bids NMFS accepts that a reduction 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 programs where bidding results do not conform to the fishing capacity reduction 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.
§ 600.1010 Referenda.
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(a) Referendum success. A referendum is successful if at least two-thirds of the ballots that qualify to be counted as referendum votes under subparagraph (d)(6) of this section are cast in favor of an industry fee system.
(b) Pre-bidding referendum—(1) Initial referendum. An initial pre-bidding referendum shall be conducted for each financed program. The business plan shall, subject to this subpart, determine the chronological relationship of the initial pre-bidding referendum to other pre-bidding aspects of the reduction process sequence. The initial pre-bidding referendum shall be based on the fishing capacity reduction specifications. If the initial pre-bidding referendum precedes the adoption of any necessary reduction amendment, the initial pre-bidding referendum shall also be based on the reduction amendment specifications. If the initial pre-bidding referendum follows the adoption of any necessary reduction amendment, the initial pre-bidding referendum shall also be based on the adopted reduction amendment;
(2) Successful initial pre-bidding referendum. If the initial pre-bidding referendum is successful, the reduction process will proceed as follows:
(i) If the initial pre-bidding referendum follows reduction amendment adoption, no second pre-bidding referendum shall be conducted,
(ii) If the initial pre-bidding referendum precedes reduction amendment adoption, a second pre-bidding referendum shall be conducted if, in NMFS' judgment, the reduction amendment subsequently adopted differs, in any respect materially affecting the borrower's reduction investment in the program and the borrower's ability to repay the reduction loan, from the reduction amendment specifications upon which the initial pre-bidding referendum successfully occurred. The sole purpose of any second pre-bidding referendum shall be to determine whether the voters authorize an industry fee system despite any such difference between the reduction amendment specifications and a subsequently adopted reduction amendment.
(3) Unsuccessful initial pre-bidding referendum. If the initial pre-bidding referendum is unsuccessful, the reduction process will either cease or NMFS may suspend the process pending an appropriate 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 bidding under §600.1009 does not conform, in any material respect, to the fishing capacity reduction specifications and such result justifies, in NMFS' judgment, conducting a post-bidding referendum. Bidding that results in reducing fishing capacity in any amount not less than the minimum fishing capacity reduction amount for any reduction loan amount not more than the maximum reduction loan amount, and otherwise achieves all material requirements of the fishing capacity reduction specifications, shall conform to the fishing capacity reduction specifications. The sole purpose of any post-bidding 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 minimum 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 parties whose names are listed as being eligible 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 organization, the person having authority 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 nature 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 return envelope,
(iv) For each pre-bidding referendum, state:
(A) The fishing capacity reduction specifications, (continued)