[Federal Register Volume 68, Number 171 (Thursday, September 4, 2003)]
[Rules and Regulations]
[Pages 52523-52527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-22548]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 660

[Docket No. 030612150-3214-02; I.D. 051503B]
RIN 0648-AQ94


Fisheries Off West Coast States and in the Western Pacific; 
Coastal Pelagic Species Fishery; Regulatory Amendment

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

ACTION: Final rule.

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SUMMARY: NMFS issues a final rule to implement a regulatory amendment 
to the Coastal Pelagic Species (CPS) Fishery Management Plan (FMP) that 
changes the management subareas and the allocation process for Pacific 
sardine. The purpose of this final rule is to establish a more 
effective and efficient allocation process for Pacific sardine and 
increase the possibility of achieving optimum yield (OY).

DATES: Effective August 29, 2003.

ADDRESSES: Copies of the environmental assessment/regulatory impact 
review/final regulatory flexibility analysis (EA/RIR/FRFA) may be 
obtained from Donald O. McIssac, Executive Director, Pacific Fishery 
Management Council, 7700 NE Ambassador Place, Suite 200, Portland, OR 
97220.

FOR FURTHER INFORMATION CONTACT: James Morgan, Sustainable Fisheries 
Division, NMFS, at 562-980-4036.

SUPPLEMENTARY INFORMATION: On April 28, 2003, the Pacific Fishery 
Management Council (Council) submitted a regulatory amendment to the 
FMP that proposed changing the management subareas and the allocation 
process for Pacific sardine. A range of options were analyzed in the 
Council's regulatory amendment, which included an environmental 
assessment, a regulatory impact review, and an initial regulatory 
flexibility analysis (IRFA). A proposed rule was published in the 
Federal Register on June 26, 2003 (68 FR 37995). The public comment 
period ended on July 28, 2003. The background on development of the 
amendment was explained in the proposed rule and is not repeated here.
    The Council recommended a preferred option that: (1) Changes the 
definition of subarea A and subarea B by moving the geographic boundary 
between the two areas from Pt. Piedras

[[Page 52524]]

Blancas, CA at 35[deg] 40' 00'' N. lat. to Pt. Arena, CA at 39[deg] 00' 
00'' N. lat., (2) moves the date when Pacific sardine that remain 
unharvested are reallocated to Subarea A and Subarea B from October 1 
to September 1, (3) changes the percentage of the unharvested sardine 
that is reallocated to Subarea A and Subarea B from 50 percent to both 
subareas to 20 percent to Subarea A and 80 percent to Subarea B, and 
(4) reallocates all unharvested sardine that remain on December 1 coast 
wide. This procedure will be in effect for 2003 and 2004, and for 2005 
if the 2005 harvest guideline is at least 90 percent of the 2003 
harvest guideline. Currently, Subarea A includes the area from 
Monterey, CA, north to the U.S.-Canada border. Subarea B includes the 
area south of Monterey, CA to the U.S.-Mexico border. Changing the 
boundary between the two subareas will move Monterey, CA to Subarea B, 
and the new geographic boundary will coincide with the boundary for the 
limited access and open access fisheries.
    The change in the allocation system is viewed by the Council as an 
interim approach. The sardine resource has recovered after decades of 
low abundance and there is a more detailed process for allocating the 
resource among the fishing communities along the Pacific coast. The 
change will most likely avoid the need for an emergency rule to 
reallocate unharvested portions of the OY, which was necessary in 2002, 
and will have a greater possibility of achieving OY than the current 
allocation process. Information from resource surveys scheduled for the 
Pacific Northwest in 2003 and 2004 plus accumulated data on size and 
age of sardine from all areas of the fishery will improve the 
assessment model and provide better data for measuring the impacts of 
various allocation options for the longer-term.

Comments and Responses

    Six letters were received from the fishing industry and one from 
the city of Monterey, CA. Two electronic mail messages were received. 
Most respondents opposed the proposed action. One comment was received 
on the IRFA and is addressed in the Response to Comment 10. Following 
is a summary of the comments received:
    Comment 1: The proposed regulations do not comply with the 
Magnuson-Steven Fishery Conservation and Management Act (Magnuson-
Stevens Act) because the proposed action overcapitalizes the fishery by 
allowing more vessels in the fishery than are Federally licensed.
    Response: The final regulations comply with the Magnuson-Stevens 
Act. Amendment 8 to the FMP gives the reasons for having an open access 
area in the Pacific Northwest. Sardine will be available in the Pacific 
Northwest only when the biomass is around 750,000 mt or more. A high 
biomass allows benefits to be obtained by a larger number of 
harvesters. Amendment 8 cautions against investing heavily in 
harvesting sardine in this area because sardine exhibit wide 
fluctuations in abundance. The fishing season in the Pacific Northwest 
is also restricted by deteriorating sea conditions in the fall. The new 
allocation procedure is only valid through 2005. Resource surveys are 
being conducted in the Pacific Northwest to obtain better information 
on the status of Pacific sardine. At this time, there is no indication 
that there is overcapitalization in the Pacific northwest; however, 
fishing capacity in this area will be an issue when the Council begins 
review of alternatives for a longer term allocation procedure.
    Comment 2: The Council did not take a precautionary approach when 
selecting its proposed action. Cooler sea surface temperatures indicate 
a potential shift in the ocean environment that will likely lead to a 
decline in sardine abundance. Action was taken without knowing the 
impact of harvesting the larger fish in the Pacific Northwest.
    Response: Recognizing the role of temperature in sardine abundance 
is one of the risk averse measures utilized in the FMP. If the average 
sea surface temperature declines, the harvest rate will be reduced, 
which will yield a smaller harvest guideline, thereby protecting the 
resource. The size of the fish harvested involves two issues. One is 
that a disproportional harvest of larger fish in the Pacific Northwest 
may have a detrimental effect on the resource. Size and age data are 
collected all along the Pacific coast and, to date, there is no 
indication of a detrimental impact on the resource from harvesting 
relatively large fish in the north or relatively small fish in the 
south. The second issue is that the migration patterns of the resource 
are poorly understood; therefore, the relationship between fish 
harvested in the south and fish harvested in the north at any 
particular time is not known. Although uncertainty does exist, the 
model used to estimate the current biomass includes a factor to account 
for migration, which is based on information obtained from the 
historical fishery. Given the overall conservative harvest formula 
adopted by the Council, there does not appear to be any risk to the 
resource from implementing the proposed action.
    Comment 3: Including Monterey in the southern California subarea 
risks preempting Monterey's fall harvest due to the much larger fishing 
industry in southern California.
    Response: Monterey may be at some risk of preemption from southern 
California and the Pacific Northwest, but preemption is not likely at 
current harvest guideline levels. Under the current system, Monterey is 
at risk of early closure if there is strong participation from the 
northern fisheries, as in 2002. There is less risk to Monterey 
fisheries under the proposed new system because Monterey often has a 
strong fall fishery, which might be preempted by the summer fishery in 
the Pacific Northwest. The Council may address this issue when it 
considers a more permanent allocation process.
    Comment 4: The net result of the proposed action will be to shift 
economic hardship from the open access area in the Pacific Northwest to 
the limited access area in California.
    Response: Under the proposed alternative, the net gain in producer 
surplus above the status quo in the open access area would be 
$1,567,441. The net gain in the limited access area would be $288,712. 
Of all options considered, the proposed alternative has the largest net 
gain above the status quo for the limited access while still providing 
a net gain for the open access area. No economic hardships are 
anticipated from taking this action.
    Comment 5: The proposed action perpetuates the coast wide 
overfishing of the sardine resource that has occurred from the recent 
expansion of the Mexican and Canadian harvest, which is not adequately 
accounted for in setting the harvest guideline.
    Response: The Council determined that the proposed alternative is 
more likely to achieve OY than the status quo, and the analysis in the 
analytical documents supporting the conclusion. From current figures on 
the 2002 fishery, the total harvest by Mexico, Canada, and the United 
States was about 145,000 mt, close to 9,000 mt above the total 
allowable biological catch. There is no agreement between the United 
States and any other country on management; however, the harvest 
formula deals with this uncertainty in two ways. First, a percentage of 
the biomass is subtracted from the total biomass to account for harvest 
beyond the jurisdiction of the United States. Second, total removals 
from the resource in all sectors of the fishery are included in the 
calculation of the next

[[Page 52525]]

year's biomass estimate. A better way to manage the resource would be 
to have a management agreement with Mexico and Canada. Nevertheless, 
the formula in the FMP uses the best information available to account 
for harvests beyond U.S. jurisdiction and is designed to minimize the 
potential for overfishing. In 2002, the U.S. fishery left about 18,000 
mt of the harvest guideline unharvested.
    Comment 6: The proposed option encourages further expansion of the 
open access fishery, which includes more than 40 additional vessels, 
even though veteran California fishermen were denied limited entry 
permits.
    Response: In 2002, 26 vessels landed sardine in the open access 
fishery off Oregon and Washington, of which six vessels held limited 
entry permits for the southern fishery. By the end of July 2003, 
however, sardine landings in the Pacific Northwest were about 3,000 mt 
below the landings through July 2002, about 75 percent of the 2002 
landings. Only 18 vessels had participated. At this time, there is no 
indication that this regulation will lead to a substantial increase in 
the number of participating vessels in the Northwest. Amendment 8 
assumes that since high biomass levels of Pacific sardine are 
transitory, the limited availability of sardine in the Pacific 
Northwest will tend to limit the number of participating vessels, while 
offering an opportunity for more northern fisheries to gain benefits 
when the sardine biomass is large. To date, neither the Council nor any 
other source of information has indicated a need to change this 
approach.
    Comment 7: The economics of the fishery were not well addressed in 
California with regard to the impact of shifting the quotas to Oregon 
and Washington.
    Response: Under the proposed option, an additional 2,200 mt is 
anticipated to be harvested off California. The proposed option 
provides the greatest increase in producer surplus for California in 
relation to the benefits that accrue to California from the nine 
options analyzed. The increase in the estimated Pacific Northwest 
harvest is not great enough to invite significant increases in vessels 
and processors in the Pacific Northwest. If the biomass and the harvest 
guideline increase substantially in the future, there would be pressure 
to increase capital investment, but larger harvest guidelines would 
produce this pressure even under the status quo.
    Comment 8: If there is a cold water regime shift and the sardine 
biomass declines, this is a good reason for precaution and to avoid 
locking up a fixed 33 percent of the sardine quota in the open access 
fishery. A reduced quota will cause economic hardship on the 
traditional limited entry fishery.
    Response: The harvest formula in the FMP is a risk averse approach 
to fishing mortality, and the proposed option does not allocate a fixed 
amount to any fishery. One-third of the harvest guideline would be 
initially allocated to Subarea A (Pacific Northwest); however, the 
unharvested portions of the harvest guideline in Subarea A and Subarea 
B (California) are added together and reallocated on September 1, 20 
percent to Subarea A and 80 percent to Subarea B. The amount received 
in either area depends on performance of the individual fisheries and 
the limit set by the harvest guideline. The Council also intends to 
revisit this allocation issue in the near future. With regard to the 
economic impact on California fisheries, if the biomass declines, there 
would be economic consequences to all sardine fisheries under all 
options.
    Comment 9: The proposed rule incorrectly assumes that southern 
California vessels can offset economic impact by fishing in Monterey, 
California, when such long distance travel is not possible for much of 
this fleet.
    Response: The summary of the initial regulatory flexibility 
analysis states only that some vessels may be able to participate in 
more northern fisheries. However, there could be mitigation to a 
certain extent for some vessels by changing fishing locations to land 
larger, higher-priced sardines.
    Comment 10: The regulatory amendment and the proposed rule do not 
include impacts on processors, many of which are small businesses.
    Response: The impact on processors was addressed in the regulatory 
impact review, which included calculations of producer surplus based on 
data supplied by cooperating sardine processors. Some processors may be 
small businesses, but data are not available on processors in the way 
that ex-vessel revenue is available for individual vessels. In this 
regard, the best available data were used. No information on 
profitability of individual vessels was available, so ex-vessel revenue 
was used as a proxy for vessel profitability. The producer surplus 
figures are assumed to reflect profitability for processors in general, 
and the economic effect of the proposed action on processors is assumed 
to be related to ex-vessel revenue.
    In considering the above comments, NMFS did not change the proposed 
rule.

Classification

    The Administrator, Southwest Region, NMFS, determined that the FMP 
regulatory amendment is necessary for the conservation and management 
of the coastal pelagic species fishery and that it is consistent with 
the Magnuson-Stevens Act and other applicable laws.
    The Assistant Administrator for Fisheries, NOAA (AA), finds that 
this final rule relieves a restriction under 5 U.S.C. 553 (c)(1), and 
thus is exempt from the 30 delay in the effective date requirement of 5 
U.S.C. 553(d). This rule relieves a restriction because the allocation 
to Subarea A is likely to be reached before October 1. If the 
allocation is reached before October 1, the Subarea A fishery will be 
closed and the fishery will not be able to resume until the 
reallocation is completed on October 1 under the existing rule. In 
2002, the Pacific Northwest fisheries landed more than 36,500 mt before 
October 1, and the fishery in northern California, which was included 
in Subarea A in 2002, landed more than 5,000 mt by October 1. The 
initial allocation to Subarea A in 2003 is 36,969 mt, lower than the 
allocation in 2002, when an emergency rule was necessary to keep the 
fishery open following a temporary closure. Keeping the fishery 
operating will increase landings by about 1,500 mt per week. At an ex-
vessel price of $100/mt, this would generate $150,000 per week to 
fishermen and $300,000 to processors (based on 50 percent recovery rate 
and a sales price of $400/mt).
    The final rule has been determined to be not significant for the 
purposes of Executive Order 12866.
    The Council prepared an IRFA which was summarized in the proposed 
rule published on June 26, 2003 (68 FR 37995). The Council prepared an 
FRFA that describes the economic impact of this action on small 
entities. Two specific comments were received on the IRFA, one 
regarding the possibility of some vessels minimizing impacts by fishing 
in more northern fisheries and one regarding the treatment of 
processors in the IRFA. Responses to these comments are contained in 
comments 9 and 10 in the preamble to the final rule. The following is 
the summary of the FRFA. The need for and objectives of this final rule 
are contained in the SUPPLEMENTARY INFORMATION of the preamble and in 
the proposed rule. Comments and responses regarding the economic 
impacts of this rule are contained in the preamble.
    Approximately 140 vessels are permitted in the sardine fisheries 
off the U.S. West Coast; 65 vessels are

[[Page 52526]]

permitted in the Federal CPS limited entry fishery off California, 
while approximately 55 vessels are permitted in the sardine fisheries 
of the States. An additional 18 live bait vessels are permitted in 
southern California and 2 live bait vessels are permitted in Oregon and 
Washington. All of these vessels would be considered small businesses 
by the Small Business Administration. Therefore, there would be no 
disproportionate economic impacts resulting between small and large 
vessels under the proposed action. Because cost data are lacking for 
the harvesting operations of CPS finfish vessels, it was not possible 
to evaluate the economic impacts from estimated changes in sardine 
landings in terms of vessel profitability. Instead, economic impacts 
were evaluated based only on changes in sardine ex-vessel revenues 
compared to sardine landings under the status quo. Therefore, the 
difference between vessel revenues generated by 2003 proposed quotas 
and those generated by 2003 projected landings were used as a proxy for 
vessel profitability among the three regions evaluated. All projections 
utilized 2001 data because this was the best available data. CPS 
finfish vessels typically harvest a number of other species, including 
anchovy, mackerel, squid, and tuna. However, since data on individual 
vessel operations were not readily available, it was not possible to 
evaluate potential changes in fishing strategies by these vessels in 
response to different opportunities to harvest sardines under each of 
the allocation alternatives and what this would mean in terms of total 
ex-vessel revenues from all species.
    Under the proposed action, sardine landings for CPS vessels for the 
entire West Coast are estimated to increase 9,846 metric tons (mt) from 
the status quo, with a corresponding increase in ex-vessel value of 
$1,077,540. As used by the Council, the ``status quo'' harvest levels 
reflect an increase of 10 percent from 2002 harvest levels. All of the 
coastwide harvest guideline OY would be caught by the end of the season 
under the proposed action. Sardine landings by vessels participating in 
the Oregon/Washington fishery were estimated to be 7,622 mt greater 
than the status quo (and more than 11,000 mt above the 2002 level), 
with ex-vessel revenues increasing by $873,526 relative to the status 
quo. Landings by CPS vessels that historically would have participated 
in the northern California sardine fishery would increase 2,449 mt 
above the status quo (and 4000 mt above the 2002 harvest level) with a 
corresponding rise in ex-vessel revenues of $228,035. Under the 
proposed action, a loss of 225 mt in landings relative to the status 
quo was estimated for vessels that historically fished out of southern 
California ports, which equates to foregone ex-vessel revenues 
amounting to $24,021, or approximately $370 per vessel, in lost ex-
vessel revenue relative to the status quo. However, landing would still 
be about 4,900 mt greater than in 2002, and revenue would be almost 10 
percent higher than in 2002. Twenty live bait vessels landed 
approximately 2,000 mt per year of mixed species from 1993 through 
1997. Those landings were comprised mostly of Pacific sardine and 
northern anchovy. The estimated 18 live bait vessels fishing in 
southern California are expected to be only minimally impacted by this 
action similar to results for the CPS limited entry vessels fishing in 
that area. The two live bait vessels fishing in Oregon and Washington 
are not expected to be impacted by this action.
    For the 65 CPS limited entry vessels that could participate in 
either the southern California or northern California sardine 
fisheries, the 225 mt reduction in harvest relative to the status quo 
represents a potential loss in ex-vessel revenues for the CPS vessels 
choosing to operate in southern California. If the 65 CPS limited entry 
vessels choose to fish in the traditional northern California sardine 
fishery, the potential gain in ex-vessel revenue for that fishery is 
estimated to be approximately $3,508 per vessel per year. However, this 
amount could be underestimated since data from the 2001 SAFE report 
show that only 27 CPS vessels landed in Monterey/Santa Cruz and only 13 
CPS vessels landed in San Francisco.
    Even though limited entry vessels based in southern California are 
not restricted from participating in the northern California or the 
open access Oregon/Washington sardine fisheries, it is unlikely that it 
would be profitable for all southern California vessels to do so due to 
additional travel time and fuel costs. However, any loss in 
profitability by the CPS vessels choosing to fish in southern 
California could be mitigated to a certain extent by moving northward 
to land larger, higher-priced sardines in northern California ports.
    Vessels that participate in the Oregon/Washington sector of the 
fishery are estimated to increase ex-vessel revenues by $15,882 per 
vessel based on the estimated 55 state sardine permits issued. However, 
this figure may be underestimated since data show that, of the 35 
Washington permitted vessels, only 19 vessels participated in these 
fisheries in 2002 with the majority of the catch accomplished by only 
13 vessels.
    The Council considered 3 alternatives to the proposed action in 
addition to the no-action alternative. All alternatives resulted in ex-
vessel revenue gains of various magnitudes for the fishery as a whole. 
However, the proposed alternative yielded the greatest overall gain, 
with the least negative impacts to individual vessels from any one 
region while also providing the fishery with a high likelihood of 
achieving OY as required under the Magnuson-Stevens Act.
    Alternative 1 (status quo)--With a 10-percent increase in harvest 
from 2002, total landings would be 101,061 mt and total ex-vessel 
revenues would amount to $10,587,481. Southern California vessels would 
realize ex-vessel revenues of $5,749,562, northern California vessels 
$1,039,424, and Oregon/Washington vessels $3,798,405.
    Alternative 2 (start year with 66-33 allocation, subarea line to 
39[deg] N lat., September (50-50) reallocation, and December 
(coastwide) reallocation). Relative to 10 percent overall increase in 
the status quo, southern California vessels would lose 3,618 mt or 
$386,201 in ex-vessel revenues. Northern California vessels would gain 
35 mt or $3,306, and Oregon/Washington would gain 10,108 mt or 
$1,158,314, for a net increase in coastwide ex-vessel revenues of 
$775,420.
    Alternative 4 (start year with 66-33 allocation, subarea line not 
changed, September (50-50) reallocation, and December (coastwide) 
reallocation). Compared to the status quo, southern California vessels 
would realize no change in landings, northern California vessels would 
gain 274 mt or $25,518 in ex-vessel revenues, and Oregon/Washington 
vessels would gain 8,091 mt or $927,167. This results in an overall net 
increase of $952,685 in ex-vessel revenues.
    Alternative 5 (start year with 66-33 allocation, subarea line to 
39[deg] N lat., September coastwide reallocation). Relative to the 
status quo, southern California vessels would lose 2,500 mt or $266,924 
in ex-vessel revenues. Northern California vessels would gain 2,239 mt 
or $208,547, and Oregon/Washington vessels would gain 10,108 mt or 
$1,099,937, for a net increase in overall ex-vessel revenues of 
$1,099,937.
    There are no new compliance requirements resulting from this rule. 
Two management subareas and the amount of the harvest guideline 
allocated to the subareas have been redefined, and the date unharvested

[[Page 52527]]

amounts of the resource are reallocated to the subareas has been 
changed. This action changes how the annual harvest is monitored, but 
imposes no compliance requirements on the fishing industry beyond those 
already in effect and well understood by those affected.

List of Subjects in 50 CFR Part 660

    Administrative practice and procedure, American Samoa, Fisheries, 
Fishing, Guam, Hawaiian Natives, Indians, Northern Mariana Islands, 
Reporting and recordkeeping requirements.

    Dated: August 29, 2003.
John Oliver,
Deputy Assistant Administrator for Operations, National Marine 
Fisheries Service.

0
For the reasons set out in the preamble, 50 CFR part 660 is amended to 
read as follows:

PART 660--FISHERIES OFF WEST COAST STATES AND IN THE WESTERN 
PACIFIC

0
1. The authority citation for part 660 continues to read as follows:

    Authority: 16 U.S.C. 1801 et seq.


0
2. In Sec.  660.503, paragraphs (b)(2) and (c)(1) are revised to read 
as follows:


Sec.  660.503  Management subareas.

* * * * *
    (b) * * *
    (2) Southern boundary--at 39[deg]00'00'' N. lat. (Pt. Arena).
    (c) * * *
    (1) Northern boundary--at 39[deg]00'00'' N. lat. (Pt. Arena); and
* * * * *

0
3. Section 660.509 is revised to read as follows:


Sec.  660.509  Closure of directed fishery.

    (a) The date when Pacific sardine that remains unharvested will be 
reallocated to Subarea A and Subarea B is September 1 for 2003 and 
2004, and for 2005 if the 2005 harvest guideline is at least 90 percent 
of the 2003 harvest guideline.
    (b) All unharvested sardine that remains on December 1 will be 
available for harvest coast wide.

0
4. In Sec.  660.511 new paragraph (f) is added to read as follows:


Sec.  660.511  Catch restrictions.

* * * * *
    (f) The percentages of the unharvested sardine that are reallocated 
to Subarea A and Subarea B are 20 percent to Subarea A and 80 percent 
to Subarea B.

[FR Doc. 03-22548 Filed 8-29-03; 3:46 pm]
BILLING CODE 3510-22-P