[Federal Register Volume 59, Number 123 (Tuesday, June 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15553]


[Federal Register: June 28, 1994]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 676

[Docket No. 940683-4183; I.D. 060994B]
RIN 0648-AE79


Limited Access Management of Federal Fisheries In and Off of 
Alaska

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

ACTION: Proposed rule; request for comments.

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SUMMARY: NMFS issues a proposed rule to implement Amendment 31 to the 
Fishery Management Plan (FMP) for the Groundfish Fishery of the Bering 
Sea and Aleutian Islands Area (BSAI), Amendment 35 to the FMP for 
Groundfish of the Gulf of Alaska (GOA), and a regulatory amendment 
affecting the fishery for Pacific halibut in and off the State of 
Alaska (Alaska or State). This action is being proposed to implement 
the Modified Block Proposal, to clarify the transfer process for the 
Individual Fishing Quota (IFQ) program, and to prevent excessive 
consolidation of the Pacific halibut and sablefish fisheries off 
Alaska. If approved, these FMP and regulatory amendments would require 
the issuance of quota share (QS) blocks for QS resulting in less than 
20,000 lb (9 mt) of IFQ for halibut or sablefish, based on the 1994 
total allowable catch (TAC) for fixed gear in those fisheries, allow 
the combination of QS blocks that are less than 1,000 lb (0.5 mt) of 
IFQ for halibut and less than 3,000 lb (1.4 mt) of IFQ for sablefish, 
restrict the number of blocks that may be held by a person in any IFQ 
regulatory area, and clarify the transfer process for QS and IFQ. It is 
intended to ensure that small part-time operators and diversified 
operations can continue to participate profitably in the IFQ fisheries.

DATES: Comments must be received by August 8, 1994.

ADDRESSES: Comments may be sent to Ronald J. Berg, Chief, Fisheries 
Management Division, Alaska Region, NMFS, 709 W. 9th Street, Room 453, 
Juneau, AK 99801 or P.O. Box 21668, Juneau, AK 99802, Attention: Lori 
J. Gravel. Copies of Amendments 31 and 35, and the Environmental 
Assessment/Regulatory Impact Review/Initial Regulatory Flexibility 
Analysis (EA/RIR/IRFA) for the ``Sitka Block'' proposed amendment, the 
``Full/Partial Block'' proposed amendment, and the ``Modified Block'' 
proposed amendment to the IFQ management alternative for the Pacific 
halibut and sablefish fisheries off Alaska, may be obtained from the 
North Pacific Fishery Management Council, P.O. Box 103136, Anchorage, 
AK 99510.

FOR FURTHER INFORMATION CONTACT: John Lepore, 907-586-7228.

SUPPLEMENTARY INFORMATION:

Background

    The Sitka Block proposed amendment, the Full/Partial Block proposed 
amendment, the Modified Block proposed amendment, and the status quo 
alternative for the IFQ program for fixed-gear sablefish fisheries off 
Alaska and for the fixed-gear Pacific halibut fisheries in and off 
Alaska are described in the EA/RIR/IRFA dated December 17, 1993. 
Language amending the BSAI and the GOA FMPs was developed for the 
Modified Block Proposal, the North Pacific Fishery Management Council's 
(Council) chosen alternative. The amendments to the FMPs affect the 
sablefish fisheries in the exclusive economic zone (EEZ) off Alaska, 
which are managed in accordance with the BSAI and the GOA groundfish 
FMPs. The Council prepared both FMPs under authority of the Magnuson 
Fishery Conservation and Management Act (Magnuson Act). The BSAI FMP is 
implemented by regulations appearing at 50 CFR 611.93 for the foreign 
fishery and 50 CFR part 675 for the U.S. fishery. The GOA FMP is 
implemented by regulations appearing at 50 CFR 611.92 for the foreign 
fishery and at 50 CFR part 672 for the U.S. fishery. General 
regulations that also pertain to the U.S. groundfish fisheries appear 
at 50 CFR part 620.
    The Council does not have an FMP for halibut. The domestic fishery 
for halibut in and off Alaska is managed by the International Pacific 
Halibut Commission (IPHC), as provided by the Convention between the 
United States and Canada for the Preservation of the Halibut Fishery of 
the Northern Pacific Ocean and the Bering Sea (Convention), signed at 
Washington, DC, March 29, 1979, and the Halibut Act. The Convention and 
the Halibut Act authorize the Regional Fishery Management Councils 
established by the Magnuson Act to develop regulations that are in 
addition to, but not in conflict with, regulations adopted by the IPHC 
affecting the U.S. halibut fishery. Under this authority, the Council 
may develop, for approval by the Secretary of Commerce (Secretary), 
limited-access policies for the Pacific halibut fishery in Convention 
waters in and off Alaska. ``Convention waters'' means the maritime 
areas off the west coast of the United States and Canada, as described 
in Article I of the Convention (see 16 U.S.C. 773(d)).
    The Council acted under these authorities in recommending changes 
to the IFQ program for the halibut and sablefish fisheries. These 
recommended changes would be implemented by this proposed action and 
are intended by the Council to promote the conservation and management 
of sablefish and halibut resources, and to further the objectives of 
the Magnuson Act and the Halibut Act.

QS Block Proposals

    Concern over the potential for excessive consolidation of fishing 
privileges under the IFQ program was the impetus for the QS block 
proposals. The Council asked its staff to analyze the first of the QS 
block proposals, the Sitka Block proposal, at its April 1992 meeting. 
The Sitka Block proposal provided that (1) initial QS for each IFQ 
regulatory area would be allocated in blocks, (2) QS in a block could 
not be separated and would have to be transferred as a block, and (3) 
the ``maximum block size'' allowed in each IFQ regulatory area would be 
one-half the most restrictive QS use limit for an area.
    The Full/Partial Block proposal was considered at the January 1993 
Council meeting. It provided that (1) initial QS for each IFQ 
regulatory area would be allocated in blocks, (2) QS in a block could 
not be separated and would have to be transferred as a block, (3) QS 
that represented 20,000 lb (9 mt) or more of IFQ in the implementation 
year would be issued as a ``full block'' for that IFQ regulatory area, 
and (4) QS that represented less than 20,000 lb (9 mt) would be issued 
as a ``partial block'' for that IFQ regulatory area.
    The Modified Block proposed amendment was passed after the Council 
took public testimony and discussed the other two block proposals at 
its September 1993 meeting. The Modified Block Proposal retained most 
of the features of the current IFQ program, including the same 
ownership constraints and the same vessel size categories. The Modified 
Block Proposal also provided that (1) only initial allocations of QS 
that represented less than 20,000 lb (9 mt) of IFQ in the 
implementation year would be issued as a block, (2) QS that represented 
20,000 lb (9 mt) or more of IFQ in the implementation year would be 
``unblocked'' QS, and (3) QS in a block could not be separated and 
would have to be transferred as a block. For each species in each IFQ 
regulatory area, a person who did not hold any unblocked QS could hold 
up to two QS blocks for that area, but the sum of the two QS blocks 
could not exceed use limits in 50 CFR 676.22 (e) and (f). A person who 
held unblocked QS for an IFQ regulatory area could hold only one QS 
block for that area, provided that the total QS held, blocked and 
unblocked, for that IFQ regulatory area did not exceed use limits 
referenced above. The Modified Block Proposal also provided that QS 
blocks resulting in less than 1,000 lb (0.5 mt) of IFQ for halibut (or 
3,000 lb (1.4 mt) of IFQ for sablefish) in the implementation year 
could be combined. The QS block resulting from this combination could 
not exceed 1,000 lb (0.5 mt) for halibut or 3,000 lb (1.4 mt) for 
sablefish. This ``sweeping-up'' provision was designed to allow very 
small QS allocations to be combined into ``fishable'' amounts.
    All three block proposals, the Sitka Block Proposal, the Full/
Partial Block Proposal, and the Modified Block Proposal, were designed 
to reduce the maximum potential consolidation relative to the current 
IFQ program. The EA/RIR/IRFA indicated that, if actual consolidation is 
proportional to the estimates of maximum potential consolidation, more 
QS holders likely would remain in the halibut and sablefish fisheries 
under any of the three block proposals than under the current IFQ 
program.
    The Council adopted the Modified Block Proposal because it 
prevented excessive consolidation of QS by blocking any QS allocation 
for an IFQ regulatory area that would have represented less than 20,000 
lb (9 mt) of IFQ in the implementation year (1994). Also, it did not 
unnecessarily interfere with the opportunities currently available 
under the IFQ program for larger operations, because QS allocations for 
an IFQ regulatory area that would have represented 20,000 lb (9 mt) or 
more of IFQ in 1994 would remain unblocked. The Council decided that 
the Modified Block Proposal would achieve the objectives of the other 
block proposals (i.e., protect small producers, part-time participants, 
and entry level participants that may tend to disappear because of 
excessive consolidation under the current IFQ program), with fewer 
restrictions on the flexibility and the economic efficiency of the IFQ 
program as a whole.
    Whether QS is blocked or unblocked would be determined by the QS 
pools for each IFQ regulatory area as they exist on October 17, 1994. 
Using a specific date to calculate whether to block QS ensures that all 
persons would be treated in a similar manner, regardless of when their 
QS is issued. October 17, 1994, was chosen as the date to calculate QS 
because it was long enough after the application period (ends July 15, 
1994) to allow the QS pools to achieve QS amounts reflective of their 
eventual range, but long enough before the 1995 fishing season to allow 
for transfers of QS for that fishing season.

Transfer of QS Blocks

    Blocked and unblocked QS would be transferable subject to the 
approval of the Regional Director, Alaska Region, NMFS, and compliance 
with the transfer regulations found in 50 CFR part 676. The Modified 
Block Proposal creates the potential that some QS blocks would become 
non-transferable, because their size would exceed the QS use limits in 
50 CFR 676.22 (e) and (f). This potential was addressed in the EA/RIR/
IRFA dated December 17, 1993. Since there was only a slight potential 
of having a QS block that would be non-transferable, and only a few 
regulatory areas were affected, an alternative was developed to solve 
the issue of non-transferability, rather than totally abandoning the 
Modified Block Proposal.
     This alternative would permit the transfer of a QS block that 
exceeded the QS use limits by dividing the block into two blocks. The 
sizes of the resulting blocks would depend on the QS use limit 
preventing the transfer--one block would be the maximum size allowable 
under the QS use limit, the other block would contain the residual QS. 
Dividing a block to allow its transfer when it would be otherwise non-
transferable because it exceeded the QS use limit is an exception to 
the proposed rule (Sec. 676.21(d)(1)). Under any other circumstance, a 
QS block could not be divided.
    Furthermore, this alternative does not waive any of the other use 
limits under the existing IFQ program or under the changes proposed to 
the program by this action. For example, a person may only hold two QS 
blocks for an IFQ regulatory area, or one QS block if any unblocked QS 
is held. Also, a person cannot exceed the QS use limit by transfer. 
These limits would prevent a person from receiving, by transfer, the 
two blocks created by dividing a block because its size exceeded the QS 
use limit. If a person held any QS for an IFQ regulatory area, blocked 
or unblocked, the most he/she would be able to receive by transfer 
would be one block. If a person did not hold any QS for an IFQ 
regulatory area, he/she would still be prevented from receiving both 
blocks, because the sum of the QS in both blocks would exceed the QS 
use limit for that regulatory area.

Other Changes to the IFQ Regulatory Language

    This action proposes changes to the transfer procedure in 50 CFR 
part 676 to accommodate the Modified Block Proposal, and to further 
clarify the transfer process. First, a definition of transfer of QS or 
IFQ would be included in the introductory paragraph of Sec. 676.21. 
Second, Sec. 676.21(e) would be revised and placed at Sec. 676.21 (a), 
(b), and (c). Third, procedures designed specifically for transferring 
QS blocks would be placed in Sec. 676.21(d). Fourth, procedures for 
transfers of QS or IFQ resulting from court orders, operation of law, 
or as part of security agreements would be clarified and placed in 
Sec. 676.21(e). Fifth, transfer restrictions specific to regulatory 
areas would be expanded and placed in Sec. 676.21(f). Making the 
transfer process easier to understand is the impetus for these proposed 
changes. NMFS is particularly interested in public comments regarding 
these changes to the existing transfer process for QS and IFQ, which 
was published in the Federal Register on November 9, 1993 (58 FR 
59375).
    Section 304(a)(1)(D) of the Magnuson Act requires the Secretary to 
publish regulations proposed by a Council within 15 days of receipt of 
the FMP amendments and regulations. At this time, the Secretary has not 
determined that the FMP amendments these regulations would implement 
are consistent with the national standards, other provisions of the 
Magnuson Act, and other applicable laws. The Secretary, in making final 
determinations about the FMP amendments and in promulgating final rules 
under both the Magnuson and Halibut Acts, will take into account the 
data, views, and comments received during the comment period.

Classification

    The Council prepared an IRFA as part of the RIR, which describes 
the impact this proposed rule would have on small entities, if adopted. 
The analysis in the IRFA indicates that by reducing consolidation, the 
Modified Block Proposal may increase the total cost of harvesting the 
fishery resource, thereby decreasing the net economic benefits of the 
IFQ program and increasing harvesting costs to small entities. The 
analysis also indicates that by reducing consolidation, the Modified 
Block Proposal may result in higher levels of harvesting employment. 
Higher levels of harvesting employment and the maintenance of diversity 
in fishing operations participating in the IFQ program are the main 
goals of the Modified Block Proposal. A copy of the analysis is 
available from the Council (see ADDRESSES).
    This proposed rule has been determined to be not significant for 
purposes of E.O. 12866.

List of Subjects in 50 CFR Part 676

    Fisheries, Reporting and recordkeeping requirements.

    Dated: June 22, 1994.
Henry R. Beasley,
Acting Program Management Officer, National Marine Fisheries Service.

    For the reasons set out in the preamble, 50 CFR part 676 is 
proposed to be amended as follows:

PART 676--LIMITED ACCESS MANAGEMENT OF FEDERAL FISHERIES IN AND OFF 
OF ALASKA

    1. The authority citation for 50 CFR part 676 continues to read as 
follows:

    Authority: 16 U.S.C. 773 et seq. and 1801 et seq.


Sec. 676.16  [Amended]

    2. Section 676.16 is amended by removing and reserving paragraphs 
(i) and (n).
    3. Section 676.20 is amended by revising paragraph (a) and the 
first sentence of the introductory text of paragraph (f) to read as 
follows:


Sec. 676.20  Individual allocations.

* * * * *
    (a) Initial allocation of quota share. The Regional Director shall 
initially assign to qualified persons, on or after October 18, 1994, 
halibut and sablefish fixed gear fishery QS that are specific to IFQ 
regulatory areas and vessel categories. QS will be assigned as a block 
in the appropriate IFQ regulatory area and vessel category if that QS 
would have resulted in an allocation of less than 20,000 lb (9 mt) of 
IFQ for halibut or sablefish based on:
    (1) The 1994 TAC for fixed gear in those fisheries for specific IFQ 
regulatory areas, and
    (2) The QS pools of those fisheries for specific IFQ regulatory 
areas as of October 17, 1994.
* * * * *
    (f) * * * The Regional Director shall assign halibut or sablefish 
IFQs to each person holding unrestricted QS for halibut or sablefish, 
respectively, up to the limits prescribed at Sec. 676.22 (e) and (f). * 
* *
* * * * *
    4. Section 676.21 is revised to read as follows:


Sec. 676.21  Transfer of QS and IFQ.

    Transfer of QS or IFQ means any transaction requiring QS, or the 
use thereof in the form of IFQ, to pass from one person to another, 
permanently or for a fixed period of time, except that transactions 
requiring IFQ cards to be issued in the name of a vessel master 
employed by an individual or a corporation are not transfers of QS or 
IFQ.
    (a) Transfer procedure. A person who receives QS by transfer may 
not use IFQ resulting from that QS for harvesting halibut or sablefish 
with fixed gear until an Application for Transfer of QS/IFQ 
(Application for Transfer) is approved by the Regional Director. The 
Regional Director shall provide an Application for Transfer form to any 
person on request. Persons who submit an Application for Transfer to 
the Regional Director for approval will receive notice of the Regional 
Director's decision to approve or disapprove the Application for 
Transfer, and, if applicable, the reason(s) for disapproval, by mail 
posted on the date of that decision, unless another communication mode 
is requested on the Application for Transfer. QS or IFQ accounts 
affected by an Application for Transfer approved by the Regional 
Director will change on the date of approval. Any necessary IFQ permits 
will be sent with the notice of the Regional Director's decision.
    (b) Application for Transfer approval criteria. Except as provided 
in paragraph (e) of this section, an Application for Transfer will not 
be approved until the Regional Director has determined that:
    (1) The person applying for transfer received the QS or IFQ to be 
transferred:
    (i) By initial assignment by the Regional Director as provided in 
Sec. 676.20(a); or
    (ii) By approved transfer;
    (2) The person applying to receive the QS or IFQ meets the 
requirements of eligibility in paragraph (c) of this section;
    (3) The person applying for transfer and the person applying to 
receive the QS or IFQ have their notarized signatures on the 
Application for Transfer;
    (4) There are no fines, civil penalties, or other payments due and 
owing, or outstanding permit sanctions, resulting from Federal fishery 
violations involving either person;
    (5) The person applying to receive the QS or IFQ currently exists;
    (6) The transfer would not cause the person applying to receive the 
QS or IFQ to exceed the use limits in Sec. 676.22 (e) or (f);
    (7) The transfer would not violate the provisions of paragraph (f) 
of this section; and
    (8) Other pertinent information requested on the Application for 
Transfer has been supplied to the satisfaction of the Regional 
Director.
    (c) Eligibility to receive QS or IFQ by transfer. All persons 
applying to receive QS or IFQ must submit an Application for 
Eligibility to Receive QS/IFQ (Application for Eligibility), containing 
accurate information, to the Regional Director. The Regional Director 
will not approve a transfer of IFQ or QS to a person until the 
Application for Eligibility for that person is approved by the Regional 
Director. The Regional Director shall provide an Application for 
Eligibility form to any person on request.
    (1) A person must indicate on the Application for Eligibility 
whether the eligibility sought is as:
    (i) An individual; or
    (ii) A corporation, partnership, or other entity.
    (2) A person may submit the Application for Eligibility with the 
Application for Transfer or file the Application for Eligibility prior 
to submitting the Application for Transfer. If a person, as described 
in paragraph (c)(1)(ii) of this section, files the Application for 
Eligibility prior to submitting the Application for Transfer, and that 
person's status subsequently changes, as described in Sec. 676.22, that 
person must resubmit an Application for Eligibility before submitting, 
or with, the Application for Transfer.
    (3) The Regional Director's approval of an Application for 
Eligibility will be mailed to the person by certified mail.
    (4) The Regional Director will notify the applicant if an 
Application for Eligibility is disapproved. This notification of 
disapproval will include:
    (i) The disapproved Application for Eligibility; and
    (ii) An explanation why the Application for Eligibility was not 
approved.
    (5) Reasons for disapproval of an Application for Eligibility may 
include, but are not limited to:
    (i) Fewer than 150 days of experience working as an IFQ crew 
member;
    (ii) Lack of compliance with the U.S. citizenship or corporate 
ownership requirements specified by the definition of ``person'' at 
Sec. 676.11;
    (iii) An incomplete Application for Eligibility; or
    (iv) Fines, civil penalties, or other payments due and owing, or 
outstanding permit sanctions, resulting from Federal fishery 
violations.
    (d) Transfers of QS blocks. (1) A QS block must be transferred as 
an undivided whole, unless the size of the QS block exceeds the use 
limits specified at Sec. 676.22. If the QS block to be transferred 
exceeds the use limits specified at Sec. 676.22, the Regional Director 
will divide the block into two blocks, one block containing the maximum 
amount of QS allowable under the QS use limits and the other block 
containing the residual QS.
    (2) QS blocks representing less than 1,000 lb (0.5 mt) of IFQ for 
halibut or less than 3,000 lb (1.9 mt) for sablefish, based on the 
factors listed in Sec. 676.20(a), for the same IFQ regulatory area and 
vessel category, may be consolidated into larger QS blocks, provided 
that the consolidated QS blocks do not represent greater than 1,000 lb 
(0.5 mt) of IFQ for halibut or greater than 3,000 lb (1.4 mt) of IFQ 
for sablefish based on the factors listed in Sec. 676.20(a). A 
consolidated QS block cannot be divided and is considered a single 
block for purposes of use and transferability.
    (e) Transfer of QS or IFQ with restrictions. If QS or IFQ must be 
transferred as a result of a court order, operation of law, or as part 
of a security agreement, but the person receiving the QS or IFQ by 
transfer does not meet all of the eligibility requirements of this 
section, the Regional Director will approve the Application for 
Transfer with restrictions. The Regional Director will not assign IFQ 
resulting from the restricted QS to any person. IFQ with restrictions 
may not be used for harvesting halibut or sablefish with fixed gear. 
The QS or IFQ will remain restricted until:
    (1) The person who received the QS or IFQ with restrictions meets 
the eligibility requirements of this section and the Regional Director 
approves an Application for Eligibility for that person; or
    (2) The Regional Director approves the Application for Transfer 
from the person who received the QS or IFQ with restrictions to a 
person who meets the requirements of this section.
    (f) Transfer restrictions. (1) Except as provided in paragraph (e) 
or paragraph (f)(2)) of this section, only persons who are IFQ crew 
members, or that were initially assigned catcher vessel QS, and meet 
the other requirements in this section may receive catcher vessel QS.
    (2) Except as provided in paragraph (f)(3) of this section, only 
persons who are IFQ crew members may receive catcher vessel QS in IFQ 
regulatory area 2C for halibut or in the IFQ regulatory area east of 
140  deg.W. long. for sablefish.
    (3) Catcher vessel QS initially assigned to an individual may be 
transferred to a corporation that is solely owned by the same 
individual. Such transfers of catcher vessel QS in IFQ regulatory area 
2C for halibut or in the IFQ regulatory area east of 140  deg.W. long. 
for sablefish will be governed by the use provisions of Sec. 676.22(i); 
the use provisions pertaining to corporations at Sec. 676.22(j) shall 
not apply.
    (4) The Regional Director will not approve an Application for 
Transfer of catcher vessel QS subject to a lease or any other condition 
of repossession or resale by the person transferring QS, except as 
provided in paragraph (g) of this section, or by court order, operation 
of law, or as part of a security agreement. The Regional Director may 
request a copy of the sales contract or other terms and conditions of 
transfer between two persons as supplementary information to the 
transfer application.
    (g) Leasing QS (applicable until January 2, 1998). A person may not 
use IFQ resulting from a QS lease for harvesting halibut or sablefish 
until an Application for Transfer complying with the requirements of 
paragraph (b) of this section and the lease agreement are approved by 
the Regional Director. A person may lease no more than 10 percent of 
that person's total catcher vessel QS for any IFQ species in any IFQ 
regulatory area to one or more persons for any fishing year. After 
approving the Application for Transfer, the Regional Director shall 
change any IFQ accounts affected by an approved QS lease and issue all 
necessary IFQ permits. QS leases must comply with all transfer 
requirements specified in this section. All leases will expire on 
December 31 of the calendar year for which they are approved.
    5. Section 676.22 is amended by revising paragraph (g) to read as 
follows:


Sec. 676.22  Limitations on the use of QS and IFQ.

* * * * *
    (g) Limitations on QS blocks. No person, individually or 
collectively, may hold more than two blocks for each species in any IFQ 
regulatory area, except that if that person, individually or 
collectively, holds unblocked QS for a species in an IFQ regulatory 
area, such person may only hold one QS block for that species in that 
IFQ regulatory area. For purposes of this section, holding, or to hold, 
blocks of QS means being registered by NMFS as the person who received 
QS by initial assignment or approved transfer.
* * * * *
[FR Doc. 94-15553 Filed 6-22-94; 5:01 pm]
BILLING CODE 3510-22-W