[Federal Register Volume 62, Number 44 (Thursday, March 6, 1997)]
[Proposed Rules]
[Pages 10249-10252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5540]
[[Page 10249]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 600
[Docket No. 970213030-7030-01; I.D. 020597B]
RIN: 0648-AJ77
Central Title and Lien Registry for Limited Access Permits
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Advance notice of proposed rulemaking; request for comments.
-----------------------------------------------------------------------
SUMMARY: NMFS requests comments about a central registry (Registry) for
limited access permits (LAPs). The Magnuson-Stevens Fishery
Conservation and Management Act (Magnuson-Stevens Act) requires us to
establish the Registry. The Registry will be the exclusive means of
perfecting title to LAPs. It will also be the exclusive means of
perfecting security interests in, assignments of, and liens and other
encumbrances (collectively Liens) against LAPs.
We want the public's guidance before proposing regulations.
DATES: Comments must be submitted by April 7, 1997.
ADDRESSES: Send comments to: Michael L. Grable, Chief, Financial
Services Division, NMFS, 1315 East West Highway, Silver Spring, MD
20910.
FOR FURTHER INFORMATION CONTACT: Michael L. Grable at (301) 713-2390.
SUPPLEMENTARY INFORMATION: Conservation and management sometimes
requires limiting access to Federally-managed fisheries. Only parties
with LAPs can fish in these fisheries. Some LAPs are transferable
independently of fishing vessels (Transferable). Others are not.
The Sustainable Fisheries Act of 1996 (SFA) is Public Law 104-297.
The SFA amended the Magnuson-Stevens Act. One SFA provision requires
NMFS to establish the Registry:
* * * the Secretary [of Commerce] shall establish an exclusive
central registry system (which may be administered on a regional
basis) for limited access system permits established under section
303(b)(6) or other Federal law, including individual fishing quotas,
which shall provide for the registration of title to, and interests
in, such permits * * *.
Section 110(d) of the SFA makes the Registry the legally exclusive
means of perfecting LAP titles and Liens (except Federal tax Liens).
Before establishing the Registry, NMFS wants the public's guidance.
We welcome comments from anyone, but particularly want guidance from:
1. Fisheries parties who will buy and sell LAPs,
2. Creditors and other parties who will file Liens for registration
against LAPs, and
3. The Regional Fishery Management Councils.
We welcome comments about any Registry aspect, but particularly
want guidance about the following:
1. Who should administer the Registry?
The SFA allows us either to administer the Registry or contract for
its administration. We are considering the former alternative because:
a. The Registry's perpetual nature requires continuity,
b. Similar functions often appear to be governmentally
administered, and
c. Many Registry title aspects involve LAP administration functions
we already perform.
Should we administer the Registry, or should we contract for its
administration? Which is the better alternative, and why?
2. Where should we locate the Registry?
Almost 90 per cent of all Transferable LAPs involve Alaska's
fisheries. NMFS' Regional Office in Juneau, AK, administers these
through its Restricted Access Management (RAM) Division.
If we administer the Registry, Juneau, AK, could be the most
efficient and effective Registry location and the RAM Division the
Registry's most suitable manager. A comparable example of a centralized
national registry is the U.S. Coast Guard's National Vessel
Documentation Center (NVDC) in Falling Waters, WV.
A centralized Registry could consider ways to facilitate filings
from all parts of the country. One alternative could be similar to a
NVDC approach that allows facsimile filings contingent upon receiving
original documentation within 10 calendar days. If we adopted this
approach, a facsimile's date and time could be the date and time of
perfection if the original documentation were timely received.
Otherwise, the date and time the Registry received the original
documentation would be the date and time of perfection.
The centralization alternative includes only the Registry portion
of LAP functions. Regular LAP administrative functions (issuance,
renewal, transfer approval, etc.) would remain in their present
regional locations.
3. Should the Registry register LAPs that are not Transferable?
About 60 per cent of all LAPs are Transferable. They can be bought
and sold. They have market value. They can be pledged as collateral.
The other 40 per cent are not Transferable. They cannot be
independently bought and sold. They have no independent market value.
They are not useful as collateral. Most of them generally follow the
titles of the fishing vessels to which they relate. They have no
commercial significance apart from those vessels.
Although the SFA does not limit registration to Transferable LAPs,
we question whether there is a practical reason to register LAPs that
are not Transferable. The Registry's purpose is perfecting title to,
and Liens against, LAPs. This benefits LAP buyers, sellers, lenders,
and other lienholders. LAPs that are not Transferable do not separately
involve any of these parties.
4. Should initial title registration be voluntary or mandatory for
all Transferable LAPs?
In the first alternative, registration would be voluntary for all
Transferable LAPs, except those to which title transfers, or against
which Liens, were filed for registration. Registration would be
mandatory for the excepted LAPs. The Registry would, without LAP holder
requests, register these LAPs and bill LAP holders for the registration
fees.
In the second alternative, registration of all Transferable LAPS
would be mandatory. This might produce a more stable and dependable
Registry that affords all LAP holders, buyers, lenders, and other
lienholders greater security and assurance. Potential objections to
mandatory registration, however, include:
a. Those planning neither to sell nor pledge their LAPs might
object to mandatory registration's time and cost,
b. Mandatory registration could be burdensome for seasonal LAPs,
and
c. Registering all LAPs might cause unnecessary Government work.
Regular LAP administration records disclose the authorized holders
of all LAPs. We could automatically register title in the names of the
authorized holders and charge a moderate fee for it (the SFA requires a
fee). This would minimize the time and cost of mandatory registration.
The alternative in question No. 5 might minimize the seasonal LAP
problem.
5. How should the Registry treat seasonal LAPs that merely allocate
periodic catch quantities for continuous LAPs?
The Pacific halibut and sablefish fishery, for example, has two
types of LAPs. The first type is Quota Share (Access) permits. These
are continuous
[[Page 10250]]
LAPs allowing access to the fishery. The second type is Individual
Fishing Quota (Allocation) permits. These are seasonal LAPs that
annually allocate the amount of fish each Access permit holder may
catch that season. Allocation permit holders may transfer only 10 per
cent of allocated catch quantity.
Separately including this fishery's Allocation permits in the
Registry would be burdensome and complicated for everyone. Excluding
Allocation permits could compromise minor commercial interests in the
Allocation permit's limited transferability, but the time and expense
of doing otherwise might not be worth the limited benefit.
One alternative we are considering would be for initial title
registration of this fishery's Access permits (and payment of the
registration fee) to include automatic registration of all subsequent
Allocation permits (in the name of the LAP title holders of record and
without payment of additional registration fees). This would prevent
Access permit holders from having each year to register their seasonal
Allocation permits and pay annual registration fees. Under this
alternative, Liens against the Access permits would also encumber the
corresponding Allocation permits.
6. How should we determine LAP ``value''?
The SFA limits Registry fees to amounts not exceeding 0.5 per cent
of LAP ``value.'' Fees may be less, but not more, than this. We must
determine the ``value'' of all LAPs included in the Registry.
Some LAPs have commonly known market values. We have market-value
ranges for other LAPs because buyers and sellers have disclosed
purchase prices to us. There may, however, be little or no market-value
data for some LAPs.
Valuation problems should mostly be limited to initial title
registration. The registration of subsequent title transfers should
involve purchase prices or other consideration that we can objectively
value. Where known, we could apply market values to LAPs transferred by
gift, trade, or inheritance.
If initial registration fees are a modest flat fee for all, the
valuation problem might be mostly limited to determining that the fee
does not exceed 0.5 per cent of the ``value'' of LAPs for which little
or no market data exists. We are unsure how to establish the ``value''
of these LAPs.
7. What fees should the Registry charge?
The SFA requires fees for initial title registration (Initial Fee)
and subsequent title-transfer registration (Transfer Fee). It does not
authorize fees for registering Liens (or their renewal, release,
assumption, assignment, etc.) or for any other Registry service.
Presumably, Registry fees should offset Registry expenses.
Unless fees other than the specifically authorized ones are
possible, title and title-transfer registrants will have to bear the
cost of all Registry services. Although it might be more equitable if
the Registry could also charge the cost of Lien or other services to
those seeking them, the SFA does not authorize this.
How should we determine the Initial Fee? Should it be a modest flat
fee or 0.5 per cent of market value, whichever is less? If so, what
should control the flat fee's amount? Should it, instead, be a
specified percentage (not exceeding 0.5%) of market value? If so, what
should control the percentage's amount? Should we publish a schedule of
average market values representative of various LAPs and base the
percentage on those values?
Under the mandatory title-registration alternative, the Initial Fee
could be moderate. There are about 23,000 Transferable LAPs, if Pacific
halibut and sablefish Allocation permits are included. If not, there
are about 14,500. Under the voluntary title-registration alternative,
however, the Initial Fee may have to be substantially higher.
How should we determine the Transfer fee, and what should control
its amount? Should it be a specified percentage (within the statutory
maximum) of LAP purchase price? If so, what should control the
percentage's amount? This alternative could include provisions to
determine market value for LAP gifts, inheritances, trades, and other
title transfers involving considerations other than market value.
Recent title-transfer activity for Transferable LAPs indicates
about 2,300 title transfers annually.
8. How should we respond when LAP holders required to register LAP
titles and pay registration fees do not do so?
This would apply to all LAP holders included in a mandatory
Registry. In a voluntary Registry, it would apply only to those who
sell or pledge their LAPs or whose LAPs are otherwise subjected to
Liens. The Registry must be able to compel appropriate performance. How
should it do this? What should the penalties be?
9. What Lien registrations should the Registry allow?
One alternative we are considering would limit registerable Liens
to:
a. Secured interests in LAPs to which the LAPs' holders have, by
their signatures, consented,
b. Liens authorized or constituted by the judgments or orders of
duly constituted courts of competent jurisdiction, and
c. Other Liens authorized by State or Federal statute.
Should the Registry allow other types of Liens to be registered?
Why? Could this create problems or be burdensome?
10. Should the Registry attempt to validate any title or Lien?
One alternative we are considering is to accept the validity of
title or Lien filings that meet the Registry's minimal filing
requirements. Under this alternative, the Registry would not attempt to
determine the completeness, accuracy, or validity of any documents
filed.
11. Should the Registry do anything to help prevent unauthorized
signatures?
One alternative might be requiring signatures to be notarized.
Would this be useful? Is there a better approach?
12. Should the Registry require using a standard form for filing
Liens for registration?
One alternative we are considering is to require using a form
fulfilling the Registry's minimum filing requirements. This seems to be
the practice under the Uniform Commercial Code (UCC). For consensual
Liens, the Registry could require both the lienholder and the LAP
holder to sign this form. Nonconsensual Liens would not require the LAP
holder's signature, but could require specifying the nature of, and
authority for, the nonconsensual Liens. All forms could identify: the
name and address of the LAP holder, the name and address of the
lienholder, the LAP against which the Lien is to be registered, and the
effective date of the Lien.
Would the use of a standard form expedite registration or make it
more reliable? If so, what should the form require?
13. Should Lien filing forms be accompanied by the Lien
documentation upon which the filings are based?
If the Registry were to register all Liens that met its minimal
filing requirements, should Lien documentation accompany Lien filing
forms? If so, why, and what should the Registry do with this
documentation?
14. Should Lien registrations require periodic renewal?
One alternative we are considering is for Lien registrations to
expire if lienholders do not renew them within a certain time. This
seems to be the UCC practice. If we should adopt this alternative, what
should the periodic renewal period be?
15. How should the Registry handle registering Lien releases?
[[Page 10251]]
The UCC practice seems to involve release forms signed by
lienholders.
16. What Lien data should the Registry register, and how long
should the Registry maintain them?
Should the Registry register only lienholders' names and addresses?
Would registering other Lien characteristics (e.g., nature, amount, and
maturity) be useful? Should the Registry perpetually maintain all Lien
data or periodically purge all data about terminated Liens?
17. Should the Registry require using a specific form for filing
LAP title transfers for registration and, if so, what should it
include?
We are considering this alternative, because it might expedite
title-transfer registration or make it more reliable.
For voluntary transfers, the form could be signed by the LAP seller
and purchaser and could include: the identity of the LAP whose title
seller transfers to purchaser, the date seller transfers title to
purchaser, and the accompanying instrument evidencing seller's transfer
of title to purchaser.
For involuntary transfers, the form could be signed by the party to
whom title involuntarily transfers and include: the identity of the LAP
interest whose title involuntarily transfers, the date title
involuntarily transfers, and the nature of the accompanying instrument
evidencing involuntary title transfer.
18. Should any evidence of title transfer the Registry might
require contain original signatures or would a copy of the original
evidence be sufficient?
19. Should the Registry perpetually maintain any evidence of title
transfer it might require?
20. Should the Registry make available for public inspection any
evidence of title transfer it might maintain and, if so, how and under
what circumstances?
21. Should the Registry provide title abstracts (or any other
written record of LAP title and lien registration)?
The statute does not authorize the Registry to charge fees for this
purpose. If the Registry provided this, its cost might have to be
recovered primarily from fees that the statute authorizes the Registry
to collect for title transfers. What would the effect be if the
Registry did not provide this? If it did, should it limit provision to
certain users for certain purposes? What data should this include?
22. How should the Registry best provide for nonjudicial
foreclosure (NJF)?
The SFA requires the Registry to provide:
* * * a mechanism for filing notice of a nonjudicial foreclosure * *
* by which the holder of a senior security interest acquires or
conveys ownership of a permit * * * [and] the interests of the
holders of junior security interests are released when the permit is
transferred * * *.
How should the Registry best comply? One alternative we are
considering is adapting the UCC's NJF procedure. Under this
alternative, we would register an NJF title transfer only if one of the
following two conditions apply:
a. The LAP holder and all registered lienholders junior (Junior
Lienholders) to the senior security interest being foreclosed
nonjudicially (NJF Security) first notify the Registry in writing that
they consent to the recordation of the NJF title transfer; or
b. Absent such consent:
i. The holder of the NJF Security (NJF Lienholder) certifies to the
Registry that the NJF Lienholder:
A. Is contractually entitled to NJF,
B. Has, at least 21 calendar days before such certification,
notified the LAP Holder and all Junior Lienholders and given the LAP
Holder and all Junior Lienholders the opportunity to object in writing
to the Registry about the NJF title transfer; and
ii. The Registry has received no such objection.
If either of these two conditions apply, the Registry would
register NJF title transfer to the NJF Lienholder.
If neither of these two conditions applied, the Registry would not
register NJF title transfer.
All NJF title transfers would release only such registered Liens as
are junior to the NJF Security. The Registry would not release any
registered Liens senior to the NJF security, and the title transferred
by NJF would continue subject to the unreleased Liens.
We would not adjudicate conflicting interests. Conflicting
interests would have either to be settled by the consent of all
relevant parties or by adjudication in a duly constituted court of
competent jurisdiction.
Are there better ways to implement the NJF provisions? What are
they and why are they better than the alternative suggested here?
23. If we adopt the alternative suggested in question No. 22, what
certification requirements should the Registry impose?
One alternative we are considering is a certification, pursuant to
28 U.S.C. 1746, that:
a. The NJF Lienholder gave NJF title transfer notice, at least 21
calendar days before such certification, to the LAP holder and all
Junior Lienholders,
b. Such notice was in writing and delivered to the LAP holder and
each Junior Lienholder both at the address of record maintained at the
Registry for the LAP Holder and each Junior Lienholder and at such
other address as the NJF Lienholder may have had cause to have known
was a better address,
c. Such notice contained the notice language required by the
Registry's regulations,
d. The NJF Lienholder is contractually entitled to NJF, and
e. Such certification is made in good faith and without any design
to hinder, delay, or defraud the LAP holder or any present or future
lienholder or creditor of the LAP holder.
24. When NJF title transfer is based on consent, should the
Registry require using a standard filing form?
25. When NJF title transfer is based on certification, should the
Registry require using a standard form of certification?
26. Under what circumstances should the Registry register title
transfer by judicial foreclosure, as a result of judgment enforcement,
or otherwise by involuntary transfer?
The SFA provides that the Registry shall provide:
* * *procedures for changes in the registration of title to such
permits upon the occurrence of involuntary transfers, judicial* * *
foreclosure of interests, enforcement of judgments thereon, and
related matters deemed appropriate* * *.
The Registry would register judgments as Liens against LAP title.
One alternative we are considering, however, is that the Registry would
not register LAP title transfer by judicial foreclosure (or as a result
of judgment enforcement or other involuntary transfer) unless the party
judicially foreclosing (or enforcing a judgment or causing an
involuntary transfer) presented to the Registry a bill of sale (or
other instrument causing title transfer) issued pursuant to, or
confirmed by, the order of a duly constituted court of competent
jurisdiction.
27. How best should the Registry provide public access to Registry
data, and what Registry data should be public?
We are considering putting Registry data on the Internet. Are there
additional or better ways of providing public access to Registry data?
We are considering making the following data publicly available
a. LAP fishery;
b. LAP nature;
c. LAP holder's name and address (tax identification number and
other protected or confidential data would be excluded);
d. Chronological listing of all LAP Lien data (including names and
[[Page 10252]]
addresses of all lienholders and recordation dates for: initial
recordation, renewal, expiration, release, assumptions, assignments,
etc.); and
e. Complete chain of post-Registry LAP title, including the name
and address of each party to whom LAP title has been registered and the
date of each such title registration.
28. How should the Registry best provide for the perfection of pre-
Registry Liens?
The SFA provides that:
Security interests on * * * [LAPs] that are effective and
perfected by otherwise applicable law on the date of the final
regulations implementing * * * [the Registry] shall remain effective
and perfected if, within 120 days after such date, the secured party
submits evidence satisfactory to * * * [the Registry] and in
compliance with such regulations of the perfection of the security.
The UCC is (in UCC States) the only ``otherwise applicable law''
known to us under which pre-Registry Liens against LAPs could have been
``perfected.'' Should we give priority to Liens perfected under the UCC
in strict chronological precedence regardless of the UCC jurisdiction
involved? If so, what evidence of UCC perfection and its chronological
precedence should we require?
Are there any other ``otherwise applicable laws'' that we should
consider? If so, how would they relate to perfection under the UCC?
What should the regulations require?
Before the SFA, we had informally allowed lienholders to register
with the RAM Division their Liens against Alaska LAPs. These informal
filings are not ``perfected by otherwise applicable law'' and we cannot
consider them in determining pre-Registry Lien priorities.
We welcome all comments on any other Registry aspects.
This advance notice of proposed rulemaking has been determined to
be not significant for purposes of E.O. 12866.
Dated: February 28, 1997.
Nancy Foster,
Deputy Assistant Administrator for Fisheries, National Marine Fisheries
Service.
[FR Doc. 97-5540 Filed 3-5-97; 8:45 am]
BILLING CODE 3510-22-P