(a) Filing and commitment fees. The Program's filing and commitment fee shall be 2 of 1 percent of the first $2,000,000 principal amount (or portion thereof) of the Program guarantee for which application is made and 4 of 1 percent of all principal amount over $2,000,000. The fee shall be due at the time an application is submitted, and no application for guarantee shall be accepted unless the full filing and commitment fee accompanies it. The filing fee shall be 75 percent of the filing and commitment fee, and once an application for a guarantee is accepted, no portion of the filing fee shall be returned for any reason. The commitment fee shall be the remaining 25 percent of the filing and commitment fee, and shall be returnable only if a refund is requested before the =Program issues an Approval in Princi■ple letter or if the application is declined.

(b) Guarantee fee. The Agency guarantee fee shall be:

(1) For guarantees on financings not involving underutilized fisheries risks, 4 of 1 percent of the average unpaid principal balance of the debt obligation for which the guarantee is outstanding during each year of the life of the guarantee; and

(2) For guarantees on financings involving underutilized fisheries risks, 1 percent of the average unpaid principal balance of the debt obligation for which the guarantee is outstanding during each year of the life of the guarantee.

The guarantee fee shall be due in advance based upon the financing's amortization schedule. The first annual guarantee fee shall be due at closing of the guarantee. Each subsequent annual guarantee fee shall be due on the anniversary date of the closing of

the guarantee. No refund of guarantee fees shall be made regardless of the status of the financing or the guarantee during the year to which the guarantee fee relates.

(c) Refinancing/assumption fee. The Program's refinancing/assumption fee shall be 4 of 1 percent of the principal amount of the debt obligation to be refinanced or assumed, and is due upon application for a guarantee for the refinancing/assumption. The refinancing/assumption fee is non-returnable regardless of the subsequent disposition of an application. The Chief, Financial Services Division, may, however, (1) waive the refinancing/assumption fee where the refinancing/assumption is primarily to protect the Program's interest or (2) charge an actual cost fee, not to exceed $1,000, where the refinancing/assumption does not substitute a wholly different obligor for the initial obligor.

(d) Where payable. Fees shall be paid by check mailed to: U.S. Department of Commerce, National Oceanic and Atmospheric Administration, NBOC 1, Room 122, 11420 Rockville Pike, Rockville, Maryland 20852. Checks shall be made payable to: "NMFS/FSFF".

§ 255.13 Demands and payment.

All demands by Obligees, whose debt has been guaranteed under the provisions of this Program, for payment of all or any portion of a guaranteed obligation in default shall be made in writing to the Chief, Financial Services Division, F/UD5, 3300 Whitehaven St., NW., Washington, DC 20235, by certified mail, return receipt requested. In the event the Program does not acknowledge timely receipt of a demand alleged to have been timely made, the demander must possess evidence of the demand's timely delivery to the Program. Payment of demands shall be made within 30 days after receipt of a timely demand by the Chief, Financial Services Division. Demands may be made by Obligees' duly authorized agents or trustees.

§ 255.14 Default/liquidation of collateral.

(a) Default. In the event of default by an Obligor which results in the payment by the Program to an Obli

33-187 0-84-9

$ 255.15

gee of the guaranteed debt, the Program shall ordinarily foreclose on its collateral and institute personal collection proceedings against the Obligor and the guarantors of the financing. At the Program's sole discretion, other remedies which are deemed most appropriate to protect the Program's interest may be pursued.

(b) Liquidation of collateral. If the Program is the highest bidder at a foreclosure sale of collateral, the Program (as the new owner of the collateral) may, in its sole discretion, subsequently complete, recondition, reconstruct, renovate, repair, maintain, operate, charter, lease, or sell such collateral. In the event there is a willing buyer for such collateral at an amount at least equal, or almost equal, to the amount owed the Program, the Program may convey title to such collateral, upon proper payment, without competitive bidding or other contracting procedures. If there is not a willing buyer for such collateral at an amount equal, or almost equal, to the amount owed the Program, the collateral will ordinarily be disposed of by competitive bidding-unless the Program decides that it can best recover without competitive bidding. Any deficiency resulting from the Program's purchase of collateral at a foreclosure sale shall not be offset by receipts from a subsequent sale of such collateral in the event the Program purchases the collateral and sells it for an amount greater than that owed the Program; the original Obligors and guarantors of the guaranteed financing remain liable for such deficiency.

§ 255.15 Program guidelines.

The Chief, Financial Services Division, will issue Program guidelines from time to time, as the need arises, to govern national Program policy and administrative issues which are not addressed by these rules.

§ 255.16 Applicability of rules.

These rules will be applicable to all Program applications first accepted after the rules' effective date.

the vessels operating in the fishery for which the proposed vessel is designed.

(g) Newly developed gear. The most modern gear available that is suitable for use in the fishery for which the proposed vessel is designed.

§ 256.3 Eligibility requirements.

(a) Vessel will be of advance design: In order to be considered to be of advance design, the vessel must be designed to have significant advantages in utility and efficiency over a significant number of vessels engaged in the fishery in which the proposed vessel is designed to operate.

(b) No economic hardship to efficient vessel operators: The determination that operation of a proposed vessel will not cause economic hardship to efficient vessel operators already operating in that fishery shall be made by the Secretary after notice and hearing, taking into consideration the condition of the resource, the efficiency of the vessels and gear being operated in that fishery compared with the proposed vessel, the prospects of the market for the species caught, and the degree and duration of any anticipated economic hardship.

(c) Aid in the development of the U.S. fisheries: For the vessel to aid in the development of the U.S. fisheries under conditions that the Secretary considers to be in the public interest, the vessel must be a modern vessel which will upgrade the fleet. Special consideration will be given to vessels which will provide a significant contribution in helping the domestic fishery meet foreign competition.

(d) The applicant possesses the ability, experience, resources and other qualifications necessary to enable him to operate and maintain the proposed new fishing vessel. In making this determination, the Secretary will inquire into the economic feasibility of the fishing venture and will require reasonable assurance that the applicant can operate the vessel profitably.

§ 256.4 Applications.

Applications for a subsidy shall be made on forms prescribed by the Secretary and shall be filed with the Director, Bureau of Commercial Fisheries, Washington, D.C. The applications

must be accompanied by three copies of the cross section, deck arrangement, outboard profile, and specifications of the proposed vessel. The Secretary may require such additional complete detailed construction plans as may be necessary after a review of the application and accompanying plans and specifications.

(Approved by the Office of Management and Budget under control number 06480090)

[31 FR 16049, Dec. 15, 1966, as amended at 48 FR 57302, Dec. 29, 1983]

§ 256.5 Notice and hearing.

After receipt of an application eligible on its face for a construction differential subsidy the Director will publish a Notice of Hearing on a Subsidy Application in the FEDERAL REGISTER and hold hearings in accordance therewith. The purpose of the hearing will be to provide any person who feels he will be economically injured by the construction of the proposed vessel to cross-examine witnesses and/or present evidence that the operation of such vessel will cause economic hardship to efficient vessel operators already operating in the fishery for which the vessel is designed. Hearing procedures will be held in accordance with Part 257 of this subchapter.

§ 256.6 Subsidy contract.

(a) A contract for the payment of the subsidy will take effect when all contracts for the construction of such vessel, have been approved by the Administrator and the subsidy contract has been signed by the Secretary and the applicant; and

(b) The contract shall contain a finding of the useful life of the vessel as determined by the Secretary to be used in computing the amount of the total depreciated construction subsidy to be repaid to the Secretary in accordance with section 9 of the Act.

§ 256.7 Vessel operations.

(a) If the owner of a fishing vessel constructed with the aid of a subsidy desires to operate it in a different fishery than the one for which is was designed because of an actual decline in that particular fishery, he shall

submit an application to the Secretary for permission to transfer the operations of the vessel to a different fishery. The application shall contain data showing the decline in the fishery for which the vessel was designed, how this decline is making the operation of the vessel uneconomical or less economical, and why the transfer will not cause economic hardship or injury to efficient vessel operators already operating in the fishery to which he wishes to transfer operations.

(b) Upon receipt of such an application the Secretary will publish a Notice of Hearing on an Application to Change Fishery in the FEDERAL REGISTER and hold hearings in accordance therewith. The purpose of the hearings will be to provide any person who feels he will be economically injured by said transfer of fishing operations an opportunity to cross-examine witnesses and/or present evidence that such a transfer of operations will cause economic hardship or injury to efficient vessel operators already operating in the fishery to which the vessel's operations would be transferred. Hearing procedures will be held in accordance with Part 257 of this subchapter.

In case the Secretary shall find that a vessel has operated contrary to the provisions of the Act or of regulations issued thereunder, he shall immediately notify the owner in writing of the specific acts involved and the amount of the penalty. The vessel owner may appeal such a finding to the Secretary in writing within 30 days of the date of mailing such finding to the last known address of the vessel owner. The amount of penalty assessed in any 1 year shall be equal to the total subsidy paid multiplied by the ratio that 1 year bears to the total number of years determined, by the Secretary, as the useful life of the vessel: Provided, however, That if the amount is not paid within 60 days after receipt of notice then the amount due shall be the total amount of the subsidy paid depreciated to the beginning of the year in which the vessel operated unlawfully. Any amount due hereunder shall constitute a maritime lien

against the vessel effective at the time the Secretary determines that the vessel has operated in violation of the Act or regulations.

§ 256.9 Inspection of vessels.

The Secretary or the Administrator shall have access at all times to all vessels which are being constructed under a contract providing for a construction subsidy provided for by the Act.

§ 256.10 Payment of subsidy.

(a) Subsidy payments will be paid in accordance with the terms of the subsidy contract. No subsidy payments shall be made until the entire amount of the applicant's share of the subsidized construction cost has been paid. If the amount of subsidy exceeds 30 percent of the subsidized construction cost, an amount equal to at least 30 percent of the subsidized construction cost shall be withheld until (1) the Maritime Administrator has certified that the vessel has been completed in accordance with the approved plans and specifications, and (2) all amounts due by the applicant on account of the construction of the vessel, including designing, equipping, and outfitting costs, have been paid.

(b) Any interim subsidy payments due pursuant to the subsidy contract shall be paid only after the Secretary has determined that such amount is properly due. If the amount of subsidy does not exceed 30 percent of the subsidized construction cost, none of the subsidy shall be paid until (1) the Maritime Administrator has certified that the vessel has been completed in accordance with the approved plans and specifications, and (2) all amounts due by the applicant on account of the construction of the vessel including designing, equipment, and outfitting costs, have been paid.

(c) Subsidy payments may be made to the applicant or jointly to the applicant and construction contractor or others, as may be appropriate, pursuant to the terms of the construction contract or otherwise.

(d) If the Maritime Administrator agrees, by his clearance of a payment schedule set forth in a pro forma construction contract to accompany a re

quest for bids, that it is in the public interest to allow the percentage of the subsidized construction cost withheld to be less than 30 percent of the subsidized construction cost, then the subsidy contract executed in connection with such construction contract shall reflect payment in accordance with such payment schedule.

§ 256.11 Furnishing of information.

During the term of the contract, an affidavit will be submitted to the Secretary by the owner or his authorized agent, of each vessel constructed with the aid of a subsidy paid under the Act, within 90 days of the end of each calendar year, or at such other times as the Secretary may require, providing information on the citizenship and domicile of all vessel employees, the catch of the vessel by species, ports in which the catch was landed and assurance that the vessel has been continuously documented as a vessel of the United States during the preceding calendar year or period since the last previous affidavit was filed. It should also contain the basis for such information and when necessary include supporting documents. In addition, within 90 days of the close of each fiscal year, an operating statement shall be furnished to the Bureau.

(Approved by the Office of Management and Budget under control number 06480041)

[34 FR 19199, Dec. 4, 1969, as amended at 48 FR 57302, Dec. 29, 1983]

AUTHORITY: Sec. 10, 74 Stat. 214, as amended; 46 U.S.C. 1410 (1964).

SOURCE: 31 FR 16050, Dec. 15, 1966, unless otherwise noted.

§ 257.1 Basis and purpose.

(a) The Act of June 12, 1960 (Pub. L. 86-516), as amended by the U.S. Fishing Fleet Improvement Act (Pub. L. 88-498) authorizes the Secretary of the Interior to pay a subsidy for the construction of fishing vessels in shipyards of the United States and requires that this be done only after Notice and Hearing.

(b) The purpose of this part is to establish rules of practice and procedure for the notice and hearing.

§ 257.2 Definitions.

Definitions shall be the same as in Part 256 of this subchapter.

§ 257.3 Scope of rules.

The regulations in this part govern the procedure in hearings subject to Part 256 of this subchapter. These hearings are subject to the Administrative Procedure Act (5 U.S.C. 1003, et seq.) and Practice Before The Department of the Interior (43 CFR Part 1). The regulations shall be construed to secure the just, speedy, and inexpensive determination of every proceeding with full protection for the rights of all parties therein.

§ 257.4 Mailing address.

Documents required to be filed in, and correspondence relating to, proceedings governed by the regulations in this part shall be addressed to the Director, Bureau of Commercial Fisheries, Department of the Interior, Washington, DC 20240.

§ 257.5 Authentication.

All rules, orders, determinations, and decisions of the Secretary shall be signed by the Secretary.

§ 257.6 Inspection of records.

The files and records of these hearings, except those held by the Secretary for good cause to be confidential, shall be open to inspection and copying as follows: