[Federal Register Volume 65, Number 53 (Friday, March 17, 2000)]
[Proposed Rules]
[Pages 14518-14519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-6714]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 622

[Docket No. 000229053-0053-01; I.D. 120699A]
RIN 0648-AK96


Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; 
Reef Fish Fishery of the Gulf of Mexico; Amendment 17

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

ACTION: Proposed rule; request for comments.

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SUMMARY: NMFS issues this proposed rule to implement Amendment 17 to 
the Fishery Management Plan for the Reef Fish Resources of the Gulf of 
Mexico (FMP). This rule proposes to extend the current commercial reef 
fish vessel permit moratorium, which expires on December 31, 2000, for 
5 years to December 31, 2005. The purpose of the moratorium is to 
provide a stable environment in the fishery necessary for evaluation 
and development of a more comprehensive controlled access system for 
the entire commercial reef fish fishery.

DATES: Comments must be received no later than 5:00 p.m., eastern 
standard time, on May 1, 2000, at the appropriate address or fax number 
(see ADDRESSES).

ADDRESSES: Written comments must be mailed to the Southeast Regional 
Office, NMFS, 9721 Executive Center Drive N., St. Petersburg, FL 33702; 
they may also be sent via facsimile (fax) to 727-570-5583, but they may 
not be sent via e-mail or the Internet.
    Requests for copies of Amendment 17, which includes an 
environmental assessment and a regulatory impact review, should be sent 
to the Gulf of Mexico Fishery Management Council, 3018 U.S. Highway 301 
North, Suite 1000, Tampa, Florida 33619-2266; phone: 813-228-2815; fax: 
813-225-7015; e-mail: [email protected].

FOR FURTHER INFORMATION CONTACT: Michael Barnette, 727-570-5305; fax: 
727-570-5583; e-mail: [email protected].

SUPPLEMENTARY INFORMATION: The reef fish fishery is managed under the 
FMP as prepared by the Gulf of Mexico Fishery Management Council 
(Council) and approved and implemented by NMFS under the authority of 
the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-
Stevens Act) by regulations at 50 CFR part 622.
    This proposed rule would implement FMP Amendment 17 and extend the 
moratorium on the issuance of new commercial reef fish vessel permits 
that was initiated by Amendment 4 in 1992. Amendment 4 was intended to 
last for 3 years but was extended twice. The second extension in 1995 
was for 5 years ending on December 31, 2000. The permit moratorium was 
deemed necessary to moderate short-term future increases in fishing 
effort and to stabilize fishing mortality while the Council was 
considering a more comprehensive effort limitation program. During the 
moratorium, the Council developed an individual transferable quota 
system for red snapper. However, before it was implemented, Congress 
prohibited individual fishing quotas (IFQs) under sections 303(d) and 
407 of the Magnuson-Stevens Act. The current Congressional prohibition 
of IFQs will lapse on October 1, 2000.
    The Council intends to evaluate a broad range of controlled access 
systems, including IFQs, for the commercial reef fish fishery. 
Development and implementation of a comprehensive controlled access 
system are expected to extend past the period of the current 
moratorium. Without a moratorium, fishing effort in the resulting open 
access reef fish fishery is likely to increase and complicate 
allocation of fishing privileges, creating an unstable fishery 
environment.
    Additional background and rationale for the measures discussed 
above are contained in Amendment 17, the availability of which was 
announced in the Federal Register on December 17, 1999 (64 FR 70678). 
Written comments on Amendment 17 were solicited and must have been 
received by February 15, 2000, to be considered in the approval/
disapproval decision on Amendment 17. All comments received on 
Amendment 17 or on this proposed rule during their respective comment 
periods will be addressed in the preamble to the final rule.

Classification

    At this time, NMFS has not determined that the amendment that 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 on Amendment 17.
    This proposed rule has been determined to be not significant for 
purposes of E.O. 12866.
    The Chief Counsel for Regulation of the Department of Commerce 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration that this proposed rule, if adopted, would not have a 
significant economic impact on a substantial number of small entities 
as follows:

    The proposed rule contains a single provision to extend the 
commercial reef fish permit moratorium for 5 years, from its current 
expiration date of December 31, 2000, to December 31, 2005, unless 
replaced sooner by a comprehensive controlled access system. The 
moratorium on new permits was first instituted in May 1992 and was 
extended on two previous occasions by FMP Amendments 9 and 11. The 
current expiration date of December 31, 2000, was set by FMP 
Amendment 11 in January 1996 with the stated purpose of allowing 
time for the Gulf of Mexico Fishery Management Council (Council) to 
consider limited access for the reef fish fishery. However, several 
intervening events since January 1996, including a Congressional 
moratorium on new individual transferable quota management systems 
in effect until October 2000, have hindered the Council's taking its 
intended action to develop a limited access system for this fishery. 
Comprehensive controlled access systems are difficult to develop and 
implement; there is an insufficient amount of time to implement such 
a system by December 31, 2000. Hence, the Council is proposing the 
current action to provide additional time to develop a new limited 
access system and to ensure that the current management system will 
not revert to open access before the new system is developed, 
approved, and implemented.
    The entities that could be affected by Amendment 17 are those 
firms holding commercial reef fish harvest permits. There

[[Page 14519]]

are currently about 1,204 such permit holders and they all meet the 
Small Business Administration definition of small business entities.
    The status quo (taking no action) means that the permit 
moratorium would expire, the fishery would revert to open access, 
and the number of permits issued to fishermen would likely increase. 
Conversely, the proposed action to extend the existing moratorium 
means that nothing would change and the permit moratorium, would 
continue. Under the status quo alternative, then there would be a 
number of economic effect changes related to the fishery's reversion 
to open access. For example, given that there were 2,200 permits 
issued to fishermen at the start of the moratorium in 1992 and that 
there are now only about 1,204 permits. it is likely that additional 
vessel owners would obtain permits. While some of them would 
probably obtain a permit with the intention only of establishing 
harvesting rights in the reef fish fishery and would not actively 
participate in the fishery, other new entrants would ostensibly be 
active. Some of the active new entrants might land a minimum 
quantity of reef fish with the expectation that having a permit in 
combination with at least some level of landings history would 
enhance their claim to future fishery access rights.
    Another reason to expect additional entrants into the fishery 
under open access conditions is that the moratorium has created an 
economic situation in which about 120 permit transfers occur each 
year. A market has developed for reef fish permits, and recent 
single permit prices have been in the range of $8,000 to $10,000. 
This market probably exceeds the expected net present value of 
profits (net revenues) derived from the small catches made by 
marginal participants. The market value is also indicative of the 
value that some entrants have put on participation in the fishery. 
With the moratorium lifted, new entry would be possible by paying 
only the administrative permit fee, currently $50 for a new permit 
or $20 for a reef fish endorsement to an existing permit for another 
species. If some fishermen are willing to buy a permit for several 
thousand dollars, others must be ready to pay the $20 or $50 for an 
endorsement or for a new permit.
    Further, at the present time, the fisherman giving up a permit 
by transfer must exit the fishery, and current exit behavior is 
probably influenced by the value of a permit. Logbook data indicate 
that some participants do not land a large amount of reef fish on an 
annual basis and these are the participants who are most likely to 
sell their existing permit to a new entrant under the continuing 
condition of a moratorium on new permits. the reasoning is that the 
expected net present value of profits (net revenues) derived from 
small catches would be exceeded by the current market value of the 
reef fish permit. This exit behavior probably accounts for the bulk 
of the annual transfer of about 120 permits.
    In summary, maintaining the status quo and thereby allowing the 
current permit moratorium to expire could result in an increase in 
the number of permits; an increase in the catch of those reef fish 
species not currently subject to a commercial catch quota; an 
unknown, but likely small, decrease in exvessel prices; and a loss 
of the estimated $8,000 to $10,000 market value of a permit. The 
result would be a negative economic impact on all current permit 
holders, including those who might otherwise be expected to sell 
their permits and exit the fishery under the current system.
    At the same time, there would also be positive impacts for at 
least some new entrants because they could obtain a permit for $20 
to $50 instead of paying $8,000 to $10,000 for an existing permit. 
Some new entrants probably would be able to participate in the 
fishery at a significant and profitable level. In addition to these 
rather straightforward impacts on current participants and new 
entrants, the increase in the number of permitted fishermen could 
create derby fisheries for species subject to commercial quotas with 
the attendant loss in economic benefits typically associated with 
such fisheries.
    By allowing the fishery to revert to open access, the Council 
would once again have to undertake the preliminary steps necessary 
to establish a comprehensive controlled access system. It is likely 
that these steps would have negative economic impacts on at least 
some participants who may have to reestablish a fishing history or 
take other steps to remain in the new system.
    The overall conclusion is that if the status quo was chosen and 
the permit moratorium allowed to expire on December 31, 2000, there 
would be negative impacts on existing participants in the Gulf of 
Mexico reef fish fishery. While there would likely be some positive 
economic impacts for a portion of the new entrants, the negative 
impacts would be expected to exceed the positive impacts. Taking 
action to extend the moratorium means that the expected negative 
economic outcome of the status quo (letting the permit moratorium 
expire) will not occur. In other words, the proposed action of 
extending the moratorium for an additional 5 years will forestall 
economic changes and impacts associated with the status quo 
scenario. The effect of taking action in this case is to maintain 
the present permits system; hence, there should be no economic 
impacts. It follows, therefore, that there will not be a significant 
economic impact on a substantial number of small business entities.
    As a result, a regulatory flexibility analysis was not prepared.

List of Subjects in 50 CFR Part 622

    Fisheries, Fishing, Puerto Rico, Reporting and recordkeeping 
requirements, Virgin Islands.

    Dated: March 13, 2000.
Andrew A. Rosenberg,
Deputy Assistant Administrator for Fisheries, National Marine Fisheries 
Service.
    For the reasons set out in the preamble, 50 CFR part 622 is 
proposed to be amended as follows:

PART 622--FISHERIES OF THE CARIBBEAN, GULF, AND SOUTH ATLANTIC

    1. The authority citation for part 622 continues to read as 
follows:

    Authority: 16 U.S.C. 1801 et seq.
    2. In Sec. 622.4, paragraph (m) introductory text is revised to 
read as follows:


Sec. 622.4  Permits and fees.

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    (m) Moratorium on commercial vessel permits for Gulf reef fish. The 
provisions of this paragraph (m) are applicable through December 31, 
2005.
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[FR Doc. 00-6714 Filed 3-16-00; 8:45 am]
BILLING CODE 3510-22-F