[Federal Register Volume 63, Number 135 (Wednesday, July 15, 1998)]
[Rules and Regulations]
[Pages 38101-38115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18751]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 660

[Docket No. 980406085-8164-01; I.D. 031998C]
RIN 0648-AJ27


Fisheries off West Coast States and in the Western Pacific; 
Pacific Coast Groundfish Fishery; Management Measures for Nontrawl 
Sablefish

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

ACTION: Final rule.

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SUMMARY: NMFS issues this final rule to implement management measures 
recommended by the Pacific Fishery Management Council (Council) for the 
limited entry, fixed gear sablefish fishery north of 36 deg. N. lat. 
These measures provide a three-tiered management regime with three 
different cumulative landings limits for permit holders participating 
in the regular, limited entry, fixed gear sablefish fishery. The 
cumulative landings limit available to a permit holder depends on the 
tier to which the permit is assigned, with tier assignment based on 
historical and more recent participation in the fixed gear sablefish 
fishery. Both the limited entry and open access fixed gear sablefish 
fisheries will be closed for 48 hours immediately before and for 30 
hours immediately after the regular fishery, with different 
restrictions applying during the two closed periods. Provisional 1997 
regulatory language is updated by this final rule. These actions are 
intended to recognize the historical and more recent participation and 
investment in the fixed gear sablefish fishery while eliminating the 
traditional ``derby'' style management system.

DATES: Effective July 10, 1998.

ADDRESSES: Copies of the Environmental Assessment/Regulatory Impact 
Review/Initial Regulatory Flexibility Analysis (EA/RIR/IRFA) and the 
Final Regulatory Flexibility Analysis (FRFA) for this action are 
available from the Pacific Fishery Management Council, 2130 SW. Fifth 
Avenue, Suite 224, Portland, OR 97201. Comments regarding the 
collection-of-information requirements contained in this rule should be 
sent to William Stelle, Administrator, Northwest Region, NMFS, 7600 
Sand Point Way NE, BIN C15700, Seattle, WA 98115-0070 or to

[[Page 38102]]

William Hogarth, Administrator, Southwest Region, NMFS, 501 W. Ocean 
Blvd., Suite 4200, Long Beach, CA 90802-4213, and to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
(OMB) Washington, DC 20503 (ATTN: NOAA Desk Officer).

FOR FURTHER INFORMATION CONTACT: Yvonne deReynier at 206-526-6140, or 
Wes Silverthorne at 562-980-4000.

SUPPLEMENTARY INFORMATION:

Background

    NMFS issues this final rule to implement recommendations from the 
Council, under the authority of the Pacific Coast Groundfish Fishery 
Management Plan (FMP) and the Magnuson-Stevens Fishery Conservation and 
Management Act (Magnuson-Stevens Act), to implement changes to the 
management measures for the limited entry, fixed gear sablefish 
fishery. The notice of proposed rulemaking for this action (63 FR 
19878, April 22, 1998) fully described the background and rationale for 
the Council's recommendations. NMFS requested public comments on this 
action through May 22, 1998. NMFS received 26 letters during the 
comment period, which are addressed later in the preamble to this final 
rule.
    In summary, limited entry permits with sablefish endorsements are 
divided into three tiers, with placement based on the cumulative 
sablefish catch associated with that permit from 1984 through 1994. 
Each tier is allowed a different cumulative limit during the regular, 
limited entry, fixed gear fishery. These measures apply only north of 
36 deg. N. lat.

Three-Tier Program

    NMFS has accepted the Council's recommendation for qualifying 
criteria for the three different tiers. To qualify for the highest 
tier, Tier 1, a permit must be associated with at least 898,000 lb 
(407.33 mt) of cumulative sablefish landings made from 1984 through 
1994. To qualify for the middle tier, Tier 2, a permit must be 
associated with between 380,000 lb (172.36 mt) and 897,999 lb (407.33 
mt) of cumulative sablefish landings made from 1984 through 1994. 
Permits with sablefish endorsements that are associated with less than 
380,000 lb (172.36 mt) of cumulative sablefish landings from 1984 
through 1994 qualify for the lowest tier, Tier 3.
    Analysts examined the distribution of sablefish cumulative catch 
histories over the 1984 through 1994 period to determine whether there 
were any large gaps between groupings of the cumulative catch histories 
of limited entry permits with sablefish endorsements that might serve 
as logical breakpoints between tiers. The Council wanted broad 
divisions of permit catch history between permits assigned to different 
tiers. Based on the analysis available at its meetings, the Council 
determined that the above qualifying criteria for Tier 1 reflected the 
largest break among a series of high catch history breakpoints, and 
that the qualifying criteria for Tier 2 reflected the largest break 
among a series of mid-range catch history breakpoints.
    Permit catch history will be used to determine tier assignments for 
limited entry permit holders with sablefish endorsements. Permit catch 
history includes the catch history of the vessel(s) that initially 
qualified for the permit, as well as subsequent catch history that was 
accrued when the limited entry permit or permit rights were associated 
with other vessels. Permit catch history also includes the catch 
associated with any interim permit held during the appeal of an initial 
NMFS decision to deny the initial issuance of a limited entry permit, 
but only if (1) the appeal for which an interim permit was issued was 
lost by the appellant, and (2) the owner's current permit was used by 
the owner in the 1995 limited entry sablefish fishery. The catch 
history of an interim permit where the full ``A'' permit was ultimately 
granted will also be considered part of the catch history of the ``A'' 
permit. If the current permit is the result of the combination of 
multiple permits, the combined catch histories of all of the permits 
that were combined to create a new permit before March 12, 1998, will 
be used in calculating the tier assignment for the resultant permit, 
together with any catch history (during the qualifying period) of the 
resultant permit. Only sablefish catch regulated by the FMP that was 
legally taken with longline or fishpot gear will be considered for tier 
placement. Harvest taken in tribal sablefish set-asides will not be 
included in calculating permit catch histories.
    Under the regulations that implemented Amendment 9 to the FMP, 
which established the sablefish endorsement requirement, if two limited 
entry, fixed gear permits are combined to generate a single permit with 
a larger length endorsement, the resulting permit also will have a 
sablefish endorsement only if all permits being combined have sablefish 
endorsements. After tier assignments are issued by NMFS, if permits are 
combined, the resulting permit will be assigned to the highest tier 
held by either of the original permits before combination.
    The three-tier program maintains a ratio between the cumulative 
landings limits for the three tiers that approximates the 1991-1995 
catch relationships between permits assigned to each tier on a group 
average basis. Setting cumulative limits by ratios ensures that the 
long-term relationships between the cumulative limits for each tier 
will remain stable. With cumulative limits set by ratio, impacts from 
changes in the numbers of permits distributed to each tier will be 
shared by all vessels in the fleet. The cumulative landings limit ratio 
for the tiers is 3.85 (Tier 1); 1.75 (Tier 2); and 1 (Tier 3). For 
example, if Tier 3 had a cumulative limit of 10,000 lb (4,536 kg), Tier 
2 would have a corresponding cumulative limit of 17,500 lb (7,938 kg), 
and Tier 1 would have a corresponding cumulative limit of 38,500 lb 
(17,463 kg).
    Overhead guidelines will be used to set the cumulative limits for 
each tier and for the overall expected catch for the fishery. 
``Overhead'' is defined as the difference between the expected harvest 
level and the total harvest that would occur if each permitted vessel 
took its cumulative limit (maximum potential harvest). The concept of 
overhead is based on the premise that not all participants in this 
fishery will harvest the cumulative limit. NMFS considers a fishery 
where all participants have the opportunity to catch a cumulative limit 
and are all able to catch that limit to be an Individual Fishing Quota 
(IFQ) program. The Magnuson-Stevens Act imposes a moratorium on 
implementation of new IFQ programs until October 1, 2000.
    Cumulative limits and season lengths for the limited entry, fixed 
gear regular sablefish fishery will be set to achieve a projected 
overhead, based on the most reasonable assumptions, of at least 25 
percent and an overhead based on worst-case assumptions of at least 15 
percent for the fleet as a whole. The overhead goal for any single tier 
will be at least 15 percent, based on the most reasonable assumptions.
    Tier assignments for limited entry permits with sablefish 
endorsements will `be issued by NMFS, before the start of the regular 
1998 limited entry, fixed gear sablefish season. NMFS has used landings 
records from the Pacific States Marine Fisheries Commission's Pacific 
Fisheries Information Network (PacFIN) database to preliminarily 
determine which limited entry permits meet the Council-recommended 
qualifications for each tier.
    The Sustainable Fisheries Division (SFD), NMFS Northwest Region, 
has

[[Page 38103]]

notified each limited entry permit owner with a sablefish endorsement 
by letter whether PacFIN records indicate that his or her permit 
qualifies for Tier 1, Tier 2, or Tier 3.
    A permit owner who believes that his or her permit qualifies for a 
different tier than the tier indicated by PacFIN records has 30 days to 
send supporting documentation, such as fish tickets, to the SFD to 
demonstrate how the qualifying criteria for a different tier have been 
met. A new tier will be assigned if the permit owner demonstrates that 
his or her permit meets the qualifying criteria. If the SFD, after 
review of the information submitted by the permit owner, decides that 
the permit does not qualify for the tier requested by the owner, the 
owner will have 30 days to appeal the decision to the Regional 
Administrator, NMFS Northwest Region. Unlike the initial limited entry 
permitting process but similar to the sablefish endorsement issuance 
process, there will be no industry appeals board to review appeals of 
tier placement.
    For the 1998 season only, permit owners with sablefish endorsements 
will be issued certificates of tier assignment that will need to be 
kept with, and considered part of, their limited entry permits. When 
limited entry permit owners renew their permits for 1999, tier 
assignments for those limited entry permit owners with sablefish 
endorsements will be indicated directly on the limited entry permit.
    Applications for sablefish endorsements, implemented in 1997 under 
Amendment 9 to the FMP, will not be accepted after November 30, 1998, 
which is the limited entry permit renewal deadline for the 1999 fishing 
year.

Changes From the Proposed Rule

    NMFS received Council recommendations on the two changes to the 
proposed rule described in this section.
    At the March 1998 Council meeting, the Council learned from its 
analysts that the initial analysis presented before the 1997 Council 
decision on the three-tier program had two mistakes directly related to 
the Council's decision. The Council reconsidered the affected portions 
of its recommendations. The first mistake was that the database used 
for the initial analysis for the three-tier program had inadvertently 
included some sablefish taken in waters off Alaska and later landed at 
a Pacific Coast port. Tier qualification catch history includes only 
sablefish landed from the Pacific Coast groundfish fishery. The catch 
histories of some permits were inflated because of this inclusion of 
Alaska-caught sablefish. Once the Alaska-caught sablefish was removed 
from the permit catch history database, the tier qualification levels 
had to be re-analyzed to determine whether the breaks between permit 
catch histories (described above) were still large enough to draw clear 
distinctions between permits above and below the breaks. The Council 
particularly did not wish to set a qualification level that was within 
a few thousand pounds of the next lowest permit catch history level. 
Removal of Alaska sablefish data did not significantly change the 
breaks in cumulative catch histories identified by the Council at its 
November 1997 meeting. The break for Tier 1, 898,000 lb (407.33 mt), 
actually became larger, and so is a more effective fleet-division 
indicator than it was when the Alaska data were included in the 
cumulative catch histories. The qualifying amount that the Council had 
originally recommended for Tier 2, 411,000 lb (186.43 mt), also occurs 
at a large break in cumulative catch histories, but it is no longer the 
lowest large breakpoint in its class. Analysis presented at the March 
1998 meeting showed that 398,000 lb (180.53 mt) was the most 
significant break in cumulative catch histories, and the lowest large 
break among mid-range breakpoints. The Council commented on this issue, 
stating that it preferred to use the lowest large breakpoint in the 
mid-range area. In order to cushion any further possible data mistakes, 
the Council recommended setting the Tier 2 qualifying poundage at 
380,000 lb (172.37 mt). NMFS received no public comment on this issue, 
and implements this change with this final rule.
    The second mistake in the November 1997 analysis was made when the 
Council considered whether permits that were the result of the 
combination of two earlier permits would be assigned to a tier based on 
the cumulative catch history of one of the earlier permits, or based on 
the combined cumulative catch histories of both permits together. The 
analysis presented to the Council in November indicated that no permit 
holder would be denied qualification to a higher tier if the cumulative 
catch history of the highest of two combined permits were used as the 
qualifying catch history for that permit, rather than the summed 
cumulative catch history of both permits that were used to create the 
currently held permit. However, analysts later discovered a permit that 
is a result of two previously combined permits with catch histories 
that would each qualify for Tier 2, but that combined would qualify the 
resultant permit for Tier 1. This mistake was presented to the Council 
at its March 1998 meeting, after which the Council recommended changing 
its initial decision so that permits that are the result of a 
combination of multiple permits made before March 12, 1998, may combine 
the cumulative catch histories of all of the permits that went into the 
combination in order to determine the tier qualification status for the 
resultant permit. The Council only allowed this change for pre-existing 
combinations, but not for future combinations, so that permit holders 
would not have an incentive to buy up latent effort in the fleet to 
expand the capacity of their own operations. During the comment period, 
NMFS received two letters expressing support for the new Council 
recommendation. NMFS implements this change with this final rule.

Management Measures for 1998 and Beyond

    To facilitate enforcement, there will be a 48-hour closure before 
the start of the limited entry, fixed gear regular season, during which 
time all fixed gear north of 36 deg. N. lat. must be out of the water, 
and no sablefish may be landed by a fixed gear vessel. The 1998 pre-
season closure will begin at noon local time (l.t.) on Thursday, July 
30, and end at noon l.t. on Saturday, August 1, at the start of the 
fishery. There will be no opportunities for any fishers to set their 
gear before the 1998 regular season start time.
    The 1998 limited entry, fixed gear regular season will begin at 
noon l.t. on Saturday, August 1, 1998. Only holders of limited entry 
permits with sablefish endorsements and tier assignments may 
participate in this fishery. The fishery will be 6 days long, ending at 
noon l.t. on Friday, August 7, 1998. The cumulative landings limits for 
participants in the limited entry, fixed gear sablefish fishery will be 
52,000 lb (23,587 kg) for Tier 1; 23,500 lb (10,660 kg) for Tier 2, and 
13,500 lb (6,124 kg) for Tier 3. During the regular and mop-up seasons, 
there is a trip limit in effect for sablefish smaller than 22 inches 
(56 cm) total length, which may comprise no more than 1,500 lb (680 kg) 
or 3 percent of all legal sablefish 22 inches (56 cm) or larger, 
whichever is greater.
    To facilitate enforcement at the end of the regular season, there 
will be a 30-hour post-season closure north of 36 deg. N. lat., during 
which time no sablefish taken with fixed gear (limited entry or open 
access) may be taken and retained

[[Page 38104]]

for the 30 hours immediately after the end of the regular season. 
However, sablefish taken and retained during the regular season may be 
possessed and landed during that 30-hour period. The post-season 
closure has been changed from 48 hours in duration to 30 hours in 
duration. This shorter post-season closure is a compromise between 
vessel owners with pot gear who would prefer a short post-season 
closure so that they may retrieve gear as soon after offloading as 
possible, and vessels delivering sablefish to ports in Puget Sound that 
are farther from the main fishing grounds than from direct ocean ports. 
In 1998, this 30-hour post-season closure will begin at noon l.t. on 
August 7 and end at 1800 hours l.t. on August 8. Gear may remain in the 
water during the 30-hour post-season closure; however, gear used to 
take and retain groundfish may not be set or retrieved during this 
period.
    Commencing at 1800 hours l.t., August 8, 1998, the daily trip 
limits for fixed gear sablefish will resume at 300 lb (136 kg) per day 
north of 36 deg. N. lat. (Daily trip limits apply to calendar days. 
Therefore, on August 8, 1998, a daily trip limit may be landed between 
1800 hours and 12 midnight l.t. Beginning at 0001 hours l.t. on August 
9, 1998, daily trip limits will apply to the full 24 hours.) A vessel 
participating in the regular fishery must begin landing its catch 
before 1800 hours l.t., August 8, 1998, and complete the offloading 
before returning to sea or continuing a trip at sea, or the daily trip 
limit will apply to the fish remaining on board after 1800 hours l.t. 
on August 8, 1998.
    Estimates of the likely total harvest in the regular fishery have 
been made conservatively in order to ensure that the fishery does not 
exceed its total allocation. Because of this conservative management 
and the need to provide harvest overhead in setting cumulative landings 
limits for the three tiers, the regular fishery may not harvest all of 
the limited entry, fixed gear allocation for north of 36 deg. N. lat. 
in excess of that required for the daily trip limit fishery. Following 
an estimation of the catch from the regular fishery, there will be a 
mop-up fishery to harvest this excess. The recommendation on the size 
of the mop-up cumulative limit will be made by the Council's Groundfish 
Management Team, after calculation of the actual landed catch from the 
regular fishery and the daily trip limit fishery. NMFS will announce 
the start date, duration, and cumulative limit amount for the mop-up 
portion of the fishery in the Federal Register before the start of the 
mop-up season.

Comments and Responses

    The comments in 26 letters received during the public comment 
period ending on May 22, 1998, are summarized below. Comments 1 through 
17 were received from 12 individuals in opposition to the three-tier 
program. Comments 18 through 30 are comments were received from 13 
individuals and from an attorney representing west Coast fixed gear 
fishers. One letter in support of the rule included a suggestion that 
permit owners be allowed to stack multiple permits to pursue multiple 
cumulative limits during the regular fishery and a suggestion that the 
regular fishery be managed with an option of two different start dates, 
one in April and one in August. Neither of these suggestions was within 
the scope of the proposed rule or the Council's considerations for the 
three-tier program, so those comments have not been responded to below.

Comments Opposing the Rule

     Comment 1: No justifiable need has been demonstrated for tiered 
sablefish allocation. Tiered allocation does nothing to further the 
stated purpose of the overall management program--to end derby fishing. 
In fact, derby fishing would be perpetuated by this program. The three-
tier program does not address the safety-at-sea issue.
     Response: For the past several years, the Council has expressed a 
strong desire to end the status quo management regime of an open 
competition derby while still maintaining historic trends in catch 
distribution among participants. Each year, since 1987, the open 
competition derby season has shortened in duration, yet the Council has 
been unable to choose whether to support the management recommendations 
of long-term fleet members who wanted to maintain their historic share 
of sablefish landings, or the management recommendations of new 
entrants to the fleet who wanted to increase their future shares of 
sablefish landings. The history of the fixed gear sablefish management 
regime is discussed in the preamble to the proposed rule. Finally, for 
1998 and beyond, the Council recommended the three-tier program, a 
compromise that recognizes historic and recent fishery participation 
levels. The unrestricted competition derby will end with the 
implementation of the three-tier program.
    The amount of sablefish available to a three-tier regular fishery 
provides a 6-day fishery in 1998. Without this rule, the regular 
fishery would be an unrestricted derby of 2 to 3 days. With this rule, 
approximately one-third of the expected participating vessels will be 
able to slow their rate of fishing over the rate that they would have 
fished under an unrestricted derby fishery, without reducing their 
catch. The Council has several times deliberated on whether this 
fishery would still be unsafe for vessels unable to catch the 
cumulative limit within the time allotted for the fishery. Fishers who 
knew that they would not be able to catch the cumulative limit within 
the time available have testified before the Council that any increase 
in the number of days in the fishery would allow them to slow the pace 
of their fishing and improve their ability to operate in a safer 
manner. The Council concluded that the three-tier program was an 
appropriate compromise because it would substantially slow the fishery 
without the adverse impacts of the alternatives that would have more 
drastically redistributed the catch.
    The regular fishery under the three-tier program will still be a 
short, intense season. However, the only management option that has 
been suggested to end such seasons entirely was to set equal, monthly 
cumulative landings limits, an option with other offsetting drawbacks. 
Equal monthly landings limits would drastically redistribute catch from 
longer term participants to more recent and smaller capacity entrants. 
Cumulative limits also give fishers incentive to aim for a limit, and 
in aiming for that limit, they often exceed the limit and must discard 
any fish exceeding the limit. Discard mortality is largely unmeasured, 
and thus is a danger to the long-term health of the fish stocks. A 
system of monthly limits risks the possibility that fishers will aim 
for and exceed 12 small landings limits. The three-tier program has 
just the large, regular fishery limit to aim for, plus an expected 
second, smaller limit in the mop-up portion of the fishery.
     Comment 2: The three-tier program is based solely on historic 
catch. Historic catch is not mentioned in the Magnuson-Stevens Act. The 
Magnuson-Stevens Act states that if the available resource must be 
allocated to American fishers, historic participation shall be 
required. All fishers with sablefish endorsements have shown historic 
participation in the fishery.
    Response: Under section 303 of the Magnuson-Stevens Act, a Council 
may establish a limited access program if it takes into account, among 
other things, ``historical fishing practices in, and dependence on, the 
fishery.'' The three-tier program uses cumulative sablefish landings 
from the 1984 through 1994

[[Page 38105]]

period to quantify the historical fishing practices and dependence of 
participating fishers on the fixed gear sablefish fishery.
    National standard 4 of the Magnuson-Stevens Act states that, 
``Conservation and management measures shall not discriminate between 
residents of different States. If it becomes necessary to allocate or 
assign fishing privileges among various United States fishermen, such 
allocation shall be (A) fair and equitable to all such fishermen; (B) 
reasonably calculated to promote conservation; and (C) carried out in 
such a manner that no particular individual, corporation, or other 
entity acquires an excessive share of such privileges.'' The three-tier 
program is fair and equitable to participants in the program because it 
recognizes historic and recent participation and dependence on the 
fishery, and because it divides fishing privileges in a manner designed 
to minimize economic impact on those participants, within the 
constraints of the Magnuson-Stevens Act prohibition on implementing new 
IFQ programs.
    Derbies, three-tier programs, and series of monthly cumulative 
limits, were three of the major alternatives considered in this action. 
Each provides a different means of controlling harvest in this fishery, 
each with different social, economic, and conservation implications 
that would change over time and with conditions in the fishery. The 
implementation of any of these alternatives would promote resource 
conservation. Deteriorating social and economic conditions resulting 
from derby fishery management led to the consideration of alternative 
conservation measures.
    Finally, if the fishery could be managed in a way that would allow 
each of the permits to harvest the entire cumulative limit associated 
with the tiers, each of the permits in the top tier would be receiving 
just 1.4 percent of the total catch available to that fishery. A small 
number of fleet participants own more than one permit, so it is 
extremely unlikely that any one individual, corporation, or any other 
entity will acquire an excessive share of the privileges associated 
with this fishery through the three-tier program.
     Comment 3:  The Magnuson-Stevens Act states that economic gain 
shall not be used to allocate fish resources.
     Response: National standard 5 of the Magnuson-Stevens Act states 
that, ``Conservation and management measures shall, where practicable, 
consider efficiency in the utilization of fishery resources; except 
that no such measure shall have economic allocation as its sole 
purpose.'' The purpose of the three-tier program is to move away from 
the unrestricted derby fishery with a management program that allows 
sablefish catch distribution to reflect historic and recent 
participation levels in the fishery. A management measure that would 
improve the efficiency of the use of a fishery resource would, among 
other things, remove or discourage redundant capacity in the fleet 
targeting that resource. Derby management encourages each fishery 
participant to increase the capacity of his or her vessel, to maximize 
the amount of fish that a vessel can catch during the time of the 
fishery. If the catching capacity of each vessel in a fleet is 
increased to improve its competitive advantage over other vessels, the 
total catching capacity in the fleet becomes so great that the duration 
of the derby must be shortened to prevent these vessels from exceeding 
the harvest guideline for the target species. The Pacific Coast fixed 
gear sablefish fishery has had a classic case history of a derby 
fishery that rushed into the vicious spiral of ever-increasing 
redundant capacity and ever-decreasing fishery duration. The three-tier 
program is intended to decrease the intensity of this spiral by 
matching permits to the tiers that most closely reflect their historic 
landings shares of the fishery. Fishers within each tier will be 
allowed to pursue cumulative limits that match more closely their 
current vessel capacities, and will thus as a group have less incentive 
to continue to increase those vessel capacities. There will still be 
incentive for vessels that are unable to catch their cumulative limit 
in the allotted time to increase their capacity (about two-thirds of 
the fleet), but the degree of incentive will be reduced. The three-tier 
program is a compromise program resulting from constraints created by 
the Magnuson-Stevens Act moratorium on the creation of new IFQ programs 
and the major reallocative effects of other alternative management 
strategies (e.g., a year-round series of monthly cumulative limits). 
Economic allocation is not the sole purpose of this regulation. As 
discussed in response to comments 1 and 2, the rule also has social and 
conservation purposes.
    Comment 4: The tier system rewards overcapitalization by large 
producers by giving them an unreasonably larger allocation of sablefish 
in comparison to the rest, and majority, of the fleet.
     Response: Fleet overcapitalization is primarily the result of two 
factors: individual fishers improving and supplementing their gear and 
vessel catching capabilities, and increasing numbers of new entrants to 
the fleet. Both of these factors contributed to overcapitalization in 
the fixed gear sablefish fishery. It is incorrect to say that, during 
any given period, a vessel that added gear contributed more to the 
overcapacity problem than a fisher bringing in a similar amount of 
capacity as a new entrant, or to say that this program rewards 
overcapitalization by recognizing historic and recent fishery 
participation. The three-tier program is designed to reflect, in part, 
dependence on the fishery.
    The ratio that describes this distribution of cumulative catch 
limits between tiers approximates the 1991 through 1995 catch 
relationships between permits assigned to each tier on a group average 
basis. Setting cumulative limits by ratios ensures that the long-term 
relationships between the cumulative limits for each tier will remain 
stable. With cumulative limits set by ratio, impacts from changes in 
the numbers of permits distributed to each tier will be shared by all 
vessels in the fleet. The cumulative limits ratio for the tiers will be 
3.85 (Tier 1); 1.75 (Tier 2); and 1 (Tier 3). The ratio between the 
average permit catch histories for permits in the three different tiers 
over the 1984 through 1994 period is 10.9 (permits in Tier 1) to 3.9 
(permits in Tier 2) to 1 (permits in Tier 3). Tier 1 fishers will not 
have an unreasonably larger allocation of sablefish as compared with 
the rest of the fleet, particularly given the difference between the 
historic cumulative catch ratio and the cumulative limits ratio 
implemented by the three-tier program.
     Comment 5: The tier program criteria are arbitrary and 
inappropriately inflexible. The criteria do not adequately allow for 
the changing circumstances and contingencies common in the industry, 
such as boat and gear loss, weather, price fluctuations, etc.
     Response: NMFS disagrees. The three-tier program qualifying 
criteria include the initial 1984 through 1988 window period used to 
qualify vessels for limited entry permits, plus the 1989 through 1994 
period that was added to the limited entry window period for sablefish 
endorsement qualification. In considering this question, it is 
important to remember that NMFS considers the relevant history to be 
the history of the groundfish fishing firm as represented by the 
groundfish permit. Within the 11-year window period, NMFS expects that 
most fishers had some period of relatively low fishing activity due to 
any number of possible problems they might have had with their boats, 
gear and weather, with personal health and family needs or with basic 
changes in market

[[Page 38106]]

conditions. The long (11 years) qualifying period reduces the impact of 
any particular problem that might have affected a fisher's 
participation in this fishery. For vessels that may have entered the 
fishery in the latter part of the qualifying period, such as those 
qualifying for a limited entry permit based on construction provisions, 
notice was given as early as the November 1991 Council meeting 
(announced at 57 FR 4394, February 5, 1992), that additional actions 
might be taken to further restrict access to the fishery, and that the 
Council was reserving the option to not consider subsequent investment 
and dependence on the fishery in determining future allocation 
questions with regard to this fishery. The qualifying requirement 
represents a balance that considers both the duration of involvement in 
the fishery and the size of the harvest operation. A fisher who entered 
the fishery as a large producer in the later part of the qualification 
window would have an opportunity to qualify for one of the higher 
tiers, as would a fisher who participated at a lower, but consistent, 
level over a longer period.
     Comment 6: The catch requirements for tier placement would 
unfairly favor large vessels and handicap smaller vessels. Recent derby 
management has artificially widened the catch gap between larger and 
smaller vessels, because small boats are more vulnerable to adverse 
weather and must spend a greater percent of time in transit, loading, 
and offloading. Thus, the catch rate of these smaller vessels has been 
constrained during the extremely short seasons.
     Response: NMFS agrees that there is some correlation between 
vessel size and vessel catch history. However, there are also several 
examples of small-sized vessels in the Tier 1 that have had high and 
consistent sablefish landings over the entire 11-year qualifying 
period. Conversely, there are very large vessels in Tier 3 with 
relatively low cumulative catch histories. Many factors contribute to 
whether a vessel has a relatively large or small sablefish catch 
history. In addition to basic vessel length, cumulative catch history 
might be related to sablefish abundance near the home port of the 
vessel, the fishing skills of the captain and crew, the type and 
condition of the gear used, the condition of the vessel, choices of the 
vessel owner to participate in the West Coast sablefish fishery or in 
other simultaneous fisheries, the number of years in this fishery, and 
many other possible factors. During the 1984 through 1994 window 
period, only the last three seasons could be classified as short in 
duration, being 15 days in 1992, 21 days in 1993, and 20 days in 1994. 
These short periods necessarily constrained the catch rates of all 
participating vessels to ensure that the fishery did not exceed the 
available harvest guideline. NMFS does not agree that smaller sized 
vessels necessarily spend more time in transit, or in loading and 
offloading than larger vessels.
     Comment 7: High-producing pot fishers had an advantage of high 
harvest levels during the window period because they, unlike 
longliners, were allowed to set their gear before the start of the 
season. This was supposedly justified by safety concerns that boats 
carrying too many pots would be unstable.
     Response: In 1993 and 1994, fixed gear vessels were prohibited 
from taking and retaining, possessing, or landing sablefish for the 72 
hours before the start of the regular sablefish fishery (58 FR 16629, 
March 30, 1993). For those 2 years, all fixed gear fishers could deploy 
their gear during the 72-hour pre-season closure, but no sablefish 
could be taken from the water until the season start. In 1995, 
longliners were prohibited from deploying their gear until the start of 
the season, while pot fishers were allowed to deploy and bait their 
gear in advance of the start of the regular season (60 FR 34473, July 
3, 1995). Because tier qualification status is based on landings made 
from 1984 through 1994, the pot pre-set allowance in 1995 and 1996 did 
not affect harvest during the three-tier qualification period.
     Comment 8: The three-tier program does not consider the impact on 
the small fishing ports along the coast, as directed by the Magnuson-
Stevens Act.
    Response: National standard 8 of the Magnuson-Stevens Act requires 
that, ``Conservation and management measures shall, consistent with the 
conservation requirements of this Act (including the prevention of 
overfishing and rebuilding of overfished stocks), take into account the 
importance of fishery resources to fishing communities in order to (A) 
provide for the sustained participation of such communities, and (B) to 
the extent practicable, minimize adverse economic impact on such 
communities.'' NMFS notes that, according to the Council's decisional 
analysis, the three-tier program is expected to cause little change in 
the inter-port distribution of harvest over past years' harvest 
distributions. Moreover, other alternatives to unrestricted derby 
management, such as providing a single period equal cumulative limit 
fishery for all vessels or a series of equal monthly cumulative limits, 
would have imposed greater changes to inter-port harvest distribution 
than the three-tier program implemented by this rule. The program 
implemented by this rule meets the requirements of national standard 8.
     Comment 9: The three-tier plan is only a disguised IFQ program, 
which is not allowed under the Magnuson-Stevens Act. The ``overhead'' 
allowance does not remedy this being an IFQ program. Additionally, the 
season has been artificially shortened in order to maintain this 
``overhead'' fiction, increasing the fishery's hazardousness for all 
participants.
     Response: The October 11, 1996, Sustainable Fisheries Act 
significantly revised and renamed the Magnuson-Stevens Act. The new 
changes to the Magnuson-Stevens Act included a moratorium on the 
implementation of new IFQ programs until October 1, 2000. An IFQ is 
defined in the Magnuson-Stevens Act as, ``a Federal permit under a 
limited access system to harvest a quantity of fish, expressed by a 
unit or units representing a percentage of the total allowable catch of 
a fishery that may be received or held for exclusive use by a person.''
    Management measures for the limited entry, fixed gear sablefish 
fishery have been carefully designed not to violate this IFQ 
prohibition. As with the 1997 equal cumulative limit fishery, the 
Council recommended using overhead guidelines in setting the cumulative 
limits for each tier and for the overall expected catch for the total 
fishery. ``Overhead'' is defined as the difference between the expected 
harvest level and the total harvest that would occur if each permitted 
vessel took its full cumulative limit (maximum potential harvest). The 
concept of overhead is based on the premise that not all participants 
in this fishery will be able to harvest the cumulative limit. Because 
not all participants will be able to harvest the cumulative limits, and 
the remaining fish will be made available to others in the fleet, the 
cumulative limits are not held for ``exclusive use by a person.'' These 
limits are merely caps on what the most productive members of each tier 
may harvest during the regular season. NMFS considers a fishery where 
all participants have the opportunity to catch a cumulative limit and 
they are all able to catch that limit to be an IFQ program. The Council 
recommended setting cumulative limits and season lengths in 1998 and 
beyond to achieve a projected overhead, based on the most reasonable 
assumptions, of at least 25 percent and an overhead, based on worst-
case assumptions, of at least 15 percent for the fleet as a whole. The 
goal overhead for any single tier

[[Page 38107]]

would be at least 15 percent, based on the most reasonable assumptions. 
Overhead provisions ensure that fishery participants do not have 
exclusive use of the cumulative limits. Any fish that is not harvested 
in the cumulative limit fishery will be redistributed in another catch 
opportunity during the mop-up fishery. NMFS is satisfied that a 
management program based on these conservative overhead guidelines will 
not result in all participating fishers being able to catch their full 
cumulative limits and that such a program will, therefore, not be an 
IFQ program. NMFS agrees that a longer season would be more desirable 
for its safety benefits. However, a longer season is not possible under 
the current IFQ moratorium, and would not achieve the Council's goal of 
ending the unrestricted derby with a management program that recognizes 
historic and recent participation.
     Comment 10: Adequate consideration has not been given to 
alternative means of achieving the program's objectives. Alternatives 
to the three-tier program include management by equal allocation of 
sablefish for all limited entry permit holders, as in 1997.
     Response: NMFS disagrees that adequate consideration has not been 
given to alternative means of achieving the program's objectives. The 
history of Council deliberation regarding this management system was 
described in the preamble to the proposed rule. The Council 
specifically considered, analyzed, and rejected options that provide 
equal allocation of sablefish for all permit holders as having too 
great a redistributive effect on the fishery. Because an option was not 
adopted does not mean that it was not considered.
    The 1997 management scheme for the limited entry, fixed gear 
sablefish fishery set equal cumulative limits for all limited entry 
permit holders with sablefish endorsements. This scheme was 
specifically adopted for 1 year only because a long-term equal limits 
policy would have had significant adverse social and economic effects. 
This option, in addition to an option to set monthly equal cumulative 
limits, was included in the Council's decisional analysis for the 
management of this fishery in 1998 and beyond. In addition to these 
options, the Council considered a status quo derby option, three 
different three-tier options, and one four-tier option. The Council 
thoroughly analyzed and considered all seven management options before 
choosing the three-tier program implemented by this rule.
    Comment 11: One commenter opposed to the rule supported the single 
period equal cumulative limit with mop-up option. The commenter noted 
that the Council's analysis for this issue showed that only 18 percent 
of fishery participants would experience a greater than 5-percent 
decrease in their incomes, making this less than NMFS's standard 
``significant impact'' criteria of 20 percent.
     Response: This comment appears to refer to NMFS criteria for 
determining whether an action will have a significant economic impact 
on a substantial number of small entities, a determination NMFS makes 
pursuant to the Regulatory Flexibility Act (RFA). NMFS considers an 
impact to be ``significant'' if it results in a reduction in annual 
gross revenues by more than 5 percent, an increase in annual compliance 
costs of greater than 5 percent, compliance costs at least 10 percent 
higher than for large entities, compliance costs that require 
significant capital expenditures, or the likelihood that 2 percent of 
the small entities would be forced out of business. NMFS considers a 
``substantial number'' of small entities to be more than 20 percent of 
those small entities affected by the regulation that are engaged in the 
fishery. This determination is discussed in the Classification section 
of this rule, and analyzed in the EA/RIR/IRFA/FRFA for this action.
    The Council set an equal cumulative limit regime in 1997 forall 
sablefish endorsement holders with the understanding that such a 
division of fishing opportunities within a fleet with vastly differing 
historical fishery participation rates and dependence levels would be 
an unfair allocation as a long-term policy. In the final rule 
implementing the 1997 regime, NMFS stated that, while the equal 
cumulative limit regime was preferable to a derby, the agency would 
support a 1998 management system that better reflected historic and 
more recent levels of fishery participation. NMFS does not agree that 
an equal allocation for all sablefish endorsement holders is an 
appropriate management option for this fishery. Although the single 
period equal cumulative limit option would have resulted in fewer 
businesses with economic loss, the degree of impact on those businesses 
would have been much greater. Those businesses that would have lost 
economically under this option would have lost revenue to a greater 
degree than those businesses losing revenue under any of the tier 
options. Comparisons of revenue losses and gains under the different 
management options considered by the Council are analyzed in the EA/
RIR/IRFA and FRFA for this action. There is a higher likelihood that 
applying the NMFS RFA criteria to a management measure to implement a 
long-term policy of equal cumulative limits would have resulted in a 
finding of significant economic impacts to fleet participants on the 
basis of the standard that more than 2 of participating small 
businesses could have been forced to cease operations. Thus, while the 
three-tier program results in a greater number of businesses 
experiencing losses, those losses are smaller, and the impacts of the 
new management regime are spread more evenly through the fleet.
     Comment 12: Equal opportunity to access the fisheries is the fair 
and long-established approach to fishery management. There is no 
justification for managing this one fishery differently from other West 
Coast fisheries. Monthly trip limits have worked for trawlers, why 
can't they be used for the longline and pot sablefish fishery?
     Response: Management of the trawl and longline fishery for 
sablefish diverged in 1987, when the Council established constraining 
trip limits for the trawl fishery, but did not set trip limits for the 
non-trawl fishery. Since then, the fisheries have developed in 
different manners. A sudden shift to monthly trip limits for the non-
trawl fishery would have drastic reallocative impacts on the fishery, 
which the Council specifically wanted to avoid. While equal trip limits 
could be imposed on the fixed gear fleet, the effect would be, and was 
in 1997, very different than for trawl vessels because of the different 
management paths these two gear groups have taken. The trawl fishery 
reached its current trip limit levels over a period of many years, with 
some downward adjustments made each year. The sudden imposition of 
today's limits on a trawl fleet previously constrained only by season 
length would be extremely reallocative and disruptive. When the size of 
harvests is changed dramatically and suddenly, rather than over time, 
greater dislocations result, both in terms of labor and business, as 
well as personal capital. The monthly trip limit for trawlers is not 
without problems. An overcapitalized fleet fishing on relatively low 
trip limits in a multi-species fishery may have high discard rates, 
with reduced economic viability for many of the fishery participants. 
Any management scheme has drawbacks, and the Council must balance all 
competing factors in choosing a management regime for any fishery.
     Comment 13: If a permit received an endorsement, the Council 
should allow permit holders who did not qualify for limited entry 
permits to use their vessel

[[Page 38108]]

catch history, rather than just the permit catch history, to qualify 
that permit for tier placement.
     Response: Permit catch history includes the catch history of the 
vessel(s) that initially qualified for the permit and subsequent catch 
histories accrued when the limited entry permit or permit rights were 
associated with other vessels. This comment suggests that a permit 
holder who purchased a permit after the limited entry program went into 
effect should be able to add his or her personal vessel's pre-1994 
catch history to the pre-1994 catch history of the vessel that 
initially qualified for the purchased permit.
    It has been the Council's policy to allow permit catch history to 
include a vessel's catch only from a time when that vessel was 
associated with the permit. Permit catch history includes the catch 
history of the vessel that initially qualified for the permit (before 
1994), plus any catch history accumulated by vessels using that permit 
after issuance (1994 - present). It would be inconsistent with historic 
Council and NMFS policy to change these parameters for vessel and 
permit catch history for the three-tier program. To the degree 
possible, it is important to maintain consistent policy so that people 
can move in and out of the fishery and plan their fishery investments. 
Changing a policy that has been consistently followed since 1989 would 
create uncertainty about future policies for current participants and 
new entrants, and would require substantial justification.
    A different set of qualifying histories would require redesign of 
the entire program, with the result being a different set of permit 
owners benefitting and losing under the new qualifying histories. If 
the proposal in this comment were adopted, either the qualifying 
requirements for the tiers would have to be raised to maintain a 
similar number of permits in each tier, or the cumulative limits for 
all vessels would have to be reduced in order to accommodate a greater 
number of permits in higher tiers. The net effect in the former case is 
that some permits would be moved down so that others could move up, or 
that everyone would experience a decrease in his or her harvest so that 
more permits could move up.
    Comment 14: In 1992, the Council established a window period for 
future sablefish access limitation programs with a 1991 cutoff date. A 
commenter noted that fishing business decisions were based on this 
cutoff date and that, for this reason, his West Coast landings after 
1991 are not as high as they would have been if he had known that there 
would be a later cutoff date.
     Response: On February 5, 1992, NMFS published a Notice of Control 
Date (57 FR 4394), indicating that the Council was considering further 
access restrictions to the limited entry groundfish fisheries. At that 
time, the Council intended to consider individual quota (IQ) programs 
for West Coast halibut and sablefish fisheries. In the Notice of 
Control Date, NMFS stated, ``If IQ programs are adopted, the Council 
has expressed its intent to exclude from consideration fishing activity 
occurring after November 13, 1991, in establishing priorities for 
issuance and shares of individual quotas for these fisheries.'' The 
notice also explained that IQ programs were only a potential future 
management program, and that setting a control date was intended to 
``discourage speculative entry into these fisheries (sablefish and 
halibut) while discussions on access control continues.'' Just as the 
Council prepared to take final action on whether to implement an IQ 
program, it received a letter from the West Coast congressional 
delegation requesting that it defer action until national policy 
guidance could be developed. The Council delayed action in response to 
this letter and the industry controversy surrounding the issue. 
Subsequently, Congress enacted a moratorium on new IFQ programs.
    On August 1, 1995, NMFS published another Notice of Control Date 
(60 FR 39144), this time stating that the Council was considering 
establishing a sablefish endorsement program for limited entry, fixed 
gear permit holders to control participation or effort in the regular 
sablefish season. The notice read ``If a limited entry program is 
established, the Council is considering June 29, 1995, as a possible 
control date. Consideration of a control date is intended to discourage 
new entry by nontrawl `A'permit holders into the sablefish fishery 
based on economic speculation during the Council's deliberation on the 
issues.'' This notice also explained that the Council might choose a 
different control date or might choose a management regime thatdid not 
make use of a control date. The purpose of a published notice of 
control date was to prevent fishers from rushing into the fishery in 
the hopes of accumulating catch history for possible future management 
schemes.
    The sablefish endorsement program and the Council's recommendation 
for a three-tier management program have the same 11-year qualification 
period of 1984 through 1994. This qualification period incorporates 
catch over a long period and includes both historic and recent 
participation. It also accounts for the fact that some fishers may 
depend on different fisheries in different years or may have some years 
of relatively low catch for reasons outside their control.
    The use of control dates is a difficult issue. Control dates are 
necessary for the protection of the resources and the fishers that are 
dependent on the fishery. However, when a policy is not developed 
fairly soon after the issuance of the control date, so many changes 
occur in the fishery that adherence to old control dates lead to 
perceived inequities. The need to maintain the control date is 
difficult to balance with the need to account for changes in the 
fishery. One way to resolve this balance is to recognize that one of 
the purposes of the qualification criteria is to establish degree of 
dependence on the fishery. If the Council had not set the 1991 control 
date, the commenter may have made investments and fished at a level 
that established a degree of dependence entitling his or her permit to 
qualify for a higher tier. However, during the intervening years, such 
investment was not made, and a greater degree of dependence on future 
income from sablefish was not established. There is a greater 
probability that the commenter's fishing enterprise will be able to 
withstand a harvest reduction associated with assignment to a lower 
tier, or the need to purchase a permit for a higher tier, than an 
enterprise that has harvested at a higher rate. It is also possible, 
depending on his or her catch history, that, even in the lowest tier, 
the commenter will experience an increase relative to recent harvests.
     Comment 15: A commenter suggested that the qualifying amount for 
Tier 1 should be lower than it is, because some long-time participants 
in the fishery may be placed in Tier 2.
     Response: As discussed in this document and in the preamble to the 
proposed rule for the three-tier program, the tier qualification 
amounts are based on the largest breaks between a ranking of the 
cumulative catch histories of all of the limited entry permits with 
sablefish endorsements. A permit's tier placement reflects the catch 
history associated with that permit, as compared with the catch 
histories associated with all of the other permits with sablefish 
endorsements. These 163 permits are associated with a wide range of 
cumulative catch histories, from under 40,000 lb (18.14 mt) cumulative 
catch history from 1984 through 1994 to over 3,000,000 lb (1,360.78 mt) 
cumulative catch history during that same period. The breakpoints in 
this three-tier program fall at levels where

[[Page 38109]]

there were large and obvious divisions between groupings of permit 
catch histories.
    Qualification requirements have to do not only with being a fisher 
and a boat owner, but also with the level of participation in the fixed 
gear sablefish fishery. A long-term owner in the fishery and steady 
participant should end up in a tier somewhat reflective of his or her 
general harvest levels. Because the program cannot provide individual 
allocations due to the Magnuson-Stevens Act's moratorium on IQ 
programs, there will inevitably be some reallocation from historic 
catch shares; some fishers will receive more than their demonstrated 
production levels and others will receive less. To those who sold a 
vessel or permit with catch history or who recently invested in a 
vessel with little catch history, many notices have been given since 
the close of the 1988 limited entry window period that access rules for 
the fishery might change overtime.
     Comment 16: If there is to be a tiered system, the regulations 
should have an appeal procedure under which hardship circumstances 
adversely affecting an individual boat owner's tier placement can be 
heard and placement upgraded if adequately justified.
     Response: A permit holder eligible for participation in the three-
tier program has the opportunity to appeal his or her permit's tier 
placement if that permit holder believes that the permit has been 
placed in the wrong tier based on incorrect information about the catch 
history associated with that permit. Like the sablefish endorsement 
program, the three-tier program does not include a hardship provision 
for tier placement. The three-tier program has a long qualifying period 
(1984 through 1994) that encompasses the limited entry window period 
plus more recent years.
    Tier assignments are based on catch history of the permit, which 
includes the catch history of the vessel that initially qualified for 
the permit during the time before the permit was issued, plus any 
subsequent catch made by vessels operating under the permit. The 
qualifying window period for limited entry permits was July 11, 1984, 
through August 1, 1988. Most vessels that qualified for an initial 
limited entry permit based on personal hardship had to have been 
fishing before the end of the limited entry qualifying period. Every 
permit should have a long permit history, except for those that 
qualified under vessel construction or conversion criteria.
    The vessel construction/conversion criteria required that 
construction on the vessel must have been started before 1988 and 
completed by September 1990. Vessels qualifying under this provision 
had at least 4 years of fishing opportunity during the three-tier 
window period, except where unexpected circumstances may have prevented 
construction completion before September 1990. A construction history 
running from before August 1, 1988 through September 1990 or later 
demonstrates some degree of ability to survive financially without 
substantial fishing income.
    Vessels entering the fishery for the first time in 1991, or later, 
arrived in the fishery when there were only short derby fishing 
opportunities and after the Council had provided notice of impending 
changes to fishery access rules. A vessel that was a high producer 
during the last four derbies in the three-tier qualification period 
(1991 through 1994) may have established a high enough permit history 
to qualify that permit for Tier 2. Conversely, low-producing vessels 
that participated only in the 1991 through 1994 derbies have shown a 
relatively low level of dependence on the fishery. Vessels that entered 
the fishery at a later date had less of an opportunity to qualify for a 
higher tier assignment than vessels with a long history of fishery 
participation.
     Comment 17: A commenter suggested that, if the tier system is 
approved, upon death of a permit holder or sale of any permit, the 
permit's associated cumulative limit should be forfeited into the total 
amount available to all sablefish endorsement holders, to be divided 
between active permits.
     Response: NMFS is uncertain exactly how this proposal would work. 
It appears that the proposal is to make sablefish harvesting a non-
transferable privilege, as opposed to the other fishing privileges 
conferred by permit ownership. Similar provisions have been considered 
in the past, but rejected because of complications having to do with 
methods by which ``sales'' can be circumvented, and defining deaths 
where partnerships or corporations are involved in the ownership. The 
three-tier program is a program to allocate the fixed gear portion of 
the limited entry sablefish allocation between participants in the 
regular fishery; it is not a capacity reduction program. However, the 
Council has expressed an interest in capacity reduction programs, and 
this idea might be considered during future Council efforts to develop 
capacity reduction programs.

Comments Supporting the Rule

     Comment 18: The three-tier plan is equitable because it recognizes 
historic dependence on and investment in the fishery as a rational 
method of fishery management. The 11-year window period of 1984 through 
1994 for the three-tier program is inclusive of both historical 
participation and (at the time of program development) current 
dependence upon the fishery. Using catch history to allocate fish is 
the best method of distributing reductions in fishing opportunity 
through an overcapitalized fleet. The time has come to implement a 
management regime that will maintain a semblance of economic stability 
and continued participation in a long-established fishery.
    This three-tier program is also a compromise that gives low level 
participants a higher harvest catch level than they have historically 
enjoyed, while greatly reducing the poundage of the high level 
producers. Vessels in Tier 1 will lose about 3.2 percent of their total 
catch, while vessels in Tiers 2 and 3 are expected to gain 1.0 percent 
and 0.7 percent respectively. Reallocation of proportional catch share 
within and between permit holders in each tier is relatively modest.
    The length of the qualifying period and the lack of an exception 
for personal hardship represents a balance in the consideration of the 
dependence of long-term producers and more recent entrants. For owners 
of permits with a long catch history, the lack of a hardship provision 
is another way of weighing the degree of dependence established in the 
fishery. For the three-tier program, the question is not whether a 
vessel will qualify for a tier assignment, but which tier assignment 
the associated permit will receive. Owners of permits not qualifying 
for a higher tier may move to a higher tier by purchasing a higher tier 
permit, just as people who have not yet entered the fishery will have 
to do to enter even the lowest tier.
     Response: This comment refers in part to analysis in the EA/RIR/
IRFA for this issue that shows how the distribution of catch shares 
between vessels in the fishery would change upon implementation of the 
three-tier program. NMFS agrees that the three-tier program takes both 
historic and recent participation into account in setting qualification 
levels for the three tiers. NMFS also agrees that the three-tier 
program has been carefully designed to spread the burden of more 
rational management among fleet members. NMFS notes that many of the 
comments in favor of the three-tier program were received from persons 
who would have been negatively affected (as compared with status quo 
derby management) by either the equal cumulative limits program or the 
three-tier program, but

[[Page 38110]]

who prefer the three-tier program for its recognition of differing 
fishery participation levels. However, NMFS also notes that, despite 
this effort to reduce the reallocative effects of this program, the 
degree of reallocation of proportional catch shares within the tiers is 
still substantial, with some vessels experiencing increases and others 
decreases.
     Comment 19: The proposed rule would provide an effective mechanism 
for the prevention of overfishing and the achievement of optimum yield 
by providing close control over harvesting conducted by an over-
capitalized fleet. The proposed rule would enhance conservation of the 
fishery by making the fishery easier to manage, increasing the 
likelihood that harvests will remain within the harvest guideline, thus 
improving the sustainability of the fishery. For these reasons, the 
three-tier program complies with national standard 1.
     Response: NMFS disagrees that the fishery is necessarily easier to 
manage under the three-tier system than it would be under the derby. 
The sum of the cumulative limits for all vessels in the fishery 
substantially exceeds the total amount of available fish. Cumulative 
limit management with overhead allows a longer fishery than 
unrestricted derby management, at a similar degree of risk and 
conservativeness. Additionally, there are enforcement and monitoring 
problems with cumulative limits that must be recognized. Under derby 
management, no incentive exists for vessels to under-report landings. 
Under cumulative limit management, vessels able to take their 
cumulative limits in the available time might under-report their 
landing in order to land more sablefish than the limits allow. All of 
these factors were taken into account when the Council and NMFS 
balanced conservation, safety, allocation, and other management 
objectives in selecting what they determined to be the best management 
option.
     Comment 20: The three-tier program complies with national standard 
2, which states that ``Conservation and management measures shall be 
based on the best scientific information available.'' Not only did the 
Council use the most current data and analyses in shaping the three-
tier program, but also, when analysts discovered errors in the database 
of permit catch histories, those mistakes were properly and timely 
disclosed, and the Council reviewed and reconsidered its decisions 
based on the new data.
     Response: NMFS agrees. Changes from the proposed rule to the final 
rule result from decisions made at the Council's March 1998 meeting, 
and are described above.
     Comment 21: According to one commenter, opponents of the three-
tier program argue that catch history should not be used to allocate 
the sablefish resource and that equal allocation is the most fair 
allocation. That same commenter noted that ``fairness of allocation 
(national standard 4) is in the eye of the receiver.'' This commenter 
pointed out that the 1997 equal limits management allowed permits that 
had caught only 16,000 pounds in a single year to fish toward a limit 
of 34,000 pounds, also allocating 34,000 pounds to permits with 
historical annual catches of 300,000 pounds. Additionally, several 
commenters noted that, in the three-tier program, fishers in Tiers 1 
and 2 will lose catch opportunity, and fishers in Tier 3 will gain 
catch opportunity, commenting that this program is a well compromised 
allocation.
     Response: As indicated in the response to Comment 11, NMFS agrees 
that the three-tier program, which spreads the burden of catch 
reductions more evenly through the fleet, is a fairer allocation than a 
long-term equal cumulative limit allocation.
     Comment 22: The three-tier program is an initial step toward 
capacity reduction. Before capacity can be reduced, it must be 
prevented from increasing. By assigning each permit an allocation, 
fleet harvest capacity cannot increase because the incentive to catch 
more fish disappears. In this way, the program complies with national 
standard 5, which states that ``conservation and management measures 
shall, where practicable, consider efficiency in the utilization of 
fishery resources; except that no such measure shall have economic 
allocation as its sole purpose.''
     Response: NMFS partially agrees. As stated in the responses to 
Comment 3, derby-style fishery management encourages each individual in 
a given fleet to expand his or her vessel's catching capacity to better 
compete with all of the other vessels in the fleet. Even if a limited 
entry program restricts the number of vessels in the derby, individual 
fishers have incentives to improve the competitive abilities of their 
vessels. Derby management inevitably leads to the cumulative catching 
ability of the fleet exceeding the actual capacity needed to harvest 
the available resource. The three-tier program reduces but does not end 
this derby-style management, and attempts to match permits to tiers 
based on the cumulative catch associated with those permits. During the 
fishery, a portion of vessels in each of the tiers will closely match 
the catching ability associated with the available cumulative limit and 
the time available, while some vessels will have more than enough 
catching ability, and some vessels will have less catching ability than 
needed for taking that cumulative limit within the available time.
     Comment 23: One commenter stated that he appreciated the stability 
this program will bring to a fishery that has a history of management 
difficulties. The commenter noted that the stability of this program 
will allow him to assure his crew members that otherwise lean years can 
be filled out by catch in the sablefish season, and anticipated that 
this stability would ensure loyalty from his experienced crew members 
throughout the year.
    The commenter further noted that the three-tier program will also 
allow flexibility to participate in multiple fisheries. The three-tier 
program, with a fixed fishery period and a mop-up following shortly 
afterwards, allows fishers to get their gear on and off their boats and 
to pursue the multiple fisheries necessary to make a year round living. 
The commenter also was pleased that the three-tier program accounts for 
the different fishing strategies of the many fleet participants, the 
three-tier program follows national standard 6, which states that 
``Conservation and management measures shall take into account and 
allow for variations among, and contingencies in, fisheries, fishery 
resources, and catches.''
     Response: In developing the three-tier program, one of the 
Council's goals was to begin to bring stability and rational management 
to a frenetic and unstable fishery. The Council and NMFS recognize that 
fixed gear fishers participate in a variety of fisheries throughout the 
year, and season start dates for this fishery are set to accommodate as 
many alternative fishery schedules as possible.
     Comment 24: The fixed gear sablefish fleet is diverse and divided 
into opposing categories: long term participants and new entrants, 
large catch histories and small catch histories, large boat and small 
boats. This program causes some losses and gains for some coastal 
communities because we all deliver to and support coastal communities, 
not because of a disregard for coastal communities. The three-tier 
program complies with national standard 8, which states that the 
interests of fishing communities be taken into account when 
implementing conservation and management measures.

[[Page 38111]]

     Response: NMFS agrees. As stated in the response to Comment 8, the 
three-tier program is expected to cause little change in the inter-port 
distribution of fixed gear sablefish landings, and less variation in 
inter-port distribution than would have occurred under a long-term 
system of equal cumulative limits. All of the vessels involved in this 
fishery are considered small businesses, and all of the boats in the 
fishery deliver their fish to coastal communities. National standard 8, 
which addresses the dependence of fishing communities on fishery 
resources, does not constitute a basis for allocating resources to 
specific fishing communities.
    Comment 25: One commenter stated that a longer fishery, even if it 
is longer only by several days, allows him to keep and handle his 
bycatch. Open derbies lead to people setting out more gear than they 
can haul in a given time, resulting in a waste of gear and hooked fish. 
At the other end of the scale, a monthly trip limit fishery would 
unquestionably lead to high-grading and increased bycatch on a regular 
basis. The commenter noted that this longer fishery will also allow him 
to handle his gear more carefully, making him less likely to lose gear. 
By minimizing bycatch, the three-tier program complies with national 
standard 9.
     Response: Bycatch can occur for many reasons. In a derby fishery, 
where all vessels are participating at their highest possible rates of 
fishing, fishers may not have the time to fish in a selective manner. 
Fish would be hauled on board as quickly as possible without regard to 
species or size, and then a portion would be discarded according to 
market or regulatory constraints on what catch should and may be 
retained. Conversely, in a fishery where all participants have ample 
time to sort through their catch and fish until their vessels are 
filled with the highest value fish, many lower value fish may be 
discarded in the process. The three-tier program will allow some 
fishers to slow their rates of fishing and to improve the selectivity 
of their fishing methods. To some extent, however, selectivity in 
fishing is a matter of personal ethics and fishing skill. NMFS does 
agree that a slower paced fishery should have the much-desired result 
of reducing gear abandonment and ghostfishing by lost gear.
     Comment 26: The three-tier program provides increased safety with 
respect to the status quo derby because fishers will know how much fish 
they are allowed to catch and the season can be tailored to more 
favorable weather patterns. The three-tier program allows 6 days 
fishing while an unrestricted derby would probably allow 2. Several 
commenters noted that any increase in the number of days in the 
fishery, even if it is from 2 days to 6 days, is a safety improvement. 
These commenters concluded that, for these reasons, the three-tier 
program complies with national standard 10, which states that 
``Conservation and management measures shall, to the extent 
practicable, promote the safety of human life at sea.'' Finally, one 
commenter noted with irony that if the Council had been able to 
implement an IFQ program, the fishery could be several months long, 
rather than several days long.
     Response: NMFS agrees that a 6-day fishery provides greater safety 
than a 2-day fishery. It is unfortunate that overcapitalization and the 
reduced 1998 sablefish harvest guideline level have severely shortened 
the fishery duration. NMFS expects that the primary safety benefit of a 
6-day fishery over a 2-day fishery will occur for the approximately 
one-third of the fleet easily able to take the allotted cumulative 
limit during the time allowed. For the other two-thirds of the fleet 
still operating in the derby mode, the effect of this action on safety 
is uncertain. Income will increase as the length of the fishery 
increases, and it is possible that risk-taking behavior will decline as 
the amount of potential income increases. However, the Council decision 
documents show that these are not conclusive findings.
    NMFS also agrees that IFQ management for this fishery nwould allow 
fishers adequate time to catch sablefish poundage associated with their 
tiers. If this fishery were managed with an IFQ program (an option 
currently prohibited under the Magnuson-Stevens Act), regardless of how 
the available catch were allocated between permits, each permit owner 
would likely be able to catch his or her entire allocation at any time 
during the year, and likely without landings limits.
     Comment 27: The three-tier program complies with section 303(b)(6) 
of the Magnuson-Stevens Act, which states that, ``Any fishery 
management plan which is prepared by any Council, or by the Secretary, 
with respect to any fishery, may -- (6) establish a limited access 
system for the fishery in order to achieve optimum yield if, in 
developing such system, the Council and the Secretary take into 
account--(A) present participation in the fishery, (B) historical 
fishing practices in, and dependence on, the fishery, (C) the economics 
of the fishery, (D) the capability of fishing vessels used in the 
fishery to engage in other fisheries, (E) the cultural and social 
framework relevant to the fishery and any affected fishing communities, 
and (F) any other relevant considerations.'' In making its 
recommendations for this program, the Council considered all of the 
factors required under this section and, has therefore, met the 
requirements of this section.
     Response: NMFS agrees, see also response to Comment 2.
    Comment 28: As stated in the proposed rule for the three-tier 
program, the Council initially decided not to allow permit owners with 
permits that were the result of a combination of multiple permits to 
determine their tier placement based on the combined catch histories of 
those original permits. This decision was based on a study that showed 
that no individuals currently operating in the fishery would be 
affected by that restriction. After further study, however, analysts 
showed that this first assumption was incorrect and that this decision 
would negatively affect a few individuals who had combined their 
permits long before discussions of the three-tier program. We the 
commenters who would have been harmed by this action, supported the 
Council's March 1998 recommendation to allow permits that were a result 
of a combination made before March 12, 1998, to combine their 
cumulative catch histories for tier qualification status.
     Response: NMFS agrees. The Council's initial recommendation on 
this issue was based on an incorrect analysis. After receiving more 
complete information, the Council revised that recommendation to allow 
permits that were the result of a combination of multiple permits to 
receive tier placement based on the combined cumulative catch histories 
of the permits that went into the combination. Regulatory language 
detailed in the proposed rule has been changed to reflect public and 
Council comments on this issue.
     Comment 29: One commenter supports the three-tier program, but 
would like to be allowed to set his pots for 24 hours before the 
opening of the regular fishery, since it takes at least 48 hours for 
him to set all of his pots.
     Response: As stated in the response to Comment 7, in 1995 and 
1996, pot fishers were allowed to set their gear before the start of 
the regular fishery. Longliners were opposed to this practice because 
it gave pot fishers the chance to choose and then monopolize premium 
fishing ground positions before the start of the derby. Because of 
these concerns and because the 1997 10-day fishery period was expected 
to provide all pot gear participants with sufficient time to set and 
tend their gear, this pot pre-set

[[Page 38112]]

option was not allowed in the 1997 regular fishery. The Council 
reconsidered a pot pre-set allowance for the three-tier system, but 
concluded that the tiered cumulative limits would constrain pot fisher 
catch levels enough so that they would not need to fish at a speed that 
would require a pre-set allowance.
     Comment 30: Several commenters who have participated in and/or 
have studied the Alaska halibut and sablefish IFQ program support 
future consideration of an IFQ program in the fixed gear sablefish 
fishery once the Magnuson-Stevens Act moratorium is lifted.
     Response: A Council may not submit and the Secretary may not 
approve or implement an IFQ program before October 1, 2000. However, a 
Council may begin development of an IFQ program before that date.
     Comment 31: The proposed rule would not implement an IFQ system. 
Under the Magnuson-Stevens Act and NMFS interpretation, for a program 
to be an IFQ program, it must grant permits that give recipients a 
privilege to harvest a specified percentage of the total annual catch 
(TAC). Unless sold or otherwise disposed of, that permit holder has an 
annual, guaranteed privilege to harvest that same percentage of the 
TAC. With the three-tier program, no person is guaranteed a percent of 
the harvest, fishers are merely separated into three different tiers 
with three different cumulative limits that they can then try to 
achieve in the given season. The ``overhead'' system embedded in the 
rule ensures that this program is not an IFQ system. The proposed rule 
would ensure that there is no guaranteed right to a specific amount of 
fish--the antithesis of an IFQ system.
     Response: NMFS agrees that the three-tier program is not an IFQ 
program. See response to Comment 9.

Classification

    Under 5 U.S.C. 553(d)(3), the Assistant Administrator finds good 
cause to waive the 30-day delay in effectiveness for this rule. August 
1 was chosen as a season opening date to promote safety and to allow 
fishers to participate in other fisheries aside from this directed 
sablefish fishery. In order to avoid a 2 to 3 day derby fishery this 
year and to allow the limited entry fixed gear sablefish fishery to 
fully benefit from the increased vessel safety of holding the regular 
and consequent mop-up seasons before the most difficult autumn weather, 
this rule must be made effective to allow implementation of the three-
tier program before the August 1, 1998, start date of the regular 
season. To this extent, to delay the effectiveness of this rule would 
be contrary to the public interest.
    This final rule has been determined to be not significant for the 
purposes of E.O. 12866.
    The Final Regulatory Flexibility Analysis (FRFA) consists of the 
FRFA supplemental analysis prepared by NMFS, the IRFA (as submitted by 
the Council and supplemented by the preamble to the proposed rule (63 
FR 19878, April 22, 1998)), and the preamble to this final rule. NMFS 
considers an impact to be ``significant'' if it results in a reduction 
in annual gross revenues by more than 5 percent, an increase in annual 
compliance costs of greater than 5 percent, compliance costs at least 
10 percent higher for small entities than for large entities, 
compliance costs that require significant capital expenditures, or the 
likelihood that 2 percent of the small entities would be forced out of 
business. NMFS considers a ``substantial number'' of small entities to 
be more than 20 percent of those small entities affected by the 
regulation that are engaged in the fishery.
    There are 163 limited entry, fixed gear permit owners with 
sablefish endorsements. All of the permit owners and vessels in the 
Pacific Coast, limited entry, fixed gear fleet are considered small 
entities. As indicated in the FRFA for this action, 42 permit holders 
with sablefish endorsements (26 percent) would suffer a greater than 5 
percent loss in total gross fishing revenue over what they would have 
been expected to earn if the open competition derby management had been 
continued for 1998.
    The Council initially reviewed six different management options 
aside from status quo, open competition derby management. Of those six 
options, two options would have resulted in fewer than 26 percent of 
endorsement holders suffering a greater than 5 percent loss in gross 
annual revenue. The Council considered continuing the status quo derby 
undesirable, expecting that a future policy of unrestricted derby 
fishing would cause significant negative social and economic impacts to 
fishery participants, with potentially grave safety consequences. An 
option to continue the 1997 style fishery management of a single period 
equal cumulative limit regime would have resulted in 18 percent of 
endorsement holders suffering a greater than 5 percent loss in total 
gross annual revenue. Although this option would have resulted in fewer 
businesses with significant economic loss, those businesses that would 
have lost economically under this option would have lost revenue to a 
greater degree than those businesses losing revenue under any of the 
tier options. This option would have also resulted in a greater 
proportion of the harvest being reallocated amongst fleet members than 
the proportion of harvest reallocation under the three-tier management 
program implemented by this rule. There is a higher likelihood that a 
management measure to implement a long-term policy of equal cumulative 
limits would have been found to have significant economic impacts to 
fleet participants on the basis of the standard that questions whether 
more than 2 percent of participating small businesses would have been 
forced to cease operations. Thus, while the option chosen by the 
Council results in a greater number of businesses with significant 
economic losses, the impacts of that option are spread more evenly 
through the fleet. The Council also specifically decided when it 
recommended a single period equal cumulative limit for 1997 that it 
would not recommend continuing such an option for 1998 because of the 
severe reallocative impacts.
    The other option that would have resulted in fewer than 26 percent 
of permit owners suffering a greater than 5 percent loss in gross 
annual revenue was a four-tiered access system. This option was 
projected as leading to greater than a 5 percent loss in gross annual 
revenue for 22 percent of permit holders with sablefish endorsements. 
One major impediment to Council recommendation of a four-tiered option 
was that maintaining an overhead to prevent designation as an IFQ 
system would have been more difficult under a four-tiered option. The 
greater the number of tiers in a tiered access system, the more likely 
it is that fishers will be able to achieve their tier limits, and the 
greater the likelihood that the agency would find the program to 
function as an IFQ. In an IFQ fishery, all fishers would be allowed to 
use as much time as necessary to catch whatever cumulative limits are 
available for the year. The Council chose the option that would have 
the least impact on fishers' revenues while still maintaining enough 
overhead to avoid the NMFS IFQ classification criteria and eliminating 
derby management.
    In addition to the single-period equal cumulative limit fishery, 
the three-tier options, the four-tier option and the status quo derby, 
the Council considered setting a year-round series of equal, monthly 
cumulative limits as an

[[Page 38113]]

option that could offer greater safety benefits than the three-tier 
program. However, a year-round fishery would have resulted in the 
greatest reallocation of catch among participants, and would have had 
significant, negative economic consequences for the greatest number of 
fleet participants. The Council was also concerned that this option 
would increase discard of sablefish. Finally, the Council expected that 
the effects of year-round cumulative trip limits in this fishery would 
be contrary to Magnuson-Stevens Act national standards on fairness and 
equity, and on providing for sustained participation and minimizing 
adverse effects on fishing communities.
    This action is not expected to result in an increase in annual 
compliance costs of greater than 5 percent, compliance costs at least 
10 percent higher for small entities than for large entities, 
compliance costs that require significant capital expenditures, or the 
likelihood that 2 percent of the small entities will be forced out of 
business.
    In summary, all of the affected entities are small entities. 
Therefore, there are no special provisions that can be inserted to 
affect small entities differently than large entities. The losses from 
one small entity turn to gains for another small entity. In order to 
eliminate the traditional, unrestricted derby fishery, some small 
entities will suffer negative economic impacts. The Council selected 
the legally-available option that would eliminate the traditional 
unrestricted derby, while minimizing the reallocation of catch.
    This rule contains a collection-of-information requirement subject 
to the Paperwork Reduction Act (PRA) that has been approved by the OMB 
under OMB Control Number 0648-0203. Notwithstanding any other provision 
of the law, no person is required to respond to, nor shall any person 
be subject to a penalty for failure to comply with, a collection of 
information subject to the requirements of the PRA, unless that 
collection of information displays a currently valid OMB Control 
Number. This rule's collection of information burden applies only to 
those permit owners who disagree with the initial NMFS tier assignment, 
and who wish to provide documentation to prove that they have in fact 
met the tier qualifications for the tier that they wish to have 
assigned to their permits. It is expected that the public reporting 
burden will be 2 hours to make an initial application and possible 
appeal. This is a one-time only collection-of-information, and this 
rule imposes no annual reporting and recordkeeping burden. Send 
comments regarding the collection-of-information burden or any other 
aspect of the information collection to NMFS and OMB (see ADDRESSES).

List of Subjects in 50 CFR Part 660

    Administrative practice and procedure, American Samoa, Fisheries, 
Fishing, Guam, Hawaiian Natives, Indians, Northern Mariana Islands, 
Reporting and recordkeeping requirements.

    Dated: July 9, 1998.
David L. Evans,
Deputy Assistant Administrator for Fisheries, National Marine Fisheries 
Service.
    For the reasons set out in the preamble, 50 CFR part 660 is amended 
as follows:

PART 660--FISHERIES OFF WEST COAST STATES AND IN THE WESTERN 
PACIFIC

    l. The authority citation for part 660 continues to read as 
follows:

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

    2. Section 660.323 is amended by revising paragraph (a)(2) to read 
as follows:


Sec. 660.323  Catch restrictions.

    (a) * * *
    (2) Nontrawl sablefish. This paragraph (a)(2) applies to the 
regular and mop-up seasons for the nontrawl limited entry sablefish 
fishery north of 36 deg. N. lat., except for paragraphs (a)(2)(ii), 
(iv), and (vii) of this section, which also apply to the open access 
fishery north of 36 deg. N. lat. Limited entry and open access fixed 
gear sablefish fishing south of 36 deg. N. lat. is governed by routine 
management measures imposed under paragraph (b) of this section.
    (i) Sablefish endorsement. A vessel may not participate in the 
regular or mop-up season for the nontrawl limited entry fishery, unless 
the vessel's owner holds (by ownership or otherwise) a limited entry 
permit for that vessel, affixed with both a gear endorsement for 
longline or trap (or pot) gear, and a sablefish endorsement.
    (ii) Pre-season closure--open access and limited entry fisheries. 
(A) Sablefish taken with fixed gear in the limited entry or open access 
fishery in the EEZ may not be retained or landed during the 48 hours 
immediately before the start of the regular season for the nontrawl 
limited entry sablefish fishery.
    (B) All fixed gear used to take and retain groundfish must be out 
of EEZ waters during the 48 hours immediately before the opening of the 
regular season for the nontrawl limited entry sablefish fishery.
    (iii) Regular season--nontrawl limited entry sablefish fishery. (A) 
The Regional Administrator will announce a season for waters north of 
36 deg. N. lat. to start on any day from August 1 through September 30, 
based on consultations with the Council, taking into account tidal 
conditions, Council meeting dates, alternative fishing opportunities, 
and industry comments.
    (B) During the regular season, each vessel with a limited entry 
permit with a sablefish endorsement that is registered for use with 
that vessel may land up to the cumulative trip limit announced for the 
tier to which the permit is assigned. Each permit will be assigned to 
one of three tiers. A cumulative trip limit is the maximum amount of 
sablefish that may be taken and retained, possessed, or landed per 
vessel in a specified period of time, with no limit on the number of 
landings or trips.
    (C) The Regional Administrator will annually calculate the length 
of the regular season and the size of the cumulative trip limit for 
each tier in accordance with the process specified in chapter 1 of the 
EA/RIR/IRFA for ``Fixed Gear Sablefish Tiered Cumulative Limits,'' 
dated February 1998, which is available from the Council. The season 
length and the size of the cumulative trip limits will vary depending 
on the amount of sablefish available for the regular and mop-up 
fisheries and the projected harvest for the fishery. The season will be 
set to be as long as possible, under the constraints described in 
chapter 1 of the EA/RIR/IRFA, up to a maximum season length of 10 days.
    (D) During the regular and mop-up season, limited entry nontrawl 
sablefish fishers may also be subject to trip limits to protect 
juvenile sablefish.
    (E) There will be no limited entry, daily trip limit fishery during 
the regular season.
    (iv) Post-season closure--limited entry and open access. No 
sablefish taken with fixed gear north of 36 deg. N. lat. during the 30 
hours immediately after the end of the regular season for the nontrawl 
limited entry sablefish fishery, may be retained. Sablefish taken and 
retained during the regular season may be possessed and landed during 
the 30-hour period. Gear may remain in water during the 30-hour post-
season closure. Fishers may not set or pull from the water fixed gear 
used to take and retain groundfish during the 30-hour post-season 
closure.
    (v) Mop-up season--limited entry fishery. A mop-up season to take 
the remainder of the limited entry nontrawl allocation will begin in 
waters north of

[[Page 38114]]

36 deg. N. lat. about 3 weeks, or as soon as practicable, after the end 
of the regular season. During the mop-up fishery, a cumulative trip 
limit will be imposed. A cumulative trip limit is the maximum amount of 
sablefish that may be taken and retained, possessed, or landed per 
vessel in a specified period of time, with no limit on the number of 
landings or trips. The length of the mop-up season and the amount of 
the cumulative trip limit, will be determined by the Regional 
Administrator in consultation with the Council or its designees, and 
will be based primarily on the amount of fish remaining in the limited 
entry nontrawl allocation, the amount of sablefish needed for the 
remainder of the daily trip limit fishery, and the number of mop-up 
participants anticipated. The Regional Administrator may determine that 
too little of the nontrawl allocation remains to conduct an orderly or 
manageable fishery, in which case there will not be a mop-up season. 
There will be no limited entry daily trip limit fishery during the mop-
up season.
    (vi) Other announcements. The dates and times that the regular 
season starts and ends (and trip limits on sablefish of all sizes are 
resumed), the size of the cumulative trip limits for the three tiers in 
the regular fishery, the dates and times for the 30-hour post-season 
closure, the dates and times that the mop-up season begins and ends, 
and the size of the cumulative trip limit for the mop-up fishery will 
be announced in the Federal Register, and may be modified. Unless 
otherwise announced, these seasons will begin and end at 12 noon on the 
specified date.
    (vii) Trip limits. Trip and/or frequency limits may be imposed in 
the limited entry fishery before and after the regular season, and 
after the mop-up season, under paragraph (b) of this section. Trip and/
or size limits to protect juvenile sablefish in the limited entry or 
open-access fisheries also may be imposed at any time under paragraph 
(b) of this section. Trip limits may be imposed in the open-access 
fishery at any time under paragraph (b) of this section.
* * * * *
    3. In Sec. 660.333, the first sentence of paragraph (c)(1), 
paragraphs (d) introductory text, (f)(2), and (h)(2)(iii) are revised 
to read as follows:


Sec. 660.333  Limited entry fishery--general.

* * * * *
    (c) Transfer and registration of limited entry permits and gear 
endorsements. (1) When the SFD transfers a limited entry permit, the 
SFD will reissue the permit in the name of the new permit holder with 
such gear and, if applicable, species endorsements and tier assignments 
as are eligible for transfer with the permit. * * *
* * * * *
    (d) Evidence and burden of proof. A vessel owner (or person holding 
limited entry rights under the express terms of a written contract) 
applying for issuance, renewal, transfer, or registration of a limited 
entry permit has the burden to provide evidence that qualification 
requirements are met. The owner of a permit endorsed for longline or 
trap (or pot) gear applying for a sablefish endorsement or a tier 
assignment under Sec. 660.336(c) or (d) has the burden to submit 
evidence to prove that qualification requirements are met. The 
following evidentiary standards apply:
* * * * *
    (f) * * *
    (2) Gear endorsements, sablefish endorsements, and sablefish tier 
assignments may not be transferred separately from the limited entry 
permit.
* * * * *
    (h) * * *
    (2) * * *
    (iii) 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. With 
respect to permits endorsed for nontrawl limited entry gear, a 
sablefish endorsement will be issued for the new permit only if all of 
the permits being combined have sablefish endorsements. If two or more 
permits with sablefish endorsements are combined, the new permit will 
receive the same tier assignment as the tier with the largest 
cumulative landing limit of the permits being combined. The vessel 
harvest capacity rating for each of the permits being combined is that 
indicated in Table 2 of this part for the LOA (in feet) endorsed on the 
respective limited entry permit. Harvest capacity ratings for fractions 
of a foot in vessel length will be determined by multiplying the 
fraction of a foot in vessel length by the difference in the two 
ratings assigned to the nearest integers of vessel length. The length 
rating for the combined permit is that indicated for the sum of the 
vessel harvest capacity ratings for each permit being combined. If that 
sum falls between the sums for two adjacent lengths on Table 2 of this 
part, the length rating shall be the higher length.
* * * * *
    4. In Sec. 660.336, the section heading paragraphs (a)(1), (a)(2), 
(b) introductory text, (b)(1), (c) heading, and paragraph (c)(1), are 
revised; and paragraphs (b)(3), (d), and (e) are added to read as 
follows:


Sec. 660.336  Limited entry permits--sablefish endorsement and tier 
assignment.

    (a) * * *
    (1) A sablefish endorsement with a tier assignment will be affixed 
to the permit and will remain valid when the permit is transferred.
    (2) A sablefish endorsement and its associated tier assignment are 
not separable from the limited entry permit, and therefore may not be 
transferred separately from the limited entry permit.
    (b) Endorsement and tier assignment qualifying criteria. A 
sablefish endorsement will be affixed to any limited entry permit that 
meets the sablefish endorsement qualifying criteria and for which the 
owner submits a timely application. Limited entry permits with 
sablefish endorsements will be assigned to one of three different 
cumulative trip limit tiers, based on the qualifying catch history of 
the permit.
    (1) Permit catch history will be used to determine whether a permit 
meets the qualifying criteria for a fixed gear sablefish endorsement 
and to determine the appropriate tier assignment for endorsed permits. 
Permit catch history includes the catch history of the vessel(s) that 
initially qualified for the permit, and subsequent catch histories 
accrued when the limited entry permit or permit rights were associated 
with other vessels. The catch history of a permit also includes the 
catch of any interim permit held by the current owner of the permit 
during the appeal of an initial NMFS decision to deny the initial 
issuance of a limited entry permit, but only if the appeal for which an 
interim permit was issued was lost by the appellant, and the owner's 
current permit was used by the owner in the 1995 limited entry 
sablefish fishery. The catch history of an interim permit where the 
full ``A'' permit was ultimately granted will also be considered part 
of the catch history of the ``A'' permit. If the current permit is the 
result of the combination of multiple permits, then for the combined 
permit to qualify for an endorsement, at least one of the permits that 
were combined must have had sufficient sablefish history to qualify for 
an endorsement; or the permit must qualify based on catch occurring 
after it was combined, but taken within the qualifying period. If the 
current permit is the result of the combination of multiple permits, 
the combined catch histories of all of the permits that were combined 
to create a new permit before March 12, 1998, will

[[Page 38115]]

be used in calculating the tier assignment for the resultant permit, 
together with any catch history (during the qualifying period) of the 
resultant permit. Only sablefish catch regulated by this part that was 
taken with longline or fish trap (or pot) gear will be considered for 
this endorsement. Sablefish harvested illegally or landed illegally 
will not be considered for this endorsement.
* * * * *
    (3) Only limited entry, fixed gear permits with sablefish 
endorsements will receive cumulative trip limit tier assignments. The 
qualifying criteria for Tier 1 are: At least 898,000 lb (406,794 kg) 
cumulative round weight of sablefish caught with longline or trap (or 
pot) gear over the years 1984 through 1994. The qualifying criteria for 
Tier 2 are: At least 380,000 lb (172,365 kg), but no more than 897,999 
lb (406,793 kg) cumulative round weight of sablefish caught with 
longline or trap (or pot) gear over the years 1984 through 1994. Fixed 
gear permits with less than 380,000 lb (172,365 kg) cumulative round 
weight of sablefish caught with longline or trap (or pot) gear over the 
years 1984 through 1994 qualify for Tier 3. All catch must be sablefish 
managed under this part. Sablefish taken in tribal set aside fisheries 
does not qualify.
    (c) Issuance process for sablefish endorsements. (1) The SFD has 
notified each limited entry, fixed gear permit holder, by letter of 
qualification status, whether Pacific States Marine Fisheries 
Commission's Pacific Fisheries Information Network (PacFIN) records 
indicate that his or her permit qualifies for a sablefish endorsement. 
A person who has been notified by the SFD, by letter of qualification 
status, that his or her permit qualifies for a sablefish endorsement 
will be issued a revised limited entry permit with a sablefish 
endorsement if, by November 30, 1998, that person returns to the SFD 
the endorsement application and pays the one-time processing fee. No 
new applications for sablefish endorsements will be accepted after 
November 30, 1998.
* * * * *
    (d) Issuance process for tier assignments. (1) The SFD will notify 
each owner of a limited entry permit with a sablefish endorsement, by 
letter of qualification status, of the tier assignment for which his or 
her permit qualifies, as indicated by PacFIN records. The SFD will also 
send to the permit owner a tier assignment certificate.
    (2) If a permit owner believes there is sufficient evidence to show 
that his or her permit qualifies for a different tier than that listed 
in the letter of qualification status, that permit owner must, within 
30 days of the issuance of the SFD's letter of qualification status, 
submit information to the SFD to demonstrate that the permit qualifies 
for a different tier. Section 660.333(d) sets out the relevant 
evidentiary standards and burden of proof.
    (3) After review of the evidence submitted under paragraph (d)(2) 
of this section, and any additional information the SFD finds to be 
relevant, the SFD will issue a letter of determination notifying a 
permit owner of whether the evidence submitted is sufficient to alter 
the initial tier assignment. If the SFD determines the permit qualifies 
for a different tier, the permit owner will be issued a revised tier 
assignment certificate once the initial certificate is returned to the 
SFD for processing.
    (4) If a permit owner chooses to file an appeal of the 
determination under paragraph (d)(3) of this section, the appeal must 
be filed with the Regional Administrator within 30 days of the issuance 
of the letter of determination (at paragraph (d)(3) of this section). 
The appeal must be in writing and must allege facts or circumstances, 
and include credible evidence demonstrating why the permit qualifies 
for a different tier assignment. The appeal of a denial of an 
application for a different tier assignment will not be referred to the 
Council for a recommendation under Sec. 660.340(e).
    (5) Absent good cause for further delay, the Regional Administrator 
will issue a written decision on the appeal within 30 days of receipt 
of the appeal. The Regional Administrator's decision is the final 
administrative decision of the Department of Commerce as of the date of 
the decision.
    (e) Tier assignment certificates. For the 1998 season only, permit 
holders with sablefish endorsements will be issued certificates of tier 
assignment that are to be kept with and are considered part of their 
limited entry permits. When limited entry permit holders renew their 
permits for 1999, tier assignments for those limited entry permit 
holders with sablefish endorsements will be indicated directly on the 
limited entry permit.
[FR Doc. 98-18751 Filed 7-10-98; 9:51 am]
BILLING CODE 3510-22-F