[Federal Register Volume 59, Number 38 (Friday, February 25, 1994)]
[Unknown Section]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4231]


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[Federal Register: February 25, 1994]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 663

[Docket No. 940257-4057; I.D. 012494C]
RIN No.: 0648-AF76

 

Pacific Coast Groundfish Fishery

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

ACTION: Proposed rule.

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SUMMARY: NMFS requests public comments on a proposed rule to establish 
requirements for combining two or more limited entry Pacific Coast 
groundfish fishery permits endorsed with vessel lengths from smaller 
vessels into a single limited entry permit endorsed with a larger 
length for use with a single fishing vessel. Comments are requested on 
the NMFS preferred approach for which proposed regulatory text is 
offered, and on two alternatives (Initial Alternatives I and II). This 
rule is necessary to comply with regulations that require the Director, 
Northwest Region, NMFS (Regional Director), to develop and implement a 
standardized measure of harvest capacity for the purpose of determining 
the appropriate endorsed lengths for limited entry permits created by 
combining two or more permits with smaller size endorsements.

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 Anneka W. Bane, Acting 
Director, Southwest Region, National Marine Fisheries Service, 501 W. 
Ocean Blvd., Suite 4200, Long Beach, CA 90802-4213. Copies of the 
Environmental Assessment/Regulatory Impact Review/Initial Regulatory 
Flexibility Analysis (EA/RIR/IRFA) are available for public review 
during business hours at the office of the Regional Director.

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

SUPPLEMENTARY INFORMATION: Amendment 6 to the Pacific Coast Groundfish 
Fishery Management Plan (FMP) was prepared by the Pacific Fishery 
Management Council (Council) and approved and implemented by NMFS on 
November 16, 1992 (57 FR 54001), through regulations codified at 50 CFR 
part 663, subpart C. Amendment 6, also called the ``Limited Entry 
Plan,'' is intended to control the harvesting capacity of the 
groundfish fishing fleet by: (1) Limiting the overall number of 
vessels; (2) limiting the number of vessels using each of the three 
major gear types; and (3) limiting increases in vessel harvest capacity 
by limiting vessel length.
    Amendment 6 requires that each limited entry fishing permit be 
endorsed with the length overall of the vessel that initially qualified 
for the permit (except for certain exceptions explained in the 
implementing regulations). A permit can only be used on a vessel no 
more than 5 ft (1.5 m) longer than the endorsed size on the permit or 
on a smaller vessel. Vessel owners may obtain and fish with larger 
vessels by combining permits for smaller vessels. Regulations at 50 CFR 
663.33(g) require the Regional Director, with professional advice of 
marine architects and other qualified individuals, and after 
consultation with the Pacific Fishery Management Council (Council), to 
develop and implement a standardized measure of harvest capacity for 
the purpose of determining the appropriate endorsed lengths for limited 
entry permits created by combining two or more permits with smaller 
size endorsements.
    Amendment 6 bases the system for combining limited entry permits in 
the Pacific Coast groundfish limited entry fishery on overall length of 
the fishing vessel. The standard it sets is that the harvest capacity 
represented by the appropriate length endorsement for the combined 
permit should not exceed the sum of the capacity of the permits being 
combined. As provided by Amendment 6, the standard applies regardless 
of the target species being fished, and is equally applicable to trawl, 
longline, and fish trap (pot) vessels. As a practical matter, any 
system for combining permits must also provide the flexibility for 
vessel owners to mix and match permits with a variety of different 
length endorsements in order to achieve the desired length endorsement 
for a larger vessel. Once the relationship between length and 
harvesting capacity is established, a table can be generated that 
assigns a certain number of capacity rating points for each increment 
of vessel length. This table can be used by vessel owners to determine, 
at a glance, how many rating points are needed for any particular 
length of vessel (see Table 1 proposed to be added to Sec. 663.33(g)). 
Under Amendment 6, only limited entry permits with ``A'' gear 
endorsements may be combined, and only permits for the same gear type 
(e.g., longline and longline, not trawl and longline) may be combined.
    At the April 1993 Council meeting, NMFS circulated a discussion 
paper proposing a theoretical approach for combining permits based on 
the premise that, within a certain size range of vessels, the larger 
the vessel, the greater the harvesting capacity. This relationship was 
described by an exponential curve up to a certain vessel length. The 
theoretical approach initially put forward stemmed from the generally 
accepted premise that the relationship between length, width, and depth 
of a vessel is logically related to the harvesting capacity of the 
vessel and that, other things being equal, the harvesting capacity 
increases or decreases in direct relationship to these measurements. 
This relationship was described mathematically as length cubed. The 
April 1993 NMFS discussion paper illustrated three different 
relationships: length cubed, length to the 2.5 power, and length 
squared. At some vessel length, however, it was assumed that the curve 
was no longer exponential, because the rate of increase in capacity 
begins to slow as vessel length increases. This was assumed because 
observed catch rates for vessels above a certain size no longer 
appeared to be exponentially greater than the catch rates of smaller 
vessels. To illustrate the decline in the increase in harvesting 
capacity per increment of length for many larger vessels, the 
exponential curves were flattened in several examples between 120 ft 
(36.6 m) and 250 ft (76.2 m), at which point the rate of increase 
declined to zero.
    This theoretical approach was reviewed by the Council, its 
Scientific and Statistical Committee and Groundfish Advisory Panel in 
consultation with a marine architect at the April 1993 Council meeting. 
In general, all groups supported the theoretical approach, but desired 
to see it ``reality checked'' with data from actual groundfish 
fisheries where, to the extent possible, landings were not artificially 
constrained (e.g., by trip landing limits or markets).
    Prior to the September 1993 Council meeting, NMFS examined actual 
production (catch amounts per time period) of vessels of various 
lengths for all three limited entry gear types in a variety of 
different fisheries. (Note: Harvest capacity, a physical measure, is 
not synonymous with a vessel's actual production. In some cases, 
vessels may produce (harvest) very close to their theoretical capacity. 
In other cases, factors may exist that act to limit a vessel's ability 
actually to produce at physical capacity level. When comparing the 
actual production of different vessel classes to the theoretical 
capacity curves, it is important to keep in mind that actual production 
is often less than theoretical capacity).
    In addition to reviewing the data in a graphical format, NMFS 
conducted regression analyses using vessel-periods falling in the top 
25 percent of landings quantities for a vessel class (highliners). 
Highliner landings are significant because they are a measure of the 
highest level of actual production that, historically, has been 
observed within a particular fishery. Generally, for all three limited 
entry gears used by the West Coast shorebased groundfish fleet, the 
relationship observed between length and the upper 25 percent of catch 
amounts per time period was very consistent with the use of a cubic or 
2.5 exponential function of vessel length, for lengths up to somewhere 
in the 55-70 ft (16.8-21.3 m) range. Above this range, except for 
Alaska freezer longliners (i.e., freezer longliners built primarily for 
fishing off Alaska but also fishing off the West Coast), actual catch 
rates usually either increased at a much slower rate or, in several 
cases, went down. This pattern of landing rates increasing and then 
decreasing as vessel size increases was also present in shoreside 
longline landings from the Alaskan 1991 groundfish fishery. However, 
when Alaska freezer longliner catch rates were included, a 2.5 
exponential relationship between length and catch also tracked peak 
performance reasonably well for vessels from 120 ft (36.6 m) up to 150 
ft (45.7 m). In the ranges from 75-120 ft (22.9-36.6 m) and above 150 
ft (45.7 m), no vessels performed up to the level corresponding to a 
2.5 exponential function fitted to the peak values in the two other 
length ranges.
    The only West Coast groundfish fishery in which very large vessels 
have participated is the whiting fishery. It is the only fishery in 
which motherships (typically supplied with catch by five to seven 
trawlers) and factory trawlers (combination harvester/processors) have 
conducted operations off the West Coast. The harvesting vessels in this 
fishery are typically larger than other groundfish vessels. All of the 
factory trawlers were larger than 210 ft (64 m), while more than two-
thirds of the trawlers delivering to motherships were larger than 85 ft 
(25.9 m).
    The 1991 data for the offshore delivery fleet shows a very gradual 
increase in the weekly whiting catch of the top 25 percent of vessels 
as vessel length increases. Over a range of vessel lengths from 50 to 
150 ft (15.2 to 45.7 m), a 1.5 exponential value produced the best fit 
to actual production values. In the factory trawler fleet, there was 
even less evidence of a significant upward trend in catches with 
increased vessel size. The best fit for a regression using the top 25 
percent of the vessel-weeks was obtained using an exponent for length 
of roughly 1.2, meaning that the increase in catch was proportionately 
not much greater than the increase in vessel size. Review of 1992 
production data, as with the 1991 data, showed a slight upward slope to 
the factory trawler production values for vessels over 200 ft (61.0 m), 
although the actual production values were somewhat higher in 1992. 
Within the context of the at-sea whiting fishery, the data show that 
any function steeper than a linear function of length is likely to be 
adequate to ensure that existing harvesting capacity is not exceeded, 
even if permits are combined across the full range of vessel sizes.
    The Council's Groundfish Management Team (GMT) reviewed this 
analysis prior to the Council's September meeting. There was general 
agreement within the GMT that a simple and reasonably safe formula for 
combining permits could be created using a 2.5 exponential function of 
length, up to 90 ft (27.4 m), followed by a straight-line increase from 
that point up to a value equal to 10 times that for a 60-foot (18.3 m) 
boat (10 permits endorsed with a vessel length overall of 60 ft (18.3 
m)) for vessels 200 ft (61.0 m) in length, or greater. Above 200 ft 
(61.0 m) in length, the rate of increase would be zero and no further 
accumulation of permits would be required.

Initial Two Alternatives

    At the September 14-17, 1993, Council meeting in Portland, OR, NMFS 
recommended the formula described below be used to determine the vessel 
length rating points for each 1-foot (0.3 m) increment in vessel length 
beginning with a vessel length of 20 ft (6.1 m) length overall and 
ending with zero rate of increase at a vessel length of 200 ft (61.0 
m), which is equal to about 10 times the rating points of a 60-foot 
(18.3 m) vessel. The formula was expressed in a form so that vessel 
owners could easily consult the table and determine the number of 
rating points necessary to achieve any specified vessel length.
    Beginning with a vessel length of 20 ft (6.1 m) length overall, the 
formula is a 2.5 exponential function up to and including a length of 
90 ft (27.4 m), followed by a linear increase from that point up to a 
value equal to 10 times that for a 60-foot (18.3 m) boat for vessels 
200 ft (61.0 m) in length. Above 200 ft (61.0 m) in length, the rate of 
increase is zero and no further accumulation of permits would be 
required. For purposes of this rulemaking, use of this formula is 
Initial Alternative I.
    The Council considered this recommendation and raised several 
concerns. Considerable concern was expressed that large (over 200 ft 
(61.0 m)), efficient vessels would be able to enter the whiting fishery 
by buying up ten 60-foot (18.3 m) permits from vessels that represented 
the lowest level of production in the groundfish fishery and had no 
previous history harvesting whiting. The vessels that entered the 
whiting fishery in this way would represent new harvesting capacity in 
the whiting fishery without displacing any real production from the 
groundfish fishery. The Council accurately pointed out that experiences 
in other fisheries where limited access programs were imposed usually 
resulted in those entering the fishery acquiring the necessary permits 
from those who value them the least, and therefore are willing to sell 
them for the lowest price. In general, this means that owners who have 
been sporadic, low-volume participants in the groundfish fishery will 
be the first to sell out, whether they sell to someone owning a vessel 
of the same size, or one that is larger. The Council was concerned that 
the proposal was not sufficiently conservative to prevent overall 
harvesting effort and capacity to increase in these cases, especially 
through the entry of very efficient larger vessels into the whiting 
fishery. Although the concern that potentially high producers will 
purchase permits from historically low producers applies for all vessel 
lengths, there is greater concern regarding large vessels entering the 
whiting fishery because those new vessels may displace existing whiting 
harvesting vessels from the whiting fishery into the fishery for other 
groundfish species, which already is considered to be overcapitalized.
    Another concern raised by the Council was the suggestion that 
current production for large factory trawlers reflected only current 
conditions, and that large vessels might change their operating 
procedures under the limited entry program and become more efficient. 
For example, it was suggested that factory trawlers could remove 
processing barriers to improved performance by operating in pairs, with 
one vessel catching enough fish to feed the processing lines on both 
vessels. Another example relates to the fact that harvesting and 
processing in the whiting fishery currently is constrained by the 
fragile nature and rapid deterioration of the whiting flesh. Vessels 
currently harvesting only whiting might, at some point, switch to 
groundfish species with less fragile flesh and increase their proven 
production significantly.
    To address its concerns about insufficient control over the 
harvesting capacities of larger vessels, the Council recommended that 
NMFS adopt a numerical rating system that extended the 2.5 exponential 
curve all the way to 200 ft (61.0 m). Above 200 ft (61.0 m) the rating 
would be the rating for a 200-foot (61.0 m) permit, plus 0.9354 times 
the difference between the permit endorsement length and 200 ft (61.0 
m) (a linear relationship). Under this formula, a 200-foot (61.0 m) 
vessel would need to purchase twenty 60-foot (18.3 m) permits and a 
300-foot (91.4 m) vessel, twenty-six 60-foot (18.3 m) permits, compared 
to ten permits for either size under the initial NMFS proposal. The 
Council recommended a linear slope to determine the number of permits 
for vessels over 200 ft (61.0 m), reflecting the belief that vessel 
owners would not have built vessels greater than 200 ft (61.0 m) if 
they did not believe the larger vessels represented increased 
production potential. For purposes of this rulemaking, the rating 
system is referred to as Initial Alternative II.

Proposed Numerical Rating Formula (NMFS Preferred Alternative)

    Upon reviewing the Council's recommendation and its rationale, NMFS 
has initially concluded that it exaggerates the relationship between 
vessel length and harvesting capacity for vessels over about 150 ft 
(45.7 m). Using an average weekly production of 500 mt for catcher 
vessels delivering to motherships in the Pacific whiting fishery as a 
proxy for the harvest capacity of a 60-foot (18.3 m) permit, under the 
Council's recommendation, it would require, for example, the owner of a 
200-foot (61.0 m) vessel to purchase 20 permits. This represents 
harvesting capacity four times greater than the demonstrated production 
of this class of vessel in the Pacific whiting fishery (maximum of 
2,500 mt per week), and about twice the demonstrated production of 
large factory trawlers in the Alaska pollock fishery (maximum of 5,000 
mt per week), which represents the highest production for these vessels 
in any fishery. The owner of a 400-foot (121.9 m) vessel would have to 
acquire 32 permits from 60-foot (18.3 m) vessels under the Council's 
recommendation. This represents harvesting capacity over six times the 
demonstrated production of a factory trawler in the Pacific whiting 
fishery, and over three times factory trawler production values for the 
Alaska pollock fishery.
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    On the other hand, NMFS agrees that the propensity for unproductive 
or marginally productive permits to pass into the hands of efficient, 
productive vessel owners should be considered in the formula for 
relating vessel length to harvesting capacity. This is true, however, 
for all vessel size classes, and occurs both in the transfer of a 
permit to another vessel of the same size or in combining permits for 
larger vessels. As a result, a reasonable amount of conservatism is 
necessary for all size vessels to ensure that the transfer and 
combination of permits does not result in an increase in harvesting 
capacity in the overall fishery.
    Taking the considerations discussed above into account, NMFS has 
revised its initial proposal to base the numerical rating system on a 
mathematical expression of fishing power that (1) extends the 2.5 
exponentially based relationship initially proposed from 90 ft (27.4 
m)(initial proposal) to 150 ft (45.7 m); and (2) uses a linear 
relationship between 150 ft (45.7 m) and 400 ft (121.9 m) so that 400 
ft (121.9 m) in vessel length would require the purchase of twenty 60-
foot (18.3 m) permits.
    NMFS recommends no changes for vessel lengths less than 90 ft (27.4 
m) because the production data examined for these vessels confirm that 
the 2.5 exponential relationship is appropriate for vessels below 90 ft 
(27.4 m). NMFS proposes using the 2.5 exponential curve from 90 ft 
(27.4 m) to 150 ft (45.7 m) to account for the potential additional 
productivity suggested by the higher production figures from the Alaska 
freezer longline fleet. The linear relationship between 150 and 400 ft 
(45.7 and 121.9 m) increases gradually, as did the production data from 
this class of vessels; this linear increase provides the margin of 
safety recommended by the Council to account for unproductive permits 
being transferred into the hands of productive vessel owners, 
especially in the whiting fishery.
    For example, under the proposed rule, the owner of a 200-foot (61.0 
m) vessel would have to purchase 12 permits representing harvest 
capacity about 2.4 times the production values for a factory trawler in 
the Pacific whiting fishery, and representing about the same capacity 
(1.2 times) as the production values from the largest factory trawlers 
in the Alaska pollock fishery. The owner of a 400-foot (121.9 m) vessel 
would have to acquire 20 permits representing harvesting capacity about 
four times the production of a factory trawler in the whiting fishery 
and twice the production of large factory trawlers in the Alaska 
pollock fishery. NMFS believes this degree of conservatism is necessary 
for vessels larger than 150 ft (45.7 m) to account for the potential 
for these vessels to increase their actual production in the future, 
and to account for the potential increase in harvesting capacity in the 
whiting sector of the fishery due to the combination of permits for 
vessels that have no past history in the whiting fishery.
    Because no limited entry permits are being issued with length 
endorsements of less than 20 ft (6.1 m), the starting point for the 
rating table will reflect all vessels of 20 ft (6.1 m) or less length 
overall. The ratings table ends at 400 ft (121.9 m) because the 
accumulation of a greater number than 20 permits does not appear to be 
justified by production data.
    The proposed rating formula is shown graphically in Figure 1 of 
this preamble and the exact number of rating points for each 1-foot of 
vessel length for vessels between 20 and 400 ft (6.1 and 121.9 m) in 
length is shown in Table 1 in the regulatory section of this proposed 
rule. The proposal is intended to ensure that harvesting capacity 
represented by larger size endorsements does not exceed existing 
harvesting capacity by relating vessel length to harvest capacity, by 
accounting for the propensity of unproductive permits to be transferred 
to more productive vessels, and by recognizing the potential for 
increased production suggested by the Alaskan freezer longline data, 
and the potential for increased production from larger factory 
trawlers. The formula is intended to be conservative and also to apply 
equitably to all vessel lengths so that it does not disproportionately 
affect only larger or smaller vessels. The proposed rating formula 
recognizes that smaller vessels appear to produce at a level closer to 
their harvesting capacity, while larger vessels, especially 200 ft 
(61.0 m) and larger, may produce considerably below their actual 
capacity. As a result, the formula reflects that the harvesting 
capacity for larger vessels is potentially greater than they have 
produced historically.
    The following example illustrates how a vessel owner would use 
Table 1 to determine the number of permits from smaller vessels that 
would be required to be combined for a single permit for a larger 
vessel. A vessel owner with a permit for a 58-foot (17.7 m) vessel who 
desired to upgrade to a 90-foot (27.4 m) vessel would have to purchase 
permits endorsed for the same gear type, with combined rating points 
equal to or greater than the difference between the 58-foot (17.7 m) 
vessel (14.32 rating points) and the 90-foot (27.4 m) vessel (42.96 
rating points), or 28.64 rating points. Using Table 1, the vessel owner 
has a choice of a large number of combinations of permits that can be 
purchased to achieve the needed 28.64 rating points. Some examples are 
a 58-foot (17.7 m) (14.32) and a 60-foot (18.3 m) (15.59) totalling 
29.91 rating points, or a 42-foot (12.8 m) (6.39), 50-foot (15.2 m) 
(9.88), and a 55-foot (17.8 m) (12.54) permit for a total of 28.81 
rating points. In each case, the additional permits can be combined 
with the permit from the original 58-foot (17.7 m) vessel resulting in 
a single permit endorsed for a 90-foot (27.4 m) vessel. In this manner, 
vessel owners are afforded the necessary flexibility to choose from the 
different size permits that may be available on the open market to meet 
the requirements for a permit for a larger vessel.
    Current regulations implementing Amendment 6 already allow vessel 
owners to register a permit to a vessel that is up to 5 ft (1.5 m) 
longer than the vessel length endorsed on the permit. Thus, vessel 
owners seeking to combine permits for use on larger vessels only have 
to obtain permits equivalent to the rating points for a vessel 5 ft 
(1.5 m) shorter than the vessel to which the single combined permit 
will be registered. Therefore, in the example above, the upgrade to a 
90-foot (27.4 m) vessel could be accomplished by combining permits with 
22.92 rating points (37.24 points for an 85-foot (25.9 m) vessel minus 
14.32 points for the owner's 58-foot (17.7 m) vessel). This should 
reduce the overall cost of obtaining additional permits somewhat.
    For ease of implementation, NMFS proposes to round the sum of the 
rating points for the permits being combined to the next highest whole 
integer for the purpose of meeting the required number of rating points 
listed in the regulations for a larger permit. For example, if a vessel 
owner needs 28.64 rating points, but the particular combination of 
permits purchased totals only 28.48 rating points, NMFS will round the 
sum of the rating points for the permits purchased to 29 rating points. 
Because only vessel permits may be combined, rating points gained from 
combining permits that are surplus to qualifying the larger vessel for 
a combination permit are not available for any other permit 
combination. For purposes of this rulemaking, the second NMFS proposal 
is referred to as the NMFS preferred approach. Proposed regulatory text 
is offered for this approach.
    Figure 1 of this preamble graphically compares the differences 
between the NMFS initial proposal (Initial Alternative I), the 
Council's proposal (Initial Alternative II), and the NMFS preferred 
approach. Public comment is invited on all three.

Classification

    This notice of proposed rulemaking is issued under 50 CFR part 663. 
The Assistant Administrator for Fisheries, NOAA, has initially 
determined that the NMFS preferred approach is consistent with the FMP 
and the national standards and other provisions of the Magnuson Act.
    The NMFS preferred approach or Initial Alternatives I or II, if 
adopted, could have a significant economic impact on a substantial 
number of small entities. Although the cost to a vessel owner of 
purchasing additional permits to combine for use on a larger vessel 
would be offset by the greater fishing effectiveness and larger profit 
potential represented by the larger vessel, vessel owners may be 
adversely affected by not being able to obtain the appropriate 
combination of permits or by having increased permit costs due to the 
possible absence of permits for sale endorsed with the appropriate 
vessel lengths. As a result, an initial regulatory flexibility analysis 
was prepared.
    This rule is not subject to review under Executive Order 12866.

List of Subjects in 50 CFR Part 663

    Fisheries, Fishing, Reporting and recordkeeping requirements.

    Dated: February 18, 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.

    2. Section 663.33(g) is revised to read as follows:


Sec. 663.33  Limited entry fishery--General.

* * * * *
    (g) Combining limited entry permits. Two or more limited entry 
permits with ``A'' gear endorsements for the same type of limited entry 
gear may be combined and reissued as a single permit with a larger size 
endorsement. The vessel harvest capacity rating for each of the permits 
being combined is based on the length overall (in feet) endorsed on 
each limited entry permit. The vessel harvest capacity ratings (see 
Table 1 of this paragraph) for the length endorsement on each permit 
will be added to produce the length rating for the larger permit. The 
individual harvest capacity ratings for each limited entry permit will 
not be rounded before they are combined. The sum of the harvest 
capacity ratings for the permits being combined will be rounded to the 
next highest whole number.

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[FR Doc. 94-4231 Filed 2-18-94; 4:27 pm]
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