[Federal Register Volume 68, Number 138 (Friday, July 18, 2003)]
[Rules and Regulations]
[Pages 42613-42643]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18344]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 600

[Docket No. 030509119-3168-02; I.D. 032603D]
RIN 0648-AQ99


Magnuson-Stevens Act Provisions; Fishing Capacity Reduction 
Program; Pacific Coast Groundfish Fishery; California, Washington, and 
Oregon Fisheries for Coastal Dungeness Crab and Pink Shrimp

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

ACTION: Final notice of proposed fishing capacity reduction program.

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SUMMARY: NMFS issues this final notice about a voluntary fishing 
capacity reduction program in the Pacific Coast groundfish fishery. 
After a successful referendum, harvesters accepted to participate would 
be paid to surrender their fishing permits and restrict their vessels. 
A loan, which would be repaid by fishermen remaining in the fishery, 
will finance the majority of the program's cost. The program will 
invite bids from owners of groundfish trawl permits (except those 
harvesting whiting and processing it at sea) that are willing to 
surrender their fishing privileges, score the bids in a reverse auction 
against the value of bidders' harvests, and then conduct a referendum 
regarding repayment of the loan. If the referendum is successful, 
accepted bidders must relinquish their California, Oregon, and 
Washington fishing licenses for coastal Dungeness crab and pink shrimp. 
Accepted bidders must also surrender their Federal groundfish permits, 
as well as all other Federal fishing licenses, fishery permits, area 
and species endorsements, and any other fishery privileges issued to 
vessels named in their bids (or to persons on the basis of their 
operation or ownership of those vessels). The fishing vessels involved 
will never again be eligible to fish. If the referendum is not 
successful, bidders are excused from all such obligations. The 
groundfish program aims to increase the remaining harvesters' 
productivity, help financially stabilize the fishery, and help conserve 
and manage its fish. This notice also contains the groundfish program's 
invitation to bid and bidding document.

DATES: The final notice is effective July 18, 2003.

ADDRESSES: Copies of the environmental assessment and regulatory impact 
review are available from NMFS upon request from Michael L. Grable, 
Chief, Financial Services Division, National Marine Fisheries Service, 
1315 East-West Highway, Silver Spring, MD 20910-3282. Comments 
involving the reporting burden estimates or any other aspects of the 
collection of information requirements should be sent both to Michael 
L. Grable at the above address and to the National Oceanic and 
Atmospheric Administration Desk Officer, Office of Information and 
Regulatory Affairs, Office of Management and Budget, Washington, DC 
20503. Comments sent by Internet or e-mail will not be accepted.

FOR FURTHER INFORMATION CONTACT: Michael L. Grable, (301) 713-2390.

SUPPLEMENTARY INFORMATION: 

I. General

    Enacted on February 20, 2003, Section 212 of Division B, Title II, 
of Pub. L. 108-7 (section 212) authorizes a fishing capacity reduction 
program (program) for that portion of the limited entry trawl fishery 
under the Pacific Coast Groundfish Fishery Management Plan whose 
permits, excluding those registered to whiting catcher-processors, are 
endorsed for trawl gear operation (reduction fishery). The program's 
objective is to reduce the number of vessels and permits endorsed for 
the operation of groundfish trawl gear. Vessels that catch and process 
whiting at sea are ineligible to participate. The program also involves 
corollary fishing capacity reduction in the California, Oregon, and 
Washington fisheries for coastal Dungeness crab and pink shrimp (fee-
share fisheries). Sections 1111 and 1112 of the Merchant Marine Act, 
1936 (46 App. U.S.C. 1279f and 1279g) (Title XI) authorize loans for 
financing the cost of fishing capacity reduction programs (reduction 
loans).
    The program has two appropriations. A $10 million appropriation, 
authorized by section 501(b) of Division N, Title V, of Public Law 108-
7, directly funds part of the program's cost. The second, a $0.5 
million appropriation, included in Pub. L. 107-206, funds the Federal 
Credit Reform Act cost of authorizing a $36 million reduction loan.
    Section 212 supersedes some of the provisions of both the fishing 
capacity reduction framework regulations (50 CFR 600.1000 et seq.) and 
the Magnuson-Stevens Act fishing capacity reduction provisions (16 
U.S.C. 1861a(b)-(e)).
    When fishing capacity reduction is undertaken pursuant to the 
Magnuson-Stevens Act provisions, NMFS implements each reduction program 
by adding an implementing section to the framework regulations. Section 
212, however, renders some of the Magnuson-Stevens Act provisions and 
the framework regulations inapplicable. Among other things, the 
groundfish program applies to more than one fishery. Section 212 also 
requires NMFS to implement the groundfish program by publishing a 
notification and an invitation to bid in the Federal Register rather 
than by promulgating additional regulations. In addition, section 212 
supersedes one provision of Title XI, by extending the reduction loan's 
term to 30 years.

II. Reduction Cost

    The amount paid to harvesters in exchange for relinquishing their 
fishery privileges (reduction cost) may equal, but may not exceed, $46 
million. A $10 million appropriation will fund part of the reduction, 
and future harvesters will finance any remainder.

III. Summary of Comments

    NMFS received comments from nine entities. Comments from both 
individuals and organizations represent the views of many parties. Most 
of the comments supported fishing capacity reduction in the reduction 
fishery, although some comments disagreed

[[Page 42614]]

with some aspects of the proposed notice.
    Comment 1: Three comments suggested that NMFS offer flat permit-
relinquishment payments to groundfish reduction permit owners who own 
no reduction vessel.
    Response: This was not specifically contemplated in the statute and 
therefore NMFS does not have the authority to implement such a payment 
scheme.
    Comment 2: Three comments suggested that NMFS allow entities that 
own reduction vessels to be co-bidders with other entities that own 
groundfish reduction permits but not reduction vessels.
    Response: NMFS agrees and has expanded the definition of bidder to 
allow co-bidder participation. A bid can include multiple parties 
owning or holding the different reduction components required for a 
bid.
    Comment 3: One comment requested that NMFS change ``Dungeness 
crab'' to ``ocean Dungeness crab'' to ensure that Dungeness crab inside 
Puget Sound is excluded from this program.
    Response: NMFS agrees that Puget Sound Dungeness crab should be 
excluded as a fee-share fishery and has added the term ``coastal'' to 
clarify the Dungeness crab eligible for this program. This term is 
intended to encompass California, Oregon, and Washington state's 
description of Dungeness crab fisheries and permit systems outside of 
Puget Sound.
    Comment 4: Two comments requested that NMFS remove the provisions 
requiring relinquishment of fee-share reduction permits not registered 
to reduction vessels.
    Response: NMFS agrees and has clarified the language to require 
that only fee-share permits registered to a reduction vessel be 
relinquished.
    Comment 5: Two comments state that NMFS' request for information 
regarding catch history as a requirement of the bid is unnecessary 
because such information on how fishermen got their permits is 
irrelevant.
    Response: NMFS agrees and has made the appropriate revisions.
    Comment 6: One comment suggested clarifying that relinquishing 
Federal permits other than the groundfish reduction permit is 
restricted to Federal permits registered to the reduction vessel.
    Response: NMFS agrees and has made the appropriate revision.
    Comment 7: One comment suggests that bid scoring should include the 
average landings values of only those fee-share fisheries that match 
the bidder's fee-share reduction permits.
    Response: NMFS agrees and has clarified that such values should 
correspond to the bidder's fee-share reduction permits.
    Comment 8: Two comments requested that NMFS allow bidders to 
document alternative landings values higher than those in the official 
fish-ticket databases.
    Response: In order to provide a fair opportunity for all bidders to 
document their landings, NMFS determined the best evidence of landings 
is the official fish-ticket databases.
    Comment 9: One comment suggested that in situations involving bids 
with identical scores, where accepting both would exceed funding 
levels, NMFS should accept the bid with the lowest value first rather 
than the bid first received.
    Response: NMFS agrees that the process for accepting bids with 
identical scores should be revised. However, to be consistent with the 
purposes of the Program, where there is not sufficient reduction 
funding to accept all bids, NMFS will accept the bid that removes the 
greatest amount of capacity without exceeding funding limits. If both 
bids remove the same amount of capacity, the bid received first will be 
accepted.
    Comment 10: One comment suggested that NMFS delay notifying bidders 
that bids have been accepted until after a successful referendum.
    Response: NMFS agrees and will notify accepted bidders after the 
referendum.
    Comment 11: One comment suggested that NMFS clarify that the loan 
sub-amount calculation's dividend is derived from the bid-scoring 
period landing values of the accepted bidders.
    Response: NMFS agrees and has changed the notice accordingly.
    Comment 12: One comment suggests that NMFS establish a specific 
time for every accepted bidder to stop fishing, as opposed to the 
proposed notice and addenda provisions that each accepted bidder must 
stop fishing upon receipt of NMFS' request for payment instructions. 
The suggestion is that fishing cease 30 days after the certification of 
referendum results.
    Response: NMFS agrees that this provision should be modified so 
that all accepted bidders will cease fishing at the same time. The 
provision has been revised so that the bidder must have stopped fishing 
and must have retrieved all fishing gear previously deployed from the 
reduction vessel 30 days after the publication of the reduction payment 
tender notice.
    Comment 13: Two comments suggest that NMFS revise the notice and 
addenda language which holds accepted bidders accountable for the 
actions of new owners to whom accepted bidders may, after buyback, 
transfer reduction vessels.
    Response: NMFS agrees that accepted bidders cannot be held 
responsible for the future actions of unrelated third parties to whom 
they transfer these vessels. Any violations by the new owners will be 
addressed under existing statutory authority.
    Comment 14: One comment questioned if ``inside waters'' fishing 
count for bid scoring purposes.
    Response: All landings, including in inside waters, associated with 
the management of federal groundfish and with state coastal fisheries 
for pink shrimp and Dungeness crab will be used for bid scoring 
purposes.
    Comment 15: One commenter questioned if accepted bidders may fish a 
reduction vessel in ``inside waters'' or sell the vessel to Mexico or 
Alaska.
    Response: A reduction vessel may not be fished anywhere. It may not 
be sold into any foreign registry or operation but can be sold to an 
Alaska resident, although it cannot fish there or anywhere else.
    Comment 16: One comment asked NMFS to establish the ``basic trawl 
permit price without a past harvest''.
    Response: Congress established a bidding formula, which requires 
past harvest revenues.
    Comment 17: One comment asked if NMFS buys back only his permit, if 
he could fish his reduction vessel in inside waters.
    Response: This capacity reduction program compensates fishermen for 
relinquishing not only the reduction permits but the fishery 
endorsement of the reduction vessel. Therefore, the reduction vessel 
cannot fish anywhere. If the reduction vessel is a state registered 
vessel, it must be scrapped.
    Comment 18: One comment asked what to do with a reduction vessel.
    Response: The owner of a reduction vessel may do whatever he 
chooses with a reduction vessel as long as he does not fish with the 
reduction vessel or move it into a foreign registry or operation, 
except for non-Federally registered vessels which must be scrapped.
    Comment 19: One comment suggested that a reduction vessel be 
saleable into a foreign fishery because this is most beneficial to the 
buyback.
    Response: The authorizing statute prohibits such a sale.
    Comment 20: One comment asked if a reduction vessel can be used for 
tendering and for the definition of ``fishing''.
    Response: The definition of ``fishing'' is contained in the 
Magnuson-Stevens

[[Page 42615]]

Act and would preclude a reduction vessel from tendering.
    Comment 21: One comment asked if income from NMFS fisheries 
research charters can be included in landings for bid scoring.
    Response: Yes, but only the income from the sale of the groundfish 
recorded on fish tickets.
    Comment 22: One comment asked what happens to fish in deployed gear 
at the time of tender, when fishing must cease.
    Response: Any fish caught within the 30 day time period may be 
legally retained and sold. After that date, the gear should have been 
pulled up and no longer fishing.
    Comment 23: One comment implies that coastal Dungeness crab and 
pink shrimp gear should be included in the capacity reduction program.
    Response: No statutory authority exists to buy back fishing gear.
    Comment 24: One comment implies that accepted bidders should be 
prevented from using their reduction payments to buy existing coastal 
Dungeness crab or pink shrimp permits and crab or shrimp gear and 
leasing them to vessels already in these fisheries.
    Response: No statutory authority exists to make this change.
    Comment 25: One comment implies that the existence of latent 
permits in coastal Dungeness crab and pink shrimp fisheries exacerbates 
problems described in comments (23) and (24).
    Response: Latent permits in these fisheries is an issue that should 
be addressed by state fisheries managers.
    Comment 26: One comment implies that accepted bidders should, 
themselves, be prevented from ever fishing again.
    Response: No statutory authority exists to make this change.
    Comment 27: One comment suggested that all reduction vessels should 
be scrapped.
    Response: The authorizing statute allows for retention of the 
reduction vessel as long as the fishery endorsement is cancelled. This 
affords more capacity removal from the targeted fisheries at less cost.
    Comment 28: One comment stated that neither the notice nor its 
addenda indicate whether a reduction vessel which has a multi-year NMFS 
trawl-survey charter can continue with the charter after the buyback.
    Response: The vessel's fishery endorsement will have been withdrawn 
and therefore the vessel can no longer fish. However, NMFS will work 
internally to ensure that any fishermen who is bought out will not be 
subject to a Governmental action for breach of contract based on 
inability to fish due to the buyback.
    Comment 29: One comment stated that NMFS lacks legal authority 
regarding the coastal Dungeness crab and pink shrimp fisheries noting 
that they are managed by the respective states.
    Response: NMFS acknowledges that these are state-managed fisheries 
and will work with the states to implement this voluntary program as 
directed by the authorizing legislation to revoke the fee-share fishery 
reduction permits. Nevertheless, this does not affect fee payment and 
collection.
    Comment 30: One comment questioned NMFS' legal authority regarding 
processors of trawl groundfish noting that there are no Federal 
requirements for permits or reporting groundfish landings.
    Response: The Fishery Management Plan for Pacific Coast Groundfish 
incorporates by reference state requirements to record landings on 
state fish tickets.
    Comment 31: One comment stated that Congress intended for NMFS to 
follow existing practices for fee collection.
    Response: The authorizing legislation provides an option for the 
U.S. may enter into agreements with California, Oregon, and Washington 
to collect the fees that repay the reduction loan. Unless and until 
NMFS arranges to do so, however, fish sellers will pay the fees and 
fish buyers will collect the fees in accordance with the framework 
regulations.
    Comment 32: One comment states that the volume and size of fish 
buyers dictates special circumstances to avoid an administrative 
nightmare for NMFS.
    Response: NMFS believes that the fee collection system currently in 
place should be adequate.
    Comment 33: One comment strongly suggests that NMFS enter into fee 
collection arrangements with the States.
    Response: Because of specific statutory time constraints, NMFS must 
defer this matter's resolution until after the buyback, at which time 
we will explore optional state fee collection.
    Comment 34: One comment states that the program's Environmental 
Assessment and Regulatory Impact Review (EA/RIR) does not estimate how 
many small businesses may be required to participate in the fee 
collection process.
    Response: Section 3.6 or the EA/RIR discusses the processing sector 
by reviewing data on the 1,780 purchasers of fish from West coast 
harvesters during 2000. Fish buyers are categorized according to 
``large'' and ``small'' buyers based on the amount of fish purchased. 
However, available analyses on the diversity and size of the processing 
sector as well as state participation in the fee collection process 
precludes NMFS from developing definitive estimates of processor 
involvement. According to SBA (See Section 6.6), a ``large'' processor 
is a processor with more than 500 employees. NMFS does not have 
complete data on processing employment by processing site or by 
company. (Some companies control several sites). However, based on 
available descriptions of companies and ownership, NMFS believes that 
almost all of the processors on the West Coast would be considered 
``small'' under the SBA definition. Sections 3.6 and 6.6 of the EA/RIR 
will be revised accordingly.
    Comment 35: One comment questioned the analysis undertaken in 
Section 4.2 of the EA/RIR to show the remaining fishermen the benefit 
of the program will outweigh the program costs passed on to them.
    Response: The program is statutorily mandated but participation is 
voluntary. It is difficult to quantify the effects of a capacity 
reduction program before it occurs due to many unknown variables. 
However, the success of a fishing capacity reduction program depends 
upon certain assumptions such as the number of fish after a reduction 
remaining constant, preventing new capacity from replacing retired 
capacity, and fish prices remaining constant. If these assumptions are 
true then revenue for the remaining participants after fee payment 
would likely increase. A majority of those voting in the referendum 
would need to support it in order for the industry fee system to be 
approved.
    Comment 36: One comment asserted that the analysis in Section 4.8 
of the EA/RIR repeats an untrue assumption that removing permits from 
the coastal Dungeness crab and pink shrimp fisheries will benefit 
fishermen by increasing access to a greater portion of management 
quotas and trip limits.
    Response: The appropriate sections of the EA/RIR will be clarified 
to reflect that trip limits and quotas are not used in the management 
of coastal Dungeness Crab and Pink Shrimp. However, NMFS maintains that 
in general terms, these fisheries would benefit because fewer fishermen 
would remain fishing for the same amount of fish. In addition, if the 
Buyback Program provides conservation benefits to the groundfish fish 
stocks, current groundfish bycatch restrictions on the non-groundfish 
fisheries, particularly the Pink Shrimp fisheries may be relaxed. 
However, the

[[Page 42616]]

commenter raises valid issues in noting that benefits to non-groundfish 
fee share fisheries may be limited by the extent that latent capacity 
is activated, purchased capacity is replace through the issuance of new 
state permits, or effort is increased as the result of buyback program. 
The Commenter estimates that at least 100 of the the Oregon Dungeness 
Crab fishery permits are latent permits. As described in the EA/RIR, 
the Oregon Pink shrimp fishery has a requirement that if the number of 
active permits falls below 150, a lottery is to be held to return the 
number of issued permits to 150. Currently, there are 186 Oregon 
permits issued. Therefore, depending on the state fishery, the benefits 
will be hard to assess until it is known what permits are to be 
purchased and how the States are to respond to the statutory language 
that states: ``It is the sense of Congress that the States of 
Washington, Oregon, and California should revoke all relinquishment 
permits in each of the fee-share fisheries immediately after the 
reduction payment, and otherwise to implement appropriate State 
fisheries management and conservation provisions in each of the fee-
share fisheries that establishes a program that meets the requirements 
of 16 U.S.C. 141861a(b)(1)(B) as if it were applicable to fee-share 
fisheries.''

IV. Summary of Revisions

    The following sections of this final notice revise the proposed 
notice.
    (1) The term co-bidder has been added to include third parties who 
own and/or hold reduction components and will participate in the 
bidding with the qualifying bidder.
    (2) Bid-scoring includes the average landings values of only those 
fee-share fisheries that match the bidder's fee-share reduction permits 
included in the bid.
    (3) For identical bid scores where there is not sufficient 
reduction funding to accept both, NMFS will accept the bid that removes 
the greatest amount of capacity without exceeding funding limits or if 
both bids remove identical amounts of capacity, the first received.
    (4) Notification of accepted bidders will occur after the 
referendum.
    (5) Accepted bidders must have stopped fishing and must have 
retrieved all fishing gear previously deployed from the reduction 
vessel 30 days after NMFS publishes the reduction payment tender notice 
in the Federal Register.

V. Program Summary

    NMFS will mail to each ``permit owner'' (as 50 CFR 660.302 defines 
the term ``permit owner'') of a groundfish permit endorsed for trawl 
gear operation (other than those issued to whiting catcher-processors) 
an advance notice that NMFS will formally invite bids for capacity 
reduction by mailing them a bidding package. Such notice and the 
bidding package will be mailed to the permit owner at the owner's 
permit address of record.
    The bidding package will contain, among other things, an invitation 
to bid and a bidding document. The invitation to bid will specify the 
terms and conditions under which bids are made and accepted. If the 
Secretary formally accepts a bid, the bidding document, in conjunction 
with the invitation to bid, will constitute a reduction contract 
between the bidder and the United States.
    No bidder may bid before receiving the bidding package. Bidders 
must submit bids on provided forms and in strict conformance with the 
requirements of the invitation to bid. NMFS will reject any 
nonconforming bids.
    The invitation to bid and bidding document will be similar to the 
pro forma invitation to bid and bidding document (see addenda to this 
notification). What follows is a general summary of the relevant 
provisions.
    To submit a bid, bidders must mail or otherwise deliver their bids 
to NMFS at the address specified in the invitation to bid. Each bidder 
is responsible for ensuring that NMFS receives his or her bid before 
the specified bid closing date. NMFS will reject any bid that arrives 
after the bid closing date; such a bid will be deemed unresponsive to 
the invitation to bid. All terms and conditions of the invitation to 
bid or the bidding document are final at the time NMFS mails the 
bidding package. Thereafter, NMFS will not alter or negotiate any term 
or condition.
    Each bid must specify:
    (a) The exact bid price (also referenced as Reduction Payment),
    (b) The reduction vessel the bidder proposes to remove from fishing 
(reduction vessel),
    (c) The groundfish reduction permit,
    (d) Any other Federal permits registered to or used on the 
reduction vessel,
    (e) All California, Oregon, or Washington issued permits for 
coastal Dungeness crab or pink shrimp registered to or used on the 
reduction vessel (fee-share reduction permits).
    Parties other than the qualifying groundfish permit owner who hold 
or own the other different components required for a bid may be co-
bidders. Between them, bidders or co-bidders must own or hold all 
required bid components. The groundfish reduction permit must be 
registered for use on the reduction vessel. The bidder must also 
include in the bid all Federal fishery licenses, fishery permits, area 
and species endorsements, and any other fishing privileges issued to a 
reduction vessel or to the bidder co-bidder on the basis of its 
operation or ownership of the reduction vessel.
    By completing and submitting a bidding document to NMFS, each 
bidder makes an irrevocable offer to the United States. No bidder, once 
having submitted a bid to NMFS, is entitled to withdraw or in any way 
amend the bid.
    Each bidder must offer to relinquish all of his or her Federal 
permits and any state permits for pink shrimp or coastal Dungeness 
crab. Additionally, each person submitting a bid must offer to 
relinquish the reduction vessel's legal authority to participate in any 
fishery, by offering to permanently:
    (a) Allow imposition of title restrictions that remove the 
reduction vessel's fisheries endorsement,
    (b) Relinquish eligibility for any present or future U.S. 
Government approval under section (9)(c)(2) of the Shipping Act, 1916 
(46 U.S.C. App. 808(c)(2)) for placement of the reduction vessel under 
foreign registry or operation under the authority of a foreign country, 
and
    (c) Relinquish any other present or future reduction vessel fishing 
privilege or fishery eligibility claim of any kind, including any based 
on the reduction vessel's catch history.
    If a reduction vessel is registered only under state jurisdiction 
(i.e., it is not Federally documented), it must be scrapped.
    After bidding, the bidder must continue to hold all reduction 
permits and own the reduction vessel until: NMFS notifies the bidder 
that NMFS rejects the bid, the bid expires without NMFS having accepted 
or rejected it, NMFS notifies the bidder that a reduction contract 
between the bidder and the United States no longer exists, or NMFS 
tenders reduction payment to the bidder and the bidder relinquishes all 
reduction permits and the reduction vessel's fishing privileges.
    NMFS will determine which bids it accepts by using a reverse 
auction. Upon receipt of each bid, NMFS will determine a bid score by 
dividing each bid amount by the average annual total ex-vessel dollar 
value of the Pacific groundfish, coastal Dungeness crab, and pink 
shrimp landed by the bidder's reduction vessel that corresponds to the 
bidder's fee-share reduction permits. NMFS will average the three 
highest total annual revenues from groundfish,

[[Page 42617]]

coastal Dungeness crab, and pink shrimp during 1998, 1999, 2000, or 
2001.
    NMFS will accept the responsive bid with the lowest bid score and 
then successively accept each additional responsive bid with the next 
lowest bid score until either there are no more bids to accept or 
acceptance of the bid with the next lowest bid score would cause the 
reduction cost to exceed the maximum reduction cost. If any two or more 
bid scores are exactly the same and there is not sufficient reduction 
funding to accept both, NMFS will accept the bid that removes the 
greatest amount of capacity, or in the event more that one such bid 
removes the same amount of capacity, the bid it received first.
    NMFS will accept or reject each bid but will notify bidders 
accordingly only after a successful referendum occurs. NMFS' acceptance 
of a bid offer will form a fully binding reduction contract between the 
bidder (and any co-bidders) and the United States. Each party's 
obligation to perform in accordance with the terms and conditions of 
any reduction contract will, however, be subject to a successful fee 
referendum.
    After bids are formally accepted, NMFS will establish up to seven 
reduction loan sub-amounts, one for the reduction fishery and one for 
each of the fee share fisheries. A reduction sub-amount is a fishery's 
share of the reduction loan and is in proportion to the fishery's share 
of the total ex-vessel dollar value of the groundfish, coastal 
Dungeness crab, and pink shrimp which all reduction vessels landed 
during the four-year period from 1998 through 2001. Post-reduction fees 
from each of these fisheries will repay its respective reduction loan 
sub-amount.
    Specifically, NMFS will calculate each reduction loan sub-amount as 
follows. NMFS will separately add the total ex-vessel values of the 
accepted bidders landings, for the four-year period from 1998 through 
2001, for the reduction fishery (i.e., groundfish trawl fishery) and 
the fee-share fisheries (the three coastal Dungeness crab fisheries and 
the three pink shrimp fisheries). Then NMFS will divide each of the 
seven totals by the aggregate value of all of the landings from all 
seven fisheries to derive seven quotients. NMFS will then multiply the 
reduction loan amount by each of the quotients to determine the loan 
sub-amount that each of these fisheries must repay.
    NMFS will conduct the referendum as soon as practicable. The 
referendum's sole purpose will be to determine whether the voters who 
cast referendum ballots authorize the fee required to repay the 
reduction loan.
    NMFS will mail referendum information, voting instructions, and a 
referendum ballot(s) to the permit owner of each groundfish permit in 
the reduction fishery and to the person who is the holder of record of 
each state-issued pink shrimp or coastal Dungeness crab permit 
(collectively, eligible voters). NMFS will include information about 
the following bid acceptance results:
    (a) The program's reduction cost,
    (b) The seven reduction loan sub-amounts,
    (c) The number of permits that will be relinquished,
    (e) The number of reduction vessels, and
    (f) The total ex-vessel dollar values of reduction vessel landings 
in the reduction fishery and in each of the six fee-share fisheries, 
during each year from 1998 through 2001.
    NMFS will mail eligible voters a separate referendum ballot for 
each groundfish permit they own and every pink shrimp or coastal 
Dungeness crab permit they hold. In other words, eligible voters will 
have one ballot for every such permit they hold.
    Immediately after the deadline for NMFS' receipt of ballots, NMFS 
will tally votes, fishery by fishery, and multiply each tally by the 
quotients used in calculating the reduction loan sub-amounts. The 
products of this multiplication will be the vote tallies for the 
respective fisheries weighted in proportion to each fishery's reduction 
loan sub-amount.
    If the weighted total of approving votes is greater than the 
weighted total of disapproving votes, the referendum is successful. The 
referendum is unsuccessful if the weighted total of disapproving votes 
is the same as or exceeds the weighted total of approving votes. NMFS 
will mail each eligible voter a notice about the referendum's outcome. 
If the referendum is successful, NMFS will mail to each bidder a bid 
acceptance or rejection notice.
    If the referendum is unsuccessful, the fee will not be approved; 
and NMFS will mail a notice to each bidder that neither the bidder nor 
the United States has any further obligation under any reduction 
contract.
    If the referendum is successful, NMFS will request, from each 
accepted bidder, specific and written payment instructions for 
disbursing the reduction payment. Within thirty days after the 
publication in the Federal Register of the reduction payment tender 
notice (which notifies the bidder that NMFS intends to pay the bidder 
and needs payment instructions), the bidder must have stopped fishing 
and must retrieve all fishing gear previously deployed from the 
reduction vessel. The bidder must also certify that they have complied 
with the requirements of the reduction contract.
    NMFS will:
    (a) Revoke all groundfish permits and all other federal reduction 
permits,
    (b) Notify California, Oregon, and Washington that accepted bidders 
have relinquished their fee-share reduction permits,
    (c) Request the Secretary under whom the U.S. Coast Guard operates 
to revoke the fisheries endorsements of all Federally-documented 
reduction vessels, and
    (d) Request the Secretary under whom the U.S. Maritime 
Administration operates to make all Federally-documented reduction 
vessels permanently ineligible for any present or future U.S. 
Government approval under section (9)(c)(2) of the Shipping Act, 1916 
(46 U.S.C. App. 808(c)(2)) for placement of a reduction vessel under 
foreign registry or operation under the authority of a foreign country.
    These reduction vessel revocations and restrictions run with the 
vessels' titles and apply to all subsequent owners.
    The bidder must immediately scrap any state-registered reduction 
vessel and allow NMFS to observe and certify the scrapping.
    After receiving a bidder's payment instructions and certification 
of compliance, NMFS will disburse the reduction payment unless NMFS has 
reason to believe that the bidder has not performed in accordance with 
his or her reduction contract duties and obligations. NMFS will 
disburse reduction payments only to accepted bidders, unless they 
explicitly instruct NMFS to do otherwise. If a reduction vessel needs 
to be scrapped, NMFS will withhold funds sufficient to cover the cost 
of such scrapping until its completion.

VI. Program Process

    The following table outlines, in chronological order, the program's 
process:

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------------------------------------------------------------------------
                     STEP                                ACTION
------------------------------------------------------------------------
One...........................................  NMFS publishes a final
                                                 notice in the Federal
                                                 Register, together with
                                                 the final draft of the
                                                 invitation to bid and
                                                 bidding document.
Two...........................................  NMFS mails each permit
                                                 owner of a groundfish
                                                 trawl permit (other
                                                 than those issued to
                                                 whiting catcher-
                                                 processors) a notice
                                                 that NMFS will
                                                 subsequently mail him
                                                 or her a bidding
                                                 package.
Three.........................................  NMFS formally invites
                                                 each qualified bidder
                                                 to bid by mailing to
                                                 him or her a bidding
                                                 package that also
                                                 informs him or her that
                                                 a referendum will occur
                                                 after NMFS has accepted
                                                 bids.
Four..........................................  NMFS mails a notice to
                                                 persons holding any fee-
                                                 share fishery
                                                 permit(other than those
                                                 to whom NMFS sent the
                                                 mailing in step three)
                                                 that NMFS has invited
                                                 bids. The notice will
                                                 also state that NMFS
                                                 will, without further
                                                 notice, mail him or her
                                                 a referendum ballot(s)
                                                 and voting instructions
                                                 after NMFS has accepted
                                                 bids.
Five..........................................  Bidders submit bids.
Six...........................................  NMFS receives bids until
                                                 the bid closing date.
Seven.........................................  NMFS scores and tallies
                                                 the bids.
Eight.........................................  NMFS mails to each
                                                 person eligible to vote
                                                 in the referendum a
                                                 ballot(s) and voting
                                                 instructions.
Nine..........................................  The referendum occurs.
Ten...........................................  NMFS receives votes
                                                 until the vote receipt
                                                 deadline and afterwards
                                                 tallies the votes.
Eleven (A)....................................  If the referendum fails:
                                                (a) NMFS mails to each
                                                 eligible voter a notice
                                                 that the referendum is
                                                 unsuccessful, and
                                                (b) NMFS mails to each
                                                 bidder a notice that
                                                 the reduction bids are
                                                 without force and/or
                                                 effect.
Eleven (B)....................................  If the referendum is
                                                 successful:
                                                (a) NMFS mails to each
                                                 bidder a notice that
                                                 the referendum is
                                                 successful, the bid is
                                                 either accepted or
                                                 rejected, and reminds
                                                 accepted bidders that
                                                 he or she must perform
                                                 the reduction contract
                                                 duties and obligations,
                                                (b) NMFS mails to each
                                                 person who voted a
                                                 notice indicating that
                                                 the referendum was
                                                 successful,
                                                (c) NMFS publishes a
                                                 reduction payment
                                                 tender notification in
                                                 the Federal Register,
                                                (d) NMFS tenders
                                                 reduction payments to
                                                 each accepted bidder by
                                                 requesting the bidder's
                                                 written payment
                                                 instructions,
                                                (e) Accepted bidders
                                                 relinquish their
                                                 reduction permits and
                                                 reduction vessel
                                                 fishing privileges, and
                                                (f) Accepted bidders
                                                 certify their
                                                 compliance with their
                                                 contractual obligations
Twelve........................................  NMFS disburses reduction
                                                 payments upon its
                                                 receipt of payment
                                                 instructions and
                                                 certification of
                                                 compliance.
Thirteen......................................  NMFS undertakes a
                                                 separate rulemaking
                                                 about fee payment and
                                                 collection.
Fourteen......................................  NMFS establishes fee
                                                 amounts.
Fifteen.......................................  (a) NMFS mails fish
                                                 sellers and fish buyers
                                                 a reduction loan fee
                                                 payment and collection
                                                 notice.
                                                (b) Fish sellers begin
                                                 paying the fees, and
                                                 fish buyers begin
                                                 collecting and
                                                 disbursing the fees to
                                                 NMFS, and
                                                (c) NMFS receives
                                                 collected-fee
                                                 disbursements from fish
                                                 buyers.
------------------------------------------------------------------------

VII. Reduction Loan

    The reduction loan's repayment maturity will be 30 years. Its 
principal amount will be the total of all reduction payments made under 
this program, less $10 million. NMFS will determine the reduction 
loan's interest rate in accordance with the framework regulations at 50 
CFR 600.1012.

VIII. Fee Payment and Collection

    Section 212 provides that the United States may enter into 
agreements with California, Oregon, and Washington to collect the fees 
that repay the reduction loan. Unless and until NMFS arranges to do so, 
however, fish sellers will pay the fees and fish buyers will collect, 
deposit, disburse, record, and report on the fees in accordance with 
the applicable portions of the framework regulations and the Magnuson-
Stevens Act.
    NMFS will establish any fee rates necessary for fish sellers to 
repay the reduction loan sub-amount applicable to the reduction fishery 
and to each of the six fee-share fisheries. NMFS will undertake a 
separate rulemaking to do this. The fee rates may not exceed five 
percent of the delivery value of fee fish from each of these fisheries, 
but will be less if NMFS determines that smaller percentages are 
sufficient to amortize the respective reduction loan sub-amounts over 
the 30-year reduction loan's term.

IX. Invitation To Bid and Bidding Document

    The addenda to this notification are sample pro forma invitation to 
bid and bidding document.

Classification

    The Assistant Administrator for Fisheries, NMFS, determined that 
this action is consistent with Public Law 107-206, Public Law 108-7, 
the Magnuson-Stevens Fishery Conservation and Management Act, and other 
applicable laws.
    In compliance with the National Environmental Policy Act, NMFS 
prepared an environmental assessment for this action. The assessment 
discusses the program's impact on the natural and human environment. 
NMFS will send the assessment to anyone who requests NMFS to do so (see 
ADDRESSES).
    The Office of Management and Budget has determined that this notice 
is significant under Executive Order 12866. NMFS has prepared a 
Regulatory Impact Review (RIR) for this action (see ADDRESSES).
    NMFS believes any Federalism implications arising from this notice 
are highly unlikely, however, consultations with the States of 
Washington, Oregon, and California are ongoing.
    This notice contains collection-of-information requirements subject 
to the Paperwork Reduction Act (PRA). The Office of Management and 
Budget (OMB) has approved these information collections under OMB 
control number 0648-0376. NMFS estimates that the public reporting 
burden for these requirements will average 4 hours for submitting a 
bid, 4 hours for voting in a referendum, and 1 hour for advice (if any) 
about a conflict on a vessel ownership or permit claim. Persons 
affected by this action would also be subject to other collection-of-
information requirements referred to in this action and also approved 
under 0648-0376. These requirements and their associated response times 
are 10 minutes for completing and filing a fish

[[Page 42619]]

ticket, 2 hours for submitting a monthly fish buyer report, 4 hours for 
submitting an annual fish buyer report, and 2 hours for making a fish 
buyer/fish seller report when one party fails to either pay or collect 
the fee.
    These response estimates include the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
information collection. Send comments regarding this burden estimate, 
or any other aspect of this data collection, including suggestions for 
reducing the burden, to both NMFS and OMB (see ADDRESSES).
    Notwithstanding any other provision of law, no person is required 
to respond to, and no person is subject to a penalty for failure to 
comply with, an information collection subject to the requirements of 
the PRA unless that information collection displays a currently valid 
OMB control number.
    NMFS has determined that this notice will not significantly affect 
the coastal zone of any state with an approved coastal zone management 
program. This determination has been submitted for review by the States 
of Washington, Oregon, and California.

    Authority: Pub. L. 107-206, Pub. L. 108-7, 16 U.S.C. 1861a (b-
e), and 50 CFR 600.1000 et seq.

    Dated: July 15, 2003.
Rebecca Lent,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.
BILLING CODE 3510-22-P

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[FR Doc. 03-18344 Filed 7-17-03; 8:45 am]
BILLING CODE 3510-22-C