[Federal Register Volume 63, Number 171 (Thursday, September 3, 1998)]
[Proposed Rules]
[Pages 46993-46995]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23797]



[[Page 46993]]

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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 679

[Docket No. 980817221-8221-01; I.D. 072898A]
RIN 0648-AL22


Fisheries of the Exclusive Economic Zone Off Alaska; Western 
Alaska Community Development Quota Program

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

ACTION: Proposed rule; request for comments.

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SUMMARY: NMFS proposes regulations to implement Amendment 45 to the 
Fishery Management Plan for the Groundfish Fishery of the Bering Sea 
and Aleutian Islands Area (FMP). Amendment 45 would reauthorize the 
allocation of 7.5 percent of the pollock total allowable catch (TAC) to 
the Western Alaska Community Development Quota (CDQ) Program. This 
proposed action is intended to further the objectives of the FMP.

DATES: Comments must be received by October 19, 1998.

ADDRESSES: Comments may be sent to Sue Salveson, Assistant Regional 
Administrator, Sustainable Fisheries Division, Alaska Region, NMFS, 
P.O. Box 21668, Juneau, AK 99802, Attn: Lori Gravel, or delivered to 
the Federal Building, 709 West 9th Street, Juneau, AK. Copies of the 
Environmental Assessment/Regulatory Impact Review/Initial Regulatory 
Flexibility Analysis (EA/RIR/IRFA) prepared for this action may be 
obtained from the same address or by calling the Alaska Region, NMFS, 
at 907-586-7228.

FOR FURTHER INFORMATION CONTACT: Sally Bibb, 907-586-7228.

SUPPLEMENTARY INFORMATION:

Management Background and Need for Action

    NMFS manages fishing for groundfish by U.S. vessels in the 
exclusive economic zone of the Bering Sea and Aleutian Islands 
management area (BSAI) according to the FMP. The North Pacific Fishery 
Management Council (Council) prepared the FMP under authority of the 
Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-
Stevens Act). Regulations governing fishing by U.S. vessels appear at 
50 CFR parts 600 and 679.
    The Council has submitted Amendment 45 for Secretarial review. NMFS 
published a Notice of Availability of the FMP amendment at 63 FR 41782 
(August 5, 1998) and invited comments on the FMP amendment through 
October 4, 1998. All written comments received by October 4, 1998, 
whether specifically directed to the FMP amendment, the proposed rule, 
or both, will be considered in the approval/disapproval decision on the 
FMP amendment.
    The Council initially recommended the allocation of 7.5 percent of 
the BSAI pollock TAC to the CDQ Program as part of Amendment 18 to the 
FMP, which allocated pollock among catcher vessels delivering to the 
inshore and offshore processing sectors and the CDQ program for the 
period 1992 through 1995. The Council recommended Amendment 18 in 1991, 
and the Secretary approved it on March 4, 1992. NMFS published 
regulations implementing Amendment 18 in the Federal Register on June 
3, 1992 (57 FR 23321) and October 7, 1992 (57 FR 46139). In June 1995, 
the Council recommended Amendment 38 to the FMP, which extended the 
inshore/offshore/CDQ allocation of pollock through December 31, 1998. 
The Secretary approved Amendment 38 on November 28, 1995, and NMFS 
published implementing regulations in the Federal Register on December 
12, 1995 (60 FR 63654).
    The 1996 amendments to section 305 of the Magnuson-Stevens Act 
require the Council and the Secretary to ``establish a western Alaska 
community development quota program under which a percentage of the 
total allowable catch of any Bering Sea fishery is allocated to the 
program.'' While this sentence requires the Secretary to establish a 
single, stand-alone western Alaska CDQ program, it does not 
automatically extend the pollock CDQ allocation beyond the current 
expiration date of December 31, 1998. To continue the allocation of 
pollock to the CDQ program, the Council must recommend, and the 
Secretary must approve, an amendment to the FMP.
    At its meeting in April 1998, the Council considered an initial EA/
RIR/IRFA analyzing two alternatives. Alternative 1 (no action) would 
allow the pollock CDQ allocation to expire on December 31, 1998. 
Alternative 2 would permanently extend the 7.5 percent allocation of 
the pollock TAC to the CDQ program. The Council decided to no longer 
link the pollock CDQ allocation to the inshore/offshore allocation of 
pollock, and to extend the allocation permanently.
    The Council took final action on proposed Amendment 45 in June 
1998, by selecting Alternative 2 as the preferred alternative. In 
making this decision, the Council considered the analysis of the 
economic impacts of the first 6 years of the pollock CDQ program in 
western Alaska. The information contained in, and the conclusions of, 
this analysis are summarized here.
    The allocation of pollock TAC to the CDQ program from 1992 through 
1998 has been instrumental in providing the revenues, employment, and 
training benefits to achieve the Council's goals for the CDQ program 
when it was initially established. These goals are to help western 
Alaska communities to develop and support commercial fishery activities 
that result in ongoing, regionally based commercial fisheries or 
related businesses. Six CDQ groups representing 56 western Alaska 
communities have earned over $20 million per year from contracts with 
their industry partners that harvest the pollock CDQ quotas on behalf 
of the CDQ groups. Since 1993, the groups' net income has averaged 45 
percent of revenues. The value of the CDQ groups' equity ownership in 
fishing vessels, on-shore development projects, loan portfolios, and 
Individual Fishing Quota holdings has increased an average of 37 
percent per year since 1992, and totaled approximately $64 million in 
1997. Finally, the pollock CDQ allocations have led to training and 
employment opportunities for community residents. The EA/RIR/IRFA 
estimates that in 1997, over 200 people from CDQ communities were 
employed directly in the pollock harvesting and processing industry, 
and a total of about 1,200 CDQ program related jobs had been created. 
These jobs are in CDQ program management (6 percent of jobs), pollock 
harvesting and processing (27 percent), other fisheries harvesting and 
processing (50 percent), and other employment (17 percent). Additional 
details on development projects, revenues, investments, training, and 
employment due to the pollock CDQ program are in the EA/RIR/IRFA.
    The Council also considered that not allocating pollock to the CDQ 
program would increase the amount of pollock available to the vessels 
and processors participating in the non-CDQ groundfish fisheries in the 
BSAI. However, the Council determined that the original goals of CDQ 
program were being met successfully and that the benefits provided to 
western Alaska communities justified continued

[[Page 46994]]

allocation of 7.5 percent of the pollock TAC to the CDQ Program.
    This proposed rule would make the following changes in groundfish 
fishery regulations at 50 CFR part 679:
    1. Revise Sec. 679.20(b)(1)(iii) and remove paragraph (a) in 
Sec. 679.31 so that the pollock CDQ reserve would no longer be 
specified separately from the other groundfish TAC species or species 
groups. The allocation of pollock and establishment of the pollock CDQ 
reserve would be conducted in the same manner as all other groundfish 
CDQ reserves (except fixed gear sablefish) that are established through 
an allocation of one half of the reserve (7.5 percent of the TAC) for 
that species or species group.
    2. Renumber the paragraphs in Sec. 679.31 to adjust for the removal 
of paragraph (a).
    3. Revise the new paragraph (a) on the halibut CDQ reserves to 
change the phrase ``specified in paragraph (b) of this section'' to 
read ``specified in this section.''
    4. Correct cross references in the definitions of ``Halibut CDQ 
reserve'', ``PSQ allocation'', and ``PSQ species.''
    5. Revise the definitions for ``Community Development Quota (CDQ)'' 
and ``CDQ reserve'' so that they apply to any CDQ species (groundfish, 
halibut, or crab) rather than to groundfish CDQ only.
    6. Rename the definition currently called ``Sablefish CDQ reserve'' 
to the ``Fixed gear sablefish CDQ reserve'' to more correctly identify 
this reserve.
    7. Correct a cross reference to the newly renumbered CDQ reserves 
in the general CDQ regulations at Sec. 679.30(a)(4).

Classification

    At this time, NMFS has not determined that the FMP amendment this 
rule would implement is consistent with the national standards of the 
Magnuson-Stevens Act and other applicable laws. NMFS, in making that 
determination, will take into account the data, views, and comments 
received during the comment period.
    The Council prepared an initial regulatory flexibility analysis 
that describes the impact this proposed rule, if adopted, would have on 
small entities. This preamble summarizes and supplements the Council's 
IRFA. The analysis estimates that the total universe of entities 
affected by regulations governing the BSAI pollock fishery is 249. Of 
these, 130 are small entities. The total universe is comprised of six 
CDQ groups, 56 western Alaska communities eligible for the CDQ program, 
five communities whose residents participate in the BSAI pollock 
fisheries but are not eligible for the CDQ program, 140 catcher vessels 
using trawl gear, 31 catcher/processors using trawl gear, three 
motherships, and eight shoreside processing plants. The small entities 
are the six CDQ groups, the 56 western Alaska communities eligible for 
the CDQ program, four of the Alaskan communities whose residents 
participate in the BSAI pollock fisheries but are not eligible for the 
CDQ program, and 64 of the catcher vessels. This action would benefit 
the small entities that receive the pollock allocation, while having a 
negative impact on those that do not.
    The 64 catcher vessels participating in the BSAI pollock fisheries 
would experience negative economic impacts in that 7.5 percent of the 
pollock TAC would not be available through the open access fishery. 
These boats might be able to fish for the pollock by entering contracts 
with the CDQ groups, but profits would be reduced by the cost of the 
contract. Thus, a 7.5 percent reduction in the pollock TAC may reduce 
the annual gross revenues of these vessel owners by more than 5 percent 
relative to the alternative of not allocating pollock to the CDQ 
program. The impact of the pollock CDQ allocation on the four Alaskan 
non-CDQ communities (Unalaska, Sand Point, King Cove, and Kodiak) is 
not known. Because the CDQ allocation results in a shift in who can 
catch a certain amount of pollock, to the extent that the non-CDQ 
communities would have had an opportunity to benefit from the open 
access pollock community, the CDQ allocation reduces that opportunity. 
While it is impossible to quantify the amount of loss to these 
communities, it is possible that losses would be significant. The 64 
catcher vessels and four non-CDQ communities represent 52 percent of 
the small entities in the BSAI pollock fisheries.
    NMFS data indicate that 7.5 percent of the pollock TAC yields an 
average of $2 million in wages and $10.2 million net income on annual 
revenues of nearly $20 million to the CDQ groups. These direct benefits 
likely understate total economic benefits to the CDQ groups because 
they do not include the indirect benefits generated from the 
development projects undertaken by the program. These direct and 
indirect impacts generated by the program represent a differentially 
higher economic impact when compared with other regions of the State of 
Alaska and with the United States in general because of the relative 
absence of alternative economic bases in these communities.
    The 64 independent catcher-boats appear to be the only small 
business entities participating in the BSAI pollock fishery. The 
allocation of 7.5 percent of the pollock TAC to the CDQ communities 
reduces the potential harvest by the 64 vessels and may reduce their 
annual gross revenues by more than 5 percent when comparing the 7.5 
percent allocation alternative with the alternative that would not 
reauthorize the allocation and allow it to expire at the end of 1998. 
In addition to the 64 catcher boats, the four non-CDQ communities 
(Unalaska, Sand Point, King Cove, and Kodiak) could experience a 
significant loss in annual revenue because CDQ pollock may be processed 
at plants other than those used by vessels participating in the open 
access fisheries.
    NMFS considered two alternatives that could have minimized economic 
impacts on the small entities negatively affected by this action. The 
first alternative would be to allocate 3.5 percent of pollock TAC to 
the CDQ reserve. Although this alternative would benefit the small 
entities not receiving CDQ allocation, the benefits accruing to the 56 
CDQ communities would be considerably less. The alternatives that those 
communities have for generating income and investment are so small that 
the reduction from 7.5 percent to 3.5 percent reserve would be likely 
to produce significant negative economic impacts on these small 
entities. The trade off is clear; by reserving 3.5 percent instead of 
7.5 percent, the catcher vessels gain at the expense of the CDQ 
communities. However, because of the relative absence of alternative 
economic bases in the CDQ communities, those communities will 
experience a relatively greater economic impact than would other 
regions of the State and the country in general.
    The second alternative would be to let the present reserve of 7.5 
percent of pollock TAC expire at the end of 1998. This action would 
result in a further shift of impacts from one set of small entities to 
another. It would benefit the non-CDQ participants in the fishery while 
cutting revenues of the CDQ groups.
    Because the CDQ program is allocative by nature, any approved 
alternative will affect small entities. If the 7.5 percent allocation 
alternative were found to be inconsistent with the Magnuson-Stevens 
Act, NMFS could only disapprove it. Reconsideration of the 3.5 percent 
or other allocation alternatives by the Council and the public would be 
time consuming and disruptive to the ongoing CDQ program. Because this 
rule is an allocation from

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one group of small entities to another, the Council weighed the 
economic and social effects and selected its preferred alternative as a 
legal alternative for achieving its statutory objective of allocating 
the TAC of pollock in the Bering Sea and Aleutian Islands fishery to 
the CDQ program.
    A copy of the analysis is available from NMFS (See ADDRESSES).
    This proposed rule has been determined to be not significant for 
purposes of E.O. 12866.

List of Subjects in 50 CFR Part 679

    Alaska, Fisheries, Recordkeeping and reporting requirements

    Dated: August 28, 1998.
Hilda Diaz-Soltero,
Acting Assistant Administrator for Fisheries, National Marine Fisheries 
Service.
    For the reasons set out in the preamble, 50 CFR part 679 is 
proposed to be amended as follows:

PART 679--FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA

    1. The authority citation for part 679 continues to read as 
follows:

    Authority: 16 U.S.C. 773 et seq., 1801 et seq. and 3631 et seq.

    2. In Sec. 679.2 the definition for ``Sablefish CDQ reserve'' is 
removed; the definitions for ``Community Development Quota (CDQ)'', 
``CDQ allocation'', ``Halibut CDQ reserve'', ``PSQ allocation'', and 
``PSQ species'' are revised; and a new definition for ``Fixed gear 
sablefish CDQ reserve'' is added in alphabetical order to read as 
follows:


Sec. 679.2  Definitions.

* * * * *
    CDQ allocation means a percentage of a CDQ reserve specified under 
Sec. 679.31 that is assigned to a CDQ group when NMFS approves a 
proposed CDP.
* * * * *
    Community Development Quota (CDQ) means the amount of a CDQ species 
established under Sec. 679.31 that is allocated to the CDQ program.
* * * * *
    Fixed gear sablefish CDQ reserve means 20 percent of the sablefish 
fixed gear TAC for each subarea in the BSAI for which a sablefish TAC 
is specified under Sec. 679.20(b)(iii)(B). See also Sec. 679.31(b).
* * * * *
    Halibut CDQ reserve means the amount of the halibut catch limit for 
IPHC regulatory areas 4B, 4C, 4D, and 4E that is reserved for the 
halibut CDQ program under Sec. 679.31(a).
* * * * *
    PSQ allocation means a percentage of a PSQ reserve specified under 
Sec. 679.21(e)(1)(i) and (e)(2)(ii) that is assigned to a CDQ group 
when NMFS approves a proposed CDP. See also Sec. 679.31(d).
    PSQ species means any species that has been assigned to a PSQ 
reserve under Sec. 679.21(e)(1)(i) and (e)(2)(ii) for purposes of the 
CDQ program. See also Sec. 679.31(d).
* * * * *
    3. In Sec. 679.20, paragraph (b)(1)(iii)(A) is revised to read as 
follows:


Sec. 679.20  General limitations.

* * * * *
    (b) * * *
    (1) * * *
    (iii) CDQ reserve--(A) Groundfish CDQ reserve. One half of the 
nonspecified reserve established by paragraph (b)(1)(i) of this section 
is apportioned to the groundfish CDQ reserve.
* * * * *
    4. In Sec. 679.30, paragraph (a)(4) is revised to read as follows:


Sec. 679.30  General CDQ regulations.

    (a) * * *
    (4) Request for CDQ and PSQ allocations. A list of the percentage 
of each CDQ reserve and PSQ reserve, as described at Sec. 679.31(a) 
through (d), that is being requested. The request for allocations of 
CDQ and PSQ must identify percentage allocations requested for CDQ 
fisheries identified by the primary target species of the fishery as 
defined by the qualified applicant and the gear types of the vessels 
that will be used to harvest the catch.
* * * * *
    5. In Sec. 679.31, paragraph (a) is removed and paragraphs (b) 
through (g) are redesignated as paragraphs (a) through (f). The newly 
designated paragraph (a)(1) is revised to read as follows:


Sec. 679.31  CDQ reserves.

* * * * *
    (a) Halibut CDQ reserve. (1) NMFS will annually withhold from IFQ 
allocation the proportions of the halibut catch limit that are 
specified in this section for use as a CDQ reserve.
* * * * *
[FR Doc. 98-23797 Filed 9-2-98; 8:45 am]
BILLING CODE 3510-22-F