[Federal Register Volume 59, Number 37 (Thursday, February 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4108]


[[Page Unknown]]

[Federal Register: February 24, 1994]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 663

[Docket No. 940255-4054; I.D. 012894A]
RIN 0648-AF95

 

Pacific Coast Groundfish Fishery

AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and 
Atmospheric Administration (NOAA), Commerce.

ACTION: Proposed rule; request for comments.

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SUMMARY: The Secretary of Commerce (Secretary) requests public comments 
on a proposed rule that would annually allocate the U.S. Pacific 
whiting harvest guideline or quota, in 1994 through 1996, between: 
Fishing vessels that either catch and process at sea or catch and 
deliver to at-sea processors; and fishing vessels that deliver to 
processors located on shore. In each of the 3 years, after 60 percent 
of the annual harvest guideline (or quota) for whiting is taken, 
further at-sea processing in the exclusive economic zone (EEZ) would be 
prohibited, and the remaining 40 percent (104,000 metric tons (mt) in 
1994) would be reserved initially for fishing vessels that deliver to 
shore-based processors. On or about August 15, any amount of the 
harvest guideline (including any part of the 40 percent initially held 
in reserve) that is determined by the Northwest Regional Director, 
NMFS, not to be needed by the shoreside sector during the remainder of 
the year would be made available to the at-sea processing sector. This 
action is intended to promote the goals and objectives of the Pacific 
Coast Groundfish Fishery Management Plan (FMP) by providing for 
equitable sharing of the harvest guideline between shore-based and at-
sea processors; by contributing to the economies of coastal communities 
by providing reasonable opportunity for shoreside processing of the 
whiting harvest guideline; and by promoting stability in the west coast 
fishing industry by diverting effort from other fully-utilized 
fisheries.

DATES: Comments are invited until March 21, 1994.

ADDRESSES: Comments may be mailed to J. Gary Smith, Acting Director, 
Northwest Region, National Marine Fisheries Service, 7600 Sand Point 
Way NE., BIN C15700, Seattle, WA 98115-0070; or Dr. Gary Matlock, 
Acting Director, Southwest Region, National Marine Fisheries Service, 
501 W. Ocean Blvd., suite 4200, Long Beach, CA 90802-4213. Information 
relevant to this proposed rule has been compiled in aggregate form and 
is available for public review during business hours at the Office of 
the NMFS Northwest Regional Director. Copies of the Environmental 
Assessment/Regulatory Impact Review (EA/RIR) can be obtained from the 
Pacific Fishery Management Council, 2000 SW First Avenue, suite 420, 
Portland, Oregon 97201.

FOR FURTHER INFORMATION CONTACT: William L. Robinson at 206-526-6140, 
or Rodney R. McInnis at 310-980-4030.

SUPPLEMENTARY INFORMATION: NOAA is issuing a proposed rule based on a 
recommendation of the Pacific Fishery Management Council (Council), 
under the authority of the FMP and the Magnuson Fishery Conservation 
and Management Act (Magnuson Act).

Background

    The domestic and foreign groundfish fisheries in the EEZ off the 
coasts of Washington, Oregon, and California are managed by the 
Secretary according to the FMP prepared by the Council under the 
authority of the Magnuson Act. The FMP is implemented by regulations 
for U.S. fishermen at 50 CFR part 663. General regulations applicable 
to U.S. fishermen are at 50 CFR part 620. The FMP has been amended 6 
times. Amendment 4 contains a framework process (the socio-economic 
framework) that provides the authority, guidelines, and criteria for 
establishing management measures that address social and economic 
conditions within the fishery. These measures can be implemented by 
regulation, without further amending the FMP, through the procedures 
contained in Amendment 4.
    Pacific whiting is the largest groundfish resource managed by the 
Council, and makes up over 50 percent of the potential annual 
groundfish harvest. Prior to 1980, this species was harvested primarily 
by foreign fishing vessels. Foreign directed fishing for whiting ended 
in 1989, when all the available whiting were allocated to U.S. 
fishermen, mostly for delivery of raw fish to foreign processing 
vessels under joint venture arrangements. By mid-1990 it was clear that 
over-capacity of the harvesting and processing sectors in the Alaska 
groundfish fisheries was causing shorter fishing seasons and that 
participants were looking for alternative resources, both inside and 
outside Alaska.

1991

    In 1991, the Council recommended, and the Secretary approved, a 
proposal to allocate the 228,000-mt 1991 Pacific whiting quota 104,000 
mt to catcher/processors and 88,000 mt to fishing vessels that do not 
process (including vessels that delivered whiting both to shoreside 
plants and to motherships), with 36,000 mt reserved for priority access 
for the shoreside sector (56 FR 43718, September 4, 1991). The actual 
1991 harvest was 117,000 mt by factory trawlers, 80,000 mt delivered to 
motherships, and 21,000 mt delivered to shoreside processors.

1992

    In 1992, no more than 98,800 mt of whiting initially could be 
processed at sea, 80,000 mt was allocated to vessels delivering to 
shoreside processors, and 30,000 mt was retained in reserve with a 
priority for use by the shoreside sector. The 30,000-mt reserve was 
released to at-sea processing operations on September 4, and an 
additional 24,000 mt of the initial shoreside allocation was made 
available for at-sea processing on October 1. In 1992, factory trawlers 
again harvested 117,000 mt, motherships received 36,000 mt and 56,000 
mt was delivered to shoreside processing plants.
    A more detailed discussion of the history of this fishery through 
1992 is contained in the March 18, 1993 Federal Register (58 FR 14543) 
and in the Council's EA/RIR for this proposed rule.

1993

    In 1993, the first 112,000 mt of the 142,000 mt harvest guideline 
was available for open competition (``olympic fishery''), with the 
remaining 30,000 mt held in reserve for shoreside processing. This 
assumed that vessels delivering shoreside would harvest about 12,000 mt 
during the olympic fishery, for a total of 42,000 mt for the year. When 
it became apparent that shoreside deliveries were substantially lower 
than expected during the olympic fishery, an emergency rule was issued 
that prohibited processing at sea when 100,000 mt was taken by the at-
sea processing sector. Therefore, 42,000 mt was reserved for vessels 
delivering shoreside in 1993. The regulations also included a provision 
for releasing any unneeded portion of the shoreside allocation on 
September 1, to ensure the harvest guideline would be fully utilized. 
However, shore-based processors used their entire allocation and no 
additional whiting were made available for processing at sea in 1993. 
The at-sea processing sector harvested 99,103 mt in 1993 (84,588 mt by 
catcher/processors and 14,515 mt by vessels that delivered to 
motherships). Shore-based landings were about 41,859 mt in 1993. In 
total, 140,962 mt of whiting were caught in 1993, over 99 percent of 
the 142,000 mt harvest guideline.

1994

    The fleet composition in the 1994 whiting fishery may be quite 
different than in 1992 and 1993. A license limitation (``limited 
entry'') program was implemented under Amendment 6 to the FMP, and 
became effective on January 1, 1994. The limited entry program requires 
trawl vessels targeting on groundfish to have a limited entry permit. 
Limited entry permits were issued to vessels that landed a minimum 
amount of groundfish during the window period (July 11, 1984--August 1, 
1988). Permits also were issued to vessels purchased or under 
construction or conversion during the window period that later had a 
certain level of participation in the fishery. The permits may be 
bought and sold. Therefore, the traditional vessels that were active in 
the whiting fishery during the window period initially received permits 
while entrants after 1988 (which includes the catcher/processor fleet) 
are not able to operate in the fishery unless they buy or lease permits 
sufficient for these vessels to operate. In 1993, 16 catcher/processors 
operated in the whiting fishery. As of January 20, 1994, it appears 
that one catcher/processor may initially receive a limited entry permit 
while several others might acquire enough limited entry permits to 
operate as a catcher/processor (rather than a mothership) in the 1994 
whiting fishery. However, the catcher/processor fleet is expected to be 
much smaller than in 1992 and 1993--the whiting market is weak and too 
few permits are likely to be available for purchase to accommodate the 
entire whiting catcher/processor fleet. The final composition of the 
whiting fleet for 1994 and beyond will not be known until the fishery 
is underway, but it is clear that future participation by the catcher/
processor fleet will be constrained by implementation of the limited 
entry program in 1994.

Statement of the Problem

    Both the fishing and processing sectors of the whiting fishery 
continue to be overcapitalized, which means there is more capacity than 
needed to take and to process the entire harvest guideline. The at-sea 
processing sector is more mobile and thus able to follow whiting that 
migrate from south to north during the March-October/November fishing 
season. Catcher/processors and catcher vessels delivering to 
motherships do not lose fishing time by having to return to shore to 
offload. Until 1994, there have been more at-sea processing vessels (as 
many as 26 in a given year) than shore-based plants (10-12 major 
plants). The at-sea processing fleet generally prefers shorter, intense 
seasons to minimize operating costs, and to ``fill in'' between other 
fisheries, particularly the pollock fisheries off Alaska. The shore-
based plants clearly are not mobile and are limited by the availability 
of whiting as it migrates within range of local ports. Shore-based 
processing plants tend to prefer a longer, slower season to maintain 
their work force and markets when other fisheries are less productive. 
Even under limited entry, the potential exists for the at-sea 
processing sector to preempt the shoreside sector's opportunity for a 
longer processing season if enough at-sea processing capacity enters 
the whiting fishery. Although limited entry may reduce the number of 
catcher/processors that harvest whiting, it has no effect on the number 
of at-sea processors that may choose to offer at-sea markets to catcher 
boats.
    The shore-based fleet and processing plants now are established 
components of the whiting industry, not likely to be totally preempted 
by the at-sea fleet. They are, however, vulnerable to severe economic 
impacts should landings be precipitously reduced by unrestricted at-sea 
processing taking much of the harvest guideline in a fast, early 
fishery. The Council believes that even partial preemption of shoreside 
processing opportunities will result in an inequitable redistribution 
of economic benefits between sectors of the industry. The greatest 
change in the fishery in 1994 will be due to implementation of the 
limited entry program. Even though the traditional catcher vessels 
might appear to be protected from the rapid and intense competition of 
the catcher/processor fleet, concern remains that market opportunities 
might be severely restricted by an at-sea processing fleet consisting 
of motherships (including former catcher/processors acting as 
motherships) or of catcher/processors accumulating enough permits to 
operate in the fishery. The mothership fleet provides a viable market 
for the traditional catcher vessels, and to this extent is beneficial 
to the catcher fleet. However, if the mothership fishery attracts a 
large number of catcher/processors acting only as motherships, and if 
they are able to process whiting almost as rapidly as when they acted 
as catcher/processors (which is expected), the harvest guideline still 
could be taken in a matter of weeks (as early as May 31, 1994, 
according to Table 7-2 in the EA/RIR). The Council believes the 
traditional catcher fleet's market opportunities are enhanced when 
there are viable, competing markets both onshore and offshore over a 
longer period of time, and therefore a less intense, slower fishery 
appears to benefit market choices for these vessels.
    The Council also is concerned that preemption of harvesting 
opportunities for whiting catcher boats will result in those vessels 
transferring additional fishing effort into the traditional groundfish 
fisheries for rockfish, sablefish, and flatfish, which already are 
fully utilized. Increased effort in the non-whiting groundfish fishery 
could result in shortened seasons and more restrictive trip limits for 
all groundfish fishing vessels, could economically disadvantage many 
fishermen, and could exacerbate the current problem of excessive 
discards and wastage attributed to restrictive regulations. To the 
extent that the Council can maintain employment for the traditional 
joint venture fishing vessels in the Pacific whiting fishery, adverse 
impacts on the other groundfish fisheries will be lessened.
    In addition, the Council and the industry desire stability in the 
regulatory process. For each of the last 3 years, the Council submitted 
recommendations for allocations to the Secretary. Uncertainty as to 
what the allocation would be and delays in announcing the allocation 
prevented participants in the whiting fishery from planning their 
harvesting and processing operations prior to the season. The industry 
was unable to plan ahead because it did not have a firm foundation on 
which to base its business decisions.
    In summary, the problems the Council has identified and is seeking 
to solve are: Too much fishing and processing capacity and not enough 
fish; inequitable distribution of economic benefits among the competing 
sectors; and regulatory instability that has prevented the industry 
from making timely business decisions.
    To resolve these problems, the Council identified the following 
priorities:

    (1) Ensure that [the] shore-based sector has reasonable 
opportunity to participate; (2) foster stability of shore-based 
processing sector by providing replacement revenues for other 
faltering fisheries; (3) help stabilize faltering rural coastal 
economies by providing fishing, processing and supporting industry 
revenues to replace income declines in other industries; (4) achieve 
maximum net benefit to the nation by putting economic benefits 
directly into coastal communities and distributing income impacts/
benefits along traditional geographic paths; (5) spread fishery over 
time and area, reducing potential pulse fishery impacts on whiting, 
salmon and rockfish stocks; (6) prevent effort shift to other 
species; (7) address management of the entire groundfish resource 
rather than piecemeal; (8) contribute to increased long-term product 
yield and employment opportunities by spreading harvest over a 
longer season; (9) discourage additional capital investment in 
harvesting or processing facilities.

    The Council convened an ad hoc industry subcommittee in July 1993 
in Portland, Oregon, to develop an allocation option that would be 
acceptable to all sectors. The subcommittee included a representative 
from each major sector in the whiting industry: catcher vessels 
delivering at-sea, shoreside, and ``at-large;'' shoreside processors; 
catcher/processors; and mothership processors. The ad hoc committee, 
after considering a number of alternatives, successfully negotiated a 
3-year agreement that was acceptable to all participants, and 
subsequently was adopted by the Council and recommended to the 
Secretary (Option 1 in the EA/RIR or the proposed rule).
    The Council's recommendation provides that the first 60 percent of 
the annual whiting harvest guideline will be available to all vessels 
in open competition. The remaining 40 percent is reserved initially for 
shore-based activities. When the 60 percent has been harvested, no 
further at-sea processing will be allowed for the remainder of the year 
or until August 15, when an additional portion of the harvest guideline 
may be made available. NMFS will assess how much of the harvest 
guideline will be utilized by shore-based processors during the 
remainder of the year, and any surplus to shore-based needs will be 
made available to all permitted vessels on August 15. The allocation 
would remain in effect for 3 years, 1994-1996. Any Pacific whiting 
harvested or processed in state ocean waters (0-3 nautical miles 
offshore) will be counted toward the EEZ limits.
    The Council also considered the alternatives of continuing the 1993 
percentages (of 30 percent for vessels delivering shoreside and 70 
percent for at-sea processing (Option 2 in the EA/RIR), and continuing 
the ``olympic''-style fishery with no allocations to either sector 
(Option 3 in the EA/RIR).
    The ad hoc committee also reached a consensus agreement to assume 
that only the traditional whiting catcher fleet (limited entry vessels 
with ``A'' permits) would be allowed to operate in the whiting fishery. 
The Committee believed that the limited entry fleet, which contains 
approximately 40 catcher vessels from the traditional whiting fishery 
and possibly one catcher/processor, is sufficient to harvest any likely 
harvest guideline for whiting in the next 3 years. However, NOAA cannot 
foresee what choices fishermen will make and cannot guarantee that the 
entire harvest guideline will be taken by the current limited entry 
fleet. Participation in the limited entry fishery is determined under 
Amendment 6 to the FMP, which allows for participation by vessels that 
are not in the current limited entry fleet (by issuance of ``designated 
species B permits''), based on seniority in the fishery, if the current 
limited entry fleet will not use the entire harvest guideline. 
Therefore, the FMP provides for temporary participation by vessels that 
do not have ``A'' permits to ensure that the harvest guideline for 
whiting will be fully utilized.

Impacts of the Proposed Rule

    The socio-economic framework in the FMP, under which this action is 
taken, requires the Council to consider a number of factors in its 
recommendation to directly allocate the resource among users. (See 
section III.C.3 of the appendix to 50 CFR part 663.) One factor that 
must be considered by the Council is ``any consensus harvest sharing 
agreement or negotiated settlement between the affected participants in 
the fishery.'' However, the fact that an agreement has been negotiated 
is not in itself a sufficient basis for the Secretary to approve the 
Council's recommendation. The socio-economic framework also requires 
consideration of a number of biological, social, and economic factors, 
as well as consistency with the goals and objectives of the FMP, the 
Magnuson Act and other applicable law. These factors are more fully 
discussed in the Council's EA/RIR (see ADDRESSES) and are summarized 
below.
    In its analysis, the Council developed a model to predict how much 
whiting would be taken by each sector under each option and under 
certain conditions and assumptions (section 7.2.3 of the EA/RIR). The 
resulting ranges of estimated production for the shore-based sector are 
listed in the following table. 

 Estimated Harvest Guideline (HG) and Whiting Catch by the Shore-based Fishery Under the Assumptions Used in the
                                                     EA/RIR                                                     
                                          [in thousands of metric tons]                                         
----------------------------------------------------------------------------------------------------------------
                                     Reserve                                                                    
        Year               HG        (40% HG)    Option 1 (proposed)   Option 2 (1993 %'s)  Option 3 (no alloc.)
----------------------------------------------------------------------------------------------------------------
1994................          260        104.0  60-134 mt...........  59-77 mt............  21-57 mt.           
                                                23-52%..............  23-30%..............  8-22%.              
1995................       \1\222         88.8  59-112 mt...........  59-66 mt............  15-47 mt.           
                                                27-50%..............  27-30%..............  7-21%.              
1996................       \1\166         66.4  59-80 mt............  50 mt...............  8-32 mt.            
                                                36-48%..............  30%.................  5-19%.              
----------------------------------------------------------------------------------------------------------------
\1\Based on 80 percent of the estimated U.S.-Canada acceptable biological catch. The actual harvest guideline   
  will not be announced until January 1 each year, and the actual harvest guideline for 1995 and 1996 may vary  
  from these estimates. (Source: Tables 7-2 and 7-3 (EA/RIR))                                                   

Biological and Environmental Impacts

    No significant biological or environmental impact is expected as a 
result of the proposed rule. The bycatch of rockfish and salmon is 
expected to be similar whether the proposed rule is implemented. 
Although it is possible that a short, intense pulse fishery could have 
localized impacts on bycatch species, it also provides the potential 
for avoiding species more likely to be caught at other times of year. 
The incentive to minimize bycatch may be less if the season is short 
and vessels race to take their allocation. However, observers have been 
carried onboard both the at-sea processors and shore-based catcher 
vessels for the purpose of monitoring bycatch. In general, bycatch 
rates of yellowtail rockfish and Pacific ocean perch are more likely to 
increase if the fishery occurs predominantly in the northern areas, and 
bycatch of bocaccio/chilipepper rockfish are more likely to increase if 
fishing occurs off California. A number of regulations were implemented 
in 1993 for the purpose of minimizing bycatch of salmon and rockfish in 
the whiting fishery (50 CFR 663.23(b)(3)).
    Although the Council heard testimony that a later and longer season 
would benefit the whiting resource because the fish would be larger 
later in the season and it would take fewer fish to fill the harvest 
guideline, the actual difference in yield is small. An analysis 
conducted in 1992 indicated that even if the entire harvest guideline 
were taken in September compared to April, the potential increase in 
yield would be about 10 percent. This 10 percent would include 
increases to liver and gonad weight, and therefore is not likely to 
represent an equal increase in marketable flesh. Since none of the 
options considered by the Council provided for the entire fishery being 
taken in September, the increase in yield from an extended season would 
be less than 10 percent.

Economic Impacts

    The economic cost-benefit analysis developed by the Council for the 
1993 allocation did not provide adequate information to support any 
allocation decision. However, one more year of fishing and marketing 
experience, and revised data were incorporated into a new analysis. 
Even though data were available in the recent analysis that did not 
exist at the time the previous analysis was prepared, the results still 
should be interpreted with caution and are contingent on assumptions 
about the effects of limited entry, and the quality of the data. 
However, given these limitations, the Council's cost/benefit analysis 
does provide consistent ranking of the three options, suggesting that 
the proposed rule may provide the greatest net economic benefit to the 
nation, even though the amount of that difference may be quite small. 
In all instances the no allocation option (Option 3) was ranked lowest 
in terms of net economic benefit to the nation. The differences between 
Options 1 and 2 were insignificant in most cases. Three important 
factors, based on 1993 prices, appear to drive the results: (1) Shore-
based headed and gutted operations are the most profitable (highest net 
economic benefit); (2) shore-based waste utilization adds to the net 
economic benefit; and (3) surimi prices are highest for catcher/
processors. Applying the new data to assumed levels of participation by 
each sector, and using observed prices, the total difference between 
the proposed rule and the no allocation option is only about $3 million 
over the three-year period. Even though the exact dollar amount may not 
be known, this indicates a small economic difference among the options.
    The Council concluded that although the net economic benefits are 
similar for Options 1 and 2, the no allocation (Option 3) was clearly 
inferior. In short, the cost-benefit analysis concluded that shore-
based activities appear to produce a slightly greater net economic 
benefit, in part due to the slower operating pace and to the multi-
faceted nature of the shore-based sector.
    However, the Council perceives a clearer difference between the 
options with respect to distributional effects, believing maintenance 
of a robust shore-based whiting fishery is essential for the 
preservation of the social and economic structure of the west coast 
fishing industry.

Social Impacts

    The Council believes that the proposed rule will provide the 
greatest stability to the harvesting and processing communities. The 
Council is concerned about the impacts on traditional fishermen and the 
rural coastal communities where they reside, focusing on those 
displaced by Americanization of the joint venture fisheries as well as 
those displaced from other declining fisheries and industries. An 
integrated industry is important in dealing with severe stock declines 
in other fisheries, most notably in the salmon industry, which also is 
stressing the shore-based processing industry.
    Similarly, the traditional whiting fishery must be viewed in the 
context of the overall groundfish fishery. Most traditional whiting 
fishermen (those receiving ``A'' permits in the limited entry fishery) 
operate in other groundfish fisheries as well. These fisheries have 
been managed under increasingly restrictive landing limits, and are 
harvested near their levels of maximum sustainable yield (MSY), which 
means they cannot sustain additional effort. Of the three options 
considered, Option 1 (the proposed rule) provides the greatest 
stability to the harvesting and processing communities in part because 
it provides for the longest season for the shoreside sector (which 
could last until late July/mid-October in 1994-1996) and should divert 
the greatest effort from other fully-utilized fisheries. Diversion of 
effort from these other fisheries is intended to prolong their seasons, 
delay reductions in trip limits, and maintain employment opportunities 
in both fishing and processing sectors.
    In contrast, the catcher/processor trawl fleet entered the fishery 
off Washington, Oregon, and California in 1990 and has targeted only on 
whiting. Consequently, its participation in the whiting fishery does 
not divert effort from other west coast fisheries, and, by taking the 
harvest guideline quickly, may reduce market opportunities for catcher 
vessels that do not process.
    The no allocation option (Option 3) could encourage a brief fishery 
conducted primarily by at-sea processors, with the entire harvest 
guideline being taken by the end of June. This would divert effort back 
to the other fully-utilized groundfish fisheries, could accelerate the 
need for reduced trip limits in those fisheries, and result in 
shortened seasons for the shoreside fishing and processing industries.
    Fishing opportunities for the at-sea fleet also have been 
substantially reduced, particularly off Alaska and the former Soviet 
Union, and therefore whiting has become more important to this fleet as 
well. The Council concluded that the social and demographic description 
included in the December 1992 EA/RIR (prepared for the 1993 allocation 
decision) clearly showed that the relative importance of whiting to the 
coastal communities exceeds the relative importance to the Seattle 
metropolitan area where most of the at-sea processing fleet is based 
(although a large percentage of employees are recruited from throughout 
the western United States). The Council agrees that neither sector 
should receive a disproportionate amount of the harvest guideline, as 
could occur under the no allocation option (Option 3). It also believes 
that the greater national benefit will be derived by giving some 
protection to the traditional catcher vessels that deliver to shore-
based processors, and the communities in which they are based.
    Although each of these options would influence participation by 
each sector, none of the options would preempt any sector entirely. The 
social impacts of Option 1 upon the Seattle-based at-sea processing 
fleet are small relative to those already occurring under the limited 
entry program. Because the fleet composition under the limited entry 
program is still relatively unknown, undertaking a rigorous social 
analysis is premature.
    The Council also recommended Option 1 because industry consensus in 
support of this option indicated a willingness to compromise that is 
unprecedented and should be encouraged.

Net Benefit to the Nation

    In addition to the findings above, the Council found other 
compelling reasons to support the proposed rule and concluded that it 
would provide the greatest net benefit to the nation.
    Option 1 addresses concerns that there be equal sharing of the 
conservation burden between the at-sea and the shoreside processing 
sectors. A percentage allocation more equitably shares between sectors 
both the conservation burden when the harvest guideline is low, and the 
benefit when the harvest guideline is high. The harvest guideline in 
1994 is much higher than previously expected, almost twice the 1993 
level, but is expected to be lower in 1995 and 1996.
    Even though the tonnage available in 1994 is substantially higher 
than in 1993, additional overcapitalization is not expected. The shore-
based industry already is developed and the 104,000 mt reserve is close 
to the 100,000 mt estimate of shoreside capacity in the EA/RIR. 
(Maximum annual harvest by shore-based whiting fishery was estimated at 
134,000 mt in 1994-1996.)
    The proposed rule, if implemented, would apply only for the next 3 
years, a long-enough horizon for stability in planning, but short 
enough to indicate to the public that the Council may reconsider this 
issue after the fleet has had a chance to adjust to the limited entry 
program and whiting markets have stabilized.
    The proposed rule is not a major departure from the approved 1993 
allocation percentage of 30 percent for the shoreside sector. The 
Council recommendation for 1994-1996 would give shoreside priority to 
40 percent of the harvest guideline, supplementing any amount taken 
during the olympic fishery for the first 60 percent. Also, with 
implementation of the limited entry program, participation by the at-
sea processing fleet may be much lower than in 1993, although the exact 
level will not be known until the fishery occurs.
    The reserve release assures that the harvest guideline will be 
fully utilized. The release date of August 15 is 2 weeks earlier than 
in the past, and provides a longer opportunity for the at-sea fleet if 
a release is made to them. August 15 also coincides with the opening of 
the pollock ``B'' season in Alaska, and therefore would provide a more 
subdued level of effort and a more orderly fishery than if the reserve 
were released much earlier or later in the year.
    In addition to the above considerations, NOAA also has considered 
the Council's response to the following three questions asked at the 
November 1993 Council meeting:
    1. Why is allocating between the sectors by regulation superior to 
allowing the market to determine the shares between sectors? Each of 
the sectors has the capacity to take a substantial portion, if not all, 
of the whiting harvest guideline in the next 3 years. It is not clear 
if each would choose to do so given current low prices and uncertainty 
in the availability of markets. The shore-based and at-sea sectors 
operate optimally at different rates, however, with the shore-based 
component generally preferring a longer, slower fishery and the at-sea 
component best served with a relatively shorter, more intense 
operation. Extended seasons at sea and on-shore actually enhance market 
opportunities for catcher boats that would have their choice of 
markets. Furthermore, providing an opportunity for all sectors would 
divert effort from other fully utilized fisheries that already are 
severely restricted. Additional effort into those fisheries would have 
a cascading effect, causing earlier and/or more restrictive management 
measures and even greater stress on shore-based processors of those 
species. (Whiting is the only trawl-caught species off Washington, 
Oregon, and California that is processed offshore to any large extent.) 
Allowing the at-sea processing sector to even partially preempt the 
shoreside sector would reduce national net benefits to the nation from 
the fishery and destabilize the successfully developed shoreside 
economic infrastructure. Thus, there is ample justification to allocate 
between sectors. The proposed rule would provide each sector with a 
reasonable opportunity to utilize this public resource. However, if a 
sector does not need or intend to use its opportunity to the fullest 
extent possible, any unused portion of the harvest guideline would be 
made available to the entire whiting fishery.
    2. Will this proposal encourage further capitalization in either 
sector? None of the options, including the preferred option, are 
expected to encourage further capitalization in either sector. The at-
sea and shore-based processing sectors and the catcher fleet are fully 
developed and are believed to be capable of taking the proposed 
amounts. Even though the tonnage available in 1994 is substantially 
higher than in 1993 (and is the highest level in the 3-year period 
under consideration), market prices for whiting currently are at such 
low levels that it is unlikely that additional processing capacity 
would be attracted. At issue is the extent that existing capacity will 
be utilized on whiting, other species, or not at all.
    3. With 104,000 mt reserved for shore-based operations in 1994, 
what are the net benefits to the nation from providing an exclusive 
opportunity to the shoreside sector to use twice its historical level? 
In 1993, the Secretary was concerned that the conservation burden of a 
reduced harvest guideline be equitably shared among the sectors. 
Similarly, the benefit of an increased harvest guideline also should be 
equitably shared between the sectors, particularly since it is not 
expected to result in increased capitalization, but rather in how 
effectively the existing infrastructure is used. Thus, it would not be 
reasonable to limit the shoreside sector to only what they processed in 
1993 or any prior year.
    The shoreside industry needs a longer operating window to be viable 
than the at-sea sector needs. Production by early August will be a key 
component in determining if shore-based processors will need the entire 
reserve. Any unneeded portion of the harvest guideline will be made 
available to the entire fishery on or about August 15, assuring there 
is adequate time to conduct successful operations on the remainder of 
the harvest guideline. In 1992 and 1993, the at-sea fleet was able to 
harvest considerably more than its initial allocation due to the 
release of whiting not needed by shoreside processors.
    The historical level of catch or production is not the only 
consideration. In 1993, both the shore-based and at-sea processing 
fleets were constrained from catching as much whiting as they wanted. 
The 40 percent reserve recognizes anticipated lower participation by 
catcher/processors in 1994 and beyond, consistent with implementation 
of the limited entry program in January 1, 1994.
    NOAA has reviewed the Council's recommendation and supporting 
analysis and initially has determined that the proposed rule is 
consistent with the Magnuson Act and its national standards and other 
applicable Federal laws.
    NOAA also requests comments on the advisability of releasing 
additional amounts of whiting after August 15, but only if necessary to 
ensure full utilization of the harvest guideline.

Clarification

    The regulatory text would revise an incorrect cross-reference at 
Sec. 663.7 which should read Sec. 663.23(b)(4)(v).

Classification

    This proposed rule is published under authority of the Magnuson 
Act, 16 U.S.C. 1801 et seq., and was prepared at the request of the 
Pacific Fishery Management Council. The Assistant Administrator for 
Fisheries, NOAA (Assistant Administrator), has initially determined 
that this proposed rule is necessary for management of the Pacific 
coast groundfish fishery and that it is consistent with the Magnuson 
Act and other applicable law.
    The Council prepared an Environmental Assessment (EA) for this 
proposed rule (contained in the EA/RIR), and concluded that there would 
be no significant impact on the environment. A copy of the EA may be 
obtained from the Council (see ADDRESSES).
    The General Counsel of the Department of Commerce certified to the 
Small Business Administration that this proposed rule, if adopted, 
would not have a significant economic impact on a substantial number of 
small entities under the Regulatory Flexibility Act, 5 U.S.C. 601 et 
seq. Although the whiting fleet contains less than 20 percent of the 
total number of groundfish vessels, if this proposed rule diverts 
effort from other traditional groundfish stocks, more than 20 percent 
of the fleet could potentially be affected. However, none of the 
options is expected to have impacts that would qualify under any of the 
criteria for determining ``significant'' impacts, nor would they force 
any small business entity to cease operation. In fact, in comparison to 
the status quo, the proposed rule could result in greater fishing 
opportunities for non-whiting vessels and thus increased revenues. For 
these reasons, it is determined that the proposed rule potentially 
would affect a substantial number of small entities, but would not 
cause significant economic impacts on those entities. Therefore, an 
initial regulatory flexibility analysis (IRFA) is not required. Also, 
the Council has requested that this notice announce a correction to 
page 77 of the EA/RIR, the last sentence in the first paragraph, so 
that it reads: ``The Council concludes that this proposed rule, if 
adopted, would not have significant effects on small entities in 1994-
1996.''
    This rule is not subject to review under E.O. 12866.

List of Subjects in 50 CFR Part 663

    Fisheries, Fishing, Reporting and recordkeeping requirements.

    Dated: February 17, 1994.
Charles Karnella,
Acting Deputy Assistant Administrator for Fisheries, National Marine 
Fisheries Service.

    For the reasons set out in the preamble, 50 CFR part 663 is 
proposed to be amended as follows:

PART 663--PACIFIC COAST GROUNDFISH FISHERY

    1. The authority citation for part 663 continues to read as 
follows:

    Authority: 16 U.S.C. 1801 et seq.


Sec. 663.7  [Amended]

    2. In Sec. 663.7, paragraph (o), reference to ``Sec. 663.23(b)(v)'' 
is revised to read ``Sec. 663.23(b)(4)(iv)''.
    3. In Sec. 663.23 paragraph (b)(4) is added to read as follows:


Sec. 663.23  Catch restrictions.

* * * * *
    (b) * * *
    (4) Pacific Whiting--Allocation. The following provisions apply 
from 1994 through 1996--(i) The Shoreside Reserve. When 60 percent of 
the annual harvest guideline for Pacific whiting has been or is 
projected to be taken, further at-sea processing of Pacific whiting 
will be prohibited pursuant to paragraph (b)(4)(iv) of this section. 
The remaining 40 percent of the harvest guideline is reserved for 
harvest by vessels delivering to shoreside processors.
    (ii) Release of the Reserve. That portion of the annual harvest 
guideline that the Regional Director determines will not be used by 
shoreside processors by the end of that fishing year shall be made 
available for harvest by all fishing vessels, regardless of where they 
deliver, on August 15 or as soon as practicable thereafter.
    (iii) Estimates. Estimates of the amount of Pacific whiting 
harvested will be based on actual amounts harvested, projections of 
amounts that will be harvested, or a combination of the two. Estimates 
of the amount of Pacific whiting that will be used by shoreside 
processors by the end of the fishing year will be based on the best 
information available to the Regional Director from state catch and 
landings data, the survey of domestic processing capacity and intent, 
testimony received at Council meetings, and/or other relevant 
information.
    (iv) Announcements. The Assistant Administrator will announce in 
the Federal Register when 60 percent of the whiting harvest guideline 
has been, or is about to be, harvested, specifying a time after which 
further at-sea processing of Pacific whiting in the fishery management 
area is prohibited. The Assistant Administrator will announce in the 
Federal Register any release of the reserve on August 15 or as soon as 
practicable thereafter. In order to prevent exceeding the limits or 
underutilizing the resource, adjustments may be made effective 
immediately by actual notice to fishermen and processors, by phone, 
fax, Northwest Region computerized bulletin board (contact 206-526-
6128), letter, press release, and/or U.S. Coast Guard Notice to 
Mariners (monitor channel 16 VHF), followed by publication in the 
Federal Register, in which instance public comment will be sought for a 
reasonable period of time thereafter. If insufficient time exists to 
consult with the Council, the Regional Director will inform the Council 
in writing of actions taken.
* * * * *
[FR Doc. 94-4108 Filed 2-18-94; 12:14 pm]
BILLING CODE 3510-22-P