[Federal Register Volume 66, Number 244 (Wednesday, December 19, 2001)]
[Rules and Regulations]
[Pages 65454-65459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31262]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 648

[Docket No. 950616159-1292-06; I.D. 022601D]
RIN 0648-ZA16


Northeast Multispecies Fishery; Fishing Capacity Reduction 
Program

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

ACTION: Interim final rule; announcement of a fishing capacity 
reduction program and solicitation for bids from participants.

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SUMMARY: NMFS issues this interim final rule to establish a voluntary 
fishing capacity reduction program (FCRP) for the Northeast 
multispecies fishery that permanently removes multispecies limited 
access fishing permits. Permit holders who would like to participate 
may submit bids, which will be ranked based on the amount of the bid 
and an estimate of the fishing capacity represented by the permit. The 
intent of this program is to obtain the maximum sustained reduction in 
fishing capacity at the least cost. As this is a limited access 
fishery, the capacity removed by the program cannot be replaced. It is 
being implemented by an interim final rule to allow public comments, in 
particular on its related Environmental Assessment and on the 
determination under the Regulatory Flexibility Act that this action 
will not have a significant economic impact on a substantial number of 
small entities.

DATES: Effective January 18, 2002. NMFS will accept bids through 
February 19, 2002. Comments must be received on or before January 18, 
2002.

ADDRESSES: Written comments should be sent to National Marine Fisheries 
Service, 1 Blackburn Drive, Gloucester, MA 01930, Attn: Jack Terrill. 
Comments involving the reporting burden estimates or any other aspects 
of the collection-of-information requirements contained in this interim 
final rule should be sent to both Jack Terrill and to the Office of 
Information and Regulatory Affairs, Office of Management and Budget 
(OMB), Washington, D.C. 20503 (ATTN: NOAA Desk Officer). Copies of the 
Environmental Assessment may be obtained from Jack Terrill, Fishery 
Administrator, National Marine Fisheries Service, 1 Blackburn Drive, 
Gloucester, MA 01930.

FOR FURTHER INFORMATION CONTACT: Jack Terrill, Fishery Administrator, 
([email protected]) 978-281-9136 or Daniel Morris, Special Projects 
Officer, ([email protected]) 978-281-9237. This Federal Register 
document is also accessible via the Internet at the Office of the 
Federal Register website at http://www.access.gpo.gov/su_docs/aces/aces 140.tml.

SUPPLEMENTARY INFORMATION:

I. Background

    On July 13, 2000, the President signed the Military Construction 
Appropriations Act for FY 2001 (Act) (Pub.L. 106-246), which authorized 
a $10 million emergency supplemental appropriation for disaster 
assistance for the Northeast multispecies fishery. The funds are 
intended to compensate industry permittees who choose to participate in 
a program aimed at reducing the permitted fishing capacity in the 
multispecies fishery. NMFS published a notice of the proposed program, 
solicited comments on the proposal, and announced nine public meetings 
throughout New England at 66 FR 17668, April 3, 2001. NMFS received 21 
written comments, one of which was signed by 88 people. The nine public 
meetings were attended by approximately 130 people; NMFS responds to 
the comments below. Further background for this program is provided in 
the April 3, 2001, Federal Register notice and is not repeated here.

II. Summary of Comments and Responses

    In general, commenters expressed support for the proposed program, 
which would compensate holders of limited access multispecies permits 
for the voluntary surrender of their permits. Separate from this FCRP, 
capacity reduction in the multispecies fishery is under consideration 
by the New England Fishery Management Council (Council) and is closely 
related to many other initiatives, including gear and time/area 
restrictions, aimed at promoting the recovery of depressed groundfish 
stocks. During the public meetings related to the FCRP, NMFS received 
many comments regarding measures under consideration by the Council. 
These comments have been shared with Council staff. Except where the 
comments are relevant to this FCRP, issues related to the Council's 
activities are not addressed in the following paragraphs.
    Relation of the FCRP to Amendment 13. Among its many goals, 
Amendment 13 to the Northeast Multispecies Fishery Management Plan 
(FMP), which has been under development by the Council for about 2 
years, aims to address issues related to over-capacity in the fishery. 
The Council developed an ad hoc Capacity Committee to develop 
management alternatives to reduce the number of excess days-at-sea 
(DAS) allocated in the fishery. Many commenters expressed concern about 
the timing of the FCRP with respect to Amendment 13. Some suggested 
that the FCRP should come after the Council's actions. They argued that 
Amendment 13 could devalue and/or invalidate latent permits, and if so, 
then the FCRP could remove even more of the permits or, as others 
suggested, the FCRP would be irrelevant. Some commenters insisted that 
the FCRP should come before the implementation of Amendment 13, 
suggesting that the Council's capacity reduction proposals could be 
inappropriate or even rendered moot, if the FCRP is very successful. In 
either case, the uncertainty of the ultimate proposed measures of 
Amendment 13 and the timing of those measures are confounding factors 
for fishers who must decide whether or not to participate in the FCRP.
    The statutory language establishing the FCRP requires that NMFS 
implement the program in a timely manner, and NMFS has attempted to do 
that. NMFS acknowledges that the uncertainty regarding the capacity 
reduction measures in Amendment 13 and the timing thereof may make it 
difficult for some permittees to determine whether or not to 
participate in the FCRP and at what level to set their bids.
    Tax implications. Several commenters asked about the tax 
implications of participating in the program, suggested that the funds 
should be tax exempt, or recommended that the payout be spread across 
several years to reduce the tax burden in any 1 year. Others claimed 
that taxes could be deferred if the funds are put in the Fishing Vessel 
Capital Construction Fund (CCF)(46 U.S.C. 1177).
    Funds received through participation in the FCRP may be considered 
taxable income. The type of income and the tax rate would be determined 
by the participant's tax situation, and it would be the responsibility 
of the program participant to seek appropriate tax

[[Page 65455]]

advice and to comply with local, state, and Federal tax regulations. 
NMFS cannot accommodate requests to disburse funds under the FCRP over 
2 tax years. To expedite the payments and provide consistent service to 
all applicants whose bids are accepted, many of whom may not desire 
staged disbursal, NMFS will only distribute funds to FCRP participants 
through a single payment. The CCF is available for the deferral of 
taxes on capital gains realized only through the sale of fishing 
vessels, and not permits. The funds received through the FCRP would not 
qualify and could not be placed in the CCF.
    Re-entry of participants. Many commenters addressed the issue of 
FCRP participants possibly re-entering the multispecies fishery. Some 
noted that vessel buyout programs have been criticized for allowing 
program participants to use the proceeds of the boat/permit sale to buy 
new boats, gain new permits and re-enter the fishery. Some claim that 
this practice is unscrupulous and that it undercuts the perceived 
benefits of the FCRP. Commenters recommended prohibitions on re-entry 
from several years, to 10 years, to a term based on the rebuilding of 
fish stocks. Others recommended disincentives to dissuade FCRP 
participants from re-entering the fishery, such as reducing their DAS 
by 50 percent on subsequent permits or otherwise severely limiting the 
fishing effort that could be exerted under the new permit.
    The purpose of the program is not to remove individuals or 
corporations from the fishery; it is to remove excess capacity as it is 
represented by limited-access multispecies permits. Unlike vessel 
buyout programs in the past, the FCRP established by this rule will 
compensate fishers for surrendering only their limited access Northeast 
multispecies permits. NMFS does not intend to restrict FCRP 
participants from working in the multispecies fishery or any other 
fishery in the future. Besides, restrictions on future fishing by FCRP 
participants would be extremely difficult to detect and enforce. The 
variations are many and would be very difficult to track. It is clear, 
however, that the multispecies fishing histories associated with the 
permits surrendered under this FCRP are prohibited from being used or 
referenced for qualification in any future multispecies permitting 
program. Though at this time no such programs are foreseen, NMFS will 
maintain records of FCRP participants to enforce this stipulation of 
the program. Whether or not the FCRP participant resumes working in the 
fishery, a permit and the capacity it represents will have been removed 
from the finite pool of capacity forever; thus meeting the goal of the 
FCRP.
    Some commenters stated that Charter/Party vessels should be 
excluded from the program. Because there is an open access category for 
Charter/Party vessels, these vessels could surrender a limited access 
permit, and then acquire an open access permit and remain in the 
fishery. Thus, the surrender of the permit, they claimed, would have no 
net effect on capacity.
    The FCRP aims to reduce commercial fishing capacity in the 
multispecies fishery. A vessel owner may currently hold both a 
multispecies limited access permit and an open access Charter/Party 
permit, and surrender of the former would be consistent with the goals 
of this program. Open access Charter/Party vessels are restricted by 
gear (two hooks per angler) and passenger capacity and are prohibited 
from selling any catch. While new fishing effort under the Charter/
Party permit category may slightly confound the benefits of the FCRP, 
the restrictions on the Charter/Party category should minimize the net 
effect of effort re-entry. NMFS does not intend to restrict vessels 
with Charter/Party permits from participation in the FCRP, nor does 
NMFS intend to change the access status of the Charter/Party permit 
category.
    Restrictions on the use of the awarded funds. Several commenters 
were concerned that the funds awarded under the FCRP might be used to 
upgrade fishing vessels and would lead to the more effective 
prosecution of the multispecies fishery or other fisheries. Some 
suggested that the funds be required to go into an Individual 
Retirement Account or into some other similarly restricted fund. Other 
commenters stated that the funds should come with no restrictions on 
future use. FCRP participants, they said, may want to buy a safer boat, 
pay crew, or otherwise enhance their businesses.
    NMFS concurs that the funds, once awarded, should not be restricted 
in how they are subsequently used. Vessel upgrades are limited by 
existing regulations.
    Effort displacement. Comments were received from the Mid-Atlantic 
Fishery Management Council, a state marine fisheries commissioner, and 
others expressing concern over the possibility that the FCRP will 
displace effort into other fisheries. The Council suggested that the 
FCRP give highest priority to ``purchasing permits from vessels 
possessing groundfish permits only or those willing to give up their 
suite of permits.'' Another commenter worried that the FCRP would 
result in vessel abandonment and that communities would be left with 
derelict vessels to dispose of.
    Though participation in the FCRP is open to any limited-access 
multispecies permit holder, the most likely participants are those for 
whom the permit represents little opportunity to land regulated 
groundfish. The permits of fishers who are working in other fisheries 
or who have moved out of the industry altogether are likely to 
represent the least utility and are more likely to be surrendered under 
the FCRP. Because most FCRP participants have already moved out of the 
multispecies fishery and into other activities, the program is not 
likely to result in a measurable shift of fishing effort. In the long 
term, the surrender of the Federal multispecies permit limits the FCRP 
participant's future fishing options, should the permittee someday wish 
to alter or diversify his/her fishing activity. Effort that might have 
returned to the multispecies fishery will be applied in another 
activity. The likelihood and timing of such an occurrence is impossible 
to predict.
    Finally, because the program allows participants to retain all 
state and Federal permits other than the one surrendered, it is likely 
vessels will continue to be used. It remains the responsibility of the 
vessel owners to dispose of unused property in accordance with local, 
state, and Federal regulations; if a vessel has fallen into disuse, it 
is conceivable that some of the proceeds from the FCRP may actually 
help a boat owner comply with disposal regulations.
    Concerns about the impacts on small communities. A few commenters 
asked that NMFS consider the potential impacts the FCRP is likely to 
have on communities that support mostly small fishing boats. Many small 
fishing businesses rely on a diversity of fishing activities over the 
course of a year and/or over a career to exploit changing resource and 
market conditions and many other factors. The surrender of a Federal 
multispecies permit limits the fisher's options and may create a 
dependence on one fishery. Commenters suggested that the FCRP should 
not result in disproportionate acquisition of permits from certain 
geographical regions.
    Participation in the FCRP is strictly voluntary. A community that 
wants to maintain Federal multispecies permits among its local fleet 
should consider coordinating its members' participation (or non-
participation) in the program. At present, Federal multispecies permits 
in

[[Page 65456]]

no way restrict the port or geographic region within the United States 
from which a permitted vessel may work. Private sales or exchanges of 
permitted vessels may be made across the region and between ports. NMFS 
cannot control where the permits accumulate or decrease through private 
exchanges and will not limit participation in the FCRP to a certain 
percentage of permittees per community or area.
    Value with respect to recency of use. NMFS received many comments 
regarding the value and removal priority that should be given to 
permits as a function of their recency of use. Some claimed that 
permits in a confirmation of permit history (CPH) status (a permit 
history held by a person who owned a vessel with a fishing history that 
qualified for a limited access permit, but whose vessel has been sunk, 
destroyed, or transferred (without permits) to another person, and who 
has applied and received a CPH) should be given the highest priority 
for removal, as they represented an unknown quantity; others countered 
that the CPH permits are the least likely to be activated and should 
thus be given the lowest priority. Some commenters called for mandatory 
revocation of permits for which no landings have been recorded; others 
countered that recency of use should have no bearing on the value of 
permits and that fishers who have moved out of the groundfish fishery 
at the encouragement of NMFS and the Council while the resources have 
been at historically low levels should not be penalized.
    NMFS has considered alternatives to the final FCRP that would take 
into account recency of use in the multispecies fishery or other 
fisheries. NMFS considered bid-ranking processes and bid-capping 
equations that gave greater credit or value to permits that have logged 
landings since 1994. However, recency of use as it relates to ease or 
likelihood of reactivation is a variable that NMFS cannot quantify with 
confidence and consistency sufficiently enough to effectively inform 
program priorities. This FCRP takes a very long view of the fishery and 
assumes that over time all the permits will have a roughly equal 
probability of being reactivated, and the value of permits should not 
be weighted with respect to recency of use.
    Furthermore, NMFS believes that the FCRP should be implemented 
without any suggestion that fishers must either use their permits, 
surrender them, or have them withdrawn for non-use. Any reliance by 
NMFS on recency of use as a factor for valuing permits may be perceived 
as contrary to this principle and may even prompt permit holders to 
reenter the fishery. Participation in the FCRP is voluntary.
    Remove DAS or otherwise reduce portions of permits. Several 
comments were received calling on NMFS to use the FCRP funds to 
compensate fishers for surrendering a percentage of their authorized 
DAS, rather than forfeiting the permit entirely. A few commenters 
suggested that the funds be used to compensate fishers who would stay 
out of the fishery for some period, 10 years, for example, but would be 
reauthorized to work in the fishery thereafter.
    The statutory language that established the FCRP requires that NMFS 
compensate fishers for the permanent revocation of their limited access 
multispecies fishing permits.
    Establishing a fixed rate, bidding, ranking bids. NMFS proposed 
that the FCRP be implemented by soliciting bids from permittees for the 
amount of compensation they would like to receive for voluntary 
surrender of their limited-access multispecies permits. NMFS suggested 
that the bids be ranked by dividing the bid amount by a factor 
representing some measure of the fishing capacity authorized under the 
permit. Most commenters were supportive of this process in general and 
recognized it as a means of ensuring that the most capacity is removed 
from the fishery for the least amount of money. (The ranking factors 
are addressed under another sub-section of this notice.) Some 
commenters, however, recommended that NMFS set a fixed rate for permits 
and make an offer to all permit holders. They suggested that, should 
the number of flat-rate acceptances equate to an amount greater than 
the authorized program ($10 million), then NMFS should use vessel 
capacity to rank the permits and prioritize payments.
    NMFS has considered this idea, but has declined to implement it for 
several reasons. The baselines and DAS associated with the permits 
range rather widely and affect the value of the permits accordingly. A 
fixed rate, set by NMFS, would be an appropriate value for only a small 
subset of the permits, and either would be too small to interest one 
segment of the fishery or would overpay the other. Permit holders are 
more likely than NMFS to have a good idea of what their permit is worth 
to them, and the reverse bid process as exercised in the vessel buyout 
programs of the past has been considered successful.
    Monkfish permits and the FCRP.. Several commenters noted that, to 
qualify for two of the limited access monkfish permit categories, 
applicants were required to hold a valid limited access multispecies or 
scallop permit and have records of monkfish landings. Commenters asked 
whether, if the permit holder were to surrender a multispecies permit 
under the FCRP, the limited access monkfish permit would be 
invalidated.
    It is correct that to qualify for a Category C or D limited access 
monkfish permit vessel owners were required to have a multispecies or 
scallop limited access permit and certain levels of monkfish landings. 
If a fisher (who does not also hold a scallop permit) surrenders the 
qualifying multispecies permit under the FCRP, the monkfish permit 
would not be invalidated, but would be moved into a different limited 
access category (C to A, and D to B), and would be subject to the 
regulations of the new category. Holders of monkfish permits should be 
familiar with these requirements when deciding whether to participate 
in the FCRP.

III. Ranking Bids

    The goal of the FCRP is to remove the greatest amount of fishing 
capacity from the Northeast multispecies fishery in the most cost 
effective manner. In support of this goal, and assuming that the bids 
submitted to the FCRP will exceed the funds that are available, NMFS 
must rank the bids with respect to relative vessel capacity. In other 
words, NMFS must rank and accept bids based on the least cost per unit 
of capacity.
    NMFS considered two methods for ranking bids under the proposed 
FCRP, using capacity estimates derived through data envelopment 
analysis (DEA) or a simplified relative capacity indicator based upon 
linear calculation of permit baseline characteristics. Each is 
described in detail in the April 3, 2001, Federal Register notice. An 
important element of the FRCP public meetings was to solicit public 
input on the two ranking methods. Specifically, NMFS sought input from 
the public regarding the weighting factors (relative importance) for 
each of the baseline characteristics for use in the simplified method.
    NMFS received many comments regarding the proposed bid ranking 
methods. In general, the public preferred the idea of the simplified 
method, as it seemed more direct and easier to understand than the DEA 
method. However, commenters failed to give consistent guidance about 
weighting factors for the simplified method and the relative importance 
of the various baseline characteristics. Vessel designs and fishing 
strategies vary widely throughout the region and no simple equation 
could be developed

[[Page 65457]]

that would give consistent relative capacity rankings. For example, 
while horsepower may be a prime factor in the capacity of large 
trawlers, gillnetters may be less dependent on horsepower and limited 
only by the volume of their holds (as suggested by net tonnage), and 
some small hook fishing boats may have the least actual capacity, but 
may have excess horsepower to accommodate faster runs to the fishing 
grounds. Thus, application of the simplified method would not be 
simple.
    For the FCRP, NMFS has elected to employ the DEA model. Using DEA, 
NMFS will prepare an estimate of all potential bidders' vessel capacity 
to harvest multispecies. This estimate of daily fishing capacity (EFC) 
would be an inference, based on capacity estimates for similarly 
configured vessels that are actively working in the fishery. This is 
the method that is gaining national and international acceptance as the 
best estimate of fishing capacity and is used by NMFS in reports on 
fishing capacity to Congress.
    Applications to participate in the FCRP will be scored by dividing 
the bid by the product of the vessel's daily estimated capacity and its 
allocated DAS [Score = bid  (EFC x DAS)]. The lowest score 
would represent the least cost per unit capacity and would be ranked 
highest. Scores would then be listed and selected in ascending order.
    Most of the limited access multispecies permits are under a fleet 
DAS management scheme and are presently authorized 88 DAS. Less than 10 
percent of the permits are in an Individual DAS category and may be 
authorized more than 88 DAS per year. Multiplying the EFC by the 
allocated DAS will reflect the additional fishing opportunity 
represented by these permits. Permits in limited access Category C, 
Small Boat Exemptions, are associated with vessels 30 ft (9.1 m) or 
less in length overall (LOA) and have unlimited DAS. To weight these 
bids appropriately, NMFS will use the category's fleet average number 
of DAS per year. If bids are received from holders of permits in this 
category, NMFS will analyze vessel trip reports to determine the 3 
consecutive years with the highest used DAS per year per vessel, and 
from these 3 years will determine the average DAS per year for Category 
C permits.
    From the July of 1998 through June 1999, NMFS initiated the 
Baseline Audit Program for multispecies and scallop limited access 
permit categories. NMFS contacted permittees who had not undergone a 
vessel replacement and asked them to verify and/or correct the permit 
baseline information in NMFS' records. For the purpose of the FCRP, 
NMFS considers information on file to be the final numbers used for 
vessel baseline. The audit program did not include all CPH status 
permits. Some CPH baselines have been verified, but some have not. If 
owners of CPH status permits without verified baselines want to 
participate in the FCRP, NMFS will work with the applicant to establish 
or verify the vessel baseline in a manner consistent with the baseline 
audit program. For all other FCRP participants, NMFS intends to use the 
baseline information on file on the date of publication for the FCRP.

IV. Setting Limits on Bids

    This FCRP allows permit holders to set their bids at any dollar 
amount, and a competitive bid ranking process will be used to determine 
which bids represent the better value for the Government and thus will 
be accepted first. The competitive nature of the process is the first 
incentive for permit holders to make reasonable bids. If bids are 
received for permits from two similarly configured vessels with equal 
DAS allocation, the lower bid will be the higher ranked of the two and 
will have a greater chance of being accepted. Therefore, permit holders 
should submit bids that are reasonable.
    Some participants at the public meetings asked if NMFS intends to 
set a maximum limit on bids and asked if NMFS will award funds to 
permit holders as long as funds are available, even if the bids are 
unreasonably high. Commenters noted that NMFS may receive bids that 
greatly exceed accepted values of permits and, if funds remain 
available, NMFS may need to justify acceptance or non-acceptance of 
such bids.
    The setting of bids should depend on the value and risks the permit 
holder associates with the business opportunity represented by the 
permit. As one suggestion of the reasonableness of bids, NMFS has 
examined the classified advertisements in industry magazines and 
newspapers. While permits, technically, are not transferable, in the 
private sector Federal fishing permits are commonly exchanged for money 
through paper transactions for vessel transfers. Over the last year, 
classified listings in national and regional publications reflected 
values for suites of Federal permits including the limited access 
Northeast multispecies permits from $10,000 to $65,000. The amount 
advertised varied with respect to the vessel's baseline and the number 
of additional permits included in the sale. While by no means a 
complete survey of the value of limited access permits, the examples 
from the industry publications may assist permit holders in the 
development of their bids and may indicate to NMFS the reasonableness 
of bids.
    NMFS also has developed a method to set a quantitative limit on the 
bid:capacity ratio. While this method will not set a maximum dollar 
amount on bids, it should encourage FCRP participants to set reasonable 
bids and should help identify and disqualify those bids that do not 
represent a good value for the Government. As noted above, applications 
will be ranked by dividing the bid amount by the product of EFC and the 
allocated (or average, for Category C) DAS. The resulting scores will 
be listed in ascending order. The median value, 50th percentile of the 
scores, will be multiplied by a capping factor of 1.5 to establish the 
maximum score value that NMFS will accept. Because this quantitative 
limit is a relative value determined by bids received and the 
distribution of the bid:capacity ratios, it cannot be determined 
beforehand. The use of this quantitative cap should further influence 
FCRP participants to set bids that are not unreasonably high.
    The use of this relative cap has its limits, and NMFS may use the 
aforementioned qualitative measures of reasonableness (private sector 
purchase prices) to validate the results of the capping method. As 
noted, for the quantitative limit calculation, NMFS intends to use the 
50th percentile of the scores and a capping factor of 1.5. These values 
were developed through an analysis of the results of the two Northeast 
multispecies vessel buyout programs during the late 1990's. If the 
distribution of scores in this FCRP is significantly different from the 
distribution of the vessel buyout ranking factors, or if all the bids 
received are exceptionally high, the quantitative method will not be an 
appropriate measure of reasonableness. NMFS maintains the discretion to 
accept or reject bids based on the combination of these measures of 
reasonableness, as well as the professional judgement of NMFS' staff 
and advisors.

V. How to Apply

A. Notification

    This interim final rule serves as notification of the program to 
all holders of Northeast multispecies limited access fishing permits. 
In addition to this official notification, NMFS will send letters to 
all holders of current limited access multispecies permits and CPH 
status announcing the program and soliciting bids. The letter will 
include

[[Page 65458]]

materials to be used for developing and submitting bids and an EFC for 
the permit as determined through the DEA. Permit holders who do not 
receive a letter may contact NMFS for their EFC and FCRP bid submission 
details.

B. Eligibility

    1. NMFS intends to consider applications to the FCRP only from 
holders of Federal multispecies permits in a limited access category or 
CPH status. Valid multispecies limited access permits are those limited 
access permits held by vessels meeting the eligibility requirements and 
maintained by annual renewal per 50 CFR 648.4(a)(1)(i). To be valid for 
the purposes of the FCRP, a permit must be free of all permit 
sanctions, pending or otherwise, at the time that the bid is submitted, 
and at the time of closing.
    2. A permit holder must be an individual who is a citizen or 
national of the United States; or a corporation, partnership, 
association (non-profit or otherwise), trust, or other nongovernmental 
entity; if such an entity is a citizen of the United States within the 
meaning of section 802 of the Shipping Act, 1916, as amended (46 U.S.C. 
App. 802).
    a. Federal Government employees, including full-time, part-time, 
and intermittent personnel, and Fishery Management Council employees 
and members (or corporations owned by members) are not eligible to 
participate in the program.
    b. Holders of permits that are the subject of outstanding and/or 
pending investigations, charges, and penalties are not eligible to 
participate in the program.
    c. Vessel owners whose permitted vessel exceeds the permit baseline 
and authorized upgrades, per 50 CFR 648.4 (a)(i)(F), are not eligible 
to participate in the program.
    3. When two or more parties share interest in the permit, the 
bidder must affirm in writing that he/she represents the other parties.

C. Submission of Bids

    1. Permit holders are limited to one bid per permit. Permit holders 
who intend to participate in the FCRP must submit their bids using the 
materials provided by NMFS. Bids must be postmarked before February 19, 
2002. NMFS will not accept bids received late, or by fax or e-mail.
    2. Bidders must ensure that all written matter is legible. Bid 
amounts must be written out numerically and in longhand (as one would 
do on a bank check).
    3. Bidders must verify their Northeast multispecies permits, and 
the histories associated with the permits.
    4. Bidders electing to offer permits in addition to the Northeast 
multispecies permit should identify the additional permit in the space 
provided on the bid submission form. Offering of additional limited 
access permits will not affect a bid's ranking or the amount of the 
compensation to be paid, but may be used by NMFS as a tiebreaker.

VI. Bid Review and Scoring

    After the bidding period closes, NMFS will rank the bids, as 
follows:

Step A. Identify Bid

    The bid is the dollar amount submitted by the applicant on the 
application materials.

Step B. Calculate the Bid Ranking Score

    Each bid received will be divided by the product of its respective 
EFC and allocated DAS to get the bid ranking score. For Category C 
permits, NMFS will use an average DAS determined as detailed in section 
III above. The lowest score will represent the least cost to the 
Government per unit of fishing capacity. NMFS will accept bids by 
beginning with the permit represented by the lowest score and will 
proceed in ascending order until all the funds are committed or until 
the cap for FCRP efficiency or other reasonableness measures are met. 
See also Section IV.
    In the event that the scoring results in a tie, NMFS will give 
preference to the permit that represents the greatest fishing capacity. 
If the tie is between two permits representing equal capacity, NMFS 
will give preference to the participant offering to surrender 
additional limited access permits.

Step C. Disbursing Funds and Revoking Permits

    1. NMFS, Northeast Region, will contact permit holders as soon as 
possible with the results of the bid ranking and will arrange for 
disbursal of the funds. The method of payment used will depend on the 
amount of the awards.
    2. Permits and associated permit history will be considered invalid 
upon the permit holder's receipt of notification that the bid has been 
accepted in the FCRP. Such history will be invalidated from use to 
qualify for any future permitting programs in this fishery.
    3. Applicants whose bids are accepted must complete and submit the 
following forms, which will be provided by NMFS, prior to disbursal of 
funds:
    a. SF-3881, ``ACH Vendor/Miscellaneous Payment Enrollment Form''
    b. W-9, ``Request for Taxpayer Identification Number and 
Certification''
    c. CD-511, ``Certification Regarding Debarment, Suspension, and 
Other Responsibility Matters: Drug-Free Workplace Requirements and 
Lobbying''

VII. Administrative Requirements

    The Department of Commerce (``Department'') Pre-Award Notification 
Requirements for Grants and Cooperative Agreements contained in the 
Federal Register notice of October 1, 2001 (66 FR 49917) are applicable 
to this solicitation. Some key requirements are set forth below.
    A. Federal Policies and Procedures. Applicants whose bids are 
accepted are subject to all Federal laws and Federal and Department 
policies, regulations and procedures applicable to financial assistance 
awards or procurement of goods and services.
    B. False Statements. A false statement on any application materials 
is grounds for denial or termination of funds and grounds for possible 
punishment by a fine or imprisonment (18 U.S.C. 1001).
    C. Delinquent Federal Debts. No award of Federal funds shall be 
made to an applicant who has an outstanding Federal debt or fine until 
either:
    1. The delinquent account is paid in full;
    2. A negotiated repayment schedule is established and at least one 
payment is received; or
    3. Other arrangements satisfactory to the Department are made.
    D. Pre-award Activities. If applicants incur any costs prior to an 
award being made, they do so solely at their own risk. Notwithstanding 
any verbal or written assurance that may have been received, there is 
no obligation on the part of the Department to cover pre-award costs.
    E. Least Cost Provision. Through this program, NMFS has been tasked 
``to obtain the maximum sustained reduction in fishing capacity at the 
least cost.'' If participation in this FCRP is insufficient to use up 
all the allocated funds, or if NMFS determines the bids are too high to 
satisfy the letter and intent of this ``least cost'' provision, then 
NMFS retains the discretion to reject bids, to close the FCRP, and to 
restructure it using the remaining funds to meet the statutory goals.
    F. Additional Funds. If, before the end of the bid closing date, 
additional funds are appropriated by Congress for NMFS to disburse 
under the same terms and conditions as for this FCRP, then NMFS

[[Page 65459]]

will expend the additional funds in accordance with this program as 
established.
    G. Release of Public Information. Information on the removed 
permits, accepted bids, and associated vessel may be released publicly 
after awards are made.

Classification

    The Assistant Administrator for Fisheries (AA), NMFS, has 
determined that this interim final rule is consistent with the Military 
Construction Appropriations Act for FY 2001 (Pub.L. 106-246) and the 
Interjurisdictional Fisheries Act of 1986.
    This interim final rule has been determined to be not significant 
for purposes of E.O. 12866.
    Applications under this program are subject to E.O. 12372, 
``Intergovernmental Review of Federal Programs''.
    NMFS prepared an environmental assessment (EA) for this action and 
the AA concluded that there will be no significant impact on the human 
environment as a result of this interim final rule. A copy of the EA is 
available from NMFS (see ADDRESSES).
    This interim final rule contains a collection-of-information 
requirement subject to the Paperwork Reduction Act (PRA). The 
collection of this information has been approved by OMB under control 
number 0648-0376. Public reporting burden for preparation of the grant 
application is estimated to be one hour per response including the time 
for reviewing instructions, gathering and maintaining records, and 
completing and reviewing the collection of information. An additional 
two hour reporting burden is estimated for those applicants who are 
accepted by NMFS including time for submission of invalidated permits. 
Send comments regarding this burden estimate or any other aspect of 
this collection of information, including suggestions for reducing this 
burden, to NMFS (See ADDRESSES) and to the Office of Information and 
Regulatory Affairs, Office of Management and Budget, Washington, D.C. 
20503 (Attn: NOAA Desk Officer).
    Notwithstanding any other provision of the law, no person is 
required to respond to, and no person shall be subject to a penalty for 
failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB control number.
    The Chief Counsel for Regulation of the Department of Commerce 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration that this interim final rule would not have a 
significant economic impact on a substantial number of small entities 
under the Regulatory Flexibility Act (RFA). Although the economic 
impacts on small entities are not immediately quantifiable, as the mix 
of accepted bids can only be determined after bidding is complete, NMFS 
does not expect that this action would have a significant economic 
impact on a substantial number of small entities. As participation in 
the FCRP is voluntary, it is unlikely that entities would participate 
unless they accrued some benefit. Moreover, the retirement of permits, 
active and latent, is expected to benefit those fishermen remaining in 
the fishery, though the extent of that benefit is unclear at this time. 
As a result, a regulatory flexibility analysis was not prepared.

    Authority: 16 U.S.C. 4107.

    Dated: December 14, 2001.
William T. Hogarth,
Assistant Administrator for Fisheries, National Marine Fisheries 
Service.
[FR Doc. 01-31262 Filed 12-18-01; 8:45 am]
BILLING CODE 3510-22-S