cuted by the grantee and the Secretary. Such awards may be amended by mutual consent of the parties.

(2) The grant-in-aid award shall contain applicable provisions as required by Federal law and regulations. These provisions are identified in the Grantin-Aid Handbook. NOAA Handbook No. 22, the most recent version of which may be obtained from the Director, National Marine Fisheries Service.

(d) Prosecution of work. (1) The prosecution of work by the grantee shall be performed in a manner acceptable to the Secretary. Unsatisfactory performance shall be cause for the Secretary to withhold payments. Grant-in-aid awards may be terminated or suspended upon determination by the Secretary that satisfactory progress has not been maintained.

(2) All work shall be performed in accordance with applicable State laws except when such laws are in conflict with Federal laws or regulations in which case such Federal law or regulations shall prevail.

(e) Economy and efficiency of operation. No grant-in-aid award shall be executed until the grantee has shown to the satisfaction of the Secretary that appropriate and adequate means shall be employed to achieve economy and efficiency, including the avoidance of undesirable duplication, in the completion of a project.

(Approved by the Office of Management and Budget under control number 06480102 is pending)

[41 FR 55534, Dec. 21, 1976, as amended at 48 FR 57302, Dec. 29, 1983]

§ 253.4 Use of funds.

(a) Apportionment of subsection 4(a) funds. (1) On October 1 of each year, or as soon thereafter as practicable, the Secretary shall notify the respective States of the amount of funds authorized under subsection 4(a) of the Act and apportioned to each State under subsection 5(a) of the Act. Funds appropriated under the Act shall remain available until expended to carry out the purposes of this authorization as determined by the Secretary.

(2) Any State which is unable to use any or all of the funds apportioned to

it may voluntarily release all or any part of such apportioned funds. Such release must be in writing and signed by the State official in charge of the agency designated under § 253.3(a) of these regulations or some other appropriate State official. Any apportioned funds released by a State may be made available by the Secretary to any other State, to supplement the funds apportioned to such other State in the fiscal year in which the released funds were apportioned, when the Secretary determines that such State is able to make prompt and effective use of such funds to carry out the purpose of the Act.

(b) Use of authorized funds for commercial fisheries resource disaster. (1) The Secretary shall cause to be published in the FEDERAL REGISTER a notice that a commercial fisheries resource disaster exists at the time such a finding is made.

(2) After such publication, Federal funds may be used for 100 percent of the cost of restoration of commercial fisheries resources if all the funds are obtained from appropriations authorized under subsection 4(b) of the Act.

(c) Use of funds for developing a new commercial fishery. (1) Applications related to the development of a new commercial fishery may be approved only after the Secretary determines that such applications will reasonably accomplish the purpose of developing a new commercial fishery.

(2) The Secretary may finance up to 100 percent of the cost of developing a new commercial fishery.

§ 253.5 Environment.

Projects shall be performed in such manner as to be consistent with the policies set forth in the National Environmental Policy Act of 1969, as amended by Pub. L. 94-83 (89 Stat. 424).

§ 253.6 Assurances.

The State must assure and certify that it will comply with all applicable Federal laws, regulations, and requirements as they relate to the application, acceptance, and use of Federal funds for projects under the Act in ac

As used in this part, terms shall have the meaning ascribed in this section.

(a) Secretary. The Secretary of Commerce or his authorized representatives.

(b) Act. Pub. L. 89-720, 80 Stat. 1149, as amended by Pub. L. 91-451, 84 Stat. 922 (16 U.S.C. 1201 et seq.).

(c) State. Any coastal State of the United States and the Commonwealth of Puerto Rico.

(d) State agency. The department(s), division(s), or commission(s) of a State empowered under its laws to manage or administer fish and shellfish resources or water-based recreation programs.

(e) Cooperator. A State agency participating in a cooperative agreement with the Secretary.

(f) Coastal waters. For the purpose of this Act, coastal waters include all or part of the mouth of a navigable or interstate stream or body of water, bays, sounds, lagoons, channels, estuaries, and other such waters.

(g) Jellyfish. Commonly known as "sea nettle," belonging to the phylum Coelenterata.

(h) Other such pests. All other species belonging to the phyla Coelenterata and Ctenophora which adversely affect fish, shellfish or water-based recreation.

(i) Floating seaweed. Marine plants including marine algae.

(j) Project proposal. A description of work to be accomplished, including objectives, procedures, cost, location, and time required for completion, and such other information as may be required by the Secretary.

(k) Cooperative agreement. The contract for research, control, or elimination of jellyfish and other such pests or the control of floating seaweed to be carried on as provided by the Act and these regulations. Such agreement shall set forth the terms and conditions binding upon the cooperator and the Secretary, including the objectives, procedures, costs, the term of the agreement, and such other provisions as may be appropriate.

§ 254.2 Funding priorities.

Funding priorities shall be given to those activities having the greatest potential for controlling or eliminating jellyfish and other such pests for the purposes of conserving and protecting the fish and shellfish resources in coastal waters.

§ 254.3 General provisions.

(a) Designation of State agency. A State agency authorized under its laws to manage or administer fish or shellfish resources or water-based recreational programs may submit project proposals and enter into cooperative agreements with the Secretary.

(b) Project proposal. (1) A project proposal shall be submitted for each proposed project for approval by the Secretary. An approved project proposal shall not be binding on the parties until incorporated in a cooperative agreement.

(2) Project proposals utilizing an allocation of State funds additional to amounts previously allocated by the State for the control or elimination of jellyfish and other such pests in coastal waters and for research on control of floating seaweed in such waters shall be preferred over project proposals utilizing an allocation of State funds which do not involve an increase of State funds dedicated to such programs. No project proposal which involves a reduction of State funds previously dedicated to such programs will be approved.

(c) Cooperative agreement. (1) After the Secretary has approved a project proposal, activities to be undertaken by the cooperator and the obligation of Federal funds shall be evidence by a cooperative agreement executed by the cooperator and the Secretary. Such agreement may be amended by mutual consent of the parties.

(2) The cooperative agreement shall contain applicable provisions as required by Federal law and regulations. These provisions are identified in the Federal Aid for Fisheries Handbook, the most recent version of which may be obtained from the Director, National Marine Fisheries Service.

(d) Prosecution of work. (1) The prosecution of work by the cooperator shall be performed in a manner acceptable to the Secretary. Unsatisfactory performance shall be cause for the Secretary to withhold payments. Cooperative agreements may be terminated or suspended upon determination by the Secretary that satisfactory progress has not been maintained.

(2) All work shall be performed in accordance with applicable State laws except when such laws are in conflict with Federal laws or regulations, in which case such Federal law or regulations shall prevail.

(e) Economy and efficiency of operations. No cooperative agreement shall be executed until the cooperator has shown to the satisfaction of the Secretary that appropriate and adequate means shall be employed to achieve economy and efficiency, including the avoidance of undesirable duplication, in the completion of a project.

(f) Subcontracts. In the performance of work under a cooperative agreement, subcontracts shall be solicited and awarded according to the laws and regulations of the State provided the Secretary is satisfied that adequate steps have been taken to insure economical and efficient services and impartial selection of subcontractors.

§ 254.4 Availability of funds.

Language appearing in Appropriation Acts providing funds for this program will govern the period during which the funds may be obligated.

§ 254.5 Use of funds.

(a) Apportionment and obligation of Jellyfish funds. On July 1 of each year, or as soon thereafter as practicable, the Secretary shall notify the States through publication in the FEDERAL REGISTER of the amount of funds authorized under the Act to carry out the purpose of the Act. Federal funds are tentatively made available for obligation for a specified period within the fiscal year in which appropriated. If the total or any portion thereof is unobligated at the end of this allocation period, such funds may be withdrawn and reallocated for obligation.

(b) Administrative funds. The National Marine Fisheries Service will finance its administrative cost from the appropriation made available by the Act. This administrative cost shall not exceed eight (8) percent of the appropriation.

(c) Level of Federal funding. Cost of activities under cooperative agreements shall be borne equally by the Federal Government and by the Cooperator. Eligible Cooperator matching funds are those available to the Cooperator agency from any non-Federal

source.

§ 254.6 Environment.

Projects contracted for shall be performed in such a manner so as to be consistent with the policies set forth in the National Environmental Policy Act of 1969 (83 Stat. 852; 42 U.S.C. 4321 et seq.).

§ 254.7 Water pollution control.

In the performance of work under a cooperative agreement the State shall take such action as is necessary to avoid pollution of water as a direct or indirect result of a contract activity. Water quality must be maintained at a level consistent with applicable water quality standards.

§ 254.8 New work requirement.

Project proposals shall set forth undertakings which constitute activities in addition to current programs. It is desirable that projects represent entirely new undertakings. However, expansion of existing programs for control or elimination of jellyfish and

These rules govern guaranteed financing for fishing vessels and fisheries shoreside facilities under the provisions of Title XI of the Merchant Marine Act, 1936 (46 U.S.C. 1271 through 1279), as amended by the American Fisheries Promotion Act (Pub. L. 96-561). The purpose of the Fisheries Obligation Guarantee Program is to make long-term financing available to the United States fishing industry by providing a U.S. Government guarantee of repayment of the debt portion of fishing vessel and shoreside facility construction, reconstruction, reconditioning, or (where eligible) purchasing costs.

§ 255.2 Definitions.

(a) Act means Title XI of the Merchant Marine Act, 1936, as amended (46 U.S.C. 1271 through 1279).

(b) Actual cost means the total amount paid or owed by an obligor for the construction, reconstruction, reconditioning or (where eligible) purchase of fishing vessels or fisheries shoreside facilities.

(c) Agency means the National Marine Fisheries Service, National Oceanic and Atmospheric Administration, U.S. Department of Commerce.

(d) Chief, Financial Services Division means the Chief, Financial Services Division, National Marine Fisheries Service, National Oceanic and Atmospheric Administration, U.S. Department of Commerce, or his desig

nee.

(e) Citizen of the Northern Mariana Islands means:

(1) Any individual who is a citizen of the Northern Mariana Islands (and qualifies as such under section 8 of the Schedule on Transitional Matters attached to the Constitution of the Northern Mariana Islands);

(2) Any corporation formed under the laws of the Northern Mariana Islands, if at least 75 percent of it is owned by individuals specified in paragraph (e)(1) of this section or citizens or nationals of the United States; or

(3) Any partnership or other form of association, if all the general partners, and at least 75 percent of all partners, are individuals specified in paragraph (e)(1) of this section or citizens or nationals of the United States.

(f) Citizen or national of the United States means:

(1) Any individual who is a citizen of the Northern Mariana Islands or a citizen or national of the United States of America;

(2) Any corporation, if at least 75 percent of it is owned by citizens of the Northern Mariana Islands or by citizens or nationals of the United States of America within the meaning of the provisions of section 2 of the Shipping Act, 1916 (46 U.S.C. 802); or

(3) Any partnership or association, if all the general partners, and at least 75 percent of all partners, are citizens of the Northern Mariana Islands or citizens or nationals of the United States of America.

(g) Conditional fishery means any fishery which has been declared as conditional under 50 CFR Part 251.

(h) Contribute to the development of the U.S. fishing industry means any project which:

(1) Enables fishing vessels to reduce harvests in conditional fisheries;

(2) Applies new technology;

(3) Makes any fisheries operation afloat or ashore more efficient, productive, or competitive;

(4) Has a potential for increasing fisheries exports;

(5) Aids in the development of an underutilized fishery; or

(6) In any other demonstrable way, contributes to the stability, growth, productivity, or development of the U.S. fishing industry.

(i) Depreciated actual cost means the actual cost of a fishing vessel or fisheries shoreside facility, depreciated (excluding land, which is not depreciable) on a straightline basis at one-year intervals over the vessel or facility's economically useful life, less a 10 percent salvage value.

(j) Economically useful life means the period during which the fishing vessel or fisheries shoreside facility, with proper maintenance, will remain economically productive.

(k) Fish means all forms of aquatic animal and plant life other than marine mammals and birds.

(1) Fisheries shoreside facility means any land, or structure or equipment on land, used for unloading, receiving, holding, processing, or distributing fish of every kind (including fish caught as a result of commercial passenger carrying fishing operations). This term does not include:

(1) Office furniture, equipment, or supplies;

(2) Any rolling equipment which will be used outside the primary production site;

(3) Any other non-fixed equipment which should be financed either from working capital or by the proceeds of short-term financing from other sources; or

(4) Any facility where more than 49 percent of the gross income is projected to be from the retail selling of fish or fisheries products or from anything else other than the unloading, receiving, holding, processing, or distribution of fish.

(m) Fishing vessel means any vessel, boat, ship, or other craft which is documented under United States law and is used for, equipped to be used for, or of a type which is normally used for commercial fishing (including commercial passenger carrying fishing vessels) or aiding or assisting one or more vessels at sea in the performance of any activity relating to fishing (including, but not limited to, preparation, supply, storage, refrigeration, transportation, or processing).

(n) Obligee means the party who lends the proceeds of a guaranteed obligation or invests in a guaranteed obligation.

(0) Obligor means the party who borrows the proceeds of a guaranteed obligation.

(p) Program means the Fisheries Obligation Guarantee Program under Title XI of the Merchant Marine Act, 1936, as amended (46 U.S.C. 1271 through 1279).

(q) Project means a construction, reconstruction, reconditioning, or (where eligible) purchase of fishing vessels or fisheries shoreside facilities, whose financing will be guaranteed under the Program.

(r) Reconstruction or reconditioning means any improvements of used fishing vessels or fisheries shoreside facilities provided that:

(1) At least 75 percent of improvement expenditures are capital, rather than expense, items;

(2) The improved vessel or facility will have an economically useful life of at least 10 years (or longer if the term of the proposed financing for which a guarantee is sought is longer), but specific equipment involved in a reconstruction or reconditioning may individually have economically useful lives of less than 10 years;

(3) The improved vessel or facility will be fit and sufficient for its intended operation; and

(4) The improvement project involves more than routine repair or maintenance.

(s) Secretary of Commerce means the Secretary of Commerce, or his desig

nee.

(t) State means any State of the United States of America, the District of Columbia, the Commonwealth of