50 CFR 600 Subpart L - Fishing Capacity Reduction Framework

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR Part 600 Subpart L (Aug. 26, 2024)

This content is from the eCFR and is authoritative but unofficial.

Title 50 —Wildlife and Fisheries
Chapter VI —Fishery Conservation and Management, National Oceanic and Atmospheric
Administration, Department of Commerce
Part 600 —Magnuson-Stevens Act Provisions
Authority: 5 U.S.C. 561 and 16 U.S.C. 1801 et seq.
Source: 61 FR 32540, June 24, 1996, unless otherwise noted.

Subpart L Fishing Capacity Reduction Framework
§ 600.1000 Definitions.
§ 600.1001 Requests.
§ 600.1002 General requirements.
§ 600.1003 Content of a request for a financed program.
§ 600.1004 Accepting a request for, and determinations about initiating, a financed program.
§ 600.1005 Content of a request for a subsidized program.
§ 600.1006 Accepting a request for, and determinations about conducting, a subsidized program.
§ 600.1007 Reduction amendments.
§ 600.1008 Implementation plan and implementation regulations.
§ 600.1009 Bids.
§ 600.1010 Referenda.
§ 600.1011 Reduction methods and other conditions.
§ 600.1012 Reduction loan.
§ 600.1013 Fee payment and collection.
§ 600.1014 Fee collection deposits, disbursements, records, and reports.
§ 600.1015 Late charges.
§ 600.1016 Enforcement.
§ 600.1017 Prohibitions and penalties.
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 Conservation and Management Act (MagnusonStevens Act) and in § 600.10 of this title, the terms used in this subpart have the following meanings:

50 CFR 600.1000 (enhanced display)

page 1 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1000 “Address of Record”

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.
50 CFR 600.1000 “Fish buyer” (3) (enhanced display)

page 2 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1000 “Fish delivery”

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 MagnusonStevens 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).
50 CFR 600.1000 “Reduction fishery” (enhanced display)

page 3 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1000 “Reduction loan”

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) 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 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.
[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 proposed reduction fishery is subject, or a
majority of permit holders in the fishery 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 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.
50 CFR 600.1001(b) (enhanced display)

page 4 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1001(c)

(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.
[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 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.
(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]

50 CFR 600.1002(c) (enhanced display)

page 5 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1003

§ 600.1003 Content of a request for a financed program.
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
50 CFR 600.1003(k)(6) (enhanced display)

page 6 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1003(k)(7)

(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;
50 CFR 600.1003(n)(4) (enhanced display)

page 7 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1003(n)(5)

(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.

50 CFR 600.1003(o) (enhanced display)

page 8 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1004

§ 600.1004 Accepting a request for, and determinations about initiating, a financed program.
(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.
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
50 CFR 600.1005(e) (enhanced display)

page 9 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1005(f)

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).

50 CFR 600.1005(i) (enhanced display)

page 10 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

(j)

50 CFR 600.1005(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.
(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
50 CFR 600.1006(d)(4) (enhanced display)

page 11 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1006(d)(5)

(5) The program is in accord with all other applicable provisions of the Magnuson-Stevens Act and this
subpart.

§ 600.1007 Reduction amendments.
(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.
(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;
50 CFR 600.1008(b)(7) (enhanced display)

page 12 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1008(b)(8)

(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
50 CFR 600.1008(d)(2) (enhanced display)

page 13 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1008(d)(3)

(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.
(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'

50 CFR 600.1009(a)(4) (enhanced display)

page 14 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1009(a)(5)

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:
(1) In any area subject to the jurisdiction 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 reduction program, unless
the reduction program vessel has been certified by the Secretary, and the requirements
established 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 expense. Upon completion of scrapping, NMFS will
take such action as may be necessary to recover from the reduction vessel owner any
cost, damages, or other expense NMFS incurred in the scrapping of the reduction vessel.
(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

50 CFR 600.1009(a)(7)(iii) (enhanced display)

page 15 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1009(a)(7)(iv)

(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.
[65 FR 31443, May 18, 2000, as amended at 75 FR 62329, Oct. 8, 2010]

50 CFR 600.1009(f) (enhanced display)

page 16 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1010

§ 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 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 prebidding 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 prebidding referendum shall be conducted,

(ii) If the initial pre-bidding referendum precedes reduction amendment adoption, a second prebidding 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);

50 CFR 600.1010(d)(1) (enhanced display)

page 17 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1010(d)(2)

(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,
(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 referendum that precedes reduction amendment adoption, state the
reduction amendment specifications,
(vi) For each initial pre-bidding referendum that follows reduction amendment adoption, summarize
the material aspects of the reduction amendment adopted,
(vii) For each second pre-bidding referendum, summarize how the adopted reduction amendment
materially differs from the reduction amendment specifications upon which a successful initial
pre-bidding referendum occurred and how this material difference affects the borrower's
reduction investment in the program and the borrower's ability to repay the reduction loan,
(viii) For each post-bidding referendum, specify the actual bidding results that do not conform to the
fishing 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

50 CFR 600.1010(d)(5)(i) (enhanced display)

page 18 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1010(d)(5)(ii)

(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 specially-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 address 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 referendum votes,
(D) The number of votes for and the number of votes against the industry fee system, and
(E) Whether the referendum was successful 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 manner, 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 determinations. NMFS' determinations about ballot qualifications and
about all other referendum matters, including, but not limited to, eligible voters and their addresses
of record, are conclusive 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
restrict the availability of all voter information to the maximum extent allowed by law; and
(9) Conclusive authorization of industry fee system. Each successful referendum conclusively authorizes
NMFS' imposition of an industry fee system—including 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]

50 CFR 600.1010(d)(9) (enhanced display)

page 19 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1011

§ 600.1011 Reduction methods and other conditions.
(a) Reduction permits or reduction permits and reduction vessels. Each program may involve either the
surrender and revocation of reduction permits or both the surrender and revocation of reduction permits
and the withdrawal from fishing either by title restriction or by scrapping of reduction vessels. No financed
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, forever 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 payment, 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 fishing vessel owner for any present or future limited
access system fishing permit in the reduction fishery.
(c) Reduction vessel title restriction or scrapping. For each program that involves reduction vessel title
restriction or scrapping:
(1) Each reduction vessel that is subject to title restriction only and is thus not required to be scrapped,
is, upon NMFS' tender of the reduction payment, forever prohibited from any future 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 expense, to scrap the reduction vessel to
NMFS' satisfaction, including adequate provision for NMFS to document the physical act of
scrapping; and
(3) Each reduction vessel owner, upon NMFS' tender of the reduction payment, 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
fishing or scrapping of reduction vessels may not require any holder of a reduction permit in a reduction
fishery to surrender any fishing permit in any non-reduction fishery or restrict or revoke any fishing permit
other than a reduction permit in the reduction fishery, except those fishing permits authorizing the
incidental harvesting of species in any non-reduction fishery during, and as a consequence of, directed
fishing for species in the reduction fishery.
(e) Reduction vessels disposition. Where a business plan requires the withdrawal from fishing of reduction
vessels as well as the revocation of reduction permits:
(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 financed program or a subsidized program;

50 CFR 600.1011(e)(1) (enhanced display)

page 20 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1011(e)(2)

(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 require 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 reduction payments that a bidder's reduction-contract
nonperformance prevents NMFS from disbursing. In financed programs, the reduction loan's principal
amount is the total amount of all reduction payments that NMFS disburses 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 the principal amount of the reduction
loan accordingly.
(g) Effect of reduction-contract nonperformance. No referendum, no reduction contract, no reduction loan,
and no fee payment and collection obligation under § 600.1013 and § 600.1014 necessary to repay any
reduction loan, shall be impaired, invalidated, avoided, or otherwise rendered unenforceable by virtue of
any reduction contract's nonperformance. This is without regard to the cause of, or reason for,
nonperformance. NMFS shall endeavor to enforce the specific performance of all reduction contracts, but
NMFS' inability, for any reason, to enforce specific performance for any portion of such reduction
contracts shall not relieve fish sellers of their obligation to pay, and fish buyers of their obligation to
collect, the fee necessary to fully repay the full reduction loan balance that results from all reduction
payments that NMFS actually makes and does not recover.
(h) Program completion. Other than the payment and collection of the fee that repays a reduction loan and
any other residual matters regarding reduction payments and the disposition of reduction permits and
reduction vessels, a program shall be completed when NMFS tenders or makes all reduction 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 obligated to collect the fee in accordance with § 600.1013 and to deposit and disburse the fee
revenue in accordance with § 600.1014.
(b) Principal amount, interest rate, repayment term, and penalties for non-payment 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 principal 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 implementation regulations shall specify for the payment of costs and
penalties for non-payment, non-collection, non-deposit, and/or non-disbursement in accordance with
§ 600.1013 and § 600.1014.
50 CFR 600.1012(b)(4) (enhanced display)

page 21 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1012(c)

(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. Treasury determines
the Treasury percentage shall not void, invalidate, or otherwise impair any reduction contract, any
reduction loan repayment obligation, or any other aspect of the reduction process under this subpart.
Should any such difference result in a reduction loan that cannot, at the maximum fee rate allowed by law,
be repaid, as previously projected, within the maximum maturity, any amount of the reduction loan
remaining unpaid at maturity shall be repaid after maturity by continuing fee payment and collection
under this subpart at such maximum fee rate until the reduction loan's unpaid principal balance and
accrued interest is fully repaid. The above notwithstanding, at the discretion of the Secretary, the
reduction contract can be voided if a material adverse change affects the reduction contract, reduction
loan obligation, or any other aspect of the reduction process under this subpart.

§ 600.1013 Fee payment and collection.
(a) Amount. The fee amount is the delivery value times the fee rate.
(b) Rate. NMFS will establish the fee rate. The fee rate may not exceed 5 percent of the delivery value. NMFS
will establish the initial fee rate by calculating the fee revenue annually required to amortize a reduction
loan over the reduction loan's term, projecting the annual delivery value, and expressing such fee revenue
as a percentage of such delivery value. Before each anniversary of the initial fee rate determination, NMFS
will recalculate the fee rate reasonably required to ensure reduction loan repayment. This will include any
changed delivery value projections and any adjustment required 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 collect 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 delivery 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 either 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 collection, deposit,
disbursement, and accounting requirements of this subpart, both the fish seller and the fish
buyer, and shall be responsible for all requirements 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:

50 CFR 600.1013(c)(3)(i) (enhanced display)

page 22 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1013(c)(3)(i)(A)

(A) Any party whose place of business 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 restaurant, 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 seller has good reason to believe is a party not subject to this
subpart or to whom or against whom NMFS cannot otherwise apply or enforce this
subpart,
(ii) In each such case the fish seller shall, with respect to the fee fish involved in each such case,
discharge, in addition to the fee payment requirements of this subpart, all the fee collection,
deposit, disbursement, accounting, record keeping, and reporting requirements that this
subpart otherwise 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 section and continues without interruption 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 maturity of the reduction loan's original amortization period, fee
payment and collection shall continue until the reduction loan is fully repaid, notwithstanding that
the time required to fully repay the reduction loan exceeds the reduction loan's initially permissible
maturity.
(d) Notification.
(1) At least 30 days before the effective date of any fee or of any fee rate change, NMFS will publish a
FEDERAL REGISTER notice establishing 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 each affected fish
seller and fish buyer of whom NMFS has notice;
(2) When NMFS determines that a reduction 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 collected. 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 seller 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 effect, each
fish seller is, nevertheless, obligated to pay the fee at the fee rate in effect and each fish buyer is,
nevertheless, 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 advise 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 collect 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, including:
50 CFR 600.1013(e)(1) (enhanced display)

page 23 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

(i)

50 CFR 600.1013(e)(1)(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 delivery 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 particulars,
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 attempted 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 accordance with this subpart.
(f) Implementation regulations at variance with this section. If any special circumstances in a reduction
fishery require, in NMFS's judgment, fee payment 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 section,
include such provisions in the implementation regulations for such reduction fishery.

§ 600.1014 Fee collection deposits, disbursements, records, and reports.
(a) Deposit accounts. Each fish buyer that this subpart requires to collect a fee shall maintain a segregated
account at a federally insured financial institution for the sole purpose of depositing collected fee revenue
and disbursing 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
deposit, in the deposit account established under paragraph (a) of this section, all fee revenue, not
previously deposited, that the fish buyer collects through a date not more than two calendar days before
the date of deposit. Neither the deposit account nor the principal amount of deposits in the account may
be pledged, assigned, or used for any purpose other than aggregating collected fee revenue for
disbursement to the Fund in accordance with paragraph (c) of this section. The fish buyer is entitled, at
any time, to withdraw deposit interest, if any, but never deposit principal, from the deposit 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 subaccount to which the deposit principal relates. The fish buyer shall mail
50 CFR 600.1014(c) (enhanced display)

page 24 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1014(d)

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 settlement
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 notification 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 transaction involved, at least the following information:
(1) For all deliveries of fee fish that the fish buyer buys from each fish seller:
(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 account:
(i)

The dates and amounts of deposits,

(ii) The dates and amounts of disbursements to the Fund's lockbox account, and
(iii) The dates and amounts of disbursements 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 implementation 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 following 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 deposited 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.

50 CFR 600.1014(e)(7) (enhanced display)

page 25 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1014(f)

(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 confidentiality laws or regulations do not prevent NMFS' access to the
records maintained for the state, then fish buyers can use such records to meet appropriate portions of
this section's recordkeeping requirements. If, however, state confidentiality laws or regulations 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
appropriate, from keeping, for the purpose of complying with any requirement of this section, separate
records that involve some or all of the same data elements as the landing records that the fish buyers
also keep, for state purposes and under state law or regulation, then a financed reduction program will not
be possible.
(g) Audits. NMFS or its agents may audit, in whatever manner NMFS believes reasonably necessary for the
duly diligent administration of reduction loans, the financial records of fish buyers and fish sellers in each
reduction fishery in order to ensure proper fee payment, collection, deposit, disbursement, 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 similar
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 essential audit documentation.
(h) Confidentiality of records. NMFS and NMFS' auditing agents shall maintain the confidentiality of all data to
which NMFS has access under this section and shall neither release the data nor allow the data's use for
any purpose other than the purpose of this subpart; provided, however, that NMFS may aggregate such
data so as to preclude 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
receipts, on a last-in/first-out basis, to the fish buyers. Fish buyers shall return the refunds, on a last-in/
first-out basis, to the fish sellers who paid the amounts refunded.

(j)

Implementation regulations at variance with this section. If any special circumstances in a reduction
fishery require, in NMFS's judgment, fee collection 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 purpose of this section, NMFS may, notwithstanding
this section, include such provisions in the implementation regulations 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 maximum 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, deposited, 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.

50 CFR 600.1015 (enhanced display)

page 26 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1016

§ 600.1016 Enforcement.
In accordance with applicable law or other authority, NMFS may take appropriate action against each fish seller
and/or fish buyer responsible for non-payment, non-collection, non-deposit, 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 (including
penalties and all costs of collection) 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 prohibited, 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 referendum 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, unauthorized, incomplete, misleading, unenforceable by specific performance,
or inaccurate bid in response to an invitation to bid under this subpart or, in any other way, interfere
with or attempt 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 subpart, including NMFS' right under such reduction contracts to specific performance;
(8) Fail to fully and properly pay and collect any fee due payable, and collectible under this subpart or
otherwise avoid, decrease, interfere with, hinder, or delay any such payment and collection,
(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 revenue 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 subpart 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, disbursement, and
accounting under this subpart or otherwise interfere with, hinder, or delay NMFS or it agents in the
course of their activities under this subpart;
50 CFR 600.1017(a)(13) (enhanced display)

page 27 of 28

50 CFR Part 600 Subpart L (up to date as of 8/26/2024)
Fishing Capacity Reduction Framework

50 CFR 600.1017(a)(14)

(14) Make false statements to NMFS, any of the NMFS' employees, or any of NMFS' agents about any of
the matters in this subpart;
(15) Obstruct, prevent, or unreasonably delay or attempt to obstruct, prevent, or unreasonably delay any
audit or investigation NMFS or its agents conduct, or attempt to conduct, in connection 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 reduction 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-Stevens Act and 15 CFR part 904 provide—including, but not limited to:
civil penalties, sanctions, forfeitures, and punishment for criminal offenses—and to the full penalties and
punishments otherwise provided by any other applicable law of the United States.
(c) Additionally, NMFS may take any and all appropriate actions, including the communication of action at
law, against each party responsible for the non-payment, non-collection, non-deposit, and/or nondisbursement in accordance 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 account of the reduction loan that such party should have, but did not, pay, collect, deposit, and/
or disburse in accordance with § 600.1013 and/or § 600.1014. All such reduction loan recoveries shall be
applied to reduce the unpaid balances of reduction loans.

50 CFR 600.1017(c) (enhanced display)

page 28 of 28