[Federal Register Volume 68, Number 239 (Friday, December 12, 2003)]
[Rules and Regulations]
[Pages 69331-69342]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30795]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 600
[Docket No. 020424095-3252-02, I.D. 032801B]
RIN 0648-AP25
Fishing Capacity Reduction Program for the Crab Species Covered
by the Fishery Management Plan for the Bering Sea/Aleutian Islands King
and Tanner Crabs
AGENCY: National Marine Fisheries Service, National Oceanic and
Atmospheric Administration, Commerce.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule establishes a fishing capacity reduction
program in the fishery for the crab species managed under the Bering
Sea/Aleutian Islands King and Tanner Crabs Fishery Management Plan
(crab FMP). The program will reduce excess capacity and promote
economic efficiency in the crab fishery. It is authorized under both
special legislation and existing National Marine Fisheries Service
(NMFS) regulations governing fishing capacity reduction programs. Its
objectives include: increasing harvesting productivity for crab
fishermen who remain after capacity reduction, helping conserve and
manage fishery resources, and encouraging harvesting effort
rationalization. Program participation is
[[Page 69332]]
voluntary. Under the program, NMFS will pay participants for
withdrawing vessels from fishing, relinquishing fishing licenses, and
surrendering fishing histories. NMFS will finance the program's $100
million cost with a 30-year loan to be repaid by post-reduction
fishermen.
DATES: The final rule is effective January 12, 2004.
ADDRESSES: Copies of the Environmental Assessment, Regulatory Impact
Review, and Final Regulatory Flexibility Analysis are available from
Michael L. Grable, Chief, Financial Services Division, National Marine
Fisheries Service, 1315 East-West Highway, Silver Spring, MD 20910-
3282.
Written comments regarding the burden-hour estimates or other
aspects of the collection of information requirements contained in this
final rule may be submitted to Michael L. Grable at the above address
and by e-mail to [email protected], or fax to (202) 395-7285.
Anyone wishing to contact the NMFS Restricted Access Management
Program (which issues crab species fishing licenses) may do so at this
address: Restricted Access Management Program, National Marine
Fisheries Service, P.O. Box 21668, Juneau, AK 99802-1668.
FOR FURTHER INFORMATION CONTACT: Michael L. Grable,(301)713-2390.
SUPPLEMENTARY INFORMATION:
Statutory and Regulatory Background
The Consolidated Appropriations Act of 2001 (Pub. L. 106-554,
section 144) directed the Secretary of Commerce to establish a $100
million fishing capacity reduction program (crab program) in the Bering
Sea/Aleutian Islands king and Tanner crab fishery (crab fishery). That
law was subsequently amended twice (Pub. L. 107-20, section 2201; and
Pub. L. 107-117, section 205) to clarify the vessels eligible to
participate in the crab fishery and change the crab program's funding
from a $50 million appropriation and a $50 million loan to a $100
million loan (reduction loan). The authority for making loans of this
type is sections 1111 and 1112 of the Merchant Marine Act, 1936 (46
App. U.S.C. 1279f and 1279g)(MMA)(Title XI).
The North Pacific Fishery Management Council (Council) developed,
and NMFS implemented, the crab FMP under the Magnuson-Stevens Fishery
Conservation and Management Act (16 U.S.C. 1801 et seq.)(Magnuson-
Stevens Act). The Council developed Amendment 5 to the crab FMP to
establish a license limitation program (LLP) for the crab fishery (63
FR 52642). The Council also developed Amendment 10 to the crab FMP
which further defined the eligibility criteria for crab LLP licenses
(66 FR 48813). NMFS implemented Amendment 10 and later corrected the
implementing regulation's eligibility criteria (68 FR 46117).
Regulations implementing the crab FMP govern the fishery's management.
Subpart L to 50 CFR part 600, a framework rule promulgated pursuant
to section 312 of the Magnuson-Stevens Act (16 U.S.C. 1861a(b)-(e)),
governs fishing capacity reduction in general. NMFS publishes this rule
as a new Sec. 600.1018 appearing immediately after the framework
rule's last existing section.
Primary Statutory Objective
Section 144 of Pub. L. 106-554 established the crab program's
primary objective as reducing ``the fishing capacity in the BSAI crab
fisheries by permanently reducing the number of license limitation
program crab licenses . . . .''
Summary of Proposed Rule and Response to Comments
On December 12, 2002, NMFS published proposed regulations to
establish this crab program (67 FR 76329). The preamble to the proposed
rule provides additional information on the program as it was proposed.
NMFS extended and later reopened the proposed rule's public comment
period.
NMFS received comments from 28 entities. Comments were evenly
distributed among individuals and organizations representing the views
of many parties. The comments generally supported the crab program, but
some disagreed with proposed rule aspects. The following is a summary
of the comments and NMFS' responses.
Comment 1: Three comments involve the definition of the term
``reduction vessel''. Two of these suggest redefining the term
``reduction vessel'' to mean the vessel currently designated on a crab
reduction permit. The other suggests expanding the definition to
include vessels which replaced other vessels under the Amendment 10
exceptions.
Response: NMFS structured the proposed rule to make the majority of
crab LLP license holders eligible to participate in the crab program.
The comments suggest, however, that the proposed rule might exclude
some holders who either qualified for their LLP crab licenses under the
Amendment 10 exceptions or transferred these licenses, after their
issuance, to vessels other than those whose catch histories gave rise
to the licenses. Accordingly, NMFS has revised the proposed rule to
better accommodate license holders in these circumstances.
The proposed rule defined the term ``reduction vessel'' as the
vessel whose crab fishing history during the FMP's three qualification
periods gave rise to an LLP crab license. This was the reduction vessel
for all crab program purposes (e.g., loss of fishing privileges, loss
of crab fishing history, bid scoring, and reduction loan
apportionment). The final rule, however, replaces the term ``reduction
vessel'' with two separate terms, ``reduction/privilege vessel'' and
``reduction/history vessel''.
In the final rule, a reduction/privilege vessel is the vessel
designated on a crab LLP license on the date of the final rule's
publication in the Federal Register and a reduction/history vessel is
the vessel whose catch history gave rise to the crab LLP license. In
many cases, the reduction/privilege vessel and the reduction/history
vessel will be the same vessel, but the distinction between these two
reduction vessel functions will better accommodate license holders in
the circumstances these comments involve. The reduction/privilege
vessel no longer has any significance for any crab program purpose
other than the loss of fishing privileges, and the reduction/history
vessel is determinative for all other crab program purposes which
involve fishing history.
Comment 2: One comment suggests redefining the term ``crab
reduction permit'' to mean a bidder's non-interim crab LLP license plus
all of its predecessor history.
Response: NMFS has resolved this issue by adding the terms
``reduction/history vessel'' and ``reduction fishing history''.
Comment 3: One comment suggests redefining ``crab reduction
history'' as all crab fishing history giving rise to or accruing under
a crab reduction permit.
Response: NMFS has resolved this issue by adding the term
``reduction fishing history''.
Comment 4: One comment suggests modifying the term ``bid crab'' to
recognize that documented harvests of crab for crab program purposes
may have been made from several different vessels.
Response: NMFS agrees and has appropriately revised the final rule.
Comment 5: Five comments involve the confidentiality of Alaska's
fish ticket data.
Two of these suggest adding a final rule provision requiring
bidders to waive confidentiality for the crab fishing history
associated with their bids, primarily as a way of providing
[[Page 69333]]
more accurate information to voters in the crab program referendum. Two
others suggest a provision allowing the disclosure of crab fishing
histories to potential bidders. The last suggests that NMFS and the
State of Alaska resolve confidentiality issues affecting the crab
program.
Response: Alaska law (AS 16.05.815) make the fish ticket data
confidential. Neither NMFS nor State officials have authority to use
the State's fish ticket data inconsistently with the State's law.
Accordingly, NMFS cannot accommodate these comments.
Comment 6: One comment suggests that NMFS review Alaska's fish
ticket data to ensure they reflect post-landing adjustments to landing
data.
Response: The crab program must rely on the State's data, and NMFS
cannot review them for this purpose.
Comment 7: Thirteen comments addressed the five-year period for
determining ``bid crab''.
Ten of these agreed with the proposed rule's provision in this
respect. Two disagreed with the proposed rule's provisions and
suggested that a more appropriate period was the most recent five-years
in which a bidder's reduction/history vessel actually harvested crab in
each endorsement fishery (rather than the most recent five-year period
during which each endorsement fishery was open for directed fishing).
The last suggests the final rule provide for this period in some area/
species endorsement fisheries to mirror certain years in the Council's
proposed crab rationalization plan.
Response: The proposed rule defined the term ``bid crab'' as the
documented harvest of crab during the most recent 5 years of a 10-year
period, beginning on January 1, 1990, and ending on December 31, 1999,
during which each of the reduction endorsement fisheries were open.
NMFS believes this is the fairest approach most consistent with the
crab program's authorizing legislation as well as the approach most
closely resembling certain years in the Council's proposed crab
rationalization plan. The crab program's authorizing statute specifies
the beginning and ending date of the 10-year period, and NMFS has no
authority to provide otherwise.
Comment 8: Ten comments discuss the stacking of more than one crab
LLP license and associated crab fishing histories on a single reduction
vessel. Nine of these suggest NMFS accommodate stacking for crab
program bidding purposes. One asked how NMFS would provide for this if
it were allowed.
Response: NMFS believes each crab program bid should include only
one crab reduction permit and the crab fishing history which gave rise
to it. Stacked crab LLP licenses and their future disposition is a
matter for fisheries managers' resolution.
Comment 9: Three comments suggest the final rule provide the non-
crab reduction permit component of a bid's reduction fishing interest
be restricted to the reduction vessel's non-crab licenses and exclude
any halibut/sablefish individual fishing quota (IFQ).
Response: NMFS believes the crab program's legislative authority
requires bidders to relinquish all fishing licenses, permits, or other
privileges they hold which were issued based on the fishing histories
of the bids' reduction/history vessels. Consequently, each bidder
holding halibut/sablefish IFQ on the date this final rule is published
in the Federal Register must relinquish the IFQ if its issuance was
based on the fishing history of the bidder's reduction/history vessel.
Comment 10: One comment suggests five specific technical
clarifications. These include: inserting ``Bering Sea and Aleutian
Islands (BSAI)'' before ``crab species'' in 50 CFR 600.1018(a);
inserting ``BSAI'' before ``crab'' in 50 CFR 600.1018(b); striking
paragraph ``(h)'' and inserting paragraph ``(i)'' in 50 CFR
600.1018(h)(2), (h)(4), and (h)(6); striking ``and'' at the end of 50
CFR 600.1018(h)(4); and striking paragraph ``(i)(1)'' and inserting
paragraph ``(j)(1)'' in 50 CFR 600.1018(j)(2).
Response: NMFS agrees and has appropriately revised the final rule.
Comment 11: One comment suggests NMFS revise the final rule to
clarify that co-bidders are not required for non-crab reduction
permits.
Response: NMFS agrees and has appropriately revised the final rule.
There are no co-bidders for non-crab reduction permits because non-crab
reduction permits are restricted to those for which bidders were the
holders of record on the date this final rule is published in the
Federal Register.
Comment 12: One comment states that the proposed rule unfairly
omits crab vessels under 32 feet (9.75 meters) as well as parties
without crab LLP licenses.
Response: The authorizing statute established the crab program's
eligibility criteria and does not allow NMFS to accommodate this
comment.
Comment 13: One comment suggests the definition of ``bid crab''
does not include the crab fishing histories of vessels that were lost
or destroyed and subsequently replaced by other vessels.
Response: NMFS intended the proposed rule's definition of ``bid
crab'' to do so and has appropriately revised the proposed rule to
remove any ambiguity about this.
Comment 14: Nine comments involve lost or destroyed vessels and
their reduction fishing histories. Eight of these suggest bids
involving lost or destroyed vessels require existing (i.e., neither
lost nor destroyed) reduction vessels that lose their fishing
privileges.
Response: NMFS agrees that each bid requires an existing reduction
vessel that loses its fishing privileges. In the final rule, this is
the reduction/privilege vessel. NMFS believes this is a matter of
equity. Most bidders will have existing reduction/privilege vessels
that will lose their fishing privileges. Allowing lost or destroyed
vessels to be reduction/privilege vessels for this purpose would allow
a minority of bidders to receive value for something which no longer
has any value. Moreover, casualty insurance has in all likelihood
already compensated most of those whose vessels were previously lost or
destroyed.
Comment 15: Five comments suggest that the crab program make no
exceptions beyond those provided in Amendment 10 for lost or destroyed
vessels or crab LLP licenses acquired through fishing history
transfers.
Response: NMFS agrees. Neither the proposed nor the final rule
makes any such exceptions.
Comment 16: One comment requests that NMFS report crab program
results by ``region''.
Response: NMFS will report crab program results only by reduction
endorsement fishery and by the crab fishery as a whole.
Comment 17: One comment asks how the crab program accommodates the
captain's share provisions of the Council's crab rationalization plan.
Response: The crab program does not accommodate this provision and
makes no provision for captains' shares because NMFS has no statutory
authority to do so.
Comment 18: One comment asks what constitutes the reduction loan
borrower.
Response: After NMFS completes the crab program, all reduction
fishery license holders under whose licenses vessels land crab and
whose fees begin repaying the reduction loan are collectively the
reduction loan borrower. Neither the reduction loan nor its collective
borrower are conventional. The reduction loan and its repayment method
are statutory. There are no promissory notes, mortgages, or other loan
security documents. No individual is responsible
[[Page 69334]]
for repaying any specific loan portion. After the fees commence, the
first ex-vessel purchasers of crab from the reduction fishery
automatically deduct the fees from trip proceeds before paying the
proceeds' balance to the parties otherwise entitled to them. No
individual's assets secure the loan's repayment (although nonpayment,
for whatever reason, of the fees could subject an individual's assets
to enforced payment of any unpaid fees).
Comment 19: One comment suggests the final rule clarify whether
Community Development Quota landings are subject to the reduction loan
repayment fees.
Response: Community Development Quota landings are subject to the
fees.
Comment 20: One comment objects both to the statutory method of
collecting the reduction loan repayment fees and the capacity reduction
framework regulation provisions to which collection of the fee is
subject.
Response: NMFS has no alternative to using the statutory method and
believes the framework provisions in this respect are reasonable and
necessary.
Comment 21: One comment suggests the final rule provide that the
crab program not result in crab catcher processors using a greater
share of total allowable crab catches after reduction than they did
before reduction due to the likelihood that most crab program bids will
involve crab catcher vessel delivering ashore.
Response: This is a voluntary program, and NMFS makes no bidding
distinction between crab catcher processors and crab vessels delivering
their catches ashore. The Council is the proper forum for dealing with
this issue.
Comment 22: One comment suggests that the final rule provide for
crab catcher processors' relinquishing their processing histories.
Response: NMFS has no statutory authority to do this as part of the
crab program.
Comment 23: One comment requests clarification of any second
referendum's basis.
Response: A second referendum may occur, at NMFS' discretion, if
the first referendum fails. The general basis would be the expectation
that a second round of bids might result in lower bid amounts producing
greater capacity reduction per dollar of reduction cost than the first
round of bids and, consequently, might improve the likelihood of a
second referendum success.
Comment 24: One comment suggests the final rule provide for paying
creditors whose security includes vessels or licenses involved in the
crab program.
Response: NMFS believes the proposed rule made adequate provision
for public notice to secured creditors.
Comment 25: One comment suggests the final rule provide for
including the holders of interim crab licenses in the crab program
based on whatever portions of their fishing histories are undisputed.
Response: The authorizing statute restricts the crab program to
non-interim crab LLP license holders, and NMFS has no authority to
provide otherwise.
Comment 26: One comment suggests releasing, before conducting the
fee referendum, aggregate data about bids involving affiliated fishing
interests.
Response: NMFS does has no way of knowing which bidders may be
affiliated with other bidders.
Comment 27: One comment suggests reduction vessels should not lose
their fishing privileges in fisheries other than the reduction fishery.
Response: The authorizing statute requires that reduction/privilege
vessels lose their worldwide fishing privileges, and NMFS has no
discretion in this matter.
Comment 28: One comment suggests the reduction loan be prorated
over the various crab area/species endorsement fisheries.
Response: The authorizing statute specifically provides for doing
this, and the proposed rule provided for it in accordance with the
statute.
Comment 29: One comment was concerned that the crab program might
result in revoking crab fishing history other than the crab fishing
history which may be used as the basis of any future crab
rationalization plan.
Response: The crab program will result in revoking the complete
crab fishing history of each crab reduction/history vessel.
Comment 30: One comment suggests the crab program involve
relinquishment of the worldwide fishing privileges of what, under the
final rule, are reduction/privilege vessels.
Response: Both the proposed rule and the final rule so provide.
Changes to Proposed Rule
Although public comment about the proposed rule did not address the
issue of when NMFS notifies crab program bidders whether NMFS accepted
or rejected their bids, the final rule differs in this respect from the
proposed rule. The proposed rule provided for this notification
occurring before the referendum about the reduction loan repayment fee.
Based on interim public comment during the Pacific Coast groundfish
fishing capacity reduction program (68 FR 42613), however, NMFS now
believes that postponing this notice until after the referendum has
already occurred may help neutralize any potential which the proposed
rule aspect might have had for biasing referendum results. If
referendum voters know before they vote whose bids NMFS accepted and
whose bid NMFS rejected, they may vote differently than they otherwise
would have if they did not know whose bids NMFS accepted and whose bids
NMFS rejected.
The following reflects the minor or clarifying revisions of the
proposed rule which the final rule incorporates:
(1) NMFS revised the term ``reduction vessel'' by replacing it with
two separate terms, ``reduction/privilege vessel'' and ``reduction/
history vessel''. Consequently, the term ``reduction vessel'' does not
appear anywhere in the final rule. The effect of this revision is that
the vessel, for loss of fishing privileges purposes, will be the vessel
designated on a crab LLP license at the time the final rule is
published in the Federal Register; and the vessel, for loss of fishing
history, bid scoring, and loan apportionment purposes, will be the
vessel (or in some cases, vessels) whose fishing history gave rise to a
crab LLP license. In most cases, the vessels will be the same for both
purposes; in other cases, the vessels for each purpose will be
different.
(2) NMFS included a new term, ``reduction fishing history'', in
order to clarify that the fishing history component of each bidder's
reduction fishing interest includes the complete documented harvest,
upon any part of which NMFS based issuance of the crab LLP licence
included as a crab reduction permit in the bid, plus such fishing
history, after the issuance of such crab LLP license, of any other
vessel upon which the bidder used such crab reduction permit;
(3) NMFS clarified that co-bidders are not required for non-crab
reduction permits;
(4) NMFS eliminated any ambiguity about whether replacement vessels
are, under appropriate Amendment 10 exceptions, reduction/history
vessels;
(5) NMFS added a definition for the term ``replacement vessel'' in
order to clarify certain aspects of multiple reduction/history vessels
under the exceptions to Amendment 10; and
(6) NMFS revised the bidder acceptance/rejection notice provisions
to postpone this notice until after the crab program's referendum.
Finally, NMFS herein clarifies that it has no direct authority to
revoke world-wide fishing privileges. The U.S.
[[Page 69335]]
Department of Transportation's Maritime Administration (MARAD) is
responsible under section 9 of the Shipping Act of 1916, 46 App. U.S.C.
808, for approving transfers of vessels from the U.S. flag to a foreign
flag. MARAD has the authority and already had a mechanism in the
regulations to deny the approval to flag foreign fishing industry
vessels over 1,000 gross tons. However, MARAD's regulations at 46
C.F.R. part 221.15 also included a general approval for transfers of
fishing industry vessels under 1,000 gross tons. Upon learning of the
crab program provision, MARAD amended the regulations to also address
vessels under 1,000 gross tons that are subject to the crab program and
to make it clear that any vessel that participates in the crab program
will be ineligible for a section 9 approval to transfer the vessel to a
foreign flag. Further, MARAD is planning to again amend its section 9
regulations to address the broader issue of fishing vessels that are
subject to a capacity reduction program.
Key Steps
NMFS will, in the following chronological order, now implement the
crab program by:
(1) Publishing the final regulations;
(2) Publishing in the Federal Register a notification listing all
qualified bidders and all qualified voters;
(3) Publishing in the Federal Register an invitation to bid, along
with a bidding form and terms of capacity reduction agreement;
(4) Issuing detailed bidding guidance to each qualifying bidder;
(5) Sending a crab program invitation to bid and a bidding form and
terms of capacity reduction agreement to each qualifying bidder;
(6) Receiving bids during the period in which bidding remains open;
(7) Tallying the resulting bids;
(8) Accepting or rejective the bids (without notice to the
bidders);
(9) Issuing detailed voting guidance to each qualifying voter;
(10) Sending a referendum ballot to each qualifying voter;
(11) Receiving referendum votes during the period in which voting
remains open;
(l2) Tallying the resulting votes;
(13) Notifying referendum voters of the referendum's results; and
(14) In the instance of a successful referendum:
(a) Notifying accepted bidders that their bids were accepted and
that the resulting reduction contracts are unconditional,
(b) Publishing in the Federal Register a reduction payment tender
notification,
(c) Tendering reduction payments,
(d) Disbursing reduction payment in accordance with accepted
bidders written payment instructions,
(e) Accomplishing the necessary crab program revocations and
restrictions, and
(f) Administering the payment and collecting reduction loan
repayment fees.
Reading the Rule in Conjunction with the Framework Rule
This final rule establishes which framework rule provisions (this
subpart's Sec. 600.1000 through Sec. 600.6017) do not apply to the
crab program. Consequently, a comprehensive understanding of the crab
program requires reading this final rule in conjunction with the
remaining framework rule provisions that continue to apply to the crab
program. NMFS recommends that all interested persons carefully read the
former in close conjunction with the latter.
Summary of Crab Program Notices and Mailings
This table summarizes, in chronological order, key crab program
actions that will involve providing notice to affected persons:
------------------------------------------------------------------------
Notice Actions Method
------------------------------------------------------------------------
FEDERAL
REGISTER Mailing Website
------------------------------------------------------------------------
Final rule X .......... X
Bidder and voter list X X X
Invitation to bid, along with X X X
bidding form and terms of
capacity reduction agreement
Referendum ballots ............... X X
Referendum results ............... X X
Bidder acceptance/reduction ............... X ..........
contracts unconditional
Reduction payment tender notice X .......... ..........
Reduction payment tender ............... X ..........
Fee payment and collection ............... X X
------------------------------------------------------------------------
[[Page 69336]]
NMFS will also mail each of the following:
------------------------------------------------------------------------
Action NMFS will mail:
------------------------------------------------------------------------
Bidder and voter notice A notice to each crab
license holder who is
prospectively a qualifying
bidder, voter, or both.
Bidder guidance Detailed guidance to all
qualifying bidders about
the crab program, how to
bid, and other bidding
matters.
Invitation to bid, bidding form, and terms An invitation to bid and a
of capacity reduction agreement bidding form and bidding
terms and agreements to
each crab license holder
who is on our prospectively
qualifying bidder list.
Voter guidance Detailed guidance to all
qualifying voters about how
to vote and other
referendum matters.
Referendum ballots A referendum ballot and
instructions to each crab
license holder who is on
NMFS prospectively
qualifying voter list.
Referendum results The results of the
referendum to each crab
license holder.
Bid Acceptance/Reduction Contracts Notification, to each
Unconditional accepted bidder, that its
bid was accepted and a
successful referendum has
fulfilled the one condition
to performance of the
reduction contracts.
Reduction payment tender NMFS' tender of reduction
payment to each accepted
bidder (requesting the
bidder's written reduction
payment instructions).
Fee payment and collection notice A notice to each fish seller
and each fish buyer of the
initial fee payment and
collection requirement.
------------------------------------------------------------------------
All website postings will be solely for the public's convenience
and our failure or inability to post anything on a website does not
affect the rights, privileges, duties, or obligations of any person
involved.
Classification
The Assistant Administrator for Fisheries, National Marine
Fisheries Service, determined that this final rule is consistent with
the Consolidated Appropriations Act of 2001, as amended, 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 final rule. The
assessment discusses the impact of this rule on the natural and human
environment and integrates a Regulatory Impact Review and a Final
Regulatory Flexibility Analysis. NMFS assessment has resulted in a
finding of no significant impact. NMFS will send the assessment, the
review and analysis to anyone who requests it (see ADDRESSES).
NMFS determined that this final rule is economically significant
for purposes of Executive Order 12866. The rule may result in a reverse
auction that could total up to $100 million worth of successful bids.
These bids represent the compensation for the net present value of the
total losses that the fishermen expect to bear from exiting the market.
The expected costs of the rule would also include administrative costs
that would be incurred by NMFS in facilitating this auction. The
benefits of the rule would be the increase in producer and consumer
surplus resulting from the lower costs of harvesting the same amount of
crab. The benefits expected by the remaining fishermen should at least
equal the cost of compensating the exiting fishermen since this auction
is voluntarily undertaken.
In compliance with the Regulatory Flexibility Act, NMFS prepared an
analysis that describes the economic impact this final rule may have on
small entities. In this final rule's preamble, NMFS described the rule
and its legal basis. NMFS intends the analysis to aid in considering
all reasonable regulatory alternatives that can minimize the economic
impact on affected small entities.
This final rule's effect on post-reduction crab harvesters will
depend on the crab program's nature and size. Our assessment, review,
and analysis considered:
(1) The effect of three alternatives:
(a) The status quo,
(b) Uniform reduction loan repayment fees, and
(c) Weighted reduction loan repayment fees; and
(2) Based on five potential magnitudes of revoked crab licenses and
vessels:
(a) 30,
(b) 45,
(c) 60,
(d) 75, and
(e) 90.
The preferred alternative, weighted reduction loan repayment fees,
provides the most equitable method for allocating reduction loan
repayment, and this is the reduction loan repayment method section 144
of Pub. L. 106-554 requires.
The final rule's impact will be positive for both bidders whose bid
offers NMFS accepts and post-reduction harvesters whose landing fees
repay the reduction loan because the bidders and harvesters will assume
the impact and fewer crab license holders after capacity reduction will
be collectively able to catch more fish than if capacity had not been
reduced:
(1) Bidders will volunteer to make bid offers at bid amounts of
their own choice. Presumably, no bidder will volunteer to make a bid
offer with a bid amount that is inconsistent with the bidder's
interest; and
(2) Reduction loan repayment landing fees will be authorized, and
NMFS can complete the crab program, only if at least two-thirds of crab
license holders voting in a post-bidding fee referendum voted in favor
of the fee. Presumably, crab license holders would not vote in favor of
the fee unless they concluded that the crab program's prospective
capacity reduction was sufficient to enable them to increase their
post-reduction revenues enough to justify the fee.
Given the large levels of overcapacity existent in U.S. and other
global fisheries, buyback vessels and permits should not be allowed to
move into other fisheries. This cascade effect would only exacerbate
the overcapacity problems that exist in those fisheries. For example,
the sale of domestic vessels to overseas operators while reducing
capacity in the U.S. would harm stocks of fish harvested globally. This
would cause U.S. fishermen to compete with additional foreign
fishermen; e.g. bluefin tuna, swordfish, sharks. This indirectly
reduces net benefits to U.S. and global fishermen. Overall net benefit
levels would be reduced in those fisheries in which capacity was
transferred and indirectly in all related fisheries through continued
or increased discarded bycatch levels, degradation of habitat, and
other related problems.
NMFS believes that this action will affect neither authorized crab
harvest levels nor crab harvesting practices.
NMFS has prepared a Regulatory Compliance Guide (RCG) for this
final rule to comply with a requirement of the Small Business
Administration. The RCG takes the form of questions and answers which
explain the requirements for participation and other aspects of the
program. It will be mailed by NMFS to all prospective bidders who may
participate in the crab program.
This final rule contains information collection requirements
subject to the
[[Page 69337]]
Paperwork Reduction Act (PRA). The Office of Management and Budget
(OMB) approved this information collection under OMB control number
0648-0376. NMFS estimates that the public reporting burden for this
information collection will average 4 hours for bidding and 4 hours for
voting in a referendum. Persons affected by this final rule will also
be subject to other collection-of-information requirements referred to
in the rule and also approved under OMB control number 0648-0376. These
requirements and their associated response times are: completing and
filing a fish ticket (10 minutes), submitting monthly fish buyer
reports (2 hours), submitting annual fish buyer reports (4 hours), and
fish buyer/fish seller reports when a person fails either to pay or to
collect the loan repayment fee (2 hours).
This final rule also contains a new collection-of-information
requirement that OMB has approved under the same OMB control number.
The provision allows the public 30 days to advise us of any license or
permit holder or vessel owner claims that conflict with accepted
bidders' representations about holding, owning, or retaining any of the
crab or non-crab reduction permits, the reduction/privilege and
reduction/history vessels, or the crab or non-crab reduction fishing
histories. Responses are voluntary, but NMFS estimates the public
reporting burden for this collection of information will be 1 hour per
response.
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. Interested persons may 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 PRA requirements
unless that information collection displays a currently valid OMB
control number.
This action will not result in any adverse effects on endangered
species or marine mammals.
List of Subjects in 50 CFR Part 600
Fisheries, Fishing capacity reduction, Fishing permits, Fishing
vessels, Intergovernmental relations, Loan programs -business,
Reporting and recordkeeping requirements.
Dated: December 8, 2003.
Rebecca Lent,
Deputy Assistant Administrator for Regulatory Programs, National Marine
Fisheries Service.
0
For the reasons in the preamble, the National Marine Fisheries Service
amends 50 CFR part 600 as follows:
PART 600--MAGNUSON-STEVENS ACT PROVISIONS
0
1. The authority citation for part 600 is revised to read as follows:
Authority: 5 U.S.C. 561, 16 U.S.C. 1801 et seq., 16 U.S.C.
1861a(b) through (e), 46 App. U.S.C. 1279f and 1279g, section 144(d)
of Division B of Pub. L. 106-554, section 2201 of Pub. L. 107-20,
and section 205 of Pub. L. 107-117.
0
2. Section 600.1018 is added to Subpart L to read as follows:
Sec. 600.1018 Bering Sea and Aleutian Islands (BSAI) Crab species
program.
(a) Purpose. This section's purpose is to implement the program
that Section 144(d) of Division B of Pub. L. 106-554, as amended by
section 2201 of Pub. L. 107-20 and section 205 of Pub. L. 107-117,
enacted for BSAI crab species.
(b) Terms. Unless otherwise defined in this section, the terms
defined in Sec. 600.1000 expressly apply to the program for BSAI crab.
Likewise, the terms defined in Sec. 679.2 of this chapter also apply
to terms not otherwise defined in either Sec. 600.1000 or this
section. The following terms used in this section have the following
meanings for the purpose of this section:
Acceptance means NMFS' acceptance, on behalf of the United States,
of a bid.
Bid means a bidder's irrevocable offer, in response to an
invitation to bid under this section, to surrender, to have revoked, to
have restricted, to relinquish, to have withdrawn, or to have
extinguished by other means, in the manner this section requires, the
bidder's reduction fishing interest.
Bid amount means the dollar amount of each bid.
Bidder means either a qualifying bidder bidding alone or a
qualifying bidder and a co-bidder bidding together who at the time of
bidding holds the reduction fishing interests specified at Sec.
600.1018(e).
Bid crab means the crab that NMFS determines each bidder's
reduction/history vessel (see definition) harvested, according to the
State of Alaska's records of the documented harvest of crab, from each
reduction endorsement fishery and from the Norton Sound fishery during
the most recent 5 calendar years in which each reduction endorsement
fishery was for any length of time open for directed crab fishing
during a 10-calendar-year period beginning on January 1, 1990, and
ending on December 31, 1999.
Bid score means the criterion by which NMFS decides in what order
to accept bids in the reverse auction this section specifies.
Co-bidder means a person who is not a qualifying bidder, but who at
the time of bidding owns the reduction/privilege vessel this section
requires to be included in a bid and is bidding together with a
qualifying bidder.
Crab means the crab species covered by the Fishery Management Plan
for the Bering Sea/Aleutian Islands King and Tanner Crabs pursuant to
Sec. 679.2 of this chapter.
Crab license means a License Limitation Program license for crab
issued pursuant to Sec. 679.4(k)(5) of this chapter.
Crab reduction permit means a non-interim crab license endorsed for
one or more reduction endorsement fisheries, regardless of whether it
is also endorsed for the Norton Sound fishery.
FSD means NMFS' Financial Services Division, located in NMFS'
Silver Spring, MD, headquarters office.
Non-crab reduction permit means a fishing license, including all of
its predecessor history, for which a bidder is the holder of record on
December 12, 2003 and which was issued based on the fishing history of
the bidder's -reduction/history vessel.
Norton Sound fishery means the non-reduction fishery defined in
Sec. 679.2 of this chapter as the area/species endorsement for Norton
Sound red king and Norton Sound blue king crab.
NVDC means the U.S. Coast Guard's National Vessel Documentation
Center located in Falling Waters, WV.
Qualifying bidder means a person who at the time of bidding is the
license holder of record of a crab reduction permit.
Qualifying voter means a person who at the time of voting in a
referendum is the license holder of record either of an interim or a
non-interim crab license, except a crab license whose sole area/species
endorsement is for the Norton Sound fishery.
RAM Program means NMFS' Restricted Access Management Program
located in NMFS' Juneau, AK, regional office.
Reduction endorsement fishery means any of the seven fisheries that
Sec. 679.2 of this chapter defines as area/species endorsements except
the area/species endorsement for the Norton Sound fishery.
[[Page 69338]]
Reduction fishery means the fishery for all crab covered by the
Bering Sea/Aleutian Islands King and Tanner Crabs Fishery Management
Plan under all area/species endorsements that section 679.2 of the
chapter defines, except the area/species endorsement for the Norton
Sound fishery.
Reduction fishing history means, for each bid, the complete
documented harvest of the bidder's reduction/history vessel, upon any
part of which such harvest NMFS based issuance of the crab license
included in the bid as a crab reduction permit, plus such fishing
history, after the issuance of such crab license, of any other vessel
upon which the bidder used such crab license.
Reduction fishing interest means, for each bid, the bidder's:
(1) Reduction fishing privilege (see definition);
(2) Crab reduction permit;
(3) Non-crab reduction permit;
(4) Reduction fishing history (see definition); and
(5) Any other claim that could in any way qualify the owner,
holder, or retainer of any of the reduction components, or any person
claiming under such owner, holder, or retainer, for any present or
future limited access system fishing license or permit in any United
States fishery (including, but not limited to, any harvesting privilege
or quota allocation under any present or future individual fishing
quota system).
Reduction fishing privilege means the worldwide fishing privileges
of a bid's reduction/privilege vessel (see definition).
Reduction/history vessel means the vessel or vessels which
generated the reduction fishing history.
Reduction loan sub-amount means the portion of the original
principal amount of reduction loan this section specifies each
reduction endorsement fishery must repay with interest.
Reduction/privilege vessel means the vessel designated on a crab
license on December 12, 2003.
Referendum means a referendum under this section to determine
whether voters approve the fee required to repay this program's
reduction loan.
Replacement vessel means a reduction/history vessel which replaced
the lost or destroyed one whose reduction fishing history qualified
during the general qualification period and the endorsement
qualification period and, which under the exceptions in Amendment 10,
qualified during the recent participation period.
(c) Relationship to this subpart--(1) Provisions that apply. The
provisions of Sec. 600.1000 through Sec. 600.1017 of this subpart
apply to this program except as paragraph (c)(2) of this section
provides; and
(2) Provisions that do not apply. The following sections, or
portions of them, of this subpart do not apply to this program:
(i) All of:
(A) Section 600.1001,
(B) Section 600.1002,
(C) Section 600.1003,
(D) Section 600.1004,
(E) Section 600.1005,
(F) Section 600.1006, and
(G) Section 600.1007,
(ii) The portions of Sec. 600.1008:
(A) Pertaining to an implementation plan,
(B) Pertaining to a 60-day comment period for a proposed
implementation regulation,
(C) Pertaining to public hearings in each State that the this
program affects,
(D) Pertaining to basing the implementation regulation on a
business plan,
(E) Within paragraphs (d)(1)(ii) through (viii),
(F) Within paragraph (d)(2)(ii),
(G) Within paragraph (e), and
(H) Within paragraph (f) and pertaining to fishing capacity
reduction specifications and a subsidized program,
(iii) The portions of Sec. 600.1009:
(A) Pertaining to fishing capacity reduction specifications,
(B) Within paragraph (a)(4),
(C) Pertaining to a reduction amendment,
(D) Within paragraph (a)(5)(ii), to the extent that the paragraph
is inconsistent with the requirements of this section,
(E) Within paragraph (b)(i), and
(F) Pertaining to an implementation plan,
(iv) The portions of Sec. 600.1010:
(A) Within paragraph (b),
(B) Pertaining to fishing capacity reduction specifications,
(C) Within paragraph (d)(1), and
(D) Within paragraphs (d)(4))(iv) through (vii),
(v) The portions of Sec. 600.1011:
(A) That comprise the last sentence of paragraph (a),
(B) Within paragraph (d), and
(C) Within paragraph (e)(2),
(vi) The portions of Sec. 600.1012:
(A) Within paragraph (b)(3) following the word ``subpart'', and
(B) Within paragraph (b)(3), and
(vii) The last sentence of Sec. 600.1014(f).
(d) Reduction cost financing. NMFS will use the proceeds of a
reduction loan, authorized for this purpose, to finance 100 percent of
the reduction cost. The original principal amount of the reduction loan
will be the total of all reduction payments that NMFS makes under
reduction contracts. This amount shall not exceed $100 million.
(e) Who constitutes a bidder. A bidder is a person or persons who
is the:
(1) Holder of record and person otherwise fully and legally
entitled to offer, in the manner this section requires, the bid's crab
reduction permit and the bid's non-crab reduction permit;
(2) Reduction/privilege vessel owner, title holder of record, and
person otherwise fully and legally entitled to offer, in the manner
this section requires, the bid's reduction fishing privilege; and
(3) Retainer and person otherwise fully and legally entitled to
offer, in the manner this section requires, the bid's reduction fishing
history.
(f) How crab licenses determine qualifying bidders and qualifying
voters--(1) Non-interim crab licenses. Each person who is the record
holder of a non-interim crab license endorsed for one or more reduction
endorsement fisheries is both a qualifying bidder and a qualifying
voter and can both bid and vote;
(2) Interim crab licenses. Each person who is the record holder of
an interim crab license endorsed for one or more reduction endorsement
fisheries is a qualifying voter but not a qualifying bidder and can
vote but not bid;
(3) Crab licenses endorsed solely for the Norton Sound Fishery.
Each person who is the record holder of any crab license endorsed
solely for the Norton Sound fishery is neither a qualifying bidder nor
a qualifying voter and can neither bid nor vote; and
(4) Time at which qualifying bidders and voters must hold required
crab licenses. A qualifying bidder must be the record holder of the
required crab license at the time the qualifying bidder submits its
bid. A qualifying voter must be the record holder of the required crab
license at the time the qualifying voter submits its referendum ballot.
(g) Qualifying bidders and co-bidders--(1) Qualifying bidders
bidding alone. There is no co-bidder when a qualifying bidder owns,
holds, or retains all the required components of the reduction fishing
interest;
(2) Qualifying bidders bidding together with co-bidders. When a
qualifying bidder does not own the reduction/privilege vessel, the
person who does may be the qualifying bidder's co-bidder; and
(3) Minimum reduction components that qualifying bidders must hold
or retain when bidding with co-bidders. At a minimum, a qualifying
bidder must hold the crab reduction permit and the non-crab reduction
permit and retain
[[Page 69339]]
the reduction fishing history. The reduction/privilege vessel may,
however, be owned by another person who is a co-bidder.
(h) Reduction fishing interest--(1) General requirements. Each
bidder must:
(i) In its bid, offer to surrender, to have revoked, to have
restricted, to relinquish, to have withdrawn, or to have extinguished
by other means, in the manner that this section requires, the reduction
fishing interest,
(ii) At the time of bidding, hold, own, or retain the reduction
fishing interest and be fully and legally entitled to offer, in the
manner that this section requires, the reduction fishing interest, and
(iii) Continuously thereafter hold, own, or retain the reduction
fishing interest and remain fully and legally entitled to offer, in the
manner that this section requires, the reduction fishing interest
until:
(A) The bid expires without NMFS first having accepted the bid,
(B) NMFS notifies the bidder that NMFS rejects the bid,
(C) NMFS notifies the bidder that a reduction contract between the
bidder and the United States no longer exists, or
(D) NMFS tenders reduction payment to the bidder;
(2) Reduction/privilege vessel requirements. The reduction/
privilege vessel in each bid must be:
(i) The vessel designated, at the time this final rule is published
in the Federal Register, on a crab license which becomes a bid's crab
reduction permit, and
(ii) Be neither lost nor destroyed at the time of bidding;
(3) Reduction fishing privilege requirements. The reduction fishing
privilege in each bid must be the reduction/privilege vessel's:
(i) Fisheries trade endorsement under the Merchant Marine Act, 1936
(46 U.S.C.A. 12108),
(ii) Qualification 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 under foreign registry or operation under
the authority of a foreign country, and
(iii) Any other privilege to ever fish anywhere in the world;
(4) Crab reduction permit requirements. (i) Except as otherwise
provided in paragraph (i) of this section, the crab reduction permit
must in each bid:
(A) Be the crab license that NMFS issued on the basis of the
bidder's reduction fishing history,
(B) Be non-interim at the time each bidder submits its bid, and
(C) Include an area/species endorsement for any one or more
reduction endorsement fisheries,
(ii) Although the Norton Sound fishery is not a reduction
endorsement fishery, an area/species endorsement for the Norton Sound
fishery occurring on a crab reduction permit must be surrendered and
revoked (and all fishing history involving it relinquished) in the same
manner as all other reduction endorsement fisheries occurring on the
crab reduction permit;
(5) Non-crab reduction permit requirements. The non-crab reduction
permit must in each bid be every license, permit, or other harvesting
privilege that:
(i) NMFS issued on the basis of the fishing history of the bidder's
reduction/history vessel, and
(ii) For which the bidder was the license holder of record on the
effective date of this section; and
(6) Reduction fishing history requirements. Except as otherwise
provided in paragraph (i) of this section, the reduction fishing
history in each bid must that of a single reduction/history vessel.
(i) Exceptions to the reduction fishing interest requirements--(1)
Lost or destroyed vessel salvaged. When a bidder has salvaged a lost or
destroyed vessel and has made from the salvaged vessel the documented
harvest of crab Sec. 679.4(k)(5)(iii)(B)(3) of this chapter requires,
the crab portion of the reduction fishing history is the salvaged
vessel's documented harvest of crab; and
(2) Lost or destroyed vessel not salvaged. When a bidder has not
salvaged the lost or destroyed vessel but has made from a replacement
vessel the documented harvest of crab Sec. 679.4(k)(5)(iii)(B)(3) of
this chapter requires:
(i) The crab portion of the reduction fishing history is the total
of the lost or destroyed vessel's documented harvest of crab through
the date of such vessel's loss or destruction plus the replacement
vessel's documented harvest of crab after such date, and
(ii) For the purposes of this program, the lost or destroyed
vessel's documented harvest of crab merges with, and becomes a part of,
the replacement vessel's documented harvest of crab; and
(3) Acquired crab fishing history. When a bidder, in the manner
Sec. 679.4(k)(5)(iv) of this chapter requires, has made a documented
harvest of crab from one vessel and has acquired a replacement vessel's
documented harvest of crab:
(i) The crab portion of the reduction fishing history is the total
of the acquired documented harvest of crab through December 31, 1994,
plus the documented harvest of crab after December 31, 1994, of the
vessel from which the bidder made the documented crab harvest Sec.
679.4(k)(5)(iv) of this chapter requires, and
(iii) For the purposes of this program, the acquired documented
harvest of crab merges with, and becomes a part of, the non-acquired
documented harvest of crab.
(j) Determining value of reduction/history vessels' bid crab--(1)
In each fishery. NMFS will determine the dollar value of each
reduction/history vessel's bid crab in each reduction endorsement
fishery and in the Norton Sound Fishery by multiplying each reduction/
history vessel's number of pounds of each species of bid crab by the
average ex-vessel price per pound that the State of Alaska annually
publishes for each crab species in the bid crab; and
(2) In all fisheries. NMFS will determine the dollar value of each
reduction/history vessel's bid crab in all reduction endorsement
fisheries and in the Norton Sound fishery by adding each of the
products of the multiplications in paragraph (j)(1) of this section;
and
(3) Crab excluded from bid crab. A reduction/history vessel's bid
crab may not include, to the extent that NMFS has knowledge:
(i) Triangle tanner crab, grooved tanner crab, and any other crab
not involved in the various area/species endorsements,
(ii) Discarded crab,
(iii) Crab caught for personal use,
(iv) Unspecified crab, and
(v) Any other crab for which the dollar value, crab fishery,
landing date, or harvesting vessel NMFS cannot, for whatever reason,
determine.
(k) Determining bid score. NMFS will determine each bid score by
dividing each bid amount by the sum in paragraph (j)(2) of this
section.
(l) Determining reduction loan sub-amount--(1) Value of all bid
crab in each fishery. NMFS will add the dollar value of bid crab of all
accepted bidders' reduction/history vessels in each reduction
endorsement fishery;
(2) Value of all bid crab in all fisheries. NMFS will add the
dollar value of bid crab of all accepted bidders' reduction/history
vessels in all reduction endorsement fisheries plus the Norton Sound
fishery;
(3) Each fishery as a percentage of all fisheries. NMFS will divide
each of the sums in paragraph (l)(1) of this section by the sum in
paragraph (l)(2) of this
[[Page 69340]]
section. The result of this calculation will be the dollar value of all
bid crab in each reduction endorsement fishery as a percentage of the
dollar value of all bid crab in all reduction endorsement fisheries
plus the Norton Sound fishery;
(4) Applying percentages to loan amount. NMFS will multiply the
reduction loan's full original principal amount by each of the yields
in paragraph (l)(3) of this section; and
(5) Loan sub-amount. Each of the amounts resulting from the
calculation in paragraph (l)(4) of this section will be the reduction
loan subamount that a reduction endorsement fishery must repay.
(m) Prospectively qualifying bidder and voter notification--(1)
General. At the appropriate point before issuing an invitation to bid,
NMFS will publish a notification in the Federal Register listing all
persons who at the time of publishing the notification prospectively
are qualifying bidders and qualifying voters;
(2) Qualifying bidder list. The prospectively qualifying bidder
list will include the names and addresses of record of each license
holder of record for all non-interim crab licenses except only crab
licenses whose sole area/species endorsement is for the Norton Sound
fishery;
(3) Qualifying voter list. The prospectively qualifying voter list
will include the names and addresses of record of each license holder
of record for all non-interim and interim crab licenses except only
crab licenses whose sole area/species endorsement is for the Norton
Sound fishery;
(4) Basis of lists. NMFS will base both the lists on the RAM
Program's license holder records for crab licenses meeting the
requirements of Sec. 679.4(k)(5) of this chapter as well as the
requirements of this section;
(5) Purpose. The purpose of the notification is to provide the
public notice of:
(i) The prospectively qualifying bidders, and
(ii) The prospectively qualifying voters; and
(6) Public comment. Any person who wants to comment about the
notification has 30 days from the notification's publication date to do
so. Persons should send their comments to both FSD and the RAM Program
(at addresses that the notification will specify). Comments may
address:
(i) Persons who appear on one or more lists but should not,
(ii) Persons who do not appear on one or more lists but should, and
(iii) Persons who believe their names and/or business mailing
addresses appearing on one or more lists are incorrect.
(n) Invitation to bid--(1) Notification. At the appropriate point
after issuing the notification in paragraph (m) of this section, NMFS
will publish the invitation to bid in the Federal Register notification
further specified in Sec. 600.1009(c) of this subpart, along with a
bidding form and terms of capacity reduction agreement. No person may,
however, bid at this stage;
(2) Notification contents. The invitation to bid notification will
state all applicable bid submission requirements and procedures
(including, but not limited to, those included in this section). In
particular, the invitation to bid notification will:
(i) State the date on which NMFS will invite bids by mailing an
invitation to bid to each person on the prospectively qualifying bidder
list,
(ii) State a bid opening date, before which a bidder may not bid,
and a bid closing date, after which a bidder may not bid,
(iii) State a bid expiration date after which each bid expires
unless, prior to that date, NMFS accepts the bid by mailing a written
acceptance notice to the bidder at the bidder's address of record,
(iv) State the manner of bid submission and the information each
bidder must submit for NMFS to deem a bid responsive,
(v) State any other information required for bid submission, and
(vi) Include a facsimile of the invitation to bid, along with a
bidding form and terms of capacity reduction agreement comprising the
entire terms and conditions of the reduction contract under which each
bidder must bid and under which NMFS must accept a bid; and
(3) Mailing. On the date specified in this notification, NMFS will
invite bids by mailing the invitation to bid and a bidding package,
including a bidding form terms of capacity reduction agreement, to each
person then on the prospectively qualifying bidder list. NMFS will not
mail the invitation to bid to any potential co-bidder because NMFS will
not then know which bids may include a co-bidder. Each qualifying
bidder is solely responsible to have any required co-bidder properly
complete the bid. No person may bid before receiving the invitation to
bid and the bidding package that NMFS mailed to that person.
(o) Bids--(1) Content. Each invitation to bid that NMFS mails to a
qualifying bidder will have a bid form requiring each bid to:
(i) Identify, by name, regular mail address, telephone number, and
(if available) electronic mail address, the qualifying bidder and each
co-bidder,
(ii) State the bid amount in U.S. dollars,
(iii) Identify, by crab license number, the qualifying bidder's
crab reduction permit and include an exact copy of this crab license
(which the RAM Program issued),
(iv) Identify, by vessel name and official number, the bidder's
reduction/privilege vessel, and include an exact copy of this vessel's
official document (which NVDC issued),
(v) Identify, by license or permit number, each of the bidder's
non-crab reduction permits; and include an exact copy of each of these
licenses or permits (which the RAM Program issued for licenses or
permits involving species under the jurisdiction of NMFS' Alaska Region
and which other NMFS offices issued for licenses or permits involving
species under those offices' jurisdiction),
(vi) Identify, separately for crab and for each other species:
(A) The qualifying bidder's reduction fishing history, and
(B) The dates that each portion of the reduction fishing history
encompasses; the name and official number of the reduction/history
vessel or vessels which gave rise to it; and the dates during which the
qualifying bidder owned such vessels or, if the qualifying bidder
acquired any reduction fishing history from another person, the name of
the person from which the qualifying bidder acquired such reduction
fishing history and the manner in which and the date on which the
qualifying bidder did so,
(vii) State, declare, and affirm that the qualifying bidder holds
the crab reduction permit and retains the complete reduction fishing
history, and is fully and legally entitled to offer both in the manner
this section requires,
(viii) State, declare, and affirm that either the qualifying bidder
or the co-bidder owns the reduction/privilege vessel and holds the non-
crab reduction permit and is fully and legally entitled to offer both
in the manner that this section requires, and
(ix) Provide any other information or materials that NMFS believes
is necessary and appropriate; and
(2) Rejection. NMFS, regardless of bid scores, will reject any bid
that NMFS believes is unresponsive to the invitation to bid. All bid
rejections will constitute final agency action as of the date of
rejection. Before rejection, NMFS may, however, contact any bidder to
attempt to correct a bid deficiency if
[[Page 69341]]
NMFS, in its discretion, believes the attempt warranted.
(p) Acceptance--(1) Reverse auction. NMFS will determine which
responsive bids NMFS accepts by using a reverse auction in which NMFS
first accepts the responsive bid with the lowest bid score and
successively accepts each additional responsive bid with the next
lowest bid score until either there are no more responsive bids to
accept or acceptance of the last responsive bid with the next lowest
bid score would cause the reduction cost to exceed $100 million. If two
or more responsive bid scores are exactly the same, NMFS will first
accept the bid that NMFS first received;
(2) Notification. NMFS will, after the conclusion of a successful
referendum, notify accepted bidders that NMFS had, before the
referendum, accepted their bids; and
(3) Post-acceptance reduction permit transfer. After NMFS has
accepted bids, neither the RAM Program (nor any other NMFS office) will
transfer to other persons any reduction permits that accepted bidders
included in the bids unless and until FSD advises the RAM Program (or
some other NMFS office) that the resulting reduction contracts are no
longer in effect because a referendum failed to approve the fee that
this section requires to repay this program's reduction loan.
(q) Reduction contracts subject to successful post-bidding
referendum condition. Although this program involves no fishing
capacity reduction specifications under this subpart, each bid, each
acceptance, and each reduction contract is nevertheless subject to the
successful post-bidding referendum condition that Sec. 600.1009(a)(3)
of this subpart specifies for bidding results that do not conform to
the fishing capacity reduction specifications.
(r) Post-bidding referendum--(1) Purpose. NMFS will conduct a post-
bidding referendum whose sole purpose is to determine whether, based on
the bidding results, qualifying voters who cast referendum ballots in
the manner that this section requires authorize the fee required to
repay this program's reduction loan;
(2) Manner of conducting. NMFS will mail a referendum ballot to
each person then on the prospectively qualifying voter list for each
crab license that the person holds and otherwise conduct the referendum
as specified in Sec. 600.1010 of this subpart;
(3) One vote per crab license. Each qualifying voter may cast only
one vote for each crab license that each qualifying voter holds;
(4) Crab license numbers on ballots. Each referendum ballot that
NMFS mails will contain the license number of the prospectively
qualifying voter's crab license to which the ballot relates;
(5) Potential reduction results stated. Each referendum ballot that
NMFS mails will state the aggregate potential reduction results of all
the bids that NMFS accepted, including:
(i) The amount of reduction that all accepted bids potentially
effect, including:
(A) The number of crab reduction permits, together with each area/
species endorsement for which each of these licenses is endorsed,
(B) The number of reduction/privilege vessels and reduction/history
vessels, and
(C) The aggregate and average dollar value of bid crab (together
with the number of pounds of bid crab upon which NMFS based the dollar
value), in each reduction endorsement fishery and in the reduction
fishery, for all reduction/history vessels during the period for which
NMFS calculates the dollar value of bid crab,
(ii) The reduction loan sub-amount that each reduction endorsement
fishery must repay if a referendum approves the fee, and
(iii) Any other useful information NMFS may then have about the
potential sub-fee rate initially necessary in each reduction
endorsement fishery to repay each reduction loan sub-amount; and
(6) Notice that condition fulfilled. If the referendum is
successful, NMFS will notify accepted bidders, in the manner that Sec.
600.1010(d)(6)(iii) of this subpart specifies, that a successful
referendum has fulfilled the reduction contracts' successful post-
bidding referendum condition specified in paragraph (q) of this
section.
(s) Reduction method. In return for each reduction payment, NMFS
will permanently:
(1) Revoke each crab reduction permit;
(2) Revoke each non-crab reduction permit;
(3) Revoke each reduction fishing privilege (which revocation will
run with the reduction/privilege vessel's title in the manner Sec.
600.1009(a)(5)(ii)(A) of this subpart requires and in accordance with
46 U.S.C. 12108(d));
(4) Effect relinquishment of each reduction fishing history for the
purposes specified in this section by noting in the RAM Program records
(or such other records as may be appropriate for reduction permits
issued elsewhere) that the reduction fishing history has been
relinquished under this section and will never again be available to
anyone for any fisheries purpose; and
(5) Otherwise restrict in accordance with this subpart each
reduction/privilege vessel and fully effect the surrender, revocation,
restriction, relinquishment, withdrawal, or extinguishment by other
means of all components of each reduction fishing interest.
(t) Reduction payment tender and disbursement--(1) Fishing
continues until tender. Each accepted bidder may continue fishing as it
otherwise would have absent the program until NMFS, after a successful
referendum, tenders reduction payment to the accepted bidder;
(2) Notification to the public. After a successful referendum but
before tendering reduction payment, NMFS will publish a notification in
the Federal Register listing all proposed reduction payments and
putting the public on notice:
(i) Of the crab reduction permits, the reduction/privilege vessels,
the reduction fishing histories, and the non-crab reduction permits
upon whose holding, owning, retaining, or other legal authority
representations accepted bidders based their bids and NMFS based its
acceptances, and
(ii) That NMFS intends, in accordance with the reduction contracts,
to tender reduction payments in return for the actions specified in
paragraph (s) of this section;
(3) Public response. The public has 30 days after the date on which
NMFS publishes the reduction payment tender notification to advise NMFS
in writing of any holding, owning, or retaining claims that conflict
with the representations upon which the accepted bidders based their
bids and on which NMFS based its acceptances;
(4) Tender and disbursement parties. NMFS will tender reduction
payments only to accepted bidders, unless otherwise provided contrary
written instructions by accepted bidders. Creditors or other parties
with secured or other interests in reduction/privilege vessels or
reduction permits are responsible to make their own arrangements with
accepted bidders;
(5) Time of tender. At the end of the reduction payment tender
notification period, NMFS will tender reduction payments to accepted
bidders, unless NMFS then knows of a material dispute about an accepted
bidder's authority to enter into the reduction contract with respect to
any one or more components of the reduction fishing interest that
warrants, in NMFS' discretion, an alternative course of action;
[[Page 69342]]
(6) Method of tender and disbursement. NMFS will tender reduction
payment by requesting from each accepted bidder specific, written
instructions for paying the reduction payments. Upon receipt of these
payment instructions, NMFS will immediately disburse reduction payments
in accordance with the payment instructions; and
(7) Effect of tender. Concurrently with NMFS' tender of reduction
payment to each accepted bidder:
(i) All fishing activity for any species anywhere in the world in
any way associated with each accepted bidder's reduction fishing
interest must cease,
(ii) Each accepted bidder must retrieve all fixed fishing gear for
whose deployment the accepted bidder's reduction/privilege vessel was
responsible, and
(iii) NMFS will fully exercise its reduction contract rights with
respect to the reduction fishing interest by taking the actions
specified in paragraph (s) of this section.
(u) Fee payment and collection--(1) Fish sellers who pay the fee.
Any person who harvests any crab, but whom ADF&G's fisheries reporting
requirements do not require to record and submit an ADF&G fish ticket
for that crab, is a fish seller for the purpose of paying any fee on
that crab and otherwise complying with the requirements of Sec.
600.1013 of this subpart;
(2) Fish buyers who collect the fee. Any person whom ADF&G's
fisheries reporting requirements require to record and submit an ADF&G
fish ticket for any crab that another person harvested is a fish buyer
for the purpose of collecting the fee on that crab and otherwise
complying with the requirements of Sec. 600.1013 of this subpart; and
(3) Persons who are both fish sellers and fish buyers and both pay
and collect the fee. Any person who harvests any crab, and whom ADF&G's
fisheries reporting requirements require to record and submit an ADF&G
fish ticket for that crab, is both a fish seller and a fish buyer for
the purpose of paying and collecting the fee on that crab and otherwise
complying with the requirements of Sec. 600.1013 of this subpart.
(v) Fishing prohibition and penalties--(1) General. Fishing, for
the purpose of this section, includes the full range of activities
defined in the term ``fishing'' in the Magnuson-Stevens Fishery
Conservation and Management Act (16 U.S.C. 1801),
(2) Prohibitions. Concurrently with NMFS' tender of each reduction
payment, and with the sole exception in paragraph (t)(7)(i) of this
section, no person whatsoever may, and it is unlawful for any person
to:
(i) Fish with or attempt to fish with, or allow others to fish with
or attempt to fish with, the reduction/privilege vessel anywhere in the
world for any species under any conditions and regardless of the
reduction/privilege vessel's ownership or registry for so long as the
reduction/privilege vessel exists. This prohibition includes, but is
not limited to, fishing on the high seas or in the jurisdiction of any
foreign country (to the extent prohibited by law) while operating under
U.S. flag,
(ii) Place or attempt to place, or allow others to place or attempt
to place, the reduction/privilege vessel under foreign flag or
registry,
(iii) Operate or attempt to operate, or allow others to operate or
attempt to operate, the reduction/privilege vessel under the authority
of a foreign country to the extent prohibited by law,
(iv) Otherwise avoid or attempt to avoid, or allow others to avoid
or attempt to avoid, the revocation of the reduction fishing privilege
with respect to any reduction/privilege vessel, and
(v) Make any claim or attempt to make any claim, or allow others to
claim or attempt to make any claim, for any present or future limited
access fishing license or permit in any U.S. fishery (including, but
not limited to, any quota allocation under any present or future
individual quota allocation system) based in any way on any portion of
a reduction fishing interest surrendered, revoked, restricted,
relinquished, withdrawn, or extinguished by other means under this
section; and
(3) Penalties. The activities that this paragraph prohibits are
subject to the full penalties provided in Sec. 600.1017 of this
subpart, and immediate cause for NMFS to take action to, among other
things:
(i) At the reduction/privilege vessel owner's expense, seize and
scrap the reduction/privilege vessel, and
(ii) Pursue such other remedies and enforce such other penalties as
may be applicable.
(w) Program administration--(1) FSD responsibilities. FSD is
responsible for implementing and administering this program. FSD will:
(i) Issue all notifications and mailings that this section
requires,
(ii) Prepare and issue the invitation to bid,
(iii) Receive bids,
(iv) Reject bids,
(v) Score bids,
(vi) Make acceptances,
(vii) Prepare and issue referendum ballots,
(viii) Receive referendum ballots,
(ix) Tally referendum ballots,
(x) Determine referendum success or failure,
(xi) Tender and disburse reduction payments,
(xii) Administer reduction contracts,
(xiii) Administer fees and reduction loan repayment, and
(xiv) Discharge all other management and administration functions
that this section requires;
(2) RAM Program responsibilities. Upon FSD's advice, the RAM
Program (for fishing licenses under the jurisdiction of NMFS's Alaska
Region) and any other appropriate NMFS authority (for fishing licenses
under the jurisdiction of any other NMFS office) will revoke reduction
permits and effect the surrender of fishing histories in accordance
with this section; and
(3) NVDC and MARAD responsibilities. FSD will advise NVDC, MARAD,
such other agency or agencies as may be involved, or all of them to
revoke reduction/privilege vessels' fisheries trade endorsements and
otherwise restrict reduction/privilege vessels in accordance with this
section.
(x) Reduction loan and reduction loan sub-amounts. [Reserved]
[FR Doc. 03-30795 Filed 12-11-03; 8:45 am]
BILLING CODE 3510-22-S