[Federal Register Volume 69, Number 84 (Friday, April 30, 2004)]
[Rules and Regulations]
[Pages 23681-23694]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-9855]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 679

[Docket No. 030922237-4111-02; I.D. 082503D]
RIN 0648-AQ98


Fisheries of the Exclusive Economic Zone Off Alaska; Individual 
Fishing Quota Program; Community Purchase

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 Amendment 66 to the 
Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP), and 
an amendment to the Pacific halibut (halibut) commercial fishery 
regulations for waters in and off of Alaska. Amendment 66 to the FMP 
and the regulatory amendment modify the Individual Fishing Quota (IFQ) 
Program by revising the eligibility criteria to receive halibut and 
sablefish IFQ and quota share (QS) by transfer to allow eligible 
communities in the Gulf of Alaska (GOA) to establish non-profit 
entities to purchase and hold QS for lease to, and use by, community 
residents as defined by specific elements of the proposed action. This 
action improves the effectiveness of the IFQ Program by providing 
additional opportunities for residents of fishery dependent communities 
and is necessary to promote the objectives of the Magnuson-Stevens 
Fishery Conservation and Management Act (Magnuson-Stevens Act) and the 
Northern Pacific Halibut Act of 1982 (Halibut Act) with respect to the 
IFQ fisheries.

DATES: Effective June 1, 2004, except for Sec. Sec.  679.5(l)(8), 
679.41(d)(1), (l)(3), and (l)(4), which will be effective after 
approval of the collection-of-information request submitted to Office 
of Management and Budget (OMB) under OMB approval number 0648-0272 and 
notification of the effective date is published in the Federal 
Register.

ADDRESSES: Copies of Amendment 66 and the Environmental Assessment/
Regulatory Impact Review/Initial Regulatory Flexibility Analysis (EA/
RIR/IRFA) prepared for the proposed rule and final Environmental 
Assessment/Regulatory Impact Review/Final Regulatory Flexibility 
Analysis (EA/RIR/FRFA) prepared for the final rule may be obtained from 
the Alaska Region, NMFS, P.O. Box 21668, Juneau, AK 99802-1668, Attn: 
Lori Durall, (907) 586-7247.

FOR FURTHER INFORMATION CONTACT: Glenn Merrill, 907-586-7228 or email 
at [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The groundfish fisheries in the Exclusive Economic Zone of the GOA 
are managed under the FMP. The FMP was developed by the North Pacific 
Fishery Management Council (Council) under the Magnuson-Stevens Act 
(Pub. L. 94-265, 16 U.S.C. 1801). The FMP was approved by the Secretary 
of Commerce and became effective in 1978. Fishing for halibut 
(Hippoglossus stenolepis) is managed by the International Pacific 
Halibut Commission (IPHC) and the Council under the Halibut Act. The 
IFQ Program, a limited access management system for the fixed gear 
halibut and sablefish (Anoplopoma fimbria) fisheries off Alaska, was 
recommended by the Council in 1992 and approved by NMFS in January 
1993. Initial implementing rules were published on November 9, 1993 (58 
FR 59375). Fishing under the IFQ Program began on March 15, 1995. The 
IFQ Program limits access to the halibut and sablefish fisheries to 
those persons holding QS in specific management areas. The IFQ Program 
for the sablefish fishery is implemented by the FMP and Federal 
regulations at 50 CFR part 679 under authority of the Magnuson-Stevens 
Act. The IFQ Program for the halibut fishery is implemented by Federal 
regulations at 50 CFR part 679 under the authority of the Halibut Act.
    The IFQ Program originally was designed to resolve conservation and 
management problems that are endemic to open access fisheries. The 
background issues leading to the Council's initial action recommending 
the adoption of IFQs are described in the preamble to the proposed rule 
establishing the IFQ Program published December 3, 1992 (57 FR 57130).
    A central concern of the Council in developing the IFQ Program was 
that QS, from which IFQ is derived, would become increasingly held by 
corporate entities instead of independent fishermen who typically own 
and operate their own vessels. To prevent this outcome, the Council 
designed the IFQ Program such that QS could, in most cases, be held 
only by individuals or natural persons, and not by corporate entities. 
The Council provided limited exemptions to this basic approach to 
accommodate existing corporate ownership of vessels at the time of 
implementation and to recognize the participation by corporately owned 
freezer vessels. However, the overall intent of the IFQ Program was for 
catcher vessel QS eventually to be held only by individual fishermen. 
The IFQ Program is designed to limit corporate holding of QS and 
increase holdings of QS by individual fishermen as corporate owners 
divest themselves of QS. This provision is implemented through the QS 
and IFQ transfer regulations at 50 CFR 679.41.
    This final rule revises the existing IFQ Program regulations and 
policy to explicitly allow a new group of non-profit entities to hold 
QS on behalf of residents of specific rural communities located 
adjacent to the coast of the GOA. This change would allow a non-profit 
corporate entity that meets specific criteria to receive transferred 
halibut or sablefish QS on behalf of an eligible community and to lease 
the resulting IFQ to fishermen who are residents of

[[Page 23682]]

the eligible community. This change is intended to provide additional 
opportunities to these fishermen, and may indirectly address concerns 
about the economic viability of those communities. The objectives for 
this action are described in detail in the proposed rule, which was 
published on October 16, 2003 (68 FR 59564), and are summarized here.
    Since initial issuance of QS, and as a result of voluntary 
transfers of QS, the amount of QS and the number of resident QS holders 
has declined substantially in most of the GOA communities affected by 
this action. This trend may have had an effect on employment and may 
have reduced the diversity of fisheries to which fishermen in rural 
communities have access. The ability of fishermen in small rural 
communities to purchase QS or maintain existing QS may be limited by a 
variety of factors unique to those communities. Although the specific 
causes for decreasing QS holdings in rural communities may vary, the 
net effect is overall lower participation by residents of these 
communities in the halibut and sablefish IFQ fisheries.
    In June 2000, representatives of several GOA communities presented 
the Council with a proposal to allow communities to purchase QS. The 
Council approved several alternatives for analysis in June 2001, 
reviewed an initial analysis in December 2001, and took final action in 
April 2002. The problem statement adopted by the Council in June 2001 
recognized the fact that a number of small coastal communities ``are 
struggling to remain economically viable.'' The Council stated that 
``[a]llowing qualifying communities to purchase halibut and sablefish 
quota share for use by community residents will help minimize adverse 
economic impacts on these small, remote, coastal communities in 
Southeast and Southcentral Alaska, and help provide for the sustained 
participation of these communities in the halibut and sablefish IFQ 
fisheries.''
    A Notice of Availability of the FMP amendment was published on 
September 2, 2003 (68 FR 52173) inviting comments on the FMP amendment 
through November 3, 2003. One written comment was received that 
specifically addressed the FMP amendment. This comment is addressed in 
the Response to Comment section of this rule. A proposed rule to 
implement the Council's recommendation was published on October 16, 
2003 (68 FR 59564) inviting comments on the proposed rule through 
December 1, 2003. Twenty-two written comments were received addressing 
the proposed rule (see Response to Comments). The Secretary of Commerce 
approved the FMP amendment on December 3, 2003.
    This action addresses these concerns by modifying the IFQ Program 
to allow non-profit entities that represent small rural communities in 
the GOA with a historic participation in the halibut and sablefish 
fisheries to hold QS. The Council's recommendations also reflect the 
most recent amendments to the Magnuson-Stevens Act, and IFQ policy 
recommendations by the National Research Council.
    The Council considered the range of comments from the public, NMFS, 
and the State of Alaska (State), and incorporated various suggestions 
in developing the policy implemented by this rule. The basic provisions 
of this rule are described in the preamble to the proposed rule 
published October 16, 2003 (68 FR 59564). Key provisions are summarized 
here.

Community QS Provisions

1. Community Quota Entities

    Community quota entities (CQEs) are non-profit entities 
incorporated under the laws of the State, or tribal regulations in the 
case of one of the communities, to represent eligible communities. The 
CQEs obtain QS by transfer and hold the QS and lease the resulting 
annual IFQ to individual community residents. Unless otherwise 
specified, the restrictions that apply to any current QS holder apply 
to a CQE. CQEs, however, are subject to additional regulatory 
requirements beyond those applying to existing QS holders.
    A CQE could represent more than one eligible community. However, no 
community can be represented by more than one CQE. This provision 
minimizes confusion and ensures effective and efficient administration 
of the program.
    To be considered eligible to hold QS on behalf of a community, a 
CQE must have been incorporated after April 10, 2002, the date of final 
Council action. The Council stated that the purpose of designating a 
new non-profit entity to hold QS is that existing administrative 
structures such as municipal governments, tribal councils, or other 
community organizations may be focused on other priorities.
    The Council also recommended that a non-profit organization provide 
proof of support from the community that it is seeking to represent. 
This support must be demonstrated in the application by a non-profit 
organization to become eligible as a CQE. The specific mechanism for 
the community to demonstrate its support for a CQE is described in the 
Administrative Oversight section of this preamble.
    Once an application to become a CQE has been approved, then that 
CQE is eligible to hold and receive QS, and lease IFQ to eligible 
community residents under the mechanisms established by this rule. If a 
CQE does not remain in compliance with the regulations applying to CQEs 
or IFQ holders generally, then NMFS can initiate administrative 
proceedings to deny the transfer of QS or IFQ to or from the CQE. As 
with other administrative determinations under the IFQ Program, any 
such determination could be appealed under the procedures set forth in 
regulations (50 CFR 679.43). The Council recommended regulatory 
measures, described below, as a means to monitor the ability of the 
non-profit entities to meet the goals of distributing IFQ among 
residents in these GOA communities.

2. Eligible Communities

    Gulf of Alaska communities eligible to participate in this program 
must meet all the following criteria: (a) have a population of less 
than 1,500 persons based on the 2000 United States Census; (b) have 
direct saltwater access; (c) lack direct road access to communities 
with a population greater than 1,500 persons; (d) have historic 
participation in the halibut and sablefish fisheries; and (e) be 
specifically designated on a list adopted by the Council and included 
in this rule (see Table 21 to part 679).
    If a community appears to meet the eligibility criteria but is not 
specifically designated on the list of communities adopted by the 
Council, then that community must apply directly to the Council to be 
included. In this event, the Council may modify the list of eligible 
communities adopted by the Council through a regulatory amendment. 
Under this action, a total of 42 communities in the GOA qualify as 
eligible to purchase QS. These eligible communities may designate a new 
non-profit entity to hold QS on behalf of that community.
    (a) Population of Less Than 1,500 Persons
    The 2000 United States Census was chosen as the standard for 
measuring total population because it is considered to be a more 
accurate measure of population than annual estimates conducted by the 
State. Additionally, at the time that the Council took final action to 
modify the IFQ Program to accommodate communities, the 2000 Census was 
the best available demographic data.

[[Page 23683]]

    This proposed rule establishes that a community with not less than 
20 persons and not more than 1,500 persons that is defined as a Census 
Designated Place under the U.S. Census fulfills the requirement for the 
definition of a community for the purposes of this program. If 
communities seek inclusion as an eligible community in the future, then 
the Council and NMFS would review those communities using the 
definitions of a community as defined by this rule.
    (b) Have Direct Saltwater Access
    A community would be defined as adjacent to saltwater if it is 
located on the GOA coast of the North Pacific Ocean.
    (c) Lack of Direct Road Access
    The Council recommended limiting eligibility to communities without 
direct surface road access to communities larger than 1,500 persons 
because such communities may lack access to markets for fishery 
products and could be disadvantaged relative to other communities with 
better transportation infrastructure. Communities that are served by 
the Alaska Marine Highway System are not considered to have surface 
road access and would be considered to lack surface road access for 
purposes of this action.
    (d) Have Historic Participation in the Halibut and Sablefish 
Fisheries
    Historic participation is defined as communities for which a 
resident has recorded a commercial landing of either halibut or 
sablefish between 1980-2000 according to Commercial Fisheries Entry 
Commission (CFEC) data for permit and fishing activity. The year 1980 
was chosen because it represents the first year of widely collected and 
reliable data from the CFEC, and the year 2000 was chosen because it 
was the last year of data available prior to the Council's decision to 
recommend this program.
    (e) Be Specifically Designated on a List Adopted by the Council
    The Council adopted a specific list of eligible communities to 
limit the entry of new communities into the Community QS Program (see 
Table 21 to part 679). Any change to the list of eligible communities 
requires Council action to recommend such a change and Secretarial 
approval of the change.

3. Use Caps for Individual Communities

    Each eligible community as represented by a CQE is subject to the 
same use limitations on QS and IFQ currently established for QS holders 
as described under 50 CFR 679.42(e) for sablefish and 50 CFR 679.42(f) 
for halibut. Therefore, for each community it represents, a CQE is 
limited to using:

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No more than: 599,799 units of halibut QS.......................                      in IFQ regulatory area 2C
No more than: 1,502,823 units of halibut QS combined............         in IFQ regulatory areas 2C, 3A, and 3B
No more than: 688,485 sablefish QS units........................  in the IFQ regulatory Area East of 140[deg] W.
                                                                             long. (Southeast Outside District)
No more than 3,229,721 sablefish QS units combined..............         in the Southeast Outside District West
                                                                     Yakutat, Central Gulf Regulatory Area, and
                                                                                   Western Gulf Regulatory Area
----------------------------------------------------------------------------------------------------------------

    A CQE representing an eligible community located within Areas 3A or 
3B is prohibited from purchasing QS in Area 2C (Southeast Alaska) on 
behalf of that community. The Council noted that 21 of the 42 
communities eligible to participate in this program are located in Area 
2C. Allowing CQEs in Areas 3A and 3B to purchase QS in Area 2C would 
increase the competition of QS and could adversely affect the price and 
availability of QS among Area 2C communities.
    Likewise, a CQE representing an eligible community within Area 2C 
is prohibited from purchasing and using QS in Area 3B (Western GOA) on 
behalf of that community. This limitation applies because residents 
from communities located in Area 2C traditionally did not fish in Area 
3B.
    Although the use of halibut QS is limited to those areas that are 
adjacent to the eligible communities, a similar provision does not 
apply to sablefish. The sablefish fishery occurs in deeper waters than 
much of the halibut fishery and typically requires larger vessels that 
can travel longer distances for harvesting fish.
    This limit provides an adequate opportunity for communities to 
purchase and hold sufficient QS for leasing the resulting IFQ among 
community residents. This level is not to be so restrictive as to 
discourage communities from purchasing and holding quota.

4. Cumulative Use Caps for All Communities

    Communities represented by CQEs cumulatively are limited to holding 
a maximum of 3 percent of the total halibut QS and 3 percent of the 
total sablefish QS in each IFQ regulatory area in the first year after 
implementation of this program. In each subsequent year, the percentage 
is increased by an additional 3 percent until, after 7 years, a maximum 
of 21 percent of the total halibut QS, and 21 percent of the total 
sablefish QS could be held in each IFQ regulatory area in which CQEs 
are eligible to hold QS.

5. Transfer and Use Restrictions

(a) Block Limits
    The purchase of blocked QS by CQEs would be restricted. The number 
of blocks that can be held by a person is limited under the IFQ 
Program. These limits were established to prevent the consolidation of 
blocked QS and to ensure that smaller aggregate units would be 
available on the market. Blocked QS typically is less expensive and 
more attractive to new-entrants.
    This rule modifies the consolidation limits for blocked QS for 
communities represented by CQEs. Each community represented by a CQE is 
limited to holding, at any point in time, a maximum of 10 blocks of 
halibut QS and 5 blocks of sablefish QS in each IFQ regulatory area for 
halibut and sablefish. The CQE could not subdivide blocked QS.
    To accommodate the interests of prospective individual new 
entrants, this rule prohibits CQEs from purchasing:

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Halibut QS blocks less than or                               in Area 2C
 equal to 19,992 units (e.g., 2,850
 lb (1,292.8 kg) of IFQ in 2003)...
Halibut QS blocks less than or                               in Area 3A
 equal to 27,912 units (e.g., 3,416
 lb (1,549.5 kg). of IFQ in 2003)..
Sablefish QS blocks less than or      in the Southeast Outside District
 equal to 33,270 units (e.g., 4,003
 lb (1,815.8 kg) of IFQ in 2003)...
Sablefish QS blocks less than or           in the West Yakutat District
 equal to 43,390 units (e.g., 3,638
 lb (1,650.2 kg) of IFQ in 2003)...
Sablefish QS blocks less than or     in the Central GOA regulatory area
 equal to 46,055 units (e.g., 4,684
 lb (2,124.7 kg) of IFQ in 2003)...
Sablefish QS blocks less than or     in the Western GOA regulatory area
 equal to 48,410 units (e.g., 6,090
 lb (2,762.4 kg) of IFQ in 2003....
------------------------------------------------------------------------


[[Page 23684]]

    These QS limits are specified in 50 CFR 679.41(e) as the ``sweep 
up'' limit, or the number of QS units initially issued as blocks that 
could be combined to form a single block.
    CQEs are not eligible to purchase or hold these smaller ``sweep-
up'' blocks because these smaller QS blocks typically are purchased by 
individuals entering the IFQ fisheries. This measure minimizes a 
potentially unfair competition in the QS market between CQEs and 
individuals for these small QS blocks. Similar restrictions on QS in 
the halibut fishery for Area 3B do not exist because fewer ``sweep-up'' 
blocks exist in Area 3B and few new entrants in Area 3B have sought 
these ``sweep-up'' blocks.
(b) Transfer and IFQ Leasing
    CQEs can only receive and use halibut QS assigned to vessel 
category B (greater than 60 feet length overall) and vessel category C 
(greater than 35 feet and less than or equal to 60 feet length overall) 
in Areas 2C and 3A.
    This provision prohibits CQEs from holding QS assigned to vessel 
category D (less than or equal to 35 feet (10.7 m) length overall) in 
Areas 2C and 3A.
    This rule does not prohibit CQEs from holding D category halibut QS 
in Area 3B. A relatively small amount of D category QS exists in Area 
3B, and traditionally few prospective buyers exist for this category of 
QS. Existing D category QS holders in Area 3B indicated that allowing 
CQEs to purchase D category QS in Area 3B would increase the 
marketability of their QS.
    This rule does not establish catcher vessel category restrictions 
for CQEs holding sablefish QS. Only B and C vessel categories exist for 
sablefish QS and sablefish are typically harvested from larger vessels.
    So that the annual IFQ derived from the QS held on behalf of a 
community can be fished, a CQE will be allowed to lease (i.e., transfer 
the annual IFQ) to one or more residents of the community, or 
communities, it represents. Each IFQ lease must be made on annual 
basis, as is currently the requirement in existing regulations. IFQ so 
transferred can be fished from a vessel of any size regardless of the 
QS vessel category from which the IFQ was derived. This provision 
applies only while the QS is held by the CQE. The vessel category 
requirements for use of the QS will be applied once again after the QS 
is transferred from a CQE to a qualified recipient that is not a CQE. 
This provision facilitates the use of the IFQ on the wide range of 
vessel types that is present in many rural communities.
    The amount of IFQ that may be leased annually to an eligible 
community resident is limited so that no such lessee can hold IFQ 
permits authorizing the harvest of more than 50,000 lb (22.7 mt) of 
halibut and no more than 50,000 lb (22.7 mt) of sablefish IFQ, 
inclusive of any IFQ derived from any source.
    This limitation ensures a broad distribution of IFQ among community 
residents and limits the amount of IFQ that may be leased to those 
residents who already hold QS or lease IFQ from another source.
    Similarly, during any fishing year, no vessel on which IFQ leased 
from the community QS program is fished can harvest an amount of IFQ 
greater than 50,000 lb (22.7 mt) of halibut and greater than 50,000 lb 
(22.7 mt) of sablefish, inclusive of all IFQ fished aboard that vessel. 
This limitation on the amount of IFQ that can be fished on any one 
vessel using IFQ from community-held QS encourages the use of a broad 
distribution of community-held IFQ on vessels that may otherwise have 
limited or no participation in the IFQ Program.
    Only permanent residents of the community represented by the CQE 
are eligible to lease IFQ derived from community-held QS. This 
provision explicitly ties the potential benefits of QS held by a CQE on 
behalf of a community to the residents of that community. A resident 
who wishes to lease IFQ is required to affirm that he or she maintains 
a permanent domicile in that specific community and is qualified to 
receive QS and IFQ by transfer under the existing regulations (i.e., 
that he or she holds a Transfer Eligibility Certificate issued by 
NMFS).
    For purposes of this program, an eligible resident is an individual 
that affirms that he or she has maintained a domicile in the community 
from which the IFQ is leased for 12 consecutive months immediately 
preceding the time when the assertion of residence is made, and has not 
claimed residency in another community, state, territory, or country 
for that period.
    An individual who receives IFQ derived from QS held by a CQE may 
not designate a skipper to fish the community IFQ.
    Individuals who hold leases of IFQ from communities are considered 
to be IFQ permit holders and are subject to the regulations that govern 
other permit holders unless specified otherwise in this rule. This 
includes the payment of annual fees as required under 50 CFR 679.45.
(c) Sale Restrictions
    To avoid certain restrictions, a CQE may not sell its QS unless 
that sale will generate revenues to improve, sustain, or expand the 
opportunities for community residents to participate in the IFQ halibut 
and sablefish fisheries. NMFS will approve the transfer of QS held by a 
CQE on behalf of a community only if the community for which the CQE 
holds the QS authorizes that transfer. This authorization must be in 
the form of a signature on the Approval of Transfer form by an 
authorized representative of the governing body of the community. The 
purpose of this authorization is to ensure that the community is fully 
aware of the transfer because certain restrictions apply to future 
transfers if the transfer of QS is for a reason other than to sustain, 
improve, or expand the program (i.e., the CQE would be prohibited from 
holding QS on behalf of that community for a period of three years and 
the CQE must divest itself of all QS held on behalf of that community).
    This rule allows a CQE to transfer QS to dissolve the CQE; or as a 
result of a court order, operation of law, or as part of a security 
agreement. These provisions account for those cases in which a CQE is 
no longer capable of representing an eligible community and seeks 
either: (1) to divest itself of QS holdings voluntarily in order to 
provide an opportunity for another non-profit to form and seek approval 
as a CQE for a community or (2) to meet the legal requirements 
requiring divestiture of QS. These forms of transfers are authorized 
under the existing IFQ Program.
    If subsequent information is made available to NMFS that confirms 
that the transfer of QS is made for reasons other than to sustain, 
improve, or expand the opportunities for community residents, then NMFS 
will withhold annual IFQ permits on any remaining QS held by the CQE on 
behalf of that community and will disqualify that CQE from holding QS 
on behalf of that community for three calendar years following the year 
in which final agency action adopting that determination is made.
    NMFS would not impose this restriction until the CQE had received 
full administrative due process, including notice of the potential 
action and the opportunity to be heard. An initial administrative 
determination (IAD) proposing an adverse action would only become final 
agency action if the CQE failed to appeal the IAD within 60 days, or 
upon the effective date of the decision issued by the Office of 
Administrative Appeals. The

[[Page 23685]]

procedures for appeal are provided at 50 CFR 679.43.
    The 3-year restriction is intended to discourage speculating in the 
QS market or using potential assets to fund other unrelated projects, 
and encourage the long-term participation of fishery dependent 
communities in the IFQ Program.

6. Joint and Several Liability for Violations

    Both the CQE and the individual fisherman to whom the CQE leases 
its IFQ will be considered jointly and severally liable for any IFQ 
fishery violation committed while the individual fisherman is in the 
process of fishing the leased IFQ. This joint and several liability is 
analogous to the joint and several liability currently imposed on IFQ 
permit holders and any hired skippers fishing the permit holders' IFQ.

7. Administrative Oversight

    Implementing this proposal requires that NMFS: (1) review 
applications of eligibility for non-profit entities seeking to be 
qualified as a CQE for a particular community and certify eligible CQEs 
and (2) review an annual report detailing the use of QS and IFQ by the 
CQE and community residents. If a CQE fails to provide a completed 
annual report to NMFS for each community that it represents, then that 
CQE will be deemed ineligible to use the IFQ resulting from that QS on 
behalf of that community until a complete annual report is received. 
Before becoming a Final Agency Action, any such determination by NMFS 
may be appealed through the administrative appeals process described 
under the IFQ Program (50 CFR 679.43).
    Each non-profit entity applying to become a CQE must provide NMFS 
with the following:
    1. Its articles of incorporation as a non-profit entity under the 
laws of the State;
    2. A statement designating the community, or communities, 
represented by that CQE;
    3. Management organization;
    4. A detailed statement describing the procedures that will be used 
to determine the distribution of IFQ to residents of each community 
represented by that CQE; and
    5. A statement of support and accountability of the non-profit 
entity to that community(ies) from a governing body representing each 
community represented by the CQE.
    NMFS will provide the State with a copy of the applications. After 
receiving the copies, the State will have a period of 30 days to 
provide comments to NMFS. NMFS will consider these comments before 
certifying a non-profit entity as a CQE. NMFS will review all 
applications for completeness. Incomplete applications will be returned 
to the applicant for revision. This rule does not establish a limit on 
the amount of time that a non-profit would have to correct deficiencies 
in an application.
    To minimize potential conflicts that may exist among non-profit 
entities seeking qualification as a CQE, NMFS will not consider a 
recommendation from a community governing body supporting more than one 
non-profit entity to hold QS on behalf of that community. The specific 
community governing body that would be relied on to make a 
recommendation varies depending on the governance structure of the 
particular community as specified below.
    Establishing a requirement that a specific governing body within a 
community provide a recommendation supporting a CQE creates a clear 
link between the governing body that represents that community and the 
CQE. Allowing multiple non-profits to apply as CQEs for a single 
community requires additional review by NMFS to ensure accountability. 
The linkage to specific recognized governing bodies within a community 
minimizes the need for additional administrative oversight to ensure 
accountability to a community and provides a clear nexus between the 
CQE and the community members it is intended to represent by holding QS 
on behalf of that community.
    The specific governing body that provides the recommendation is 
based on the principle that those communities that choose to 
incorporate as cities have established a cohesive central government 
structure in which all community residents can participate, and is 
therefore most representative of the largest number of individuals. In 
cases where a community is not incorporated, and a tribal government is 
present, the tribal government is relied on to provide representation, 
with an understanding that non-tribal members may have more limited 
representation in such communities. However, many of these communities 
are populated by a relatively large percentage of tribal members and 
the tribal government is likely to represent the overall interests of 
the communities. In communities lacking either of these governance 
structures, but with an association that has a recognized relationship 
with the State for purposes of governmental functions, that association 
is deemed best suited to serve as a representative of that community's 
interests. Establishing this priority eliminates the need to require 
multiple governance structures within a community to come to a 
consensus to recommend a CQE. This method would effectively provide a 
veto power to a smaller and likely less representative governance 
structure within the community.
    Communities incorporated as municipalities. For a community that is 
incorporated as a municipality under State statutes, the City Council 
recommends the non-profit entity to serve as the CQE for that 
community.
    Communities represented by tribal governments. For those 
communities that are not incorporated as municipalities but that are 
represented by a tribal government recognized by the Secretary of the 
Interior, the tribal governing body recommends the non-profit entity to 
serve as the CQE for that community.
    Communities represented by a non-profit association. For those 
communities that are not incorporated as a municipality, and that are 
not represented by a tribal government, the community non-profit 
association that has an established relationship as the governmental 
body recognized by the State for purposes of governmental functions 
recommends the non-profit entity to serve as the CQE for that 
community.
    Communities without governing bodies. Those communities that are 
not incorporated as a municipality, or are not represented by a tribal 
government recognized by the Secretary of the Interior, and do not have 
a community non-profit association recognized by the State for purposes 
of governmental functions, are not eligible to recommend a non-profit 
entity to hold QS on its behalf until a representative governing entity 
is formed (e.g., incorporation as a municipality, representation by a 
tribal government recognized by the Bureau of Indian Affairs, or 
formation of a community non-profit association recognized by the 
Alaska Department of Community and Economic Development). NMFS will 
consult with the State to determine whether a community non-profit 
association has been formed, and whether it adequately represents the 
interests of the community before that community non-profit association 
can recommend a CQE to hold QS on behalf of that community.
    This requirement ensures that communities that do not have a 
governmental structure form such a structure prior to being allowed to 
recommend a specific non-profit entity as a CQE. This requirement is 
expected to affect only two of the 42 eligible communities: Halibut 
Cove and Meyers

[[Page 23686]]

Chuck. Neither of these communities possess any of the governmental 
bodies described above.

8. Annual Report

    Each CQE must submit an annual report by January 31 to NMFS and to 
the governing body for each community represented by the CQE, detailing 
the use of QS and IFQ by the CQE and community residents during the 
previous year's fishing season. That annual report must contain the 
following information for the preceding fishing season:
    1. Identification of the eligible community, or communities, 
represented by the CQE ;
    2. Total amount of halibut QS and sablefish QS held by the CQE at 
the start of the calendar year and at the end of the calendar year;
    3. Total amount of halibut and sablefish IFQ leased from the CQE;
    4. Names, business addresses, and amount of halibut and sablefish 
IFQ received by each individual to whom the CQE leased IFQ;
    5. The name, ADF&G vessel registration number, USCG documentation 
number, length overall, and home port of each vessel from which the IFQ 
leased from the CQE was fished;
    6. The names, and business addresses of those individuals employed 
as crew members when fishing the IFQ derived from the QS held by the 
CQE.
    7. A detailed description of the criteria used by the CQE to 
distribute IFQ leases among eligible community residents;
    8. A description of efforts made to employ crew members who are 
residents of the eligible community;
    9. A description of the process used to solicit lease applications 
from residents of the eligible community on whose behalf the CQE is 
holding QS;
    10. The names and business addresses and amount of IFQ requested by 
each individual applying to receive IFQ from the CQE;
    11. Any changes in the bylaws of the CQE, board of directors, or 
other key management personnel;
    12. Copies of minutes and other relevant decision making documents 
from CQE board meetings; and
    13. The number of vessels on which IFQ derived from QS held by a 
CQE is fished.
    The purpose of the annual report is to assist NMFS and the Council 
to assess the performance of the CQEs in meeting the objectives of 
providing for community-held QS. The Council expressed its intent to 
review the use of community QS 5 years after the effective date of 
implementing the regulations.
    Submitting the annual report by January 31 provides NMFS adequate 
time to review the annual report for deficiencies that may exist and 
provides the CQE with time to make corrections before issuing annual 
IFQ to the CQE at the beginning of the IFQ fishing season.
    NMFS routinely collects specific information on the transfer of QS 
as part of transfer applications. Specifically, NMFS can provide items 
1 through 4 and item 13, as described above, to the CQEs so that they 
can include such information in their annual reports. The CQEs do not 
have to collect this information separately.
    If a CQE fails to submit a timely and complete annual report, then 
NMFS would initiate an administrative action to suspend the ability of 
that CQE to transfer QS and IFQ, and to receive additional QS by 
transfer. This action would be implemented consistent with the 
administrative review procedures provided at 50 CFR 679.43. Also, a CQE 
would be subject to enforcement actions for violating regulations.

Changes from the Proposed Rule

    This final rule implements the regulations established in the 
proposed rule with two minor changes. First, this action clarifies that 
residents of the Village of Seldovia would be considered eligible to 
receive IFQ by transfer from the CQE established to represent the City 
of Seldovia. Second, this action clarifies that the CQE which is 
designated to represent the Indian Village of Metlakatla could be 
incorporated under tribal authority due to its status as an Indian 
Reservation, which is incorporated under Federal law. These changes 
respond to concerns raised in public comment. A description of the need 
for this change is provided in the ``Response to Comments'' section.

Response to Comments

    The proposed rule was published in the Federal Register on October 
16, 2003 (68 FR 59564), and invited public comments until December 1, 
2003. NMFS received 22 public comment letters containing a total of 20 
unique comments. Thirteen of the comments received were letters 
supporting the proposed rule and requesting Secretarial approval of 
Amendment 66 to the FMP.
    During the public comment period, the Council convened a committee 
to review the proposed rule. This committee was charged with reviewing 
the proposed rule, but was not specifically tasked with providing 
formal comments to NMFS. This forum provided an opportunity for 
affected coastal communities and other members of the public to review 
the proposed rule and could serve as a basis for additional comments 
from individual committee members. Although no formal comments were 
submitted, several members of the committee did submit written comments 
independently.
    Comment 1: This rule will have an adverse effect on the marine 
environment, and more specifically halibut and sablefish fishery 
stocks.
    Response: This rule is not expected to adversely affect the marine 
environment. NMFS prepared an EA/RIR/FRFA for this action that examined 
its potential effects on the marine environment and found that no 
significant impact on the human environment would result from this 
action. Specifically in reference to halibut and sablefish fishery 
stocks, this rule does not increase the overall amount of halibut or 
sablefish that can be harvested. The total amount of halibut and 
sablefish that can be harvested is determined by a scientific review of 
the stock status on an annual basis. Neither the halibut nor the 
sablefish stocks are considered overfished, nor is there any indication 
that these stocks are subject to overfishing. Nothing in this rule 
diminishes the ability of the IPHC or NMFS to set conservative catch 
limits for these stocks based on the best available scientific 
information to ensure their biological conservation.
    Comment 2: Existing regulations at 50 CFR 679.41, which require 
that an individual must have a minimum of 150 days of experience 
working onboard a vessel as a member of a harvesting crew in any U.S. 
commercial fishery in order to receive IFQ by transfer, could prevent 
individuals participating in the salmon setnet fisheries, who typically 
operate from a skiff, from qualifying as an ``IFQ crew member.''
    Response: Regulations at 50 CFR 679.2 define an ``IFQ crew member'' 
as ``any individual who has at least 150 days experience working as 
part of a harvesting crew in any U.S. commercial fishery.'' In order to 
receive QS or IFQ by transfer, one of the qualifications is that an 
individual must be an IFQ crew member. Harvesting is defined as ``work 
that is related to the catching and retaining of fish'' for the 
purposes of this definition. If the salmon set net fishery is a U.S. 
commercial fishery, then nothing within the existing regulations would 
disqualify a member of a harvesting crew in that fishery from using the 
time that they have accrued in that work toward the 150-day requirement 
to receive IFQ by transfer from a CQE.

[[Page 23687]]

    Comment 3: For individuals to receive IFQ from the CQE, they must 
affirm that they have maintained a domicile in the community on whose 
behalf the CQE is holding QS from which the IFQ is leased for at least 
12 consecutive months. Individuals living outside the city limits of 
Seldovia, one of the communities qualified to have a CQE hold QS on its 
behalf, would be ineligible to receive IFQ under this program. 
Residents of Seldovia Village, which is adjacent to the City of 
Seldovia, however, have historically participated in commercial 
fisheries operating out of Seldovia.
    Response: This rule establishes the City of Seldovia as a community 
on whose behalf a CQE may hold QS. The Council did not specify whether 
the residency requirement would allow individuals living outside of the 
established boundaries of a community to participate. The City of 
Seldovia has distinct boundaries from the Village of Seldovia and a 
strict interpretation of this rule would exclude residents outside the 
City of Seldovia from participating in this program. Based on 
information provided by the commenter and additional information from 
State records, however, a historic linkage between the City of Seldovia 
and the Village of Seldovia is apparent in terms of participation in 
commercial fisheries.
    In light of the historic linkage between the City of Seldovia and 
the Village of Seldovia, NMFS is clarifying the rule so that residents 
of the Village of Seldovia could participate as potential recipients of 
any IFQ derived from QS held on behalf of the City of Seldovia. The 
final rule has been modified accordingly at 50 CFR 679.2.
    Comment 4: The Village of Seldovia should be designated as a 
community eligible to designate a CQE to hold QS on its behalf.
    Response: The Village of Seldovia may meet many of the requirements 
necessary to qualify as an eligible community under the criteria 
established by the proposed rule except that it was not specifically 
designated by the Council. As is noted in the preamble of the proposed 
rule, the Council adopted a specific list of eligible communities to 
limit the entry of new communities into the Community QS Program (see 
Table 21 to part 679). The Council expressed a desire to review the 
addition of any communities not listed. This review reduces potential 
disruption in administration of the Community QS Program due to a 
sudden and unanticipated increase in competition for QS among eligible 
communities. This Council review also would provide an additional 
public review process before modifying the Community QS Program.
    Public input into the Council process did not indicate that the 
Village of Seldovia sought inclusion into this program and the Council 
did not recommend its inclusion into the list of initially eligible 
communities. However, nothing in this final rule prevents the Village 
of Seldovia from petitioning the Council to be included into the list 
of eligible communities through a possible amendment to the FMP at some 
point in the future. However, residents of the Village of Seldovia may 
participate in the program as explained in the response to Comment 3.
    Comment 5: Establishing a program which limits the individual use 
cap of halibut and sablefish that each CQE may hold on behalf of a 
community is not responsive to the needs of individual communities with 
larger populations relative to many of the rural communities eligible 
to recommend a CQE. Larger communities should have a larger use cap in 
proportion to their population.
    Response: In the development of its policy, the Council considered 
an individual use cap for the communities as an equitable basis for 
establishing the distribution of shares. Alternative mechanisms for 
limiting QS among communities were not further developed. The commenter 
indicates that the potential amount of IFQ available for each 
individual fisher is lower in larger communities. The potential amount 
is the same (same limits) but the competition for that IFQ would be 
greater. However, the impetus for this program is not to supplement 
ownership by individuals within communities, but to provide an 
opportunity for improving the likelihood of community residents to 
receive IFQ leases. The proposed rule noted that residents of larger 
communities typically have improved access to financial markets and 
alternative fishery and non-fishery employment opportunities. 
Establishing the same individual use cap for all communities may result 
in less IFQ available per qualified resident in larger communities, but 
an alternative use cap mechanism based on the population of the 
community would create an advantage for larger communities relative to 
smaller communities. Applying an equal individual use cap among the 
communities was considered to be an equitable measure for limiting the 
holdings of an individual community without providing an allocative 
advantage to larger communities.
    Comment 6: The Commenter believes that the 50,000 lb (22.7 mt) 
limit on the amount of halibut or sablefish IFQ that can be leased and 
fished on board an individual vessel is not sufficient to meet the 
needs of the offshore fishery, particularly for sablefish, which 
typically require larger vessels and more harvests to be profitable. 
The 50,000 lb (22.7 mt) IFQ vessel lease cap may not provide adequate 
halibut and sablefish product to support the operations of newer 
vessels.
    Response: The 50,000 lb (22.7 mt) limit on halibut and 50,000 lb 
(22.7 mt) limit on sablefish was established as a measure to ensure a 
broader distribution of IFQ among potentially qualified residents. 
Although a larger upper limit on the amount of IFQ that can be used 
aboard an individual vessel would provide an opportunity for larger 
vessels to participate in IFQ fisheries using IFQ derived from QS held 
by CQEs, the 50,000 lb (22.7 mt) limit was established to limit 
consolidation and to accommodate smaller QS holder and new entrants 
that may benefit from an IFQ lease. The 50,000 lb (22.7 mt) limit was 
developed through the Council's deliberative process and is responsive 
to public concerns raised during the development of the program.
    Comment 7: The commenter raises concerns that the proceeds that may 
be generated by this program could be used to fund general community 
projects.
    Response: The final rule restricts the use of funds derived from 
the sale of QS to projects that are intended to sustain, expand, or 
improve the ability of community residents to participate in the IFQ 
fisheries. These restrictions are detailed in the preamble to the 
proposed rule. As the QS holding entity, the CQE would maintain the 
authority to administer funds within the guidelines established by this 
rule. This rule does not establish restrictions on the use of funds 
generated from revenues obtained by the lease of IFQ to community 
residents. The specific use of any funds generated by leasing IFQ could 
be used at the discretion of the CQE.
    Comment 8: The State of Alaska should be allowed to provide the 
recommendation necessary for the approval of a CQE for a particular 
community in those communities where internal issues may prohibit a 
legitimate CQE from obtaining support from the governing body, as 
established by this rule.
    Response: The mechanism for establishing support for a CQE was 
intended to provide a linkage between the community and the governing 
body of that community. Although an alternative mechanism for providing

[[Page 23688]]

support to a CQE is possible through a State approval mechanism, 
establishing such a mechanism at this time would require establishing 
criteria for establishing when a community is not capable of meeting 
the requirements for recommending a CQE to hold QS on its behalf, and 
an appeal mechanism for those governing bodies that wish to challenge 
an adverse finding. The commenter states that certain governing bodies 
may not be well-suited or capable of providing the support required to 
recommend a CQE. However, at this time it is not clear which governing 
bodies are not capable of providing the type of support that this 
program would require. Establishing a separate mechanism at this time 
could address a potential future concern about the ability of governing 
bodies to recommend a CQE, but it is unclear that the need for a 
separate approval mechanism is required at this time. If after the 
implementation of this program it becomes apparent that certain 
community governing structures are not capable of providing the support 
and oversight required then the Council could recommend additional 
regulatory changes to address these concerns with a more detailed 
understanding of the issues. The regulations could be modified at that 
time to accommodate any changes that may be necessary for specific 
communities.
    Comment 9: NMFS should review the cumulative impacts of the 
restrictions on QS purchase by CQEs and provide additional analysis on 
the amount of QS that is available for purchase in each IFQ regulatory 
management area.
    Response: The EA/RIR/IRFA prepared for this action reviews of the 
cumulative impacts of limits and restrictions on QS purchase. NMFS does 
not maintain a database listing all QS available for purchase since QS 
transfer is governed by private contractual agreements and the amount 
of QS available on the market is dependent on the choices of individual 
QS holders. NMFS maintains a list of all QS holders, but the status of 
those shares is unknown.
    Comment 10: The CQE should be required to verify an IFQ lessee's 
residency.
    Response: The CQE will be one party to the IFQ transfer form that 
is required for each vessel lease. The IFQ lessee will have to affirm 
his or her residency on this form. Presumably, the CQE can verify the 
prospective lessee's residency independently of any regulatory 
requirement. Requiring that the CQE verify the prospective lessee's 
residency and requiring the lessee to affirm his or her residency on 
the QS/IFQ transfer application is redundant and not required to meet 
the intent of this program.
    Comment 11: The CQE should be defined to include multipurpose 
operational functions such as buying and selling seafood products.
    Response: Nothing in this final rule limits the ability of the CQE 
to participate in other business operations. NMFS requires that a CQE 
meet the criteria established in this rule for its formation, but does 
not limit the ability of the CQE to engage in other activities.
    Comment 12: The regulations should require that primary processing 
occur within the community on whose behalf the CQE holds QS.
    Response: The Council did not recommend and this rule does not 
implement specific processing requirements based on public testimony 
concerning the lack of processing capacity in many of the smaller 
communities that would be eligible to participate in this program. The 
intent of the program is not to limit delivery requirements to specific 
communities, but to provide an additional opportunity to the fishermen 
of eligible communities to access halibut and sablefish IFQ fisheries. 
Limiting processing to specific communities does not meet the intent of 
this program and would limit the ability of an IFQ lessee to 
effectively seek the best ex-vessel value.
    Comment 13: The proof of support for a CQE from the governing body 
of an eligible community should be a standardized form.
    Response: The regulations established by this rule require that a 
resolution recommending a CQE be provided by the appropriate governing 
body at Sec.  679.41(l)(v). The same procedure is required for all 
governing bodies. A standardized form is not required for the governing 
body to pass a resolution to indicate its support for a CQE.
    Comment 14: Tribal governments in Southeast Alaska should be 
provided with the authority to participate as community governing 
bodies that recommend the CQE.
    Response: As noted in the preamble to the proposed rule (68 FR 
59564) and the preamble to this final rule, the Council recommended 
this program, and the Secretary of Commerce approved the FMP amendment, 
as a measure to provide additional opportunities for rural residents in 
remote communities throughout the Gulf of Alaska. This rule implements 
measures that provide an opportunity for all rural residents to 
participate in this program and is not intended to limit participation 
only to tribal members or require the approval of tribal governments to 
recommend a CQE in all communities.
    The commenter suggests that ``Southeast Tribes'' participate in the 
process of recommending a CQE in addition to the governing body of the 
community. As noted in the preamble, this rule is designed so that only 
one governing body would provide the recommendation for a CQE. This is 
intended to reduce potential conflicts that could exist with multiple 
governing bodies providing differing recommendations. The rule is 
structured to accommodate the governing bodies of the communities and 
is based on the principle that those communities that have chosen to 
incorporate as cities have established a cohesive central government 
structure in which all community residents can participate, and is 
therefore the most representative of the largest number of individuals. 
In cases where a community is not incorporated, and a tribal government 
is present, the tribal government is relied on to provide 
representation. Many of these communities are populated by a relatively 
large percentage of tribal members and the tribal government is likely 
to represent the overall interests of the communities.
    If tribal governments were required to approve the recommendation 
for a CQE in all circumstances, than they effectively would control the 
recommendation process by the ability to refuse to approve a CQE 
recommended by a city government that did not receive a recommendation 
from the tribe. This would limit the roll of the municipality and its 
ability to represent the broad range of constituents that a 
municipality is supposed to represent.
    Comment 15: The Articles of Incorporation and bylaws for a CQE 
should be consistent among the non-profit entities seeking recognition 
as a CQE.
    Response: The specific articles of incorporation and bylaws may 
differ from community to community depending on the specific needs of 
the CQE, requests of the governing body of that community, and specific 
financial considerations that may exist on a case-by-case basis. This 
rule does not establish specific requirements because the conditions 
that may be necessary for a CQE in one community may differ from other 
communities. All prospective CQEs are required to be incorporated 
through the State of Alaska (except in the case of Metlakatla), but no 
specific requirements exist on the specific form of non-profit 
incorporation to provide greater flexibility to those

[[Page 23689]]

communities. Uniform requirements would reduce that flexibility.
    Comment 16: The fishing seasons for the halibut and sablefish IFQ 
Programs should be 12 months.
    Response: This rule is not intended to modify the existing IFQ 
fishing seasons, but is intended to expand the ability of non-profit 
entities to hold QS on behalf of specific communities. Modifying the 
IFQ fishing seasons would require a separate regulatory action not 
intended under this rule.
    Comment 17: There is no discussion of the use of holding pens as a 
means of preserving live product in this rule.
    Response: This rule is not intended to modify fish handling 
practices. Nothing in this rule would limit the use of holding pens or 
other methods to hold fish for use in processing and marketing to the 
extent those techniques are allowed under other State and Federal 
regulations.
    Comment 18: Local governments, specifically borough governments, 
should be allowed to be eligible as CQEs. Additional measures to 
develop a separate non-profit entity are not necessary to meet the 
objectives of this program.
    Response: Although a number of municipalities may be well-suited to 
holding QS on behalf of specific communities, the FMP amendment that 
this final rule would implement states that a separate non-profit 
entity should be formed for the express purpose of holding QS on behalf 
of a community. The commenter correctly notes that municipalities may 
have an established financial capacity that would enable them to access 
capital markets. However, nothing in this rule would limit the ability 
of municipalities to participate in the formation of the non-profit 
entities, assist them in securing capital, or assist communities within 
a borough to incorporate a CQE. While it is possible that some of the 
functions of a CQE would duplicate functions of a borough government, 
the Council was explicit in their recommendations that a new non-profit 
entity would be best suited to serve as a CQE rather than relying on 
existing governing structures. During public deliberations the Council 
considered alternative mechanisms for establishing a CQE. At that time, 
the Council considered the potential advantages to establishing a 
separate body to hold QS on behalf of the community. The Council 
recommended that newly established CQEs be formed so that all 
communities would have a uniform application process, and so that all 
communities would be on an equal footing.
    Comment 19: The CQE established to represent Metlakatla should be 
allowed to incorporate under the laws of the Metlakatla Indian 
Community.
    Response: The Council recommended incorporation under the laws of 
the State of Alaska to provide consistency in the certification of non-
profit entities. Incorporating a non-profit entity is typically 
performed through the State although specific provisions for 
incorporating through tribal governments is possible. The community of 
Metlakatla is unique among the other communities in that it is 
incorporated under Federal law as an Indian Reservation and is not 
subject to incorporation as a municipality under regulations of the 
State of Alaska. Given the unique status of Metlakatla under Federal 
law, this rule is modified to allow the non-profit entity which will 
represent the community of Metlakatla as a CQE to incorporate as a non-
profit entity under Federal law. Any non-profit entity incorporated 
under Federal law would still need to meet the other requirements 
established in this rule under 50 CFR 679.41(l) to be authorized to 
serve as the CQE for the community of Metlakatla.
    Comment 20: The commenter requests assurance that this program may 
be modified in the future based on continuing formal consultation.
    Response: This program can be modified in the future based on 
recommendations made by the Council or NMFS. The annual report provides 
a periodic opportunity to review the progress of the CQEs in meeting 
the goals and objectives of this program. The Council stated its intent 
to review this program five years after its implementation.

Classification

    Included with this final rule is the Final Regulatory Flexibility 
Analysis (FRFA) that contains the items specified in 5 U.S.C. 604(a). 
The FRFA consists of the IRFA, the comments and responses to the 
proposed rule, and the analyses completed in support of this action. A 
copy of the IRFA is available from the Council (see ADDRESSES). The 
preamble to the proposed rule contained a detailed summary of the 
analyses conducted in the IRFA, and that discussion is not repeated in 
its entirety here.

Summary of the FRFA

    The proposed rule was published in the Federal Register on October 
16, 2003 (68 FR 59564). An Initial Regulatory Flexibility Analysis 
(IRFA) was prepared for the proposed rule, and described in the 
classifications section of the preamble to the rule. No comments were 
received on the IRFA.
    The implementation of Amendment 66 and the associated regulations 
for halibut would potentially affect all individuals, corporations or 
partnerships, or other collective entities holding QS. At the end of 
the 2001 IFQ season, 3,485 persons (individuals, corporations, and 
other entities) held halibut QS; 872 persons held sablefish QS (NMFS/
RAM 2002). An examination of limits on quota share holdings indicates 
that the halibut and sablefish fishing operations are small. 
Additionally, 42 communities are to designate Community Quota Entities 
(CQEs) to hold QS on behalf of these communities. All of these 
communities would be considered to be small entities.
    This regulation imposes new recordkeeping or reporting requirements 
on the regulated small entities. Specifically, this rule requires that 
CQEs provide an application, an annual report, information concerning 
the use of funds derived from the sale of QS, and submit a QS/IFQ 
transfer form. The governing body of an eligible community is required 
to provide a resolution supporting a CQE to represent that community 
and to provide an authorization for the sale of any QS by the CQE. This 
collection-of-information requirement was submitted to OMB for approval 
on July 29, 2003, under the OMB approval number 0648-0272. This request 
is currently under review. Those sections of the regulation that will 
be effective after OMB approval are noted in the DATES section of this 
rule.
    This rule incorporates revisions to the existing IFQ Program 
regulations and policy to explicitly allow a new group of non-profit 
entities to hold QS on behalf of residents of specific rural 
communities located adjacent to the coast of the GOA. This change 
allows a non-profit corporate entity that meets specific criteria to 
receive transferred halibut or sablefish QS on behalf of an eligible 
community and to lease the resulting IFQ to fishermen who are residents 
of the eligible community. This change is intended to provide 
additional opportunities to these fishermen, and may indirectly address 
concerns about the economic viability of those communities. The 
objectives for this action are described in detail in the proposed rule 
which was published on October 16, 2003 (68 FR 59564).
    The status quo was considered as an alternative, but was rejected. 
That alternative would have resulted in no action to address the 
concerns that since the initial issuance of QS the amount of

[[Page 23690]]

QS and the number of resident QS holders has substantially declined in 
most of the GOA communities affected by this action. This trend may 
have had an effect on employment and may have reduced the diversity of 
fisheries to which fishermen in rural communities have access. The 
ability of fishermen in small rural communities to purchase QS or 
maintain existing QS may be limited by a variety of factors unique to 
those communities. Although the specific causes for decreasing QS 
holdings in rural communities may vary, the net effect is overall lower 
participation by residents of these communities in the halibut and 
sablefish IFQ fisheries.
    Within the preferred alternative, numerous elements and options 
were analyzed that considered a range of measures for establishing 
eligibility, use caps, transfer provisions, and other aspects of this 
program. Combinations of elements and options were analyzed as part of 
the preferred alternative to provide an adequate contrast and range of 
alternative approaches to status quo management.
    The preferred alternative modified the IFQ Program to allow non-
profit entities that represent small rural communities in the GOA with 
a historic participation in the halibut and sablefish fisheries to hold 
QS. The Council's recommendations also reflect the most recent 
amendments to the Magnuson-Stevens Act, and IFQ policy recommendations 
by the National Research Council (NRC). The status quo alternative 
would not have addressed these concerns or the recommendations of the 
NRC.

Statement and Objective and Need

    A description of the reasons why this action is being considered 
and the objectives of and legal basis for this action are contained in 
the preamble to the proposed rule and are not repeated here.

Steps Taken to Minimize Economic Impacts on Small Entities

    This rule revises the eligibility criteria to receive QS and IFQ by 
transfer to allow eligible communities in the GOA to establish non-
profit entities to purchase and hold halibut and sablefish QS for lease 
to, and use by, community residents as defined by specific elements of 
the rule. This action is intended to improve the effectiveness of the 
IFQ Program and is necessary to promote the objectives of the Magnuson-
Stevens Act and the Halibut Act with respect to the IFQ fisheries. The 
potential economic impacts of these measures are described in detail in 
the FRFA.
    Analysis of this rule indicates no adverse impact on small entities 
from this action. This action may have an economic benefit for small 
entities, to the extent that this action provides additional fishing 
opportunities to rural fishermen. The benefit is largely due to the 
redistribution of fishing opportunities, and is primarily a social 
benefit, not a strictly economic benefit. However, the potential 
economic benefits of this possibility can not now be measured or 
estimated.
    Net benefits cannot be quantified because of the importance of non-
market social costs and benefits in the proposed action. However, 
qualitatively, the sale of QS to the CQEs will increase the revenues of 
some community members who may wish to exit the fishery, or redirect 
capital into other industries within the larger communities incurring a 
net loss of QS. To the extent that residents within larger communities 
currently hold proportionally more quota shares, these residents, and 
presumably the communities where they live, will benefit from the 
compensation received by the sale of quota shares; otherwise, they 
would not voluntarily choose to sell.
    No measures were taken to reduce impacts on small entities beyond 
those already taken with the development of alternatives in the IRFA. 
The IRFA considered an alternative that would have maintained the 
status quo in addition to this alternative.
    NMFS is not aware of any alternatives in addition to those 
considered in this action that would accomplish the objectives of the 
Magnuson-Stevens Act and other applicable statutes while further 
minimizing the economic impact of the rule on small entities. The 
impact on small entities under this action is not more adverse than the 
status quo for the small entities in the halibut and sablefish IFQ 
fisheries. This action could provide additional benefits to a number of 
small entities that would not occur under the status quo option.

Small Entity Compliance Guide

    Section 212 of the Small Business Regulatory Enforcement Fairness 
Act of 1996 states that, for each rule or group of related rules for 
which an agency is required to prepare a FRFA, the agency shall publish 
one or more guides to assist small entities in complying with the rule, 
and shall designate such publications as ``small entity compliance 
guides.'' The agency shall explain the actions a small entity is 
required to take to comply with a rule or group of rules. NMFS will 
publish a small entity compliance guide during the implementation phase 
of this program to assist the governing bodies of the eligible 
communities identified in this rule by posting it on the NMFS Alaska 
Region website at: http://www.fakr.noaa.gov/. Copies of this final rule 
are available from NMFS (see ADDRESSES) and at the website above.
    This final rule has been determined to be not significant for the 
purposes of Executive Order 12866.
    This final rule complies with the Halibut Act and the Council's 
authority to implement allocation measures for the management of the 
halibut fishery.

List of Subjects in 50 CFR Part 679

    Alaska, Fisheries, Recordkeeping and reporting requirements.

    Dated: April 26, 2004.
Rebecca Lent,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.

0
For the reasons discussed in the preamble, 50 CFR part 679 is amended 
as follows:

PART 679--FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA

0
1. The authority citation for 50 CFR part 679 continues to read as 
follows:

    Authority: 16 U.S.C. 773 et seq., 1801 et seq., 3631 et seq., 
Title II of Division C, Pub. L. 105-277; Sec. 3027, Pub. L. 106-31, 
113 Stat. 57; 16 U.S.C. 1540(f).

0
2. In Sec.  679.2, the definition for ``Eligible community'' is revised 
and definitions for ``Community quota entity (CQE)'' and ``Eligible 
community resident'' are added in alphabetical order to read as 
follows:


Sec.  679.2  Definitions.

* * * * *
    Community quota entity (CQE): (for purposes of the IFQ Program) 
means a non-profit organization that:
    (1) Did not exist prior to April 10, 2002;
    (2) Represents at least one eligible community that is listed in 
Table 21 of this part; and,
    (3) Has been approved by the Regional Administrator to obtain by 
transfer and hold QS, and to lease IFQ resulting from the QS on behalf 
of an eligible community.
* * * * *
    Eligible community means:
    (1) For purposes of the CDQ program, a community that is listed in 
Table 7 to this part or that meets all of the following requirements:
    (i) The community is located within 50 nm from the baseline from 
which the breadth of the territorial sea is measured

[[Page 23691]]

along the Bering Sea coast from the Bering Strait to the most western 
of the Aleutian Islands, or on an island within the Bering Sea. A 
community is not eligible if it is located on the GOA coast of the 
North Pacific Ocean, even if it is within 50 nm of the baseline of the 
Bering Sea;
    (ii) That is certified by the Secretary of the Interior pursuant to 
the Native Claims Settlement Act (P.L. 92-203) to be a native village;
    (iii) Whose residents conduct more than half of their current 
commercial or subsistence fishing effort in the waters of the BSAI; and
    (iv) That has not previously deployed harvesting or processing 
capability sufficient to support substantial groundfish fisheries 
participation in the BSAI, unless the community can show that benefits 
from an approved CDP would be the only way to realize a return from 
previous investment. The community of Unalaska is excluded under this 
provision.
    (2) For purposes of the IFQ program, a community that is listed in 
Table 21 to this part, and that:
    (i) Is a municipality or census designated place, as defined in the 
2000 United States Census, located on the GOA coast of the North 
Pacific Ocean;
    (ii) Has a population of not less than 20 and not more than 1,500 
persons based on the 2000 United States Census;
    (iii) Has had a resident of that community with at least one 
commercial landing of halibut or sablefish made during the period from 
1980 through 2000, as documented by the State of Alaska Commercial 
Fisheries Entry Commission; and
    (iv) Is not accessible by road to a community larger than 1,500 
persons based on the 2000 United States Census.
* * * * *
    Eligible community resident means, for purposes of the IFQ Program, 
any individual who:
    (1) Is a citizen of the United States;
    (2) Has maintained a domicile in a rural community listed in Table 
21 to this part for the 12 consecutive months immediately preceding the 
time when the assertion of residence is made, and who is not claiming 
residency in another community, state, territory, or country, except 
that residents of the Village of Seldovia shall be considered to be 
eligible community residents of the City of Seldovia for the purposes 
of eligibility to lease IFQ from a CQE; and
    (3) Is an IFQ crew member.
* * * * *

0
3. In Sec.  679.5, paragraph (l)(8) is added to read as follows:


Sec.  679.5  Recordkeeping and reporting (R&R).

* * * * *
    (l) * * *
    (8) CQE annual report for an eligible community. By January 31, the 
CQE shall submit a complete annual report on halibut and sablefish IFQ 
activity for the prior fishing year for each community represented by 
the CQE to the Regional Administrator, National Marine Fisheries 
Service, P.O. Box 21668, Juneau, AK 99802, and to the governing body of 
each community represented by the CQE as identified in Table 21 to this 
part.
    (i) A complete annual report contains the following information:
    (A) Name, ADF&G vessel registration number, USCG documentation 
number, length overall, and home port of each vessel from which the IFQ 
leased from QS held by a CQE was fished;
    (B) Name and business addresses of individuals employed as crew 
members when fishing the IFQ derived from the QS held by the CQE;
    (C) Detailed description of the criteria used by the CQE to 
distribute IFQ leases among eligible community residents;
    (D) Description of efforts made to ensure that IFQ lessees employ 
crew members who are eligible community residents of the eligible 
community aboard vessels on which IFQ derived from QS held by a CQE is 
being fished;
    (E) Description of the process used to solicit lease applications 
from eligible community residents of the eligible community on whose 
behalf the CQE is holding QS;
    (F) Names and business addresses and amount of IFQ requested by 
each individual applying to receive IFQ from the CQE;
    (G) Any changes in the bylaws of the CQE, board of directors, or 
other key management personnel; and
    (H) Copies of minutes and other relevant decision making documents 
from CQE board meetings.
    (ii) Additional information may be submitted as part of the annual 
report based on data available through NMFS. This includes:
    (A) Identification of the eligible community, or communities, 
represented by the CQE;
    (B) Total amount of halibut QS and sablefish QS held by the CQE at 
the start of the calendar year and at the end of the calendar year;
    (C) Total amount of halibut and sablefish IFQ leased from the CQE;
    (D) Names, business addresses, and amount of halibut and sablefish 
IFQ received by each individual to whom the CQE leased IFQ; and
    (E) Number of vessels that fished for IFQ derived from QS held by a 
CQE.
* * * * *

0
4. In Sec.  679.7, paragraphs (f)(16) and (f)(17) are added to read as 
follows:


Sec.  679.7  Prohibitions.

* * * * *
    (f) * * *
    (16) Hire a master to fish for IFQ halibut or IFQ sablefish that is 
derived from QS held by a CQE.
    (17) Process IFQ halibut or IFQ sablefish onboard a vessel on which 
a person is using IFQ derived from QS held by a CQE.
* * * * *

0
5. In Sec.  679.41, paragraphs (d)(1) and (g)(1) are revised, and 
paragraphs (c)(10), (e)(4), (e)(5), (g)(5) through (g)(8), and 
paragraph (l) are added to read as follows:


Sec.  679.41  Transfer of quota shares and IFQ.

* * * * *
    (c) * * *
    (10) If the person applying to transfer or receive QS or IFQ is a 
CQE, the following determinations are required for each eligible 
community represented by that CQE:
    (i) An individual applying to receive IFQ from QS held by a CQE is 
an eligible community resident of the eligible community in whose name 
the CQE is holding QS;
    (ii) The CQE applying to receive or transfer QS, has submitted a 
complete annual report(s) required by Sec.  679.5 (l)(8);
    (iii) The CQE applying to transfer QS has provided information on 
the reasons for the transfer as described in paragraph (g)(7) of this 
section;
    (iv) The CQE applying to receive QS is eligible to hold QS on 
behalf of the eligible community in the halibut or sablefish regulatory 
area designated for that eligible community in Table 21 to this part; 
and
    (v) The CQE applying to receive QS has received notification of 
approval of eligibility to receive QS/IFQ for that community as 
described in paragraph (d)(1) of this section.
    (d) * * *
    (1) Application for Eligibility. All persons applying to receive QS 
or IFQ must submit an Application for Eligibility to Receive QS/IFQ 
(Application for Eligibility) containing accurate information to the 
Regional Administrator, except that an Application for Eligibility to 
Receive QS/IFQ (Application for Eligibility) is not required for a CQE 
if a complete application to become a CQE, as described in paragraph 
(l)(3) of this

[[Page 23692]]

section, has been approved by the Regional Administrator on behalf of 
an eligible community. The Regional Administrator will not approve a 
transfer of IFQ or QS to a person until the Application for Eligibility 
for that person is approved by the Regional Administrator. The Regional 
Administrator shall provide an Application for Eligibility form to any 
person on request.
* * * * *
    (e) * * *
    (4) A CQE may not purchase or use sablefish QS blocks less than or 
equal to the number of QS units specified in (e)(2)(i) through 
(e)(2)(iv) of this section.
    (5) A CQE may not purchase or use halibut QS blocks less than or 
equal to the number of QS units specified in (e)(3)(i) and (e)(3)(ii) 
of this section.
* * * * *
    (g) * * *
    (1) Except as provided in paragraph (f), paragraph (g)(2), or 
paragraph (l) of this section, only persons who are IFQ crew members, 
or who were initially issued QS assigned to vessel categories B, C, or 
D, and meet the eligibility requirements in this section, may receive 
by transfer QS assigned to vessel categories B, C, or D, or the IFQ 
resulting from it.
* * * * *
    (5) A CQE may not hold QS in halibut IFQ regulatory areas 2C or 3A 
that is assigned to vessel category D.
    (6) IFQ derived from QS held by a CQE on behalf of an eligible 
community may be used only by an eligible community resident of that 
eligible community.
    (7) A CQE may transfer QS:
    (i) To generate revenues to provide funds to meet administrative 
costs for managing the community QS holdings;
    (ii) To generate revenue to improve the ability of residents within 
the community to participate in the halibut and sablefish IFQ 
fisheries;
    (iii) To generate revenue to purchase QS to yield IFQ for use by 
community residents;
    (iv) To dissolve the CQE; or
    (v) As a result of a court order, operation of law, or as part of a 
security agreement.
    (8) If the Regional Administrator determines that a CQE transferred 
QS for purposes other than those specified in paragraph (g)(7) of this 
section, then:
    (i) The CQE must divest itself of any remaining QS holdings and 
will not be eligible to receive QS by transfer for a period of three 
years after the effective date of final agency action on the Regional 
Administrator's determination; and
    (ii) The Regional Administrator will not approve a CQE to represent 
the eligible community in whose name the CQE transferred quota for a 
period of three years after the effective date of final agency action 
on the Regional Administrator's determination.
* * * * *
    (l) Transfer of QS to CQEs. (1) Each eligible community must 
designate a CQE to transfer and hold QS on behalf of that community.
    (2) Each eligible community may designate only one CQE to hold QS 
on behalf of that community at any one time.
    (3) Prior to initially receiving QS by transfer on behalf of a 
specific eligible community, a non-profit entity that intends to 
represent that eligible community as a CQE must have approval from the 
Regional Administrator. To receive that approval, the non-profit entity 
seeking to become a CQE must submit a complete application to become a 
CQE to the Regional Administrator, NMFS, P.O. Box 21668, Juneau, AK 
99802. The Regional Administrator will provide a copy of the complete 
application to the Alaska Department of Community and Economic 
Development, Commissioner, P.O. Box 110809, Juneau, AK 99811-0809. NMFS 
will consider comments received from the Alaska Department of Community 
and Economic Development when reviewing applications for a non-profit 
entity to become a CQE. The Alaska Department of Community and Economic 
Development must submit comments on an application to the Regional 
Administrator, NMFS, P.O. Box 21668, Juneau, AK 99802, within 30 days 
of receipt of the application in order for those comments to be 
considered by the Regional Administrator during the approval process. 
If an application is disapproved, than that determination may be 
appealed under the provisions established at 50 CFR 679.43. A complete 
application to become a CQE consists of:
    (i) The articles of incorporation under the laws of the State of 
Alaska for that non-profit entity, except that a non-profit entity that 
is representing the Metlakatla Indian Village may provide articles of 
incorporation under Federal Law;
    (ii) A statement indicating the eligible community, or communities, 
represented by that non-profit entity for purposes of holding QS;
    (iii) Management organization information, including:
    (A) The bylaws of the non-profit entity;
    (B) A list of key personnel of the managing organization including, 
but not limited to, the board of directors, officers, representatives, 
and any managers;
    (C) A description of how the non-profit entity is qualified to 
manage QS on behalf of the eligible community, or communities, it is 
designated to represent, and a demonstration that the non-profit entity 
has the management, technical expertise, and ability to manage QS and 
IFQ; and
    (D) The name of the non-profit organization, taxpayer ID number, 
NMFS person number, permanent business mailing addresses, name of 
contact persons and additional contact information of the managing 
personnel for the non-profit entity, resumes of management personnel, 
name of community or communities represented by the CQE, name of 
contact for the governing body of each community represented, date, 
name and notarized signature of applicant, Notary Public signature and 
date when commission expires.
    (iv) A statement describing the procedures that will be used to 
determine the distribution of IFQ to residents of the community 
represented by that CQE, including:
    (A) Procedures used to solicit requests from residents to lease 
IFQ; and
    (B) Criteria used to determine the distribution of IFQ leases among 
qualified community residents and the relative weighting of those 
criteria.
    (v) A statement of support from the governing body of the eligible 
community as that governing body is identified in Table 21 to this 
part. That statement of support is:
    (A) A resolution from the City Council or other official governing 
body for those eligible communities incorporated as first or second 
class cities in the State of Alaska;
    (B) A resolution from the tribal government authority recognized by 
the Bureau of Indian Affairs for those eligible communities that are 
not incorporated as first or second class cities in the State of 
Alaska; but are represented by a tribal government authority recognized 
by the Secretary of the Interior; or
    (C) A resolution from a non-profit community association, homeowner 
association, community council, or other non-profit entity for those 
eligible communities that are not incorporated as first or second class 
cities in the State of Alaska, and is not represented by a tribal 
government authority recognized by the Bureau of Indian Affairs. The 
non-profit entity that provides a statement of support must:

[[Page 23693]]

    (1) Have articles of incorporation as a non-profit community 
association, homeowner association, community council, or other non-
profit entity; and
    (2) Have an established relationship with the State of Alaska 
Department of Community and Economic Development for purposes of 
representing that community for governmental functions.
    (D) If an eligible community is not incorporated as a first or 
second class city in the State of Alaska, is not represented by a 
tribal government authority recognized by the Secretary of the 
Interior, and does not have a non-profit community association, 
homeowner association, community council, or other non-profit entity 
within that community with an established relationship with the Alaska 
Department of Community and Economic Development for purposes of 
representing that community for purposes of governmental functions, 
then the Regional Administrator, NMFS, will not consider any statement 
from a non-profit entity representing that community until that 
community:
    (1) Is incorporated as a first or second class city in the State of 
Alaska;
    (2) Establishes a tribal government authority recognized by the 
Secretary of the Interior; or
    (3) Establishes a non-profit community association, homeowner 
association, community council, or other non-profit entity within that 
community that meets the requirements established in paragraph (E) of 
this section.
    (E) If a community described under paragraph (l)(3)(v)(D) of this 
section establishes a non-profit community association, homeowner 
association, community council, or other non-profit entity within that 
community, then the Regional Administrator, NMFS, will consider any 
recommendations from this entity to support a particular applicant 
after reviewing:
    (1) Petitions from residents affirming that the non-profit 
community association, homeowner association, community council, or 
other non-profit entity within that community represents the residents 
within that community; and
    (2) Comments from the State of Alaska Department of Community and 
Economic Development on the articles of incorporation for that non-
profit entity and the ability of that non-profit entity to adequately 
represent the interests of that community for purposes of governmental 
functions.
    (3) If the Regional Administrator determines that this statement of 
support is not adequate, than that determination may be appealed under 
the provisions established at 50 CFR 679.43.
    (4) The governing body of an eligible community as that governing 
body is identified in Table 21 to this part, must provide authorization 
for any transfer of QS by the CQE that holds QS on behalf of that 
eligible community prior to that transfer of QS being approved by NMFS. 
This authorization must be submitted as part of the Application for 
Transfer. That authorization consists of a signature on the Application 
for Transfer by a representative of the governing body that has been 
designated by that governing body to provide such authorization to 
approve the transfer of QS.

0
6. In Sec.  679.42, paragraphs (a), (f), (g)(1), and (h)(1) through 
(h)(3) are revised, and paragraphs (e)(3) through (e)(8), and (i)(4) 
are added to read as follows:


Sec.  679.42  Limitations on use of QS and IFQ.

    (a) IFQ regulatory area and vessel category. (1) The QS or IFQ 
specified for one IFQ regulatory area must not be used in a different 
IFQ regulatory area.
    (2) The QS or IFQ assigned to one vessel category must not be used 
to harvest IFQ species on a vessel of a different vessel category, 
except:
    (i) As provided in paragraph (k) of this section (processing fish 
other than IFQ halibut and IFQ sablefish);
    (ii) As provided in Sec.  679.41(i)(1) of this part (CDQ 
compensation QS exemption);
    (iii) IFQ derived from QS held by a CQE may be used to harvest IFQ 
species from a vessel of any length.
    (3) Notwithstanding Sec.  679.40(a)(5)(ii) of this part, IFQ 
assigned to vessel Category B must not be used on any vessel less than 
or equal to 60 ft (18.3 m) LOA to harvest IFQ halibut in IFQ regulatory 
area 2C or IFQ sablefish in the regulatory area east of 140[deg] W. 
long. unless such IFQ derives from blocked QS units that result in IFQ 
of less than 5,000 lb (2.3 mt), based on the 1996 TAC for fixed gear 
specified for the IFQ halibut fishery and the IFQ sablefish fishery in 
each of these two regulatory areas.
* * * * *
    (e) * * *
    (3) No CQE may hold sablefish QS in the IFQ regulatory areas of the 
Bering Sea subarea and the Aleutian Islands subareas.
    (4) No CQE may hold more than 3,229,721 units of sablefish QS on 
behalf of any single eligible community.
    (5) In the IFQ regulatory area east of 140[deg] W. long., no CQE 
may hold more than 688,485 units of sablefish QS for this area on 
behalf of any single eligible community.
    (6) In the aggregate, all CQEs are limited to holding a maximum of 
3 percent of the total QS in those IFQ regulatory areas specified in 
Sec.  679.41(e)(2)(I) through (e)(2)(iv) of this part for sablefish in 
the first calendar year implementing the regulation in this section. In 
each subsequent calendar year, this aggregate limit on all CQEs shall 
increase by an additional 3 percent in each IFQ regulatory area 
specified in Sec.  679.41(e)(2)(i) through (e)(2)(iv) of this part up 
to a maximum limit of 21 percent of the total QS in each regulatory 
area specified in Sec. Sec.  679.41(e)(2)(i) through (e)(2)(iv) of this 
part for sablefish.
    (7) No individual that receives IFQ derived from sablefish QS held 
by a CQE may hold, individually or collectively, more than 50,000 lb 
(22.7 mt) of IFQ sablefish derived from any sablefish QS source.
    (8) A CQE receiving category B, or C sablefish QS through transfer 
may lease the IFQ resulting from that QS only to an eligible community 
resident of the eligible community on whose behalf the QS is held.
    (f) Halibut QS use. (1) Unless the amount in excess of the 
following limits was received in the initial allocation of halibut QS, 
no person, individually or collectively, may use more than:
    (i) IFQ regulatory area 2C. 599,799 units of halibut QS.
    (ii) IFQ regulatory area 2C, 3A, and 3B. 1,502,823 units of halibut 
QS.
    (iii) IFQ regulatory area 4A, 4B, 4C, 4D, and 4E. 495,044 units of 
halibut QS.
    (2) No CQE may receive an amount of halibut QS on behalf of any 
single eligible community which is more than:
    (i) IFQ regulatory area 2C. 599,799 units of halibut QS.
    (ii) IFQ regulatory area 2C, 3A, and 3B. 1,502,823 units of halibut 
QS.
    (3) No CQE may hold halibut QS in the IFQ regulatory areas 4A, 4B, 
4C, 4D, and 4E.
    (4) A CQE representing an eligible community may receive by 
transfer or use QS only in the IFQ regulatory areas designated for that 
species and for that eligible community as described in Table 21 to 
this part.
    (5) In the aggregate, all CQEs are limited to holding a maximum of 
3 percent of the total QS in those IFQ regulatory areas specified in 
Sec. Sec.  679.41(e)(3)(i) through (e)(3)(iii) for halibut in the first 
calendar year implementing the regulation in this section. In each 
subsequent calendar year, this aggregate limit on all community quota 
entities shall increase by an additional 3 percent in each IFQ 
regulatory area specified in Sec. Sec.  679.41(e)(3)(i) through 
(e)(3)(iii). This

[[Page 23694]]

limit shall increase up to a maximum limit of 21 percent of the total 
QS in each regulatory area specified in Sec. Sec.  679.41(e)(3)(i) 
through (e)(3)(iii) for halibut.
    (6) No individual that receives IFQ derived from halibut QS held by 
a CQE may hold, individually or collectively, more than 50,000 lb (22.7 
mt) of IFQ halibut derived from any halibut QS source.
    (7) A CQE receiving category B or C halibut QS through transfer may 
lease the IFQ resulting from that QS only to an eligible community 
resident of the eligible community represented by the CQE.
    (g) * * *
    (1) Number of blocks per species. Except as provided in paragraphs 
(g)(1)(i) and (g)(1)(ii) of this section, no person, individually or 
collectively, may hold more than two blocks of each species in any IFQ 
regulatory area.
    (i) A person, individually or collectively, who holds unblocked QS 
for a species in an IFQ regulatory area, may hold only one QS block for 
that species in that regulatory area; and
    (ii) A CQE may hold no more than ten blocks of halibut QS in any 
IFQ regulatory area and no more than five blocks of sablefish QS in any 
IFQ regulatory area on behalf of any eligible community.
* * * * *
    (h) * * *
    (1) Halibut. No vessel may be used, during any fishing year, to 
harvest more than one-half percent of the combined total catch limits 
of halibut for IFQ regulatory areas 2C, 3A, 3B, 4A, 4B, 4C, 4D, and 4E, 
except that:
    (i) In IFQ regulatory area 2C, no vessel may be used to harvest 
more than 1 percent of the halibut catch limit for this area.
    (ii) No vessel may be used, during any fishing year, to harvest 
more than 50,000 lb (22.7 mt) of IFQ halibut from any halibut QS source 
if that vessel is used to harvest IFQ halibut derived from halibut QS 
held by a CQE.
    (2) Sablefish. No vessel may be used, during any fishing year, to 
harvest more than one percent of the combined fixed gear TAC of 
sablefish for the GOA and BSAI IFQ regulatory areas, except that:
    (i) In the IFQ regulatory area east of 140 degrees W. long., no 
vessel may be used to harvest more than 1 percent of the fixed gear TAC 
of sablefish for this area.
    (ii) No vessel may be used, during any fishing year, to harvest 
more than 50,000 lb (22.7 mt) of IFQ sablefish from any sablefish QS 
source if that vessel is used to harvest IFQ sablefish derived from 
sablefish QS held by a CQE.
    (3) A person who receives an approved IFQ allocation of halibut or 
sablefish in excess of these limitations may nevertheless catch and 
retain all of that IFQ with a single vessel, except that this provision 
does not apply if that IFQ allocation includes IFQ derived from QS held 
by a CQE. However, two or more persons may not catch and retain their 
IFQ in excess of these limitations.
* * * * *
    (i) * * *
    (4) IFQ derived from QS held by a CQE must be used only by the 
individual whose IFQ permit account contains the resulting IFQ.
* * * * *

0
7. Table 21 to part 679 is added to read as follows:

 Table 21 to Part 679.--Eligible GOA Communities, Halibut IFQ Regulatory
  Use Areas, and Community Governing Body that Recommends the Community
                              Quota Entity
------------------------------------------------------------------------
                                           Community Governing Body that
          Eligible GOA Community                 recommends the CQE
------------------------------------------------------------------------
May use halibut QS only in halibut IFQ regulatory areas 2C, 3A
Angoon...................................                City of Angoon
Coffman Cove.............................          City of Coffman Cove
Craig....................................                 City of Craig
Edna Bay.................................            Edna Bay Community
                                                            Association
Elfin Cove...............................       Community of Elfin Cove
Gustavus.................................            Gustavus Community
                                                            Association
Hollis...................................      Hollis Community Council
Hoonah...................................                City of Hoonah
Hydaburg.................................              City of Hydaburg
Kake.....................................                  City of Kake
Kasaan...................................                City of Kasaan
Klawock..................................               City of Klawock
Metlakatla...............................     Metlakatla Indian Village
Meyers Chuck.............................                           N/A
Pelican..................................               City of Pelican
Point Baker..............................         Point Baker Community
Port Alexander...........................        City of Port Alexander
Port Protection..........................     Port Protection Community
                                                            Association
Tenakee Springs..........................       City of Tenakee Springs
Thorne Bay...............................            City of Thorne Bay
Whale Pass...............................          Whale Pass Community
                                                            Association
May use halibut QS only in halibut IFQ regulatory areas 3A, 3B
Akhiok...................................                City of Akhiok
Chenega Bay..............................           Chenega IRA Village
Chignik..................................               City of Chignik
Chignik Lagoon...........................                      Chignik Lagoon Village
                                                                Council
Chignik Lake.............................                      Chignik Lake Traditional
                                                                Council
Halibut Cove.............................                           N/A
Ivanof Bay...............................    Ivanof Bay Village Council
Karluk...................................      Native Village of Karluk
King Cove................................             City of King Cove
Larsen Bay...............................                      City of Larsen Bay
Nanwalek.................................          Nanwalek IRA Council
Old Harbor...............................            City of Old Harbor
Ouzinkie.................................              City of Ouzinkie
Perryville...............................  Native Village of Perryville
Port Graham..............................   Port Graham Village Council
Port Lyons...............................                 City of Port Lyons
Sand Point...............................            City of Sand Point
Seldovia.................................              City of Seldovia
Tatitlek.................................    Native Village of Tatitlek
Tyonek...................................      Native Village of Tyonek
Yakutat..................................               City of Yakutat
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[FR Doc. 04-9855 Filed 4-29-04; 8:45 am]
BILLING CODE 3510-22-S