[Federal Register Volume 63, Number 209 (Thursday, October 29, 1998)]
[Proposed Rules]
[Pages 57996-58004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28893]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 679

[Docket No. 981021263-8263-01; I.D. 090898D]
RIN 0648-AK12


Fisheries of the Exclusive Economic Zone Off Alaska; Inshore/
Offshore Allocations of Pollock and Pacific Cod Total Allowable Catch

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 51 to the 
Fishery Management Plan (FMP) for the Groundfish Fishery of the Bering 
Sea and Aleutian Islands Area (BSAI) and Amendment 51 to the Fishery 
Management Plan for Groundfish of the Gulf of Alaska (GOA) (FMPs). 
These amendments would allocate pollock in the BSAI and pollock and 
Pacific cod in the GOA between inshore and offshore industry components 
for the years 1999 through 2001. NMFS proposes other associated 
regulatory measures as well. The amendments and the proposed 
implementing regulations were submitted by the North Pacific Fishery 
Management Council (Council) and are intended to promote the 
socioeconomic goals and objectives of the Council and the FMPs.

DATES: Comments on the proposed rule must be received on or before 
December 14, 1998.

ADDRESSES: Comments must be sent to Sue Salveson, Assistant Regional 
Administrator for Sustainable Fisheries, 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 Amendments 51/51 
and the Environmental Assessment/Regulatory Impact Review/Initial 
Regulatory Flexibility Analysis (EA/RIR/IRFA) prepared for Amendments 
51/51 are available from the North Pacific Fishery Management Council 
at 605 W. 4th Ave., Room 306, Anchorage, AK 99501, telephone 907-271-
2809.

FOR FURTHER INFORMATION CONTACT: Kent Lind, 907-586-7228.

SUPPLEMENTARY INFORMATION:

Background

    NMFS manages the groundfish fisheries in the exclusive economic 
zone of the BSAI and GOA under the FMPs. The Council prepared, and NMFS 
approved, the FMPs under the authority of the Magnuson-Stevens Fishery 
Conservation and Management Act (Magnuson-Stevens Act). Regulations 
governing the groundfish fisheries of the GOA and BSAI appear at 50 CFR 
parts 600 and 679.
    BSAI Amendment 51, if approved, would establish the following 
allocations and management measures for the years 1999 through 2001: 
(1) The BSAI pollock total allowable catch (TAC), after subtraction of 
reserves, would be allocated 61 percent to vessels catching pollock for 
processing by the offshore component and 39 percent to vessels catching 
pollock for processing by the inshore component; (2) a portion of the 
inshore component Bering Sea B season allocation equal to 2.5 percent 
of the BSAI pollock TAC, after subtraction of reserves, would be set 
aside for harvest by catcher vessels under 125 ft (38.1 m) length 
overall (LOA) and would become available on or about August 25 of each 
year; and (3) all vessels harvesting pollock for processing by the 
offshore component

[[Page 57997]]

would be prohibited from fishing inside the Catcher Vessel Operational 
Area (CVOA) during the B season (September 1 to November 1) until the 
date that NMFS closes the inshore component B season allocation to 
directed fishing.
    GOA Amendment 51 would extend the current allocations of pollock 
and Pacific cod TACs for the years 1999 through 2001. The pollock TAC 
in the GOA would continue to be allocated 100 percent to vessels 
catching pollock for processing by the inshore component, and the 
Pacific cod TAC in the GOA would continue to be allocated 90 percent to 
vessels catching Pacific cod for processing by the inshore component 
and 10 percent to vessels catching Pacific cod for processing by the 
offshore component.
    The Council has submitted Amendments 51/51 for Secretarial review 
and a Notice of Availability of the FMP amendments was published in the 
Federal Register on September 15, 1998 (63 FR 49540), with comments on 
the FMP amendments invited through November 16, 1998. Comments may 
address the FMP amendments, the proposed rule, or both, but must be 
received by November 16, 1998, to be considered in the approval/
disapproval decision on the FMP amendments. All comments received by 
November 16, 1998, whether specifically directed to the FMP amendments 
or the proposed rule, will be considered in the approval/disapproval 
decisions on the FMP amendments.
    A major concern identified during the preliminary review of 
Amendments 51/51 is that the economic analysis submitted by the Council 
does not provide a basis upon which to draw unambiguous conclusions 
about the probable net economic benefits to the Nation of the proposed 
amendments. The reasons for this deficiency are treated in considerable 
detail in the document. They pertain to basic data limitations which 
make conversion from gross to net economic measures impossible. 
Completion of the preliminary review with publication of the proposed 
rule for Amendments 51/51 does not mean that either of these two 
amendments will be approved. NMFS invites comment on the consistency of 
the amendments and the proposed regulations with the Magnuson-Stevens 
Act, the national standards, and other applicable laws. Comments are 
specifically requested on the adequacy of the analysis to support 
findings of compliance with national standards 2 (scientific 
information), 4 (allocations), 5 (efficiency), 7 (costs and benefits), 
8 (fishing communities), and 10 (safety of life at sea). Information 
and analysis that bolster or contradict the conclusions in any of the 
supporting documents are also welcome.

Reconciliation of Amendments 51/51 with the American Fisheries Act

    On October 21, 1998, the President signed into law the American 
Fisheries Act (AFA), which, besides affecting Amendments 51/51 in other 
ways, allocates BSAI pollock differently than BSAI FMP Amendment 51 and 
these proposed regulations.
    Specifically, section 206 of the AFA states:

    (a) Pollock Community Development Quota.--Effective January 1, 
1999, 10 percent of the total allowable catch of pollock in the 
Bering Sea and Aleutian Islands Management Area shall be allocated 
as a directed fishing allowance to the western Alaska community 
development quota program established under section 305(i) of the 
Magnuson-Stevens Act (16 U.S.C. 1855(i)).
    (b) Inshore/Offshore.--Effective January 1, 1999, the remainder 
of the pollock total allowable catch in the Bering Sea and Aleutian 
Islands Management Area, after the subtraction of the allocation 
under subsection (a) and the subtraction of allowances for the 
incidental catch of pollock by vessels harvesting other groundfish 
species (including under the western Alaska community development 
quota program) shall be allocated as directed fishing allowances as 
follows--
    (1) 50 percent to catcher vessels harvesting pollock for 
processing by the inshore component;
    (2) 40 percent to catcher/processors and catcher vessels 
harvesting pollock for processing by catcher/processors in the 
offshore component; and
    (3) 10 percent to catcher vessels harvesting pollock for 
processing by motherships in the offshore component.

    Because this new statute was signed into law only a few days ago, 
the Council has not had the opportunity to reconcile Amendments 51/51 
and the proposed regulations with the new statute. The Council has 
scheduled a special meeting to examine and respond to the mandates of 
the AFA and to address management measures that may be necessary to 
protect endangered Steller sea lions. This meeting will be held in 
Anchorage, Alaska, on November 10-13, 1998. Additional information on 
this special meeting is available from the Council (see ADDRESSES) and 
on the Council's web site: http://www.fakr.noaa.gov/npfmc/npfmc.htm.
    Because the Council, at its November meeting, will address 
reconciliation of Amendments 51/51 and this proposed rule with the AFA, 
NMFS is proceeding with the publication of this proposed rule unchanged 
so that such regulatory provisions that are unaffected by the AFA as 
inshore/offshore allocations of pollock and Pacific cod in the GOA, 
establishment of a CVOA in the Bering Sea, and technical changes to the 
existing regulations can proceed in a timely manner. NMFS will 
reconcile any inconsistencies between Amendments 51/51 (including their 
proposed implementing regulations) and the AFA at the time of approval/
disapproval of the Amendments and in the final rule implementing them 
after consultation with the Council at its November 1998 meeting and 
after the public has had opportunity to comment.

History of Inshore/Offshore Allocations

Amendments 18/23

    The first inshore/offshore allocations of pollock and Pacific cod 
were established in 1992 under Amendments 18/23 to the FMPs. The 
precipitating event that led to the development of inshore/offshore 
allocations began in early 1989 when the rapid harvest of the GOA 
pollock TAC by several large factory trawlers forced an early closure 
of the GOA pollock fishery and prevented inshore catcher vessels and 
processors from realizing their anticipated economic benefit from the 
pollock fishery later in the year. At the April 1989 Council meeting, 
fishermen and processors from Kodiak Island requested that the Council 
consider specific allocations of fish for processing by the inshore and 
offshore components of the fishery to prevent future preemption of 
resources by one component of the industry. The Council considered the 
request and the impacts on coastal community development and stability 
of the fisheries and prepared Amendments 18/23.
    After 2 years of analysis, review, and debate on the inshore/
offshore issue, the Council took final action on Amendments 18/23 in 
June 1991. Amendment 18 to the BSAI FMP, as adopted by the Council, 
established a Community Development Quota (CDQ) program and set aside 
one half of the pollock reserve (7.5 percent of the BSAI pollock TAC) 
for CDQ harvest, allocated 35 percent of the remaining BSAI pollock TAC 
to vessels catching pollock for processing by the inshore component and 
65 percent of the remaining BSAI pollock TAC to vessels catching 
pollock for processing by the offshore component in the first year of 
the allocation, with the inshore allocation increasing to 40 percent in 
the second year, and 45 percent in the third and fourth years of the 
amendment, respectively. Amendment 18 also established a catcher vessel 
operational area (CVOA) from which

[[Page 57998]]

catcher processors and motherships would be excluded throughout the 
fishing year when operating in a directed fishery for pollock.
    Amendment 23 to the GOA FMP, as adopted by the Council, allocated 
100 percent of the GOA pollock TAC to vessels catching pollock for 
processing by the inshore component. Amendment 23 also allocated 90 
percent of the GOA Pacific cod TAC to vessels catching Pacific cod for 
processing by the inshore component, and 10 percent of the GOA Pacific 
cod TAC to vessels catching Pacific cod for processing by the offshore 
component.
    NMFS's review of the amendments began on December 1, 1991. On March 
4, 1992, NMFS approved Amendment 23 to the GOA FMP. On the same date, 
NMFS partially disapproved Amendment 18 to the BSAI FMP by approving 
the 35/65 allocation split for 1992 but disapproving the increased 
inshore component allocations for 1993-1995.
    In his March 4, 1992, letter notifying the Council of the approval 
of Amendment 23 and partial disapproval of Amendment 18, the Under 
Secretary for Oceans and Atmosphere and Administrator of NOAA 
(Administrator) stated that NOAA was not opposed to the concept of an 
allocation between onshore and offshore interests as an interim measure 
pending development of a solution to overcapitalization--ideally, a 
market-based solution. NMFS's disapproval of the BSAI pollock 
allocations for 1993 through 1995 was based in part on a cost/benefit 
analysis prepared by NMFS that indicated a significant net economic 
loss to the Nation under the proposed allocations for years 1993 
through 1995. The Administrator urged the Council to work as 
expeditiously as possible toward some other method of allocating fish 
than either direct competition among participants within an open access 
fishery, or direct government intervention. Meanwhile, he noted, 
preventing preemption by one fleet of another, safeguarding capital 
investments, protecting coastal communities that are dependent on a 
local fleet, and encouraging fuller utilization of harvested fish are 
desirable objectives that are provided for under the Magnuson-Stevens 
Act.
    At its April 1992 meeting, the Council considered NMFS's actions 
and decided to revise Amendment 18. The Council supplemented its 
previous analysis of allocation alternatives. At a special meeting to 
consider this issue in August 1992, the Council again considered the 
comments of its advisory bodies and the public, adopted its preferred 
alternative, and submitted it to NMFS as revised Amendment 18. As 
adopted by the Council, revised Amendment 18 would have established a 
35/65 inshore/offshore allocation for 1993, the first year of the 
revised amendment. The inshore allocation would then have increased to 
37.5 percent for 1994 and 1995, the second and third years of the 
revised amendment. In addition, revised Amendment 18 proposed two 
changes to the CVOA. Under revised Amendment 18, the CVOA would take 
effect only during the pollock B Season (September 1 to November 1), 
and motherships (and catcher processors operating as motherships) were 
allowed to receive deliveries and process pollock inside the CVOA as 
long as they did not engage in directed fishing for pollock themselves. 
In September 1992, the Council submitted revised Amendment 18 to NMFS 
for review and approval.
    On November 23, 1992, after careful consideration of the revised 
amendment, public comments, the record developed by the Council, and 
the analysis of the potential effects of the proposed amendment, NMFS 
partially disapproved revised Amendment 18. NMFS approved pollock 
allocations of 35 percent and 65 percent for vessels catching pollock 
for processing by the inshore and offshore components, respectively, 
for the years 1993 through 1995, and the establishment of the CVOA. 
However, NMFS disapproved the 2.5 percent increase for 1994 and 1995, 
finding that the sole purpose of the increased allocation to the 
inshore component during those years was economic, and therefore, in 
violation of national standards 4, 5, and 7 of Magnuson-Stevens Act, as 
well as Executive Order 12291. The final rule implementing these 
decisions was published on December 24, 1992 (57 FR 61326).

Amendments 38 and 40

    When the Council developed its original inshore/offshore 
amendments, it stipulated that Amendments 18/23 would expire on 
December 31, 1995, with the intention that by December 31, 1995, it 
would have adopted and NMFS would have approved a more comprehensive, 
long-term management program to address the overcapitalization and 
allocation problems facing the industry, not only for pollock and 
Pacific cod, but for all the groundfish and crab fisheries under the 
Council's authority.
    By 1995, the Council had made some progress on its long-term plan. 
For example, in June 1995, it adopted license-limitation programs for 
the groundfish and crab fisheries. However, the Council estimated that 
it would take 2 or 3 more years to develop and implement a 
comprehensive rationalization plan that could more directly address 
these allocation issues. Consequently, the Council decided it would be 
necessary to extend the provisions of Amendments 18/23 for an 
additional 3 years to maintain stability in the industry, facilitate 
further development of the comprehensive management plan, and allow for 
realization of the goals and objectives of the pollock CDQ program. In 
making this decision, the Council continued the mandate it established 
for itself in 1992 when it recognized that a more permanent solution to 
overcapacity and preemption was needed.
    The Council also determined that if the provisions of Amendments 
18/23 expired, the fishery would return to the ``free-for-all'' state 
that existed before Amendments 18/23, and the inshore sector again 
would be faced with the threat of preemption by the large and efficient 
offshore sector. Thus, the Council began the process to extend the 
provisions of Amendments 18/23. The provisions of Amendment 18 became 
the basis for Amendment 38 to the BSAI FMP, and the provisions of 
Amendment 23 became the basis for Amendment 40 to the GOA FMP.
    At its meeting in June 1995, the Council voted unanimously to adopt 
Amendments 38/40 through December 31, 1998, with two changes from 
Amendments 18/23. First, Amendment 38 decreased the size of the CVOA by 
moving the western boundary of the area 30 minutes to the east. Second, 
it allowed catcher processors to engage in directed fishing for pollock 
inside the CVOA if the inshore component pollock allocation was closed 
to directed fishing and the offshore component allocation was still 
open to directed fishing. A proposed rule to implement Amendments 38/40 
was published in the Federal Register on September 18, 1995 (60 FR 
48087). NMFS approved Amendments 38/40 on November 28, 1995, and a 
final rule to implement Amendments 38/40 was published in the Federal 
Register on December 12, 1995 (60 FR 63654).

Council Development of Amendments 51/51

    In April 1997, recognizing that a comprehensive rationalization 
plan to address overcapitalization and preemption issues could not be 
adopted and implemented prior to the expiration of Amendments 38/40, 
the Council began development of a third set of inshore/offshore FMP 
amendments. These amendments became identified as

[[Page 57999]]

Amendments 51/51. In June 1997, the Council requested information in 
the form of pollock industry profiles that enabled it to examine the 
evolution and current status of the BSAI pollock fisheries from 1991 
through 1996. At that time, the Council also decided to split the 
reauthorization of the pollock CDQ program in the BSAI and the 
reauthorization of BSAI inshore/offshore pollock allocations into 
separate FMP amendments. Under BSAI Amendments 18 and 38, the CDQ 
program had been included with the inshore/offshore pollock 
allocations. However, BSAI Amendment 51 only addresses inshore/offshore 
pollock allocations. The Council adopted a separate FMP amendment, 
Amendment 45, to extend the BSAI pollock CDQ program on a permanent 
basis. A proposed rule to implement Amendment 45 was published in the 
Federal Register on September 3, 1998 (63 FR 46993).
    At its September 1997 meeting, after examination of the industry 
profiles prepared by Council staff, consideration of public comment, 
and Council discussion, the Council adopted the following inshore/
offshore problem statements for the BSAI and GOA:

    BSAI Problem Statement: The current inshore/offshore allocation 
expires at the end of 1998. The Council thus faces an inevitable 
allocation decision regarding the best use of the pollock resource. 
Many of the issues that originally prompted the Council to adopt an 
inshore/offshore allocation (e.g., concerns for preemption, coastal 
community dependency, and stability), resurface with the specter of 
expiration of the current allocation.
    The current allocation was made on the basis of several critical 
assumptions including utilization rates, foreign ownership, the 
balance between social gains and assumed economic losses to the 
nation, and the nature of progress on the Council's Comprehensive 
Rationalization Program (CRP) initiative. Many of these assumptions 
have not been revisited since approval of the original amendment. It 
is not clear that these assumptions hold or that the Council and the 
nation are well-served by continuing to manage the pollock fishery 
without a reexamination of allocation options. The Magnuson-Stevens 
Act presents the Council with a new source of guidance to evaluate 
national benefits. In the context of Council deliberations over 
Inshore-Offshore 3, this includes enhanced statutory emphasis on 
increased utilization, reduction of waste, and fishing communities.
    There have also been substantial changes in the structure and 
characteristics of the affected industry sectors including number of 
operations, comparative utilization rates, and outmigration and 
concentration of capital. These changes are associated with several 
issues, including: optimization of food production resulting from 
wide differences in pollock utilization; shares of pollock 
harvesting and processing; discards of usable pollock protein; 
reliance on pollock by fishing communities; and decreases in the 
total allowable catch of pollock. In addition, changes in fishing 
patterns could lead to local depletion of pollock stocks or other 
behavioral impacts to stocks which may negatively impact Steller sea 
lions and other ecosystem components dependent upon stock 
availability during critical seasons.
    Therefore, the problem facing the Council is to identify what 
allocation would best serve to ensure compliance with the new Act 
and address the issues identified above.
    GOA Problem Statement: Allowing the current Gulf of Alaska 
Inshore/Offshore allocative regime to expire December 31, 1998, 
would allow the same preemption of resident fleets by factory 
trawlers in the pollock and Pacific cod fisheries which occurred in 
1989. It was this dramatic preemption which triggered the original 
proposal for an inshore/offshore allocation. In 1989, there was 
still pollock available in the Bering Sea when the preemption 
occurred when vessels moved into the Gulf to take advantage of fish 
with high roe content.
    A rollover of the current Gulf of Alaska inshore/offshore 
program which allocates 100 percent of the pollock and 90 percent of 
the Pacific cod to inshore operations is a proactive action to 
prevent the reoccurrence of the original problem.

Alternatives Considered by the Council

    In addition to the development of the inshore/offshore problem 
statements, the Council adopted a complex set of inshore/offshore 
alternatives at its September 1997 meeting. During the course of the 
next several Council meetings, these evolved into five basic 
alternatives and included various suboptions within each alternative. 
However, for the GOA, the Council considered only Alternatives 1 and 2.
    Alternative 1: No action. The existing BSAI and GOA inshore/
offshore allocations would expire at the end of 1998.
    Alternative 2: Reauthorize existing BSAI and GOA inshore/offshore 
allocations without change. This alternative includes suboptions for a 
1-year and 3-year effective period for the amendment.
    Alternative 3: Adopt new BSAI pollock allocations within the 
following ranges. This alternative includes a range of allocations 
among three sectors: Inshore sector 25 to 45 percent, ``true'' 
motherships 5 to 15 percent, and offshore sector 40 to 70 percent. The 
analysis defines ``true'' motherships as offshore motherships that 
process but do not harvest groundfish. This alternative includes 
options that assign ``true'' motherships (and their allocation 
percentage) to either the inshore or offshore sectors, or establish a 
separate ``true'' mothership allocation. Additional options establish a 
set-aside of 40 to 60 percent of the inshore and ``true'' mothership 
sector allocations for small catcher vessels (defined as catcher 
vessels less than 125 ft (38.1 m) LOA), and a set-aside of 9 to 15 
percent of the offshore quota for catcher vessels delivering to catcher 
processors.
    Alternative 4: ``Harvester's Choice'' for small catcher vessels. 
This alternative establishes a stand alone or separate allocation for 
small catcher vessels (defined as catcher vessels less than 125 ft 
(38.1 m) LOA). This allocation is equal to 40 to 60 percent of the 
inshore quota, plus 9 to 15 percent of the offshore quota, plus 100 
percent of the ``true'' mothership quota, depending on the sector 
allocations established under Alternative 3. Small catcher vessels are 
free to deliver their allocation to any processing sector and the 
processing sectors compete among themselves for the opportunity to 
process pollock harvested by small catcher vessels.
    Alternative 5: ``Harvester's Choice'' for catcher vessels 155 ft 
(47.2 m) LOA and shorter. This alternative is the same as Alternative 4 
except that the catcher vessel allocation is available to all catcher 
vessels 155 ft (47.2 m) LOA and shorter.
    Also included as options under Alternative 2 through 5 were four 
CVOA suboptions: (1) Retain the CVOA as currently defined, (2) prohibit 
catcher processors from operating inside the CVOA during both pollock 
seasons, (3) prohibit motherships from operating inside the CVOA during 
either pollock A season or pollock B season but not both, and (4) 
repeal the CVOA.
    Finally, the Council considered two expiration date options for 
Alternatives 3 through 5: (1) The selected alternative(s) do not 
expire, but serve as interim measures until the Council's comprehensive 
rationalization plan has been completed, and (2) the selected 
alternative(s) remain in effect for a 3-year period.

Council Adoption of BSAI Amendment 51

    At its June 1998 meeting, after examination of the EA/RIR/IRFA, 
consideration of the recommendations of its Advisory Panel (AP) and 
Scientific and Statistical Committee (SSC), and after extensive public 
testimony and deliberation, the Council voted 7-4 to adopt Amendment 51 
to the BSAI with the following changes from the allocation scheme 
established under Amendment 38: (1) Shift four percent of the BSAI 
pollock TAC, after subtraction of reserves, would be shifted to the 
inshore component resulting in a 39/61

[[Page 58000]]

inshore/offshore allocation split; (2) set aside a portion of the 
inshore component Bering Sea B season allocation, equal to 2.5 percent 
of the BSAI pollock TAC after subtraction of reserves, for small 
catcher vessels, and to become available on or about August 25 of each 
year; and (3) prohibit catcher vessels delivering to the offshore 
component from fishing inside the CVOA during the B season from 
September 1 until the inshore component B season allocation is closed 
to directed fishing. Amendment 51 would remain in effect for the years 
1999 through 2001.
    BSAI pollock allocation. Under BSAI Amendment 51, the BSAI pollock 
TAC, after subtraction of reserves, would be allocated 61 percent to 
vessels catching pollock for processing by the offshore component and 
39 percent to vessels catching pollock for processing by the inshore 
component. In developing this preferred alternative, much of the 
Council discussion focused on a last minute proposal by major inshore 
and offshore industry representatives that would have established a 3-
way allocation split: 40 percent inshore, 50.5 percent offshore, and 
9.5 percent to ``true'' motherships. A separate category for ``true'' 
motherships would have enabled the remaining factory trawlers in the 
offshore sector to establish a harvesters cooperative similar to the 
cooperative operating in the hake fishery off the Pacific coast. 
However, several Council members expressed unease with the cooperative 
idea and uncertainty about the potential spillover effects into other 
fisheries. As a result, the Council rejected the industry agreement and 
chose to maintain a 2-way allocation split.
    In rejecting the industry's 3-way split proposal, the Council noted 
that the industry proposal came very late in the process and that many 
affected members of the public did not have adequate time to analyze 
and comment on it. While the statutory moratorium on the development of 
new individual fishing quota (IFQ) programs does not prohibit the 
Council from adopting a 3-way allocation split, some Council members 
expressed concern that adopting a 3-way allocation split for the 
explicit purpose of facilitating a harvesters cooperative could be seen 
as violating the intent of the Congressional moratorium on IFQ 
programs.
    In adopting its preferred allocation alternative for BSAI Amendment 
51, the Council indicated that a shift of pollock TAC to the inshore 
component was warranted for several reasons. First, the Council noted 
that the analysis prepared for Amendments 38/40 concluded that the 
expected net losses to the Nation's economy were probably overstated in 
the cost/benefit analysis prepared for Amendments 18/23. A majority of 
the Council believed that the rationale for partially disapproving the 
original Amendment 18 in 1991 no longer was valid and that the 
allocation proposed under Amendment 51 was closer to the Council's 
original intent under Amendment 18. Second, the Council noted that the 
EA/RIR/IRFA prepared for Amendments 51/51 concludes that the inshore 
sector realizes greater gross revenues per metric ton of pollock than 
the offshore sector due to the higher recovery rates achieved by the 
inshore sector. The analysis generates gross revenue estimates for the 
various processing components using 1996 data and concludes that 4 
percent of the BSAI pollock TAC (the amount shifted under Amendment 51) 
would generate the following gross revenues if processed by each of the 
following industry components, respectively: Inshore component $24.1 
million; mothership component, $21.4 million; offshore component $21.7 
million. Third, the Council noted that coastal communities in Alaska 
where onshore processors are located are disproportionately dependent 
on pollock processing compared to the communities in which offshore 
processors are based.
    Small catcher vessel set-aside. Over the course of developing 
Amendments 51/51 the Council received substantial testimony from owners 
and operators of smaller catcher boats who indicated that, under the 
current BSAI inshore/offshore regime, their share of the catch was 
eroding constantly. The industry sector profiles prepared as part of 
the EA/RIR/IRFA also confirmed that the share of the BSAI pollock 
harvest taken by catcher vessels under 125 ft (38.1 m) LOA has eroded 
since 1991. The percentage of total catcher vessel pollock harvest 
taken by catcher vessels under 125 ft (38.1 m) LOA declined from 65 
percent in 1991 to 42 percent in 1996 despite the fact that the number 
of catcher vessels under 125 ft (38.1 m) LOA increased from 71 to 89 
during the same time period. Recognizing this trend, and the fact that 
many of these small catcher vessels are considered ``small entities'' 
under the Regulatory Flexibility Act (RFA), the Council examined a 
range of options to preserve the pollock harvest share of smaller 
catcher vessels as outlined above.
    Most of the alternatives considered by the Council included TAC 
set-asides for small catcher vessels that would be available for 
harvest during the A and B pollock seasons. However, NMFS informed the 
Council that the agency's TAC monitoring system would be unable to 
monitor TAC set-asides based on vessel size without major changes in 
recordkeeping and reporting requirements that could not be implemented 
by January 1999. Based on this constraint, and on the advice of its 
Advisory Panel, the Council chose to establish a small catcher vessel 
set-aside that would be available prior to the pollock B season. 
Because only small catcher vessels delivering to inshore processors 
would be allowed to fish during this period, recordkeeping and 
reporting changes would not be required to monitor the set-aside.
    Based on this information, the Council voted to set aside a portion 
of the inshore component Bering Sea B season allocation for small 
catcher vessels (defined as catcher vessels under 125 ft (38.1 m) LOA). 
The amount of this set-aside would be equal to 2.5 percent of the BSAI 
pollock TAC after subtraction reserves. This small vessel set-aside 
would become available on or about August 25 of each year with the 
actual opening date announced by NMFS in the Federal Register on an 
annual basis. NMFS would base the actual start date for the set-aside 
fishery on the amount of the set-aside, the projected harvest rate, and 
the number of small catcher vessels expected to participate so that 
overharvest or underharvest of the set-aside is minimized.
    While the amount of the set-aside would be equal to 2.5 percent of 
the BSAI TAC after subtraction of reserves, the set-aside would be 
available in the Bering Sea only, and would be taken out of the inshore 
component B season allocation. The effect of this action would be to 
allow small catcher vessels to begin fishing for the inshore component 
B season allocation on or about August 25, effectively giving them a 6-
day ``head start'' over catcher vessels that are 125 ft (38.1 m) LOA or 
longer. Any underages or overages of the set-aside would be added to or 
subtracted from the amount available to the inshore component Bering 
Sea B season.
    Exclusion of offshore catcher vessels from the CVOA. BSAI Amendment 
51, if approved, would exclude all vessels engaged in directed fishing 
for pollock for processing by the offshore component from fishing 
inside the CVOA during the B season from September 1 until the date 
that NMFS closes the inshore component B season allocation to directed 
fishing. The Council, in adopting this change, noted that the 
proportion of catch taken by mothership operations has increased at the 
expense of catcher processors over

[[Page 58001]]

the period examined by the EA/RIR/IRFA (1991 through 1996). Under 
current regulations, catcher vessels that deliver pollock to either the 
inshore or offshore component for processing may operate within the 
CVOA. Additionally, vessels in the offshore component that do not catch 
groundfish but do process pollock, such as motherships, may operate 
within the CVOA. Although these regulations permit a catcher processor 
to operate as a mothership within the CVOA, catcher processors 
typically catch pollock in a directed fishery during the B season and 
are therefore excluded from the CVOA. Catcher vessels that deliver 
their catch to offshore catcher processors must operate within 
relatively close proximity to their processor because codends, once 
retrieved, cannot be towed for significant distances without damaging 
the pollock. On the other hand, motherships can operate where their 
offshore catcher vessels are fishing, either inside or outside the 
CVOA. As a result of the current regulations, mothership operations may 
have a competitive advantage over catcher processors because they have 
the opportunity to operate inside the CVOA during the B season where 
pollock may be more abundant. By excluding all catcher vessels that 
harvest pollock for processing by the offshore component in the CVOA 
during the B season, the Council sought to establish a more level 
playing field between the two elements of the offshore component--
catcher processors and motherships.

Council Adoption of GOA Amendment 51

    After receiving the recommendations of the AP, SSC and public 
testimony, the Council voted unanimously to extend the provisions of 
GOA Amendment 40 without change for an additional 3 years. GOA 
Amendment 51, if approved, would allocate 100 percent of the GOA 
pollock TAC and 90 percent of the GOA Pacific cod TAC to vessels 
catching pollock and Pacific cod for processing by the inshore 
component. Ten percent of the GOA Pacific cod TAC would be allocated to 
vessels catching Pacific cod for processing by the offshore component. 
The Council believed that an extension of the existing allocation 
percentages would maintain stability in the GOA pollock and Pacific cod 
fisheries and would prevent a reoccurrence of the preemption by large 
factory trawlers that led to the original inshore/offshore amendments.

Technical Changes That Will Be Made by This Proposed Rule

    In addition to the basic regulatory provisions contained in 
Amendments 51/51, this proposed rule would make two technical changes 
to the existing regulatory definitions of the inshore and offshore 
components. First, definitions of the inshore and offshore components 
at 50 CFR 679.2 would be revised to indicate that all groundfish 
processors operating in the BSAI or GOA must be identified as belonging 
to either the inshore or offshore component regardless of whether they 
process pollock harvested in a directed fishery for pollock in the BSAI 
or GOA, or Pacific cod harvested in a directed fishery for Pacific cod 
in the GOA. This change appears to be necessary because NMFS must 
assign all catch of pollock in the BSAI and GOA and all catch of 
Pacific cod in the GOA to either the inshore or offshore components 
when the catch of those species is taken in a directed fishery for 
pollock or Pacific cod, and when it is taken as incidental catch in 
fisheries directed at other species. Second, the inshore component 
definition would be revised to eliminate obsolete language defining how 
NMFS determines a single geographic location for inshore floating 
processors. This language no longer is necessary because NMFS now 
requires that processors identify themselves as inshore or offshore 
when applying for Federal groundfish permits.

Classification

    At this time, NMFS has not determined that Amendments 51/51 are 
consistent with the national standards, other provisions 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.
    An RIR was prepared for this action that describes the management 
background, the purpose and need for action, the management action 
alternatives, and the economic and social impacts of the alternatives. 
For BSAI Amendment 51, the RIR evaluated a range of alternatives from a 
return to pre-1992 ``open access'' management, through retention of the 
current allocation scheme, to a series of incremental reallocations of 
TAC among the several BSAI industry components. For GOA Amendment 51, 
the RIR evaluated two alternatives, a return to pre-1992 ``open 
access'' management, and retention of the current allocation scheme.
    The Council prepared an IRFA as part of the RIR that addresses the 
economic impacts of the preferred alternative on small entities. The 
IRFA concludes that BSAI Amendment 51 would have a significant economic 
impact on a substantial number of small entities in the BSAI, but GOA 
Amendment 51 would not have a significant economic impact on a 
substantial number of small entities in the GOA. A copy of the IRFA is 
available from the Council (See ADDRESSES).
    The IRFA determines that the only small businesses that participate 
directly in the BSAI pollock fishery are independent catcher vessels. 
All other business entities that participate directly in the BSAI 
pollock fishery (catcher processors, motherships, shoreside processors, 
and processor-affiliated catcher vessels) are considered large entities 
under the RFA. Independent catcher vessels participate in both sectors 
of the BSAI pollock fishery. Of the 49 independent catcher vessels 
estimated to be small entities, 45 are under 125 ft (38.1 m) LOA and 4 
are 125 ft (38.1 m) LOA or larger. The estimated numbers of catcher 
vessels that participated in the 1996 BSAI pollock fishery by sector, 
vessel size, and small or large entity status are displayed in the 
following table:

----------------------------------------------------------------------------------------------------------------
                                                         Small entities                   Large entities
        Catcher vessel size and sector         -----------------------------------------------------------------
                                                     <125'      125'       <125'      125'
----------------------------------------------------------------------------------------------------------------
Inshore sector................................              35                2              17               15
Offshore sector...............................               9                2              16                0
Both sectors..................................               1                0              12                9
    Total.....................................              45                4              45               24
----------------------------------------------------------------------------------------------------------------


[[Page 58002]]

    If implemented, BSAI Amendment 51 presents three types of impacts 
on independent catcher vessels. First, the allocation shift itself 
would impact catcher vessels participating in both sectors. Second, the 
small vessel TAC set-aside would have impacts on catcher vessels of all 
sizes. Finally, the exclusion of offshore catcher vessels from the CVOA 
would impact catcher vessels delivering to the offshore sector. Each of 
these impacts is summarized below.
    Impacts of the Allocation Shift on Season Lengths. Quantitative 
predictions about the impacts of the Council's preferred alternative on 
net revenues of catcher vessels are impossible because information on 
gross and net revenues for individual catcher vessels is not available. 
However, using data from 1997, the most recent full year for which data 
are available, it is possible to estimate how BSAI pollock fishing 
season lengths would have been affected under the Council's preferred 
alternative if it had been in effect in 1997.
    If BSAI Amendment 51 had been in place during 1997, inshore catcher 
vessels equal to or longer than 125 ft (38.1 m) would have gained an 
additional 3 fishing days during the A season (January 20 to April 1) 
and would have lost one fishing day during the B season for a net gain 
of 2 fishing days. Two small entities fall into this category. Offshore 
catcher vessels over 125 ft (38.1 m) LOA would have lost 2 fishing days 
during the A season (January 25 to April 1) and 2 fishing days during 
the B season for a net loss of 4 fishing days or 7.1 percent of their 
total fishing days compared to the actual 1997 fishery. Two small 
entities fall into this category. The value of a fishing day during the 
A season may be marginally greater than the value of a fishing day 
during the B season because the catchability of pollock in the BSAI is 
generally greater during the A season, and most processors give 
fishermen a monetary bonus based on proceeds from the roe season.
    As noted above, 45 of the 49 catcher vessel small entities that 
participated in the BSAI pollock fishery in 1996 are under 125 ft (38.1 
m). If BSAI Amendment 51 had been in place during 1997, inshore catcher 
vessels under 125 ft (38.1 m) LOA would have gained an additional 3 
fishing days during the A season, would have lost 1 fishing day during 
the B season and would have gained 6 fishing days during the small 
catcher vessel set-aside fishery for a net gain of 8 fishing days. 
Thirty-five small entities fall into this category and one small entity 
delivers to both sectors. All of these small entities will benefit from 
the Council's preferred alternative. Offshore catcher boats under 125 
ft (38.1 m) LOA would have lost 2 fishing days during both the A season 
and B season, and would have gained approximately 5 fishing days during 
the small catcher vessel set-aside fishery, assuming they were able to 
secure inshore markets, for a net gain of 1 fishing day. Nine small 
entities fall into this category. Because offshore catcher vessels 
would be excluded from the CVOA during the B season, these catcher 
vessels would lose at least one fishing day while they transit to 
waters outside the CVOA prior to the start of the B season and, 
therefore, would be unable to take advantage of the entire 6-day set-
aside fishery.
    Estimating the effects of the small catcher vessel set-aside. A 
set-aside fishery for small catcher vessels has never been conducted in 
the BSAI or GOA groundfish fisheries. Consequently, it is difficult to 
project the costs and benefits of such a fishery on small entities. 
Anecdotal information from inshore processors indicates that all of the 
inshore processors in the BSAI intend to participate in this fishery 
and that they intend to operate their plants at full capacity. This 
suggests that the 25 offshore catcher vessels under 125 ft (38.1 m) (9 
of which are small entities) may be able to secure inshore markets for 
this 6-day fishery. However, offshore catcher vessels may not be able 
to participate in the entire set-aside fishery if they intend to be in 
position to begin fishing for their offshore processors outside the 
CVOA beginning September 1. Inshore processors also have stated that 
they may use large catcher vessels as tenders to ferry pollock from the 
fishing grounds to the plants. The use of tenders would enable small 
catcher vessels to fish non-stop during the opening, although they 
would likely receive a lower price for fish transferred to large 
catcher vessels at sea than for fish delivered to a plant. At present, 
projecting the net revenues to the small catcher vessel fleet as a 
result of this set-aside is impossible because the prices that inshore 
processors are willing to pay for these fish are unknown. Inshore 
processors may have little incentive to bargain with small catcher 
vessels because any unharvested quota from this fishery would become 
immediately available to all inshore catcher vessels on September 1. 
Because inshore processors own (or have financial affiliations with) 
most of the large inshore catcher vessels, inshore processors may 
benefit financially if the set-aside is under-harvested.
    Impacts from excluding offshore catcher vessels from the CVOA. 
Under BSAI Amendment 51, catcher vessels that deliver to the offshore 
component would be prohibited from fishing inside the CVOA during B 
season, from September 1 until the date that NMFS closes the inshore 
component B season allocation to directed fishing. Excluding offshore 
catcher vessels from the CVOA would impact catcher vessels delivering 
to motherships more than catcher vessels delivering to factory 
trawlers. Codends, once retrieved, cannot be towed for significant 
distances without damaging the pollock, which means that offshore 
catcher vessels must operate within relatively close proximity to their 
processor. For this reason, a catcher vessel delivering to a factory 
trawler that is fishing outside the CVOA must also fish outside the 
CVOA unless both vessels are fishing very close to the boundary of the 
CVOA. Currently, catcher vessels delivering to motherships do not face 
this restriction because motherships are allowed to operate within the 
CVOA, and the mothership fleet has a history of operating within the 
CVOA during the B season. During public testimony, representatives for 
mothership operations expressed concerns about vessel safety if they 
are required to fish outside the CVOA during the B season. The extent 
to which these concerns are justified is difficult to evaluate. The US 
Coast Guard indicated that no statistics exist to suggest that fishing 
outside the CVOA is more dangerous than fishing inside the CVOA. 
However, excluding offshore catcher vessels from the CVOA would force 
these vessels to operate further offshore during the B season, which 
may have some unquantifiable impact on vessel safety. It could also 
impose additional costs on these vessels to the extent that they are 
forced to transit farther from port to begin fishing.
    Effects of GOA Amendment 51 on small entities. The IRFA concludes 
that GOA Amendment 51 would affect the entire GOA commercial fishing 
fleet. In 1996, the most recent year for which vessel participation 
information is available, 1,508 vessels participated in the groundfish 
fisheries of the GOA; 1,254 longline vessels, 148 pot vessels, and 202 
trawl vessels. Most of these vessels are considered small entities 
under the RFA. The commercial pollock catch in the GOA totaled 51,000 
mt in 1996 with an exvessel value of $10.3 million. The Pacific cod 
catch in the GOA totaled 68,000 mt in 1996 with an exvessel value of 
$25.2 million. Most of the businesses involved in the support service 
industry for the groundfish

[[Page 58003]]

fisheries of the GOA (e.g., equipment, supplies, fuel, groceries, 
entertainment, transportation) are also considered to be small 
entities.
    GOA Amendment 51, which would allocate 100 percent of the pollock 
TAC and 90 percent of the Pacific cod TAC to the vessels fishing for 
processing by the inshore component, would positively impact nearly all 
small entities participating in the pollock and Pacific cod fisheries 
of the GOA because nearly all of these small entities are part of the 
inshore component. The absence of Amendment 51 would open up the GOA 
pollock and Pacific cod fisheries to exploitation by large catcher 
processors, which are not small entities, and the current small entity 
participants in the GOA pollock and Pacific cod fisheries would be 
largely displaced as a result.
    This proposed rule has been determined to be not significant for 
the purposes of E.O. 12866.
    The Council prepared an environmental assessment (EA) for these FMP 
amendments that discusses the impact on the environment as a result of 
this rule. The fisheries for pollock and Pacific cod and the affected 
human environment are described in the FMPs, the environmental impact 
statement prepared for Amendments 18/23, the EA prepared for Amendments 
38/40, and in the EA prepared for this action. A copy of the EA is 
available from the Council (see ADDRESSES).
    A formal section 7 consultation under the Endangered Species Act 
was initiated for Amendments 51/51. A biological opinion is under 
preparation that will determine whether the fishing activities 
conducted under Amendments 51/51 and its implementing regulations are 
likely to jeopardize the continued existence of any endangered or 
threatened species under the jurisdiction of NMFS or result in the 
destruction or adverse modification of critical habitat.

List of Subjects in 50 CFR Part 679

    Alaska, Fisheries, Recordkeeping and reporting requirements.

    Dated: October 23, 1998.
Gary C. Matlock,
Director, Office of Sustainable 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 50 CFR 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 definitions of ``inshore component'' and 
``offshore component'' are revised to read as follows:


Sec. 679.2  Definitions.

* * * * *
    Inshore component (applicable through December 31, 2001) means the 
following three categories of the U.S. groundfish fishery that process 
groundfish harvested in the GOA or BSAI:
    (1) Shoreside processing operations.
    (2) Vessels less than 125 ft (38.1 m) LOA, that process no more 
than 126 mt per week in round-weight equivalents of an aggregate amount 
of pollock and Pacific cod.
    (3) Vessels that process pollock or Pacific cod harvested in a 
directed fishery for those species at a single geographic location in 
Alaska State waters during a fishing year.
* * * * *
    Offshore component (applicable through December 31, 2001) means all 
vessels not included in the definition of ``inshore component'' that 
process groundfish harvested in the BSAI or GOA.
* * * * *
    3. In Sec. 679.7, paragraph (a)(7) heading is revised to read as 
follows:


Sec. 679.7  Prohibitions.

* * * * *
    (a) * * *
    (7) Inshore/offshore (Applicable through December 31, 2001).* * *
* * * * *
    4. In Sec. 679.20, the applicable dates in the headings of 
paragraphs (a)(6), (b)(1)(iv), (b)(2)(i), (b)(2)(ii), and (c)(4) are 
revised to read: ``Applicable through December 31, 2001.''; paragraph 
(a)(6)(i) is revised; and paragraph (a)(6)(vi) is added to read as 
follows:


Sec. 679.20  General limitations.

* * * * *
    (a) * * *
    (6) * * *
    (i) BSAI pollock. The apportionment of pollock in each BSAI subarea 
or district and season will be allocated 39 percent to vessels catching 
pollock for processing by the inshore component and 61 percent to 
vessels catching pollock for processing by the offshore component.
* * * * *
    (vi) Bering Sea subarea pollock set-aside fishery for catcher 
vessels less than 125 ft (38.1 m) LOA--(A) Calculation of amount. An 
amount equal to 2.5 percent of the BSAI pollock TAC, after subtraction 
of reserves, will be set aside from the inshore component B season 
allowance. This set-aside will become available to catcher vessels less 
than 125 ft (38.1 m) LOA catching pollock for processing by the inshore 
component on or about August 25 of each year as set out at 
Sec. 679.23(e)(2)(ii)(E).
    (B) Underages and overages. Any harvest underage or overage of the 
small vessel set-aside established under paragraph (a)(6)(vi)(A) will 
be added to or subtracted from inshore component B season allowance.
* * * * *
    5. In Sec. 679.22, paragraph (a)(5) is revised to read as follows:


Sec. 679.22  Closures.

    (a) * * *
    (5) Catcher Vessel Operational Area (CVOA) (applicable through 
December 31, 2001). The CVOA is defined as the area of the BSAI east of 
167 deg. 30' W. long., west of 163 deg. W. long., and south of 56 deg. 
N. lat. (see Figure 2 of this part).
    (i) Effective time period. The CVOA is established annually during 
the B season, defined at Sec. 679.23(e)(2)(i)(B), from September 1 
until the date that NMFS closes the inshore component B season 
allocation to directed fishing.
    (ii) Offshore component restrictions. Vessels in the offshore 
component or vessels catching pollock for processing by the offshore 
component are prohibited from conducting directed fishing for pollock 
in the CVOA unless they are operating under a CDP approved by NMFS.
    (iii) Fisheries other than pollock. Vessels that harvest or process 
groundfish in directed fisheries for species other than pollock may 
operate within the CVOA consistent with the other provisions of this 
part.
    6. In Sec. 679.23, paragraph (e)(2) is revised to read as follows:


Sec. 679.23  Seasons.

* * * * *
    (e) * * *
    (2) Directed fishing for pollock. (i) Subject to other provisions 
of this part, and except as provided in paragraphs (e)(2)(ii) through 
(e)(2)(iv) of this section, directed fishing for pollock is authorized 
only during the following two seasons:
    (A) A season. From 0001 hours A.l.t. January 1 through 1200 hours 
A.l.t. April 15.
    (B) B season. From 1200 hours A.l.t. September 1 through 1200 hours 
A.l.t. November 1.
    (ii) Offshore component restrictions (applicable through December 
31,

[[Page 58004]]

2001)--(A) Offshore A season. Subject to the other provisions of this 
part, directed fishing by the offshore component or by vessels 
delivering to the offshore component is authorized from 1200 hours 
A.l.t. January 26 through 1200 hours A.l.t. April 15.
    (B) Offshore A season ``fair start'' requirement. Directed fishing 
for pollock by the offshore component, or by vessels catching pollock 
for processing by the offshore component is prohibited through 1200 
hours, A.l.t., February 5, for any vessel that is used to fish in a 
non-CDQ fishery for groundfish in the BSAI or GOA, or for king or 
Tanner crab in the BSAI prior to 1200 hours, A.l.t., January 26 of the 
same year.
    (iii) Set-aside for catcher vessels less than 125 ft (38.1 m) LOA 
(applicable through December 31, 2001). Subject to other provisions of 
this part, directed fishing for pollock by catcher vessels less than 
125 ft (38.1 m) LOA catching pollock for processing by the inshore 
component will be authorized beginning on or about August 25 of each 
year by notification in the Federal Register. NMFS will base the 
opening date on the amount of the set-aside, the projected harvest 
rate, and the number of vessels expected to participate in the set-
aside fishery.
    (iv) B season ``fair start'' requirement. Except as provided for in 
paragraph (e)(2)(iii) of this section, directed fishing for pollock is 
prohibited from 1200 hours A.l.t., September 1 through 1200 hours, 
A.l.t., September 8, for any vessel that is used to fish for groundfish 
with trawl gear in a non-CDQ fishery in the BSAI or GOA between 1200 
hours A.l.t., August 25, and 1200 hours A.l.t., September 1.
* * * * *
[FR Doc. 98-28893 Filed 10-28-98; 8:45 am]
BILLING CODE 3510-22-P