[Federal Register Volume 64, Number 89 (Monday, May 10, 1999)]
[Rules and Regulations]
[Pages 24960-24962]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11699]



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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration (NOAA)

50 CFR Part 679

[Docket No. 980923246-9106-02; I.D. 071598A]
RIN 0648-AK20


Fisheries in the Exclusive Economic Zone Off Alaska; Hired 
Skipper Requirements for the Individual Fishing Quota Program

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

ACTION: Final rule.

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SUMMARY: NMFS publishes a final rule implementing a change in the 
Individual Fishing Quota (IFQ) Program for fixed gear Pacific halibut 
and sablefish fisheries in and off Alaska. This action modifies the 
vessel ownership requirements for quota share (QS) holders wishing to 
hire skippers to harvest the IFQ allocations derived from QS for 
Pacific halibut and sablefish in the fixed gear IFQ fisheries. This 
action is necessary to promote an owner-operator catcher vessel fleet 
in the halibut and sablefish fixed gear fisheries off Alaska and to 
further the objectives of the IFQ Program.

DATES: Effective June 9, 1999.

ADDRESSES: Copies of the Regulatory Impact Review/Final Regulatory 
Flexibility Analysis (RIR/FRFA) for this action may be obtained from 
the Alaska Region, NMFS, Room 453, 709 West 9th Street, Juneau, AK 
99801, or P.O. Box 21668, Juneau, AK 99802, Attention: Lori J. Gravel.

FOR FURTHER INFORMATION CONTACT: James Hale, 907-586-7228.

SUPPLEMENTARY INFORMATION:

Background

    The IFQ Program is a limited access system for managing the fixed 
gear fisheries for Pacific halibut (Hippoglossus stenolepis) and 
sablefish (Anoplopoma fimbria) in waters of the exclusive economic zone 
off Alaska. The North Pacific Fishery Management Council (Council), 
under authority of the Magnuson-Stevens Fishery Conservation and 
Management Act and the Northern Pacific Halibut Act of 1982 (Halibut 
Act), recommended the IFQ Program, which NMFS implemented in 1995. The 
IFQ Program is designed to reduce excessive fishing capacity, while 
maintaining the social and economic character of the fixed gear fishery 
and the coastal communities where many of these fishermen are based. To 
this end, various program constraints limit consolidation of QS and 
ensure that practicing fishermen, rather than investment speculators, 
retain harvesting privileges. The Fishery Management Plan for 
Groundfish of the Gulf of Alaska and the Fishery Management Plan for 
the Groundfish Fishery of the Bering Sea and Aleutian Islands Area 
(FMPs) and the IFQ Program implementing regulations prohibit all 
leasing of IFQ derived from QS in categories B, C, and D (QS which 
authorizes the harvest but not the processing of IFQ species onboard 
the vessel) and require that holders of such QS be aboard the vessel 
harvesting IFQ species during all fishing operations.
    An exception to this owner-aboard provision allows initial 
recipients of B, C, or D category QS to employ a hired skipper to fish 
their IFQ provided that the QS holder owns the vessel on which the IFQ 
are being fished. This exception was created to allow fishermen who had 
operated their fishing businesses with hired skippers before the IFQ 
Program was implemented to continue operating this way under the IFQ 
Program. While the IFQ Program promotes an owner-operator fixed gear 
fishery for sablefish and halibut, this exception allows initial 
recipients of QS to remain ashore while having their IFQ harvested by a 
hired skipper. By limiting this exception to initial recipients, the 
Council designed the hired skipper provision to expire with the 
eventual transfer of all QS out of the possession of initial 
recipients.
    A problem developed in the first years of the IFQ Program because 
the regulations do not clearly define vessel ownership. Some initial 
recipients of QS purchased a nominal interest in a vessel, as little as 
1 percent or less, and thereby save the costs of operating a wholly-
owned vessel and crew. Although such nominal vessel ownership served 
the objective of fishing capacity reduction, it compromised the 
Council's social and economic intent for an owner-operator fishery in 
which QS holders actually participate in harvesting operations. Also, 
such nominal vessel ownerships created the potential for excessive loss 
of crew member jobs.
    This action revises the regulations to specify a minimum vessel 
ownership interest that must be acquired before the QS holder may hire 
a skipper to harvest the IFQ. Under the new regulations, initial 
recipients of B, C, or D category QS who wish to hire skippers to fish 
the IFQ derived from their QS must own a minimum of a 20 percent 
interest in the vessel on which the IFQ species are being harvested.
    QS holders whose applications to hire skippers were approved prior 
to April 17, 1997, the date of the Council's first review of the 
analysis of this issue, are exempt from the requirement provided that 
(1) the QS holder's percentage of ownership in the vessel which the 
hired skipper will operate does not fall below the percentage held in 
that vessel at the time he or she had a hired-skipper application 
approved prior to April 17, 1997, and (2) the QS holder has acquired no 
additional QS after September 23, 1997, the date of the Council's final 
action to recommend this regulatory change. A QS holder who held less 
than a 20 percent interest in a vessel prior to April 17, 1997, must 
continue to hold at least that percentage in order to be elgible to 
hire a skipper to fish his or her IFQ on that vessel. Moreover, because 
an initial recipient of QS may hire a skipper to fish not only the QS 
acquired as an initial allocation but also any QS acquired through 
transfer, the maximum amount of QS that can be used under this 
exemption is the level held prior to September 23, 1997, the date of 
the Council's final action on this proposal. This restriction assures 
that only existing business arrangements regarding levels of vessel 
ownership and QS holdings can use this exemption.

Changes from the Proposed Rule

    A sentence has been added to Sec. 679.42(i)(1) and to 
Sec. 679.42(j) to clarify the means by which a person's vessel 
ownership is determined. Presently, NMFS requests that vessel ownership 
be validated by submission of a facsimile of either a U.S. Coast Guard 
Abstract of Title or a bill of sale. While such documents may be 
preferable as evidence that a person holds the required minimum 
percentage of ownership interest, other documents may also provide 
adequate proof of ownership. Therefore, the regulatory language is 
amended to clarify that, for purposes of the minimum vessel ownership 
interest requirements, NMFS requires only that the evidence of 
ownership be in writing. NMFS will make its determination on the basis 
of written documentation only. This requirement is to ensure that 
vessel ownership claims are adequately supported in applications for 
hired skipper cards.
    A more detailed explanation of this action may be found in the 
preamble to the proposed rule (63 FR 69256, December 16, 1998). The 
proposed rule invited public comment through January 16, 1999, on the 
proposed

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action. NMFS received no comments on the proposed rule.

Small Entity Compliance Guide

    The following information satisfies the Small Business Regulatory 
Enforcement Fairness Act of 1996, which requires a plain language guide 
to assist small entities in complying with this rule. This rule 
requires a QS holder to own at least a 20 percent interest in a vessel 
to hire a skipper to fish his or her IFQ.

What small entities will this rule impact?

    Any person who holds an initial allocation of QS, whether an 
individual or a corporation or a partnership, is allowed by the 
regulations to hire a skipper to fish the person's IFQ, provided that 
the QS holder owns the fishing boat on which the IFQ is harvested. This 
action defines exactly what is meant by ``ownership'' of a boat for 
purposes of the IFQ Program's hired skipper provisions: To hire a 
skipper to fish your IFQ, you must own at least 20 percent interest in 
the boat used to harvest your IFQ. For example, if you wish to hire a 
skipper to fish your IFQ and you hold only 15 percent ownership 
interest in your boat, you will have to acquire an additional 5 percent 
of ownership interest to be able to hire a skipper to fish your IFQ on 
that boat. Of course, you may still choose to be aboard the vessel when 
it fishes your IFQ, in which case you need not have any ownership 
interest in the boat.

Are there any exceptions to the 20-percent minimum ownership interest 
requirement?

    Yes. If you hired a skipper prior to April 17, 1997, on a boat in 
which you owned less than 20 percent interest, you may continue to hire 
a skipper to fish your IFQ on that boat as long as you maintain the 
percentage of interest in the boat that you held on April 17, 1997. For 
example, if you held 10 percent interest in a boat on April 17, 1997, 
and had hired a skipper to fish your IFQ from that boat prior to that 
date, then you may continue to hire a skipper to fish your IFQ from 
that boat as long as you own no less than 10 percent of the boat. This 
is the grandfather clause to the 20-percent minimum vessel ownership 
requirement.

Are there any limitations on the grandfather clause?

    Yes. The rule also requires that persons eligible to take advantage 
of the grandfather clause have acquired no additional QS through 
transfer after September 23, 1997. The grandfather provision is 
limited, because, if you are eligible to hire a skipper, you may hire a 
skipper to fish not only the QS you acquired through initial issuance 
but also all QS that you acquired thereafter through approved transfer. 
While allowing for certain business practices that existed prior to 
April 17, 1997, the Council chose to limit the amount of QS that may be 
subject to the grandfather clause. For example, if you held 5 percent 
interest in a boat on which you employed a skipper to fish your IFQ 
prior to April 17, 1997, you may continue to use a hired skipper on 
that boat as long as you own no less than 5 percent interest in the 
boat and have not acquired any additional QS through transfer after 
September 23, 1997. If you have acquired additional QS after that date, 
you are no longer eligible to take advantage of the grandfather 
provision and must acquire additional interest in your boat to equal no 
less than 20 percent if you wish to hire a skipper to fish your IFQ. 
You may always fish your IFQ yourself and not be obliged to hold any 
ownership interest in the boat on which you fish your IFQ.

How will NMFS determine whether a person holds the required minimum 
percentage of vessel ownership?

    NMFS will make that determination on the basis of written 
documentation submitted with the application for a hired skipper card. 
That documentation may be in the form of a U.S. Coast Guard Abstract of 
Title, or of a bill of sale, or other such documentation, as long as 
the evidence is in writing.

Classification

    This final rule has been determined to be not significant for 
purposes of E.O. 12866.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to 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 contains a collection-of-information requirement subject 
to the Paperwork Reduction Act. The requirement that QS holders provide 
written evidence of the percentage of vessel ownership clarifies a 
collection of information that has been approved by the Office of 
Management and Budget (OMB) under control number 0648-0272.
    NMFS prepared a Final Regulatory Flexibility Analysis (FRFA) for 
this action. The total universe of small entities affected by this 
proposed action would comprise approximately 6,000 persons who hold 
initial allocations of QS and are eligible to hire skippers in the IFQ 
Program. NMFS has no data at present to indicate how many of these 
persons own their own vessels at the required minimum of 20 percent. 
Nor does NMFS have data to analyze the amount of financial burden that 
acquisition of additional ownership would impose on those who at 
present own less than 20 percent interest in a vessel and wish to hire 
skippers. The grandfather clause would in part mitigate the impact of 
the action by allowing those who had hired skippers prior to April 17, 
1997, to continue to do so at the percentage of vessel ownership held 
on that date. However, consistent with Council intent, this action will 
likely reduce the number of QS holders employing hired skippers. 
Consequently, it will also affect persons who hire themselves out as 
skippers for vessels owned by others.
    In developing this amendment, the Council considered numerous 
alternatives to develop an action that would minimize the negative 
economic impact while addressing the issue of nominal vessel ownership 
in the IFQ hired skipper provisions. Minimum vessel ownership 
percentages of 5, 20, 49, and 51 percent were analyzed and reviewed 
before recommending the present action as resolving the issue in a way 
least burdensome to the affected entities. Nevertheless, the financial 
impact of this action could potentially be borne by all initial 
recipients of QS in categories B, C, or D, as well as by skippers who 
would hire themselves out to operate vessels in the IFQ fisheries. No 
comments were received on the Initial Regulatory Flexibility Analysis. 
A copy of the FRFA analysis is available from NMFS (see ADDRESSES).

List of Subjects in 50 CFR Part 679

    Alaska fisheries, Reporting and recordkeeping requirements.

    Dated: May 4, 1999.
Penelope D. Dalton,
Assistant Administrator for Fisheries, National Marine Fisheries 
Service.
    For the reasons set out in the preamble, 50 CFR Part 679 is amended 
as follows:

PART 679-FISHERIES IN 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. 679.42, revise paragraph (i)(1); remove the first 
sentence of the

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introductory text of paragraph (j) and add two sentences in its place, 
and add paragraph (j)(5) to read as follows:


Sec. 679.42  Limitations on use of QS and IFQ.

* * * * *
    (i) * * *
    (1) An individual who received an initial allocation of QS assigned 
to categories B, C, or D does not have to be aboard the vessel on which 
his or her IFQ is being fished or to sign IFQ landing reports if that 
individual owns at least a 20-percent interest in the vessel and is 
represented on the vessel by a master employed by that individual. NMFS 
will determine ownership interest for purposes of this paragraph only 
on the basis of written documentation. This minimum 20-percent 
ownership requirement does not apply to any individual who received an 
initial allocation of QS assigned to categories B, C, or D and who, 
prior to April 17, 1997, employed a master to fish any of the IFQ 
issued to that individual, provided the individual continues to own the 
vessel from which the IFQ is being fished at no lesser percentage of 
ownership interest than that held on April 17, 1997, and provided that 
this individual has not acquired additional QS through transfer after 
September 23, 1997.
* * * * *
    (j) Use of IFQ resulting from QS assigned to vessel categories B, 
C, or D by corporations and partnerships. Except as provided in 
paragraph (j)(5) of this section, a corporation or partnership that 
received an initial allocation of QS assigned to categories B, C, or D 
may fish the IFQ resulting from that QS and any additional QS acquired 
within the limitations of this section provided that the corporation or 
partnership owns at least a 20- percent interest in the vessel on which 
its IFQ is fished, and that it is represented on the vessel by a master 
employed by the corporation or partnership that received the initial 
allocation of QS. NMFS will determine ownership interest for purposes 
of this paragraph only on the basis of written documentation. * * *
* * * * *
    (5) A corporation or a partnership that received an initial 
allocation of QS assigned to categories B, C, or D and that, prior to 
April 17, 1997, employed a master to fish any of the IFQ issued to that 
corporation or partnership may continue to employ a master to fish its 
IFQ on a vessel owned by the corporation or partnership provided that 
the corporation or partnership continues to own the vessel at no lesser 
percentage of ownership interest than that held on April 17, 1997, and 
provided that corporation or partnership did not acquire additional QS 
through transfer after September 23, 1997.
* * * * *
[FR Doc. 99-11699 Filed 5-7-99, 8:45 am]
BILLING CODE 3510-22-F