[Federal Register Volume 70, Number 40 (Wednesday, March 2, 2005)]
[Rules and Regulations]
[Pages 10174-10295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-3486]



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Part II





Department of Commerce





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National Oceanic and Atmospheric Administration



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15 CFR Part 902

50 CFR 679 and 6805



Fisheries of the Exclusive Economic Zone Off Alaska; Allocating Bering 
Sea and Aleutian Islands King and Tanner Crab Fishery Resources; Final 
Rule

  Federal Register / Vol. 70, No. 40 / Wednesday, March 2, 2005 / Rules 
and Regulations  

[[Page 10174]]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

15 CFR Part 902

50 CFR Parts 679 and 6805

[Docket No. 040831251-5032-02; I.D. 082504A]
RIN 0648-AS47


Fisheries of the Exclusive Economic Zone Off Alaska; Allocating 
Bering Sea and Aleutian Islands King and Tanner Crab Fishery Resources

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 implementing Amendments 18 and 19 to 
the Fishery Management Plan for Bering Sea/Aleutian Islands (BSAI) King 
and Tanner Crabs (FMP). Amendments 18 and 19 amend the FMP to include 
the Voluntary Three-Pie Cooperative Program (hereinafter referred to as 
the Crab Rationalization Program or Program). Congress amended the 
Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-
Stevens Act) to require the Secretary of Commerce to approve and 
implement the Program. The action is necessary to increase resource 
conservation, improve economic efficiency, and improve safety. This 
action is intended to promote the goals and objectives of the Magnuson-
Stevens Act, the FMP, and other applicable law.

DATES: Effective on April 1, 2005.

ADDRESSES: Copies of Amendments 18 and 19, the Final Regulatory 
Flexibility Analysis (FRFA), and the Environmental Impact Statement 
(EIS) for this action may be obtained from the NMFS Alaska Region, P.O. 
Box 21668, Juneau, AK 99802, Attn: Lori Durall, and on the Alaska 
Region, NMFS, Web site at http://www.fakr.noaa.gov/ 
sustainablefisheries/ crab/eis/default.htm. The EIS contains as 
appendices the Regulatory Impact Review (RIR), Initial Regulatory 
Flexibility Analysis (IRFA), and Social Impact Assessment (SIA) 
prepared for this action.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
final rule may be submitted to NMFS, Alaska Region, and by e-mail to 
[email protected], or fax to 202-395-7285.

FOR FURTHER INFORMATION CONTACT: Susan Salveson, 907-586-7228 or 
[email protected].

SUPPLEMENTARY INFORMATION: In January 2004, the U.S. Congress amended 
section 313(j) of the Magnuson-Stevens Act through the Consolidated 
Appropriations Act of 2004 (Pub. L. 108-199, section 801). As amended, 
section 313(j)(1) requires the Secretary to approve and implement by 
regulation the Program, as it was approved by the North Pacific Fishery 
Management Council (Council) between June 2002 and April 2003, and all 
trailing amendments, including those reported to Congress on May 6, 
2003. In June 2004, the Council consolidated its actions on the Program 
into the Council motion, which is contained in its entirety in 
Amendment 18. Additionally, in June 2004, the Council developed 
Amendment 19, which represents minor changes necessary to implement the 
Program. The Notice of Availability for these amendments was published 
in the Federal Register on September 1, 2004 (69 FR 53397). NMFS 
approved Amendments 18 and 19 on November 19, 2004.
    NMFS published a proposed rule to implement Amendments 18 and 19 in 
the Federal Register on October 29, 2004 (69 FR 63200). NMFS solicited 
public comments on the proposed rule through December 13, 2004. NMFS 
received 49 letters of public comment. NMFS summarized these letters 
into 234 separate comments, and responded to them under Response to 
Comments, below.
    The Program allocates BSAI crab resources among harvesters, 
processors, and coastal communities. The Council developed the Program 
over a 6-year period to accommodate the specific dynamics and needs of 
the BSAI crab fisheries. The Program builds on the Council's 
experiences with the halibut/sablefish Individual Fishing Quota (IFQ) 
program and the American Fisheries Act (AFA) cooperative program for 
Bering Sea pollock. The Program is a limited access system that 
balances the interests of several groups who depend on these fisheries. 
The Program addresses conservation and management issues associated 
with the current derby fishery, reduces bycatch and associated discard 
mortality, and increases the safety of crab fishermen by ending the 
race for fish. Share allocations to harvesters and processors, together 
with incentives to participate in crab harvesting cooperatives, will 
increase efficiencies, provide economic stability, and facilitate 
compensated reduction of excess capacities in the harvesting and 
processing sectors. Community interests are protected by Community 
Development Quota (CDQ) allocations and regional landing and processing 
requirements, as well as by several community protection measures.
    This preamble first provides a Crab Rationalization Program 
overview that presents a general description of all of the Program 
components. Subsequent sections address the response to public comments 
and changes in the rule from proposed to final. Please refer to the 
proposed rule for additional information on the Program.

Crab Rationalization Program Overview

    The Program applies to the following BSAI crab fisheries: Bristol 
Bay red king crab (Paralithodes camtschaticus), Western Aleutian 
Islands (Adak) golden king crab (Lithodes aequispinus)--west of 
174[deg] W. long., Eastern Aleutian Islands (Dutch Harbor) golden king 
crab--east of 174[deg] W. long., Western Aleutian Islands (Adak) red 
king crab--west of 179[deg] W. long., Pribilof Islands blue king crab 
(P. platypus) and red king crab, St. Matthew Island blue king crab, 
Bering Sea snow crab (Chionoecetes opilio), and Bering Sea Tanner crab 
(C. bairdi). Golden king crab is also known as brown king crab. In this 
document, the phrases ``crab fishery'' and ``crab fisheries'' refer to 
these fisheries, unless otherwise specified. A License Limitation 
Program (LLP) license will no longer be required to participate in 
these crab fisheries.
    Several crab fisheries under the FMP are excluded from the Program, 
including the Norton Sound red king crab fishery, which is operated 
under a ``superexclusive'' permit program intended to protect the 
interests of local, small-vessel participants. Also excluded from this 
Program are the Aleutian Islands Tanner crab fishery, Aleutian Islands 
red king crab fishery east of 179[deg] W. long., and the Bering Sea 
golden king crab, scarlet king crab (L. couesi), triangle Tanner crab 
(C. angulatus), and grooved Tanner crab (C. tanneri) fisheries. An LLP 
license will be required to participate in the FMP crab fisheries 
excluded from the Program.

Harvest Sector

    Qualified harvesters are allocated quota share (QS) in each crab 
fishery. To receive a QS allocation, a harvester must hold a permanent, 
fully transferable LLP license endorsed for that crab fishery. Using 
LLP licenses for defining eligibility in the Program maintains current 
fishery participation. Quota

[[Page 10175]]

share represents an exclusive but revokable privilege that provides the 
QS holder with an annual allocation to harvest a specific percentage of 
the total allowable catch (TAC) from a fishery. IFQs are the annual 
allocations of pounds of crab for harvest that represent a QS holder's 
percentage of the TAC. A harvester's allocation of QS for a fishery is 
based on the landings made by his or her vessel in that fishery. 
Specifically, each allocation is the harvester's average annual portion 
of the total qualified catch during a specific qualifying period. 
Qualifying periods were selected to balance historical and recent 
participation. Different periods were selected for different fisheries 
to accommodate closures and other circumstances in the fisheries in 
recent years.
    Quota share is designated as either catcher vessel (CV) shares or 
catcher/processor (CP) shares, depending on the nature of the LLP 
license and whether the vessel processed the qualifying harvests on 
board. Catcher vessel IFQ will be issued in two classes, Class A IFQ 
and Class B IFQ. Crabs harvested with Class A IFQ will require delivery 
to a processor holding unused processing quota. Class A IFQ landings 
also will be subject to a regional delivery requirement. Under this 
regional requirement, landings will be delivered either in a North or 
in a South region (in most fisheries). Crabs harvested with Class B IFQ 
can be delivered to any processor and will not be regionally 
designated. Landings in excess of IFQ will be forfeited in all cases. 
Class B IFQ are intended to provide ex-vessel price negotiating 
leverage to harvesters. For each region of each fishery, the allocation 
of Class B IFQ will be 10 percent of the total allocation of IFQ to the 
CV sector.
    Transfer of QS and IFQ, either by sale or lease, will be allowed, 
subject to limits including caps on the amount of shares a person may 
hold or use. To be eligible to receive transferred QS or IFQ, a person 
must meet specific eligibility criteria. Initial recipients of QS, CDQ 
groups, and eligible crab community entities are exempt from the 
transfer eligibility criteria.
    Separate caps will be imposed to limit the amount of QS and IFQ a 
person can hold and to limit the use of IFQ on board a vessel. These 
caps are intended to prevent negative impacts from what can be 
described as excessive consolidation of shares. Excessive share 
holdings are prohibited by the Magnuson-Stevens Act. Different caps 
were chosen for the different fisheries because fleet characteristics 
and dependence differ across fisheries. Separate caps on QS holdings 
are established for CDQ groups, which represent rural western Alaska 
communities. Processor holdings of QS will also be limited by caps on 
vertical integration. Quota share holders can retain and use initial 
allocations of QS above the caps.

Crew Sector

    To protect their interests in the fisheries, qualifying crew will 
be allocated 3 percent of the initial QS pool. These shares are 
intended to provide long term benefits to captains and crew. The 
Council originally intended this provision to apply only to vessel 
captains. However, NMFS has determined that documentation necessary to 
allocate Crew QS, called C shares by the Council, requires that these 
shares be initially issued to individuals who hold a State of Alaska 
Interim Use Permit. In most cases, this individual will be the captain; 
however, the State does not require that the holder of the Interim Use 
Permit be the vessel captain. The allocation to crew will be based on 
the same qualifying years and computational method used for QS 
allocations to LLP license holders. Crew (C) QS will be issued as CVC 
QS and CPC QS, depending on the activity in the qualifying years. To 
ensure that Crew QS and IFQ benefit at-sea participants in the 
fisheries, Crew IFQ can be used only when the IFQ holder is on board 
the vessel.
    To be eligible to receive an allocation, an individual is required 
to have historic and recent participation. Historic participation is 
demonstrated by at least one landing in each of three of the qualifying 
years. Recent participation is demonstrated by at least one landing in 
two of the three most recent seasons, with some specific exceptions.
    CV Crew IFQ (called CVC IFQ) will be required to be delivered to 
shore-based processors for processing. CVC IFQ is not subject to 
specific delivery requirements until July 1, 2008. After July 1, 2008, 
CVC IFQ will be subject to the Class A IFQ/Class B IFQ distinction with 
commensurate regional delivery requirements unless the Council 
determines, after review, not to apply those designations. Before July 
1, 2007, the Council intends to review CVC IFQ landing patterns to 
determine whether the distribution of landings among processors and 
communities of CVC IFQ differs from the distribution of IFQ landings.
    CP crew will be allocated CPC QS and IFQ that include a harvesting 
and on-board processing privilege. Crab harvested with CPC IFQ also can 
be delivered to shore-based processors.
    Crew QS and IFQ can be transferred to eligible individuals. Leasing 
of Crew IFQ is permitted before July 1, 2008. After July 1, 2008, 
leasing will be permitted only in the case of a documented hardship 
(such as a medical hardship or loss of vessel) for the term of the 
hardship, subject to a maximum of 2 years over a 10-year period. Use 
caps apply to individual Crew QS holdings.

Processing Sector

    A processing privilege, analogous to the harvesting privilege 
allocated to harvesters, will be allocated to processors. Qualified 
processors will be allocated processor quota share (PQS) in each crab 
fishery. PQS represents an exclusive but revocable privilege to receive 
deliveries of a specific portion of the annual TAC from a fishery. The 
annual allocation of pounds of crab based on the PQS is IPQ. IPQ will 
be issued for 90 percent of the IFQ allocated harvesters, equaling the 
amount of IFQ allocated as Class A IFQ. Processor privileges will not 
apply to the remaining TAC allocated as Class B IFQ, or for Crew IFQ 
until July 1, 2008. IPQs will be regionally designated for processing 
(corresponding to the regional designation of the Class A IFQ).
    PQS allocations are based on processing history during a specified 
qualifying period for each fishery. A processor's initial allocation of 
PQS in a fishery will equal its share of all qualified pounds of crab 
processed in the qualifying period. Processor shares are transferable, 
including the leasing of IPQs and the sale of PQS, subject to caps and 
to community protection measures. IPQs can be used without transfer at 
any facility or plant operated by a processor. New processors can enter 
the fishery by purchasing PQS or IPQ or by purchasing crab harvested 
with Class B IFQ or crab harvested by CDQ groups or the Adak community 
entity.
    A PQS holder is limited to holding 30 percent of the PQS issued for 
a fishery, except that initial allocations of shares above this limit 
can be retained and used. In addition, in the snow crab fishery, no 
processor is permitted to use or hold in excess of 60 percent of the 
IPQs issued for the Northern region.

Catcher/Processor Sector

    Catcher/processors (CPs) have a unique position in the Program 
because they participate in both the harvesting and processing sectors. 
To be eligible for CP QS, a person is required to hold a permanent, 
fully transferable LLP license designated for CP use. In

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addition, a person must have processed crab on board the CP, whose 
history gave rise to the LLP license, in either 1998 or 1999. Persons 
meeting these qualification requirements will be allocated CP QS in 
accordance with the allocation rules for QS for all qualified catch 
that was processed on board. These shares represent a harvest privilege 
and an on-board processing privilege. Catcher/Processor QS does not 
have regional designations.

Regionalization

    The regional delivery requirements for QS are intended to preserve 
the historic geographic distribution of landings in the fisheries. 
Communities in the Pribilof Islands are the prime beneficiaries of this 
regionalization provision. Two regional designations will be created in 
most fisheries. The North region is all areas in the Bering Sea north 
of 56[deg]20' N latitude. The South region is all other areas. Catcher 
vessel QS, Class A IFQ, PQS, and IPQ will be regionally designated. 
Crab harvested with regionally designated IFQ will be required to be 
delivered to a processor in the designated region. Likewise, a 
processor with regionally designated IPQ is required to accept delivery 
of and process crab in the designated region. Legal landings in a 
region in the qualifying years will result in QS and PQS designated for 
that region.
    The Program has two exceptions to the North/South regional 
designations. In the Western Aleutian Islands golden king crab fishery, 
50 percent of the Class A IFQ and IPQ will be designated as west shares 
to be delivered west of 174[deg] W. longitude. The remaining 50 percent 
of the Class A IFQ and IPQ will have no regional designation and will 
not be subject to a regional delivery requirement. The west designation 
will be applied to all Class A IFQ and IPQ regardless of the historic 
location of landings in the fishery. A second exception is the Bering 
Sea Tanner crab fishery, which will have no regional designation. This 
fishery is anticipated to be conducted primarily as a concurrent 
fishery with the regionalized Bristol Bay red king crab and Bering Sea 
snow crab fisheries, making the regional designation of Tanner crab 
landings unnecessary.

Crab Harvesting Cooperatives

    Harvesters may form voluntary crab harvesting cooperatives in order 
to collectively harvest their IFQ holdings. A minimum membership of 
four unique QS holders is required for crab harvesting cooperative 
formation. A crab harvesting cooperative is required to apply for a 
crab harvesting cooperative IFQ permit. The crab harvesting cooperative 
IFQ permit will display the aggregate amount of IFQ in each crab 
fishery that will be yielded by the collective QS holdings of the 
members. IFQ could be transferred between crab harvesting cooperatives, 
subject to NMFS' approval. For inter-cooperative transfers, the crab 
harvesting cooperative will need to designate the crab harvesting 
cooperative member engaged in the transaction for purposes of applying 
the use cap of that member to the IFQ that is being transferred to the 
crab harvesting cooperative. Crab harvesting cooperative members will 
be allowed to leave a crab harvesting cooperative or change crab 
harvesting cooperatives on an annual basis prior to the August 1 
deadline for the annual crab harvesting cooperative IFQ permit 
application. Vessels that are used exclusively to harvest crab 
harvesting cooperative IFQ will not be subject to use caps. Crab 
harvesting cooperatives are free to associate with one or more 
processors to the extent allowed by antitrust law.

Community Protection Measures

    The Program includes several provisions intended to protect 
communities from adverse impacts that could result from the Program. 
Communities eligible for the community protection measures are those 
with 3 percent or more of the qualified landings in any crab fishery 
included in the Program. Based on these criteria, NMFS has determined 
that the following crab communities meet this criteria: Adak, Akutan, 
Unalaska, Kodiak, King Cove, False Pass, St. George, St. Paul, and Port 
Moller. All of these communities are identified as eligible crab 
communities (ECCs) for purposes of community protection measures.
    ``Cooling off'' provision. Until July 1, 2007, PQS and IPQ based on 
processing history from the ECCs can not be transferred from those 
communities. The use of IPQ outside the community during this period is 
limited to 20 percent of the IPQ and for specific hardships. PQS and 
IPQ from three crab fisheries are exempt from the cooling off 
provision: Tanner crab, Western Aleutian Islands red king crab, and 
Western Aleutian Islands golden king crab.
    IPQ issuance limits. IPQ issuance limits are established to limit 
the annual issuance of IPQ in seasons when the Bristol Bay red king 
crab or snow crab TAC exceeds a threshold amount. Under these 
circumstances, Class A IFQ issued in excess of these thresholds will 
not be required to be delivered to a processor with IPQ but will be 
subject to the regional delivery requirements.
    Sea time waiver. Sea time eligibility requirements for the purchase 
of QS are waived for CDQ groups and community entities in ECCs, 
allowing those communities to build and maintain local interests in 
harvesting. CDQ groups and ECCs are eligible to purchase PQS but are 
not permitted to purchase Crew QS.
    Right of first refusal (ROFR). ECCs, except for Adak, will have a 
ROFR on the transfer of PQS and IPQ originating from processing history 
in the community if the transfer will result in relocation or use of 
the shares outside the community. Adak is not eligible for the ROFR 
provision because Adak will receive a direct allocation of Western 
Aleutian Islands golden king crab. In addition, the City of Kodiak and 
the Kodiak Island Borough in the Gulf of Alaska (GOA) have a ROFR on 
the transfer of PQS and IPQ from communities in the GOA north of 
56[deg]20' N. latitude.

Community Development Quota Program and Community Allocations

    Community Development Quota Program. The CDQ Program is be expanded 
to include the Eastern Aleutian Islands golden king crab fishery and 
the Western Aleutian Islands red king crab fishery. In addition, the 
CDQ allocations in all crab fisheries covered by the Program are 
increased from 7.5 to 10 percent of the TAC. The increase will not 
apply to the CDQ allocation of Norton Sound red king crab because this 
fishery is excluded from the Program. The crab CDQ fisheries will be 
managed as separate commercial fisheries by the State under authority 
deferred to it under the FMP. The State will establish observer 
coverage requirements, State permitting requirements, and transfer 
provisions among the CDQ groups. It also will monitor catch to 
determine when IFQ have been reached, enforce any penalties associated 
with IFQ overages, and monitor compliance with the requirement that CDQ 
groups must deliver at least 25 percent of their allocation to shore-
based processors.
    Crab harvested under the CDQ allocations (except Norton Sound red 
king crab) are subject to some of the Federal requirements that apply 
to all crab fisheries under the Program including permitting, 
recordkeeping and reporting, a vessel monitoring system, and the cost 
recovery fees.
    CDQ groups can participate in the crab fisheries as holders of both 
QS and PQS. Some CDQ groups will be initial

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recipients of QS because they hold LLP licenses and the appropriate 
catch history. In addition, CDQ groups are exempt from the transfer 
eligibility requirement related to sea time so they are eligible to 
obtain QS by transfer, subject to QS use caps for CDQ groups. CDQ 
groups also will be able to obtain PQS by transfer because there are no 
transfer restrictions on who can hold PQS. While harvesting crab with 
IFQ, CDQ groups are subject to the same regulations as apply to other 
IFQ holders. The purchase and holding of QS and PQS by the CDQ groups 
is subject to the administrative regulations for the CDQ Program at 50 
CFR part 679. These regulations include information on reporting, prior 
approval, and use requirements for all CDQ investments, which include 
QS and PQS.
    Adak allocation. An allocation of 10 percent of the TAC of Western 
Aleutian Islands golden king crab will be made to the community of 
Adak. The allocation to Adak will be made to a nonprofit entity 
representing the community, with a board of directors elected by the 
community. As an alternative and in the interim, the allocation and 
funds derived from it could be held in trust by the Aleut Enterprise 
Corporation for a period not to exceed 2 years, if the Adak community 
non-profit entity is not formed prior to implementation of the Program. 
Oversight of the use of the allocation for ``fisheries related 
purposes'' is deferred to the State under the FMP. NMFS will have no 
direct role in oversight of the use of this allocation. The State will 
provide an implementation review to the Council to ensure that the 
benefits derived from the allocation accrue to the community and 
achieve the goals of the fisheries development plan. The Adak 
allocation will be managed as a separate commercial fishery by the 
State in a manner similar to management of the crab CDQ fisheries. As 
with the CDQ allocations, crab harvested under the Adak allocation will 
be subject to several requirements that apply to all crab fisheries 
under the Program including permitting, recordkeeping and reporting, a 
vessel monitoring system, and the cost recovery fees.
    Community purchase. Any non-CDQ community in which 3 percent or 
more of any crab fishery was processed could form a non-profit entity 
to receive QS, IFQ, PQ and IPQ transfers on behalf of the community. 
The non-profit entity will be called an eligible crab community 
organization (ECCO).

Protections for Participants in Other Fisheries

    The Program will greatly increase the flexibility for crab 
fishermen to choose when and where to fish for their IFQ, and this 
increased flexibility will provide crab fishermen with increased 
opportunity to participate in other fisheries. Restrictions on 
participation in other fisheries, also called sideboards, will restrict 
a vessel's harvests to its historical landings in all GOA groundfish 
fisheries (except the fixed-gear sablefish fishery). Restrictions will 
be applied to vessels but will also restrict landings made using a 
groundfish LLP license derived from the history of a vessel so 
restricted, even if that LLP license is used on another vessel. 
Groundfish sideboards in the GOA will be managed by NMFS through fleet-
wide sideboard directed fishing closures in Federal waters and for the 
parallel fishery in state waters.

Arbitration System

    BSAI crab fisheries have a history of contentious price 
negotiations. Harvesters have often acted collectively to negotiate an 
ex-vessel price with processors, which at times delayed fishing. The 
Arbitration System was developed to resolve failed price negotiations 
arising from the creation of QS/IFQ and PQS/IPQ. The complications 
include price negotiations that could continue indefinitely and result 
in costly delays and the ``last person standing'' problem where the 
last Class A IFQ holder deliveries will have a single IPQ holder to 
contract with, effectively limiting any ability to use other processor 
markets for negotiating leverage. To ensure fair price negotiations, 
the Arbitration System includes a provision for open negotiations among 
IPQ and IFQ holders as well as various negotiation approaches, 
including: (a) A share matching approach where IPQ holders make known 
to unaffiliated IFQ holders that have uncommitted IFQ available the 
amount of uncommitted IPQ they have available so the IFQ holder can 
match up its uncommitted IFQ by indicating an intent to deliver its 
catch to that IPQ holder; (b) a lengthy season approach that allows 
parties to postpone binding arbitration until sometime during the 
season; and (c) a binding arbitration procedure to resolve price 
disputes between an IPQ holder and eligible IFQ holders.
    The arbitration process will begin preseason with a market report 
for each fishery prepared by an independent market analyst selected by 
the PQS and QS holders and the establishment of a non-binding fleet 
wide benchmark price formula by an arbitrator who has consulted with 
fleet representatives and processors. Information provided by the 
sectors for these reports will be historical in nature and at least 3 
months old. This non-binding price will guide the above described 
negotiations. Information sharing among IPQ and IFQ holders, collective 
negotiations, and release of arbitration results will be limited to 
minimize the antitrust risks of participants in the Program. The 
participants in the Arbitration System will also select Contract 
Arbitrators who will assist in Binding Arbitration.
    The binding arbitration procedure is a last best (or final) offer 
format. The IPQ holder, each IFQ holder, and each crab harvesting 
cooperative could submit an offer. For each IFQ holder or cooperative, 
the arbitrator will select between the IFQ holder's offer and the IPQ 
holder's offer. After an arbitration decision is rendered, an eligible 
IFQ holder with uncommited IFQ could opt-in to the completed contract 
by accepting all terms of the arbitration decision as long as the IPQ 
holder held sufficient uncommitted IPQ.

Monitoring and Enforcement

    NMFS and the State of Alaska will coordinate monitoring and 
enforcement of the crab fisheries. Harvesting and processing activity 
will need to be monitored for compliance with the implementing 
regulations. Methods for catch accounting and catch monitoring plans 
will generate data to provide accurate and reliable round weight 
accounting of the total catch and landings to manage QS and PQS 
accounts, prevent overages of IFQ and IPQ, and determine 
regionalization requirements and fee liabilities. Monitoring measures 
will include landed catch weight and species composition, bycatch, and 
deadloss to estimate total fishery removals.

Economic Data Collection

    The Program includes a comprehensive economic data collection 
program to aid the Council and NMFS in assessing the success of the 
Program and developing amendments necessary to mitigate any unintended 
consequences. An Economic Data Report (EDR), containing cost, revenue, 
ownership, and employment data, will be collected on a periodic basis 
from the harvesting and processing sectors. The data will be used to 
study the economic impacts of the Program on harvesters, processors, 
and communities. Pursuant to section 313(j) of the Magnuson-Stevens 
Act, the data and identifiers will also be used for

[[Page 10178]]

Program enforcement and determination of qualification for QS. 
Consequently, identifiers and data will be disclosed to NOAA 
Enforcement, NOAA GC, the Antitrust Division of the Department of 
Justice, the Federal Trade Commission, and RAM. With limited 
exceptions, participation in the data collection program is mandatory 
for all participants in the crab fisheries.

Cost Recovery and Fee Collection

    NMFS will establish a cost recovery fee system, required by section 
304(d)(2) of the Magnuson-Stevens Act, to recover actual costs directly 
related to the management and enforcement of the Program. The crab cost 
recovery fee will be paid in equal shares by the harvesting and 
processing sectors and will be based on the ex-vessel value of all crab 
harvested under the Program, including CDQ crab and Adak crab. NMFS 
also will enter into a cooperative agreement with the State of Alaska 
to use IFQ cost recovery funds in State management and observer 
programs for BSAI crab fisheries. The crab cost recovery fee is 
prohibited from exceeding 3 percent of the annual ex-vessel value. 
Within this limit, the collection of up to 133 percent of the actual 
costs of management and enforcement under the Program is authorized, 
which provides for fuller reimbursement of management costs after 
allocation of 25 percent of the cost recovery fees to the crew loan 
program.

Crew Loan Program

    To aid captains and crew in purchasing QS, a low interest loan 
program (similar to the loan program under the halibut and sablefish 
IFQ program) will be created. This program will be funded by 25 percent 
of the cost recovery fees as required by the Magnuson-Stevens Act. Loan 
money will be accessible only to active participants and could be used 
to purchase either QS or Crew QS. Quota share purchased with loan money 
will be subject to all use and leasing restrictions applicable to Crew 
QS for the term of the loan. This final rule does not contain 
regulations to implement the crew loan program. The loan program will 
be developed by NMFS Financial Services.

Annual Reports and Program Review

    NMFS, in conjunction with the State of Alaska, will produce annual 
reports on the Program. Before July 1, 2007, the Council will review 
the PQS, binding arbitration, and C share components of the Program. 
After July 1, 2008, the Council will conduct a preliminary review of 
the Program. A full review of the entire Program will be undertaken in 
2010. Additional reviews will be conducted every 5 years. These reviews 
are intended to objectively measure the success of the Program in 
achieving the goals and objectives specified in the Council's problem 
statement and the Magnuson-Stevens Act. These reviews will examine the 
impacts of the Program on vessel owners, captains, crew, processors, 
and communities, and include an assessment of options to mitigate 
negative impacts.

Summary of Regulation Changes in Response to Public Comments

    This section provides a summary of the major changes made to the 
final rule in response to public comments. All of the specific changes, 
and the reasons for making these changes, are contained under Response 
to Comments.

Harvester, Crew, and Processor Sectors

    The following significant changes from the proposed to final rule 
in response to public comments are necessary to meet the requirements 
of Amendment 18 and 19. In the final rule NMFS:
    (1) Revised the way in which Class A IFQ and Class B IFQ are 
allocated to individual IFQ holders who hold PQS or IPQ, or who are 
affiliated with PQS or IPQ holders, so that Class A IFQ is issued in 
proportion to the amount of IPQ that is held by the IPQ holder or 
affiliates.
    (2) Revised the definition of ``affiliation'' to clarify the term 
``otherwise controls''.
    (3) Clarified that CVC QS and IFQ are not subject to regional 
designation and the Class A and Class B IFQ assignment for the first 
three years of the program--until July 1, 2008.
    (4) Revised the QS use caps that apply to non-individual PQS and 
IPQ holders so that the application of those caps considers the QS 
holding of that PQS and IPQ holder and the total QS holdings of all 
persons affiliated with that PQS or IPQ holder.
    (5) Revised the PQS and IPQ use caps that apply to PQS and IPQ 
holders so that the PQS or IPQ holdings of that PQS or IPQ holder and 
the total PQS or IPQ holdings of all persons affiliated with that PQS 
or IPQ holder are used in the calculation of the PQS or IPQ holder's 
caps.
    (6) Clarified that an ``individual and collective'' rule applies 
for computing QS use caps for individual PQS holders, CDQ groups, and 
all other QS holders. This methodology sums all QS holdings by a person 
and the percentage of ownership by that person in any QS holding 
entity. This method is more consistent with Amendment 18.
    (7) Added provisions on applying limits on the amount of ``custom 
processing'' that may be undertaken at any one processing facility, or 
at any facility, or group of facilities that is owned by an IPQ holder.
    (8) Clarified the limited exemption that applies to using legal 
landings based on the activities of a vessel which received an LLP by 
transfer in order to remain in a fishery.

Crab Harvesting Cooperatives

    In response to Council and public comments, NMFS removed the 
requirement in Sec.  680.21 that crab harvesting cooperatives be formed 
under the Fishermen's Collective Marketing Act (FCMA, 15 U.S.C. 512). 
With this change, QS holders that hold PQS and IPQ, as well as QS 
holders affiliated with PQS and IPQ holders, can participate in crab 
harvesting cooperatives. To address antitrust concerns, NMFS: (1) 
Clarified that issuance of a crab harvesting cooperative IFQ permit is 
not a determination that the crab harvesting cooperative is formed or 
is operating in compliance with antitrust laws; and (2) added that 
members of crab harvesting cooperatives, that are not FCMA 
cooperatives, should consult counsel before commencing any activity 
under the crab harvesting cooperative if members are uncertain about 
the legality under the antitrust laws of the crab harvesting 
cooperative's proposed conduct. Additionally, NMFS added definitions of 
crab harvesting cooperatives and FCMA cooperatives at Sec.  680.2.
    Additionally, NMFS changed the regulations at Sec.  680.42(c)(5) so 
that a CVC or CPC QS holder is subject to the owner on board 
restriction regardless of whether he or she joins a crab harvesting 
cooperative. NMFS revised the final rule at Sec.  680.21(a)(1)(iii)(B) 
to allow CVC QS holders who join a crab harvesting cooperative to 
withhold their Class B IFQ from submission to the crab harvesting 
cooperative. This will take effect after the third year of the Program 
when CVC QS becomes subject to the Class A/Class B IFQ split. NMFS 
revised the final rule at Sec.  680.21(a)(1)(iii)(A)-(B) to permit QS 
holders to hold memberships in one crab harvesting cooperative per 
fishery. If a QS holder joins a crab harvesting cooperative for 
fishery, all of that QS holder's IFQ for that fishery will be submitted 
to the crab harvesting cooperative.
    NMFS revised intercooperative transfers at Sec.  680.21(e) to 
require the designation of the members of the crab

[[Page 10179]]

harvesting cooperatives that are engaged in the transfer for purposes 
of applying the use caps of the members to the cooperative IFQ that is 
being transferred between the crab harvesting cooperatives.

ROFR

    The final rule revises proposed provisions for an ECC's ROFR of 
purchase of PQS or IPQ that is being proposed by a PQS/IPQ holder for 
use outside the community. These revisions are in response to public 
comment and are intended to more closely reflect the original intent of 
the Council. First, the final rule clarifies that an ECC has discretion 
on whether or not to designate an ECC entity to represent it in ROFR 
and enter into civil contract arrangements for this purpose. If an ECC 
entity is not designated within a reasonable period of time, then the 
ECC permanently waives its opportunity to exercise ROFR. Second, 
statute terms for civil contracts establishing ROFR between eligible 
ECCs and holders of PQS/IPQ have been removed from the regulations. 
Instead, the regulations now refer to the provisions in section 313(j) 
of the Magnuson-Stevens Act. This approach ensures consistency with the 
Magnuson-Stevens Act and is appropriate because NMFS does not enforce 
these contract terms.

Arbitration System

    NMFS made the following significant changes from the proposed to 
final rule in response to public comments. These changes are necessary 
to meet the requirements of Amendment 18 and 19. In the final rule 
NMFS:
    (1) Clarified that only IFQ holders can initiate the Binding 
Arbitration procedure.
    (2) Revised the timeline for the 2005 season for QS holders and PQS 
holders to join an Arbitration Organization which is responsible for 
selecting a group of experts that can assist in price negotiations: the 
market analyst, formula arbitrator, and contract arbitrator.
    (3) Revised the mechanism for exchanging information between 
uncommitted IPQ holders and uncommitted Arbitration IFQ holders to 
allow for a third-party to provide data in an arms-length relationship.
    (4) Established a minimum of 25 percent of the total IFQ held by an 
FCMA cooperative that must be committed to an IPQ holder in order to 
engage in share matching.
    (5) Clarified the timing under which a Binding Arbitration 
procedure must occur and the process whereby it can occur.
    (6) Clarified the ability of persons to participate in FCMA 
cooperatives and collectively negotiate, and the limits to which FCMA 
cooperatives may exchange information among cooperatives.
    (7) Removed the requirement that the transferors require persons 
receiving QS/IFQ or PQS/IPQ by transfer to join an Arbitration 
Organization, and requiring the transferees to do that themselves.
    (8) Required that CVO IFQ, CVC IFQ after July 1, 2008, and IPQ 
would not be issued for a crab QS fishery until the Market Analyst, 
Formula Arbitrator, or Contract Arbitrators have been selected for that 
fishery.
    (9) Clarified the type of Arbitration Organization which a person 
must join depending on their holdings of QS/IFQ and PQS/IPQ.

Monitoring and Enforcement

    NMFS made two major changes to requirements for CPs as a result of 
public comment. Both changes reduce the burden on participants in the 
crab fishery. First, NMFS reduced the required reporting interval for 
crab catch by CPs from once every twenty four hours to weekly. Second, 
NMFS removed requirements for CPs to provide an observer work area on 
board their vessels. NMFS also clarified regulations governing the use 
of the Interagency Electronic Reporting System (IERS) to ensure that 
vessels that are unable to use the Internet may report catch using an 
alternative, NMFS approved, method such as an email attachment to 
report catch.

Economic Data Collection

    In response to public comment requesting additional time to prepare 
and submit the historic EDRs, the submission interval for the EDR is 
increased from 60 days to 90 days at Sec. Sec.  680.6(a)(2), 
680.6(c)(2), 680.6(e)(2) and 680.6(g)(2), to provide both the time to 
gather records and complete an accurate EDR. Also in response to public 
comment, the time interval allowed for verification of data by all 
submitters is extended in the final rule at Sec.  680.6(i)(2) to 20 
days from the 15 days interval identified in the proposed rule.

Cost Recovery and Fee Collection

    The cost recovery fee system remains relatively unchanged from the 
proposed rule. NMFS received only one comment for the cost recovery fee 
system. NMFS responded affirmatively to this comment by adjusting the 
methodology by which CPs must calculate and submit fees to reduce any 
disparity between fees paid by CPs and shoreside processors. An 
explanation of the revised methodology for CP fee calculation is 
contained in the response to comments.

Response to Comments

Harvest Sector

    Comment 1: QS should belong to the American public, not fishing 
industry. It is not fair to the American public to have the interests 
of only those who enrich themselves have a say over the resource.
    Response: Allocating QS and PQS to fishery participants is a 
provision of Amendment 18. Section 313(j) of the Magnuson-Stevens Act 
requires NMFS to implement the Program provisions as specified in 
Amendment 18.
    Comment 2: If a vessel sinks, it should lose all rights to fish 
forever.
    Response: The sunken vessel provision that allocates QS to LLP 
license holders who have had a vessel sink are part of Amendment 18. 
Under section 313(j) of the Magnuson-Stevens Act, NMFS does not possess 
the discretion to alter the sunken vessel provision as it exists in 
Amendment 18. Any change to this provision requires an amendment to the 
Program and should be addressed with the Council.
    Comment 3: The term ``IFQ TAC'' used in Sec.  680.40(h)(5)(ii) in 
the calculation of the Class A IFQ allocation and the IPQ allocation is 
not defined. Care should be taken in defining the term to show that 
prior to July 1, 2008, CVC QS yield IFQ that are not subject to the 
Class A IFQ landing requirements and that IPQ should be issued for 90 
percent of the CVO IFQ allocation. After July 1, 2008, CVC QS holders 
will receive Class A IFQ and IPQ will be issued for 90 percent of the 
CVO and CVC IFQ allocation. Clarify definition and calculation of IPQ 
and Class A IFQ allocations.
    Response: NMFS agrees and has modified the final rule at Sec.  
680.40(h)(5)(ii) to more clearly reflect the nature of the Class A IFQ, 
the allocations that may occur, and the definition of CVC and CVO QS 
and IFQ.
    Comment 4: Section 680.41(c)(2)(ii)(D)(2)(i) and (ii) does not 
adequately parallel the Council motion. For corporations and other 
entities, one ``owner'' (not ``member'') must meet the sea time 
requirement. In addition, that same owner must hold at least a 20 
percent ownership interest in the entity. The section does not exactly 
parallel these requirements. Use language from the Council motion.
    Response: NMFS agrees and has modified the final rule at

[[Page 10180]]

Sec.  680.41(c)(2)(ii)(D)(2)(i) and (ii) to more clearly show that one 
individual must meet both requirements in order to receive QS or IFQ by 
transfer. However, the final rule maintains the term ``member'' because 
not all persons who may hold QS or PQS will have ``owners.'' As an 
example, non-profit corporations don't have ``owners.''
    Comment 5: The provisions Sec.  680.41(l)(2) and (4) concerning the 
transfer of CVO QS and CVC QS, respectively, should be deleted in their 
entirety. They specifically provide, ``Notwithstanding QS use 
limitations under Sec.  680.42, CVO (CVC) QS may be transferred to any 
person eligible to receive CVO or CPO (CVC or CPC) QS as defined under 
paragraph (c) of this section.'' These provisions appear to override 
any use caps contained at Sec.  680.42 (the only section of the 
regulation defining use caps).
    Response: NMFS agrees and has revised Sec.  680.41(i)(5) in the 
final rule to clarify that the approval criteria for transfer do not 
preclude the use caps at Sec.  680.42.
    Comment 6: The rule limiting the acquisition of LLP licenses (and 
history) in excess of the cap after June 10, 2002, should apply to 
Sec.  680.42(b)(3) and (4) (CDQ caps and vertical integration caps), as 
well as the general caps. Add in control date to this section.
    Response: NMFS agrees and has revised Sec.  680.42(a)(1) to 
accommodate this comment. This revised regulatory text also notes that 
a ``person will not be issued QS in excess of the use cap established 
in this section based on QS derived from landings attributed to an LLP 
license obtained via transfer after June 10, 2002,'' except under 
limited conditions addressed under the response to comment 40. This 
provision would apply to both CDQ groups and the vertical integration 
caps.
    Comment 7: For CDQ groups, the individual and collective rule 
should be used to determine holdings for applying the caps at Sec.  
680.42(b)(3).
    Response: NMFS agrees and has modified the final rule at Sec.  
680.42(b)(3) to clarify that the QS and IFQ use caps apply individually 
and collectively to CDQ groups to meet the intent of Amendment 18.
    Comment 8: Table 7 mixes the concepts of eligibility and 
qualification. Eligibility defines the persons eligible to receive an 
allocation. For CVO and CPO, holders of permanent LLP licenses are 
eligible for an initial allocation. For CVC and CPC, persons meeting 
the historical participation requirement (i.e., landings in 3 of the 
qualifying years for vessels) and recency requirements (i.e., landings 
in 2 of the 3 most recent years) are considered eligible. Once persons 
are found eligible, their allocations are based on the qualifying years 
shown in Column B. The same subset of years would apply to all 
participants (CVO, CPO, CVC, and CPC). Column E is incorrect. In 
addition, Columns C and D define CVC and CPC eligibility, not 
qualification. Revise table to reflect difference between eligibility 
and qualification.
    Response: NMFS agrees and has revised Table 7 in the final rule to 
the reflect the difference between eligibility and qualification.
    Comment 9: Table 7 leaves out the season beginning in 1991 for 
Bering Sea Tanner crab. The seasons shown in (2) and (3) are one 
season, not two. Revise dates in the table to include the 1991 BS 
Tanner season.
    Response: NMFS agrees and has revised the dates in Table 7 to 
include the 1991 BS Tanner crab season in the final rule.
    Comment 10: Table 7 defines seasons with an opening and closing 
date. Often the last landing of the season is made after the closing 
date. The regulation should be clear that legal landings made after the 
closing date will be counted for allocations. Clarify that these 
landings will count for determining allocations.
    Response: NMFS will consider legal landings made after the closing 
date of the fishery in the calculation of PQS and QS to be issued 
provided that the harvests were made during the periods established in 
Table 7.
    Comment 11: Allocating QS only for fisheries for which the holder's 
LLP license is endorsed is unfair, inequitable, and dramatically limits 
the amount of QS an LLP license holder will receive. Specifically, if a 
vessel has substantial history in a crab fishery, but did not qualify 
for an LLP license endorsement for that fishery, then the LLP license 
holder should receive QS based on that history.
    Response: Allocating QS only for catch history in fisheries for 
which the holder's LLP license is endorsed is a provision of the 
Council's motion, which is Amendment 18. Section 313(j) of the 
Magnuson-Stevens Act requires NMFS to implement the Program provisions 
as specified in Amendment 18. The Council developed the method for 
distributing QS based on a linkage to permanent fully transferrable LLP 
license (with limited exemptions) after considerable debate and 
analysis in the EIS/RIR/IRFA prepared to support Amendment 18 and this 
final rule.
    Comment 12: NMFS should explain how QS distribution will 
accommodate resolution of appeals on LLP licenses and on QS allocation 
after initial QS allocation.
    Response: NMFS anticipates that all LLP license appeals that affect 
the interim status of crab LLP licenses will be resolved by the time 
that this action is effective and the application period commences. 
However, other potential sources of Program application claims, for 
example, regarding landings and processing histories, will likely not 
be complete until during or after the application period. Some features 
of the Program such as one-time permanent regional QS and PQS 
assignments require that NMFS base its primary initial issuance 
computations and distribution on as complete a QS/PQS pool as possible. 
Therefore it is essential that all persons who believe they may be 
eligible for QS/PQS apply during the open application period, whether 
or not their LLP license status or other situation makes them 
ineligible for QS/PQS at that time. NMFS would not issue QS unless and 
until a person's crab LLP license gained appropriate status or other 
claim was resolved in their favor by Final Agency Action of RAM, the 
Office of Administrative Appeals, or the Regional Administrator. At 
that time, NMFS would issue QS or PQS as appropriate to their 
application.
    However, no distribution of annual IFQ or IPQ would be made for the 
newly issued QS/PQS until the next time at which NMFS makes a 
distribution of annual TAC to QS/PQS holders for that crab fishery so 
as not to disrupt the balance of existing QS and PQS amounts, 
arbitration agreements, use cap credits, etc. Regional assignments of 
QS/PQS issued initially but on a delayed basis would be based on 
original regional ratios computed from data developed for the primary 
initial QS issuance event.
    Comment 13: Council intent, as stated in Amendment 18, was to 
calculate each holder's QS as a weighted average. The proposed rule, at 
Sec.  680.40(c)(2), uses a simple average determined by calculating the 
holder's percentage in each of the history years, adding up the 
percentages, and dividing by the number of years. This section should 
be changed to comply with Council intent. The Council followed AFA, 
where the boats rejected the simple average approach in favor of adding 
up all the QS holder's pounds in the aggregate, and then dividing by 
the aggregate total pounds in all of the history years (weighted 
average). Guideline harvest level (GHL) volatility in snow crab, for 
example, illustrates why. The aggregate annual landings vary 
significantly over the history years, meaning that a QS holder with 
very high landings in a low

[[Page 10181]]

GHL year would get more QS than a consistent participant. Someone who 
sat out a low GHL year (good idea for the health of the industry and 
fishery) would be severely penalized.
    Response: The methodology used at Sec.  680.40(c)(2) does use a 
weighted average when calculating the amount of QS that will be issued. 
The method requires determining the percentage of the total qualified 
landings a person and summing up the percentage of the total qualified 
landings of all persons that are qualified to receive QS. A person's 
percentage of the total qualified landings is divided by the percentage 
of the percentage of all the qualified landings in that fishery. This 
methodology is explained in detail in the preamble to the proposed rule 
(see 69 FR 63208) and in the final rule at Sec.  680.40(c)(2)(iv).
    Comment 14: The QS pool is so large that overfishing results. 
Quotas should be cut by 50 percent this year and 10 percent each year 
thereafter.
    Response: NMFS disagrees. The QS pool represents the portion of 
available TAC for a fishery that will be allocated to QS holders 
annually. The QS pool yields IFQ every year which is the pounds of crab 
the QS holder may harvest, based on the amount of crab available for 
harvest. Each year, the TAC is determined through a scientific process 
that is designed to maintain healthy stocks and reduce the risk of 
overfishing.
    Comment 15: The surviving spouse provision in the proposed rule at 
Sec.  680.41(n) provides that if a QS holder dies, his spouse has 3 
years to lease out his QS. There are no additional regulations in the 
proposed rule to explain what happens after that time. If this 
provision is similar to the halibut/sablefish QS surviving spouse 
provision, then the surviving spouse will have to either sell the QS or 
qualify to have the QS transferred to their name. They qualify by 
having 150 days of sea time-fishing only, no tendering or research 
vessel time. If they do qualify, then they have to be on board during 
the harvesting and delivery of the product.
    This would be a hardship for a surviving spouse of a crab QS 
holder. Crab fishing is much different than halibut fishing, and 
provides a large portion of a family's annual income. A surviving 
spouse probably would not be able to leave the children and job and go 
out to the Bering Sea to crab fish for weeks at a time, a few times a 
year, even if she could qualify. I don't think it is the wish or 
intention of QS holders to leave their spouses and families in such a 
bind. In these cases, the spouse, along with the QS holder, have made 
significant personal and financial investment in this fishery.
    Response: Amendment 18 does not make a specific exemption to allow 
a beneficiary to receive an additional opportunity to lease IFQ or IPQ, 
other than the provisions established under the rule. In fact, the 
three year lease period allowed for beneficiaries of QS and PQS to use 
the IFQ or IPQ is designed to mirror existing leasing by beneficiaries 
under the halibut and sablefish IFQ program. Extending this limited 
leasing ability beyond three years would frustrate the overall intent 
of the Program, which is to limit leasing after several years have 
transpired.
    A beneficiary of QS or PQS may sell the QS or PQS, or fish the IFQ 
or IPQ themselves after the three year period. Additionally, for CVO 
and CPO QS, if the beneficiary owns at least 10 percent of a vessel, 
they can hire someone else to fish the IFQs after the three year 
period. This provision is unlike the halibut/sablefish IFQ program 
where second generation QS holders cannot hire skippers to fish for 
them.
    Comment 16: It is important that any active fisherman who holds 
Class B IFQ have the ability to transfer those shares to any other 
active fisherman. For example, an active fisherman who holds Class B 
IFQ for red king crab and golden king crab should be able to transfer 
his shares for either or both species to another active fisherman. This 
accommodates the fact that an active fisherman may have earned IFQ for 
a species that he is not fishing in a particular season, but should be 
able to transfer to another active fisherman who is fishing that 
species in that same season.
    Response: Under the rule, Class B IFQ may be transferred to any 
eligible recipient mid-season, including an active participant in the 
fisheries.
    Comment 17: The final rule should clearly instruct RAM to initially 
allocate our BSAI crab IFQs directly and individually to the owners of 
IFQ qualified vessels (corporations, LLCs, and partnerships) in 
proportion to their stock ownership or interest in the vessels that 
earned each respective BSAI crab fishing history. This will help NMFS 
avoid numerous, time-consuming transfers and sale procedures, and 
substantially reduce federal paperwork.
    Response: QS will be issued to the holder of the LLP license at the 
time of application, and not to the owners of a corporation, or other 
organization, that holds the LLP license. The exact allocation of QS 
among the owners of a corporation would be an additional administrative 
burden on NMFS and the exact allocation may be subject to contractual 
agreements among the owners that NMFS would be required to interpret 
and would be subject to appeal. In some cases, owners may wish to have 
the LLP license holding corporation also hold the QS. NMFS will 
allocate QS to the entity that holds the LLP license. If the owners of 
a corporation wish to receive a portion of the QS, that can be 
accomplished by a subsequent transfer from the QS holding corporation 
to the corporation's owners. The rule has not been modified.
    Comment 18: The final rule should include a provision that provides 
for post delivery transfers of IFQ. Too often small errors in 
estimating the average weight of crab has adversely affect the crew's 
ability to judge the poundage of crab on board. Allowing transfers of 
IFQ after delivery would provide vessel operators with the flexibility 
needed to make the right decisions, and be consistent with national 
standard 1 of the Magnuson-Stevens Act.
    Response: Transfers of IFQ after deliveries are particularly 
problematic for NMFS to track and monitor. In particular, NMFS does not 
have the ability to keep ``real time'' accounts accurate enough to 
allow this type of transfer. Amendment 18 does not provide any 
provisions for IFQ overages or the ability to undertake post-delivery 
transfers. While there may be some overages in some of the fisheries, 
NMFS does not anticipate that these overages will be severe in most 
cases and after the Program has been in place for a period of time, the 
likelihood of these overages will decrease.
    Comment 19: The final rule should include language that allows flow 
thru of grandfathered ownership to an individual past the current one 
percent cap. For example, in the proposed rule an individual is allowed 
their historic ownership of QS past the one percent cap if earned in 
the qualification years and vessel history is acquired prior to January 
1, 2002. Because QS will be awarded to LLP license ownership groups 
initially, the regulations should make sure the QS can flow thru to 
individual owners based on their ownership make up with no penalty 
assessed if their grandfathered QS exceeds one percent.
    Response: Amendment 18 is clear that the exemption to the QS and 
IFQ use caps for corporations or other entities that are initially 
issued QS or IFQ in excess of the use caps do not extend to the 
individual members that comprise that corporation or other entity. The 
use cap exemption is limited to the entity that initially received the 
QS or IFQ, not to its constituent members who can only receive QS or 
IFQ from the entity

[[Page 10182]]

through transfers. Therefore, each member of that entity is subject to 
the QS and IFQ use caps without exemption. The exemption to the QS and 
IFQ use caps does not extend to persons who receive QS or IFQ by 
transfer.
    Comment 20: The proposed rule at Sec.  680.41(l)(2) and (4) 
incorrectly waives all use caps with respect to harvest shares. The 
motion establishes use caps.
    Response: NMFS agrees and has modified the wording in the final 
rule at Sec.  680.42(i)(5). See also response to comment 5.
    Comment 21: The proposed rule at Sec.  680.42(b)(4) exempts all PQS 
holders from the individual IFQ caps and applies a higher use cap to 
those persons. The motion intended a very limited exemption that would 
not apply to individuals.
    Response: NMFS agrees and has modified the provision in the final 
rule at Sec.  680.42(b)(4) to better reflect the intent of Amendment 18 
by establishing that individual PQS holders do not receive an exemption 
to the overall QS and IFQ use cap that applies to non-individual PQS 
holders who also hold QS or IFQ.
    Comment 22: If all vessels with catch history in the Eastern 
Aleutian Islands golden king crab fishery in the qualifying years were 
granted QS then there would not be such a concentration of QS holders 
in that fishery. Allocating QS only to holders of an LLP license 
endorsed for that fishery would result in a violation of the excessive 
shares provision of the Magnuson-Stevens Act.
    Response: NMFS agrees that allocating QS to all vessels with catch 
history in the fishery would result in more QS holders in that fishery, 
however, Amendment 18 is clear that QS will only be issued for catch 
history for which the holder's LLP license is endorsed, with one 
limited exemption. Section 313(j) of the Magnuson-Stevens Act requires 
NMFS to implement the Program as specified in Amendment 18.
    Comment 23: In the early stages of the Crab Rationalization 
Program, it was discussed whether or not golden king crab should be 
included; as it was a fishery that still had never fully been utilized. 
Instead of excluding golden king crab, the opposite took place, in that 
the golden king crab fishery qualification period of 1996-2000, all 
years, is the most stringent of all crab fisheries. The golden king 
crab qualifications are further compounded because golden king crab is 
the only crab fishery that is not allowed to drop one year in its 
calculations. Not allowing the dropping of a year is a blatant 
discriminatory measure. The golden king crab IFQ qualification years 
are years in which the golden king crab fishery GHLs were not fully 
harvested and the fishery lasted 12 months. The golden king crab 
fishery GHL has only become fully utilized for the first time in the 
year 2000. The proposed window of years for golden king crab was when 
the smallest number of approximately 15-17 vessels, had ever 
participated in the history of the golden king crab fishery.
    The result is a select group of vessels will receive excessive 
golden king crab QS. Approximately 6 to 8 vessels would receive 
approximately 70 percent to 80 percent of the QS. Therefore, the golden 
king crab window of years has disenfranchised many of the other golden 
king crab LLP license holders; to benefit a select group of excessive 
share recipients. Golden king crab is the only fishery that ``must'' 
use the recent years of history up until implementation, as the GHLs 
were finally fully harvested.
    There was a lot of testimony to the Council requesting the 
qualification period include the current years in which the GHLs were 
finally fully harvested. NOAA General Counsel also stated on the record 
that fishing history up until time of final action should be 
considered. Additionally the court ruling over the Halibut IFQ lawsuit, 
stated that fishing history up until final action should be considered. 
Yet the Council did not consider the years of history beyond 2000.
    In conclusion, the qualification period for the golden king crab 
fishery does not conform to the National Standards under the Magnuson-
Stevens Act. National Standards state that no such measure shall have 
economic allocation as its sole purpose. It is easy to point out that 
the specific years selected for golden king crab are for the sole 
purpose of economic allocation to a select few vessels. National 
standards state that ``allocations should be fair and equitable to all 
fisherman'', not just a select few vessels as in golden king crab 
fishery. National Standards state that allocations shall be carried out 
in such a manner that no particular entity acquires an excessive share, 
not the excessive shares that are proposed in golden king crab fishery. 
National Standards must be adhered to.
    Response: Amendment 18 establishes the qualifying years for the 
golden king crab fishery. Section 313(j) of the Magnuson-Stevens Act 
requires NMFS to implement the Program as specified in Amendment 18. 
Therefore, this provision does not violate the Magnuson-Stevens Act and 
the rule has not been modified. The Council considered recent 
participation in the golden king crab fishery in developing this 
Program. The allocation of QS or PQS in the golden crab fishery is 
based on an extensive decision making process and the EIS/RIR/IRFA 
prepared for this action considered a variety of years for the initial 
allocation of QS.
    Comment 24: The proposed rule at Sec.  680.40(c)(2)(vii) requires 
an interim LLP license as a condition of eligibility for an LLP 
license/catch history exemption contemplated by the Council; and also 
disallows severability of catch history from an LLP license for initial 
allocation of QS. Additionally, Sec.  680.40(b)(4)(ii)(B)(E) disallows 
severability of landings and history from LLP licenses. By requiring an 
interim LLP license to qualify for the exemption, the proposed rule 
excludes a vessel for which there was no interim LLP license, but which 
otherwise would qualify for the exemption. The proposed Council motion 
did not require an interim LLP license as a qualification for the 
history exemption, and it was not the intent of the Council to exclude 
the vessels in question. The final regulations should allow the history 
exemption for a very limited number of vessels in question (must have 
conducted a transfer by January 1, 2002) by removing the requirement of 
an interim LLP license for eligibility under this provision and 
providing an exception from the proposed rule which disallows 
severability of landings and catch history from the LLP license.
    Response: NMFS agrees and has modified the final rule at Sec.  
680.40(b)(4)(vii) to remove the requirement of an interim LLP license 
for eligibility under this provision, based on this comment and 
comments 42 and 43. This provision is intended to address a specific 
situation in which LLPs were transferred between vessels so that a 
vessel could legally remain in the fishery. Amendment 18 did not 
specify that an interim LLP was a requirement to qualify for this 
provision.
    Comment 25: The proposed rule at Sec.  680.40(h)(4) provides that 
persons with 10 percent common ownership with a PQS holder would 
receive all Class A IFQ (and no Class B IFQ). The motion intended that 
the exclusively Class A IFQ allocation be limited to the amount of IFQ 
``controlled'' by the IPQ holder, with the remainder allocated as Class 
A and Class B IFQ. Eligibility to receive an allocation of Class B IFQ 
in the Council motion relies on whether the processor ``controls'' 
delivery of the IFQ. Use of a ``control'' standard for determining 
whether Class B IFQ will be allocated has two effects: First, if the 
processor holds a limited amount of

[[Page 10183]]

IPQ, the Class A IFQ only allocation should be limited to an amount of 
IFQ that offset the IPQ holding, with the remainder of the allocation 
subject to the Class A/Class B IFQ split. Using this approach, a person 
receives a Class A only IFQ allocation for only those IFQ that are 
controlled by the processor, with the remainder of the allocation 
(which is beyond the control of the processor) as a Class A/Class B 
allocation. Second, if the processor does not control deliveries 
(regardless of the number of IPQ held), the Class B IFQ allocation will 
be necessary for negotiating strength of the person controlling 
deliveries in their negotiations with processors generally. If a 
``control'' affidavit is used for determining who will receive Class B 
IFQ, the term ``control'' must be well-defined, so that the signatory 
to the affidavit knows what the attestation means.
    Allocation of ``only Class A IFQ'' should be limited to the amount 
of controlled IFQ. The remainder of the allocation should be subject to 
the Class A/Class B division of fully independent harvesters. 
Additionally, the definition of control should be revised to reflect 
the nature of control at issue (i.e., does the IPQ holder control the 
delivery of the IFQ). This definition may rely to some extent on 
``affiliation,'' but control of deliveries should be paramount.
    Response: Amendment 18 provides that:
    (1) Crab harvester QS held by IPQ processors and persons affiliated 
with IPQ processors will only generate Class A annual IFQ, so long as 
such QS is held by the IPQ processor or processor affiliate.
    (2) IPQ processors and affiliates will receive Class A IFQ at the 
full poundage appropriate to their harvesters QS percentage.
    (3) Independent (non-affiliated) harvesters will receive Class B 
IFQ pro rata, such that the full Class B QS percentage is allocated to 
them in the aggregate.
    (4) ``Affiliation'' will be determined based on an annual affidavit 
submitted by each QS holder. A person will be considered to be 
affiliated, if an IFQ processor controls delivery of a QS holder's IFQ.
    The commenter raises two separate points in this comment: (1) What 
is control for purposes of determining the amount of Class A IFQ that 
is to be issued to a person holding QS that is an IPQ processor or 
affiliate; and (2) how much Class A IFQ should be allocated to an IPQ 
processor or affiliate? Both of these questions must be answered to 
address the commenter's question.
(1) What Is Control?
    The proposed rule measured control by requiring that each year in 
the Annual Application for Crab IFQ/IPQ the applicant provide 
documentation of affiliation declaring any and all affiliations using 
affiliation as defined in Sec.  680.2 (See Sec.  680.4(f)). Affiliation 
for purposes of determining a linkage with a PQS or IPQ holder is 
defined as: (1) Common ownership, either directly or indirectly by the 
PQS or IPQ holder of more than 10 percent of the QS or IFQ holding 
entity; (2) control of a 10 percent or greater interest by a PQS or IPQ 
holding entity in a QS or IFQ holding entity by controlling ownership 
or voting stock; and (3) a PQS or IPQ holder otherwise controlling a QS 
or IFQ holding entity through any other means whatsoever. This 
definition of affiliation is intended to broadly include activities 
that would allow a PQS or IPQ holding entity to exercise control over 
the activities of a QS or IFQ holder--specifically, the control of 
where the IFQ crab would be delivered. The definition of ``otherwise 
controls'' in the affiliation definition is intended to be broad and 
would encompass a range of arrangements either contractual or otherwise 
that could be used to express control. The current definition of 
affiliation does not define specific indices of control such as are 
provided in the AFA (See Sec.  679.2 for the definition of affiliation 
under the AFA) or under regulations that govern the control of a 
fishing vessel by a non-U.S. citizen as defined under Maritime 
Administration (MARAD) regulations (See 46 CFR 356.11), although those 
indices of ``control'' would be subsumed under the broad definition of 
``otherwise controls'' in the affiliation definition contained in the 
proposed rule.
    Amendment 18 does not expressly define the method for establishing 
how control is to be measured, what indices should be used, and whether 
additional factors such as ownership of the IFQ holding entity could be 
used to define control. NMFS has decided that because control is not 
specifically defined in Amendment 18 and because control can be 
expressed in a variety of ways, that the affidavit that is submitted 
each year should include a definition of control of delivery that 
includes the ability of the IPQ holder to direct the delivery of the 
IFQ using measures of ownership and otherwise controlling the 
operations of the IFQ holder. These two aspects of ``control'' are 
necessary to ensure that IFQ that is held by an IPQ holder or an 
affiliate is apportioned the appropriate amount of Class A IFQ. 
Ownership is frequently used as one index of control in measuring the 
ability of a person to exercise control over a corporation. Owning a 
corporation effectively determines the course of the activities of that 
corporation. The amount of ownership that results in an ability for the 
IPQ holder to direct the business operations (i.e., where the IFQ crab 
are delivered) is subject to some debate and business arrangements.
    The EIS prepared for the final rule does not provide a specific 
example of how a PQS or IPQ holder may control the deliveries of an IFQ 
holder. Section 2.2 of the EIS notes that: only QS holders that are 
unaffiliated with holders of processing shares would receive Class B 
IFQs. Holders of processing shares and their affiliates that hold QS 
would be allocated Class A IFQs for all of their IPQ holdings, with the 
remainder of their IFQ allocated as Class A IFQ and Class B IFQ at the 
same ratio as those allocated to independent harvesters. The annual 
poundage allocation of IFQ arising from the QS would be unaffected by 
the Class A/Class B IFQ distinctions. For each region of each fishery, 
the allocation of Class B IFQ would be 10 percent of the total 
allocation of IFQ. The absence of an affiliation with a holder of 
processing shares would be established by a harvester filing an annual 
affidavit stating that the use of any IFQ held by that harvester is not 
subject to any control of any holder of processing shares.
    While this description provides some detail about the actual 
allocation of the Class A and Class B IFQ, and that affiliation with a 
processor would be established by an annual affidavit, the indices for 
control are not defined.
    The proposed rule used a 10 percent ownership control standard as a 
means of measuring the control over an entity based on several factors: 
(1) The use of a 10 percent standard in several other aspects of 
Amendments 18; and (2) the standard used under the AFA which is a 
rationalization program that uses an affiliation definition for 
purposes of applying use caps and processing sideboard limitations.
    Use of the 10 Percent Standard in Amendment 18. There are several 
sections throughout Amendment 18 where a 10 percent common ownership 
standard is used for purposes of determining whether or not a linkage 
occurs. While these standards do not per se state that a 10 percent 
common ownership standard is applicable to establish control, the 
consistent use of a 10 percent common ownership standard in various 
aspects of this program suggests that a 10 percent standard was 
perceived to be a threshold level at

[[Page 10184]]

which some form of control is being exercised by one entity over 
another entity. The principal use of the 10 percent standard is found 
in the following sections of Amendment 18:
    (1) 1.6.2 Leasing of QS (leasing is equivalent to the sale of IFQs 
without the accompanying QS.). Leasing is defined as the use of IFQ on 
vessel which a QS owner holds less than 10 percent ownership of vessel 
or on a vessel on which the owner of the underlying QS is not present
    (2) 1.6.4 Controls on vertical integration (ownership of harvester 
QS by processors): Option 3: Vertical integration ownership caps on 
processors shall be implemented using both the individual and 
collective rule using 10 percent minimum ownership standards for 
inclusion in calculating the cap. PQS ownership caps are at the company 
level.
    (3) 2.7.1 Ownership caps. PQS ownership caps should be applied 
using the individual and collective rule using 10 percent minimum 
ownership standards for inclusion in calculating the cap. PQS ownership 
caps are at the company level.
    (4) Cooperative Section Rules governing cooperatives. The Council 
clarified the following rules for governing cooperatives: Four entities 
are required for a cooperative. The requirement for four owners to 
create a cooperative would require four unique entities to form a 
cooperative. Independent entities must be less than 10 percent common 
ownership without common control (similar to the AFA common ownership 
standard used to implement ownership caps).
    The RIR/IRFA prepared for this action also used a 10 percent 
ownership standard for purposes of measuring whether a common linkage 
exists between a processor and a harvester and whether a vessel was 
considered to be affiliated with a processor. (See 3.7.9.4 Shares of 
processor affiliates, and page 293 of Appendix 1). As is noted in the 
RIR/IRFA ``[t]his level of ownership and the ownership of affiliates is 
intended to capture all relationships and influences and was used for 
determining ownership under the AFA (See page 191 of Appendix 1).'' The 
RIR/IRFA analyzed the potential economic impacts of affiliation using 
this standard and the potential impacts on affiliated IFQ holders was 
detailed for each of the crab QS fisheries.
    While alternative ownership standards could be chosen, NMFS is 
relying on the frequent and consistent use of a 10 percent standard 
throughout Amendments 18 and 19 and the EIS/RIR/IRFA prepared to 
support this action as the basis for establishing affiliation, and 
therefore control, as being triggered when one entity holds a 10 
percent or great common ownership interest in another entity.
    Other Indices of Control. Amendment 18 indicated that control would 
be expressed ``if an IPQ processor controls delivery of a QS holder's 
IFQ.'' Amendment 18 does not provide additional guidance on how that 
control may be expressed. The preamble to the proposed rule provides 
examples of control based on the definition of affiliation. ``Examples 
of the types of control that may be encompassed by this definition 
include the authority to direct the delivery of crab harvested under an 
IFQ permit held by the second entity to a specific RCR, or when one 
entity absorbs the majority of costs and normal business risks 
associated with the operation of a second entity, including the costs 
associated with obtaining and using any amount of the QS, PQS, IFQ, or 
IPQ held by the second entity.'' The definition used in the proposed 
rule is broad, but may not provide an adequate definition for purposes 
of the affidavit that is required on an annual basis.
    NMFS agrees that the definition of ``otherwise controls'' could be 
clarified by using specific indices in the final rule. NMFS is 
expanding the definition of ``otherwise controls'' using the indices 
that are used for determining impermissible control by a non-citizen of 
a United States fishing vessel under MARAD regulations at (46 CFR 
356.11) as a guide for these specific indices. Those indices are 
detailed in the final rule and include those situation in which a PQS 
or IPQ holder has:
    (1) The right to direct, or does direct, the business of the entity 
which holds the QS or IFQ;
    (2) The right in the ordinary course of business to limit the 
actions of or replace, or does limit or replace, the chief executive 
officer, a majority of the board of directors, any general partner or 
any person serving in a management capacity of the entity which holds 
the QS or IFQ;
    (3) The right to direct, or does direct, the transfer of QS or IFQ;
    (4) The right to restrict, or does restrict, the day-to-day 
business activities and management policies of the entity holding the 
QS or IFQ through loan covenants;
    (5) The right to derive, or does derive, either directly, or 
through a minority shareholder or partner, and in favor of a PQS or IPQ 
holder, a significantly disproportionate amount of the economic benefit 
from the holding of QS or IFQ;
    (6) The right to control, or does control, the management of or to 
be a controlling factor in the entity holding QS or IFQ;
    (7) The right to cause, or does cause, the sale of QS or IFQ;
    (8) Absorbs all of the costs and normal business risks associated 
with ownership and operation of the entity holding QS or IFQ;
    (9) Has the ability through any other means whatsoever to control 
the entity that holds QS or IFQ.
    Other factors that may be indica of control include, but are not 
limited to, the following:
    (1) If a PQS or IPQ holder or employee takes the leading role in 
establishing an entity that will hold QS or IFQ;
    (2) If a PQS or IPQ holder has the right to preclude the holder of 
QS or IFQ from engaging in other business activities;
    (3) If a PQS or IPQ holder and QS or IFQ holder use the same law 
firm, accounting firm, etc.;
    (4) If a PQS or IPQ holder and QS or IFQ holder share the same 
office space, phones, administrative support, etc.;
    (5) If a PQS or IPQ holder absorbs considerable costs and normal 
business risks associated with ownership and operation of the QS or IFQ 
holdings;
    (6) If a PQS or IPQ holder provides the start up capital for the QS 
or IFQ holder on less than an arm's-length basis;
    (7) If a PQS or IPQ holder has the general right to inspect the 
books and records of the QS or IFQ holder;
    (8) If the PQS or IPQ holder and QS or IFQ holder use the same 
insurance agent, law firm, accounting firm, or broker of any PQS or IPQ 
holder with whom the QS or IFQ holder has entered into a mortgage, 
long-term or exclusive sales or marketing agreement, unsecured loan 
agreement, or management agreement.
(2) How Much Class A IFQ Should Be Allocated to an IPQ Processor or 
Affiliate?
    The second main issue raised by the commenter is how much Class A 
IFQ is issued to QS or IFQ holders who are affiliated with PQS or IPQ 
holders. Amendment 18 appears to be somewhat internally inconsistent. 
It states that ``Crab harvester QS held by IPQ processors and persons 
affiliated with IPQ processors will only generate Class A annual IFQ, 
so long as such QS is held by the IPQ processor or processor 
affiliate.'' However, the next sentence apparently modifies this 
statement by noting that ``IPQ processors and affiliates will receive 
Class A IFQ at the full poundage appropriate to their

[[Page 10185]]

harvesters QS percentage.'' Section 2.2 of the EIS further supports an 
approach in which the amount of Class A IFQ that is issued to an IFQ 
holder or affiliate is based on the proportion of QS held to the amount 
of PQS held by the PQS holder to which the QS holder is affiliated.
    NMFS is interpreting Amendment 18 in the following manner:
    (1) If a person holds IPQ and IFQ, than that person will be issued 
Class A IFQ only for the amount of IFQ equal to the amount of IPQ held 
by that person. Any remaining IFQ would be issued as Class A and Class 
B IFQ in a ratio so that the total Class A and Class B IFQ issued in 
that fishery is issued as 90 percent Class A IFQ and 10 percent Class B 
IFQ.
    As an example, if a person held 100,000 pounds of IPQ in a fishery 
and 120,000 pounds of IFQ, that person would receive 100,000 pounds of 
Class A IFQ and 20,000 pounds of IFQ issued in the appropriate Class A 
and Class B ratio for that person;
    (2) If a person holds IPQ in excess of the amount of IFQ held by 
that person, all IFQ holders affiliated with that IPQ holder will 
receive only Class A IFQ in proportion to the amount of IFQ held by 
that person relative to that amount of IPQ held by the IPQ holder to 
which they are affiliated. Any remaining IFQ would be issued as Class A 
and Class B IFQ in a ratio so that the total Class A and Class B IFQ 
issued in that fishery is issued as 90 percent Class A IFQ and 10 
percent Class B IFQ.
    For example, assume that an IPQ holder holds 200,000 pounds of IPQ 
and 100,000 pounds of IFQ in a fishery. Also assume that the IPQ holder 
is affiliated, either through a 10 percent common ownership standard, 
or through control, with 3 IFQ holders (IFQ holder A, IFQ holder B, and 
IFQ holder C). IFQ holder A has 100,000 pounds of IFQ, IFQ holder B has 
25,000 pounds of IFQ, and IFQ holder C has 175,000 pounds of IFQ. 
Collectively, the three affiliated IFQ holders have 300,000 pounds of 
IFQ.
    The IPQ holder would be issued all 100,000 pounds of his IFQ 
holdings as Class A IFQ because the amount of IPQ held (200,000 pounds) 
exceeds the total amount of IFQ that he holds. The remaining 100,000 
pounds of Class A only IFQ would be allocated on a pro rata basis as 
follows.
    (1) The total remaining IPQ (100,000 pounds) is divided by the 
total IFQ held by all affiliates of the IPQ holder (300,000 pounds). 
This yields a Class A only ratio of .333.
    (2) The IFQ held by each affiliate is multiplied by the Class A 
only ratio. In our example:

IFQ holder A = 100,000 pounds x (0.333) = 33,333 pounds of Class A only 
IFQ
IFQ holder B = 25,000 pounds x (0.333) = 8,333 pounds of Class A only 
IFQ
IFQ holder C = 175,000 pounds x (0.333) = 58,333 pounds of Class A only 
IFQ.

    Any remaining IFQ held by these IFQ holders would be allocated 
using the Class A and Class B ratio. This example is limited to IFQ 
holders being affiliated with only one IPQ holder. In cases where an 
IFQ holder is affiliated with multiple IPQ holders with IPQ in excess 
of their IFQ holding , this same methodology would apply. This method 
meets the intent of Amendment 18, and is consistent with the statements 
in the EIS concerning the allocation of Class A and Class B IFQ among 
persons affiliated with IPQ holders.
    Comment 26: The proposed rule at Sec.  680.40(h)(4) contradicts 
Amendment 18 and Congressional mandate in applying the affiliation 
definition of 10 percent or more processor ownership for the allocation 
of Class B IFQ. This provision would cause severe economic harm to 
vessels that have affiliation by processors, stifle investment by QS 
holders in processing activity, and cause a number of serious problems 
for the development of a successful crab rationalization program. The 
final rule should define who can receive Class B IFQ as follows: Class 
B IFQ will be assigned to all eligible recipients except that Class B 
IFQ will not be assigned to any person whose delivery of crab is 
controlled by a holder of PQS or IPQ. Control will be determined based 
on an annual affidavit by each QS holder submitted as part of the 
annual application for crab IFQ/IPQ permit. A PQS or IPQ holder does 
not control QS or IFQ if the skipper responsible for delivery of crab 
harvested under the QS is contractually able to deliver its harvest 
wherever they choose without direction by the PQS or IPQ holder.
    Response: The response to this comment is addressed in the response 
to comment 25.
    Comment 27: The proposed rule at Sec.  680.40(h)(4)(ii) would 
prohibit issuance of Class B IFQ to holders of PQS or IPQ or to 
entities affiliated with such holders. An affidavit requirement is set 
forth in the proposed rule as a criterion for the issuance of Class B 
IFQ, as specified in the Council motion and is an important element of 
accountability and enforceability of the system devised by the Council, 
and should be preserved. The final regulations should provide for an 
affidavit process for accountability and enforceability of a system 
devised by the Council for the issuance of B IFQ. Additionally, 
processor controlled IFQ holders should not be issued Class B IFQ.
    Response: The response to this comment is addressed in the response 
to comment 25. The affidavit is maintained as the standard by which 
NMFS will determine affiliation with a processor. The Annual 
Application for IFQ or IPQ will note what standards meet affiliation 
thresholds. The accountability for accurately supplying this 
information to NMFS will rest with the applicant.
    Comment 28: The test for determining which harvesters are 
ineligible to receive Class B IFQ should be whether a PQS holder, by 
any means whatsoever, controls where the harvester's IFQ are delivered. 
With respect to this test, control should be evaluated on the basis of 
criteria similar to those employed by the Maritime Administration when 
evaluating compliance with the AFA citizenship requirements. By 
focusing on IPQ holder ownership or control of an IFQ holder to the 
exclusion of other factors, the use of the affiliation standard at 
Sec.  680.2 leaves open the possibility that Class B IFQ could be 
controlled by PQS holders in a manner that contravenes the intent 
expressed in the Council motion.
    In order to fully protect the independence of Class B IFQ, each 
affiliation evaluation should include consideration of indicia of IPQ 
holder control of an IFQ holder and over IFQ delivery. Accordingly, the 
definition of affiliation used at Sec.  680.40(h)(4) should be expanded 
to include indica of direct or indirect control similar to those used 
for evaluating affiliation in the AFA context and control of U.S. flag 
fishing vessels (46 CFR 356.11). In each case, these regulations compel 
a thorough evaluation of both the ownership of an entity and other 
control factors that may permit a non-owner to none-the-less exercise 
control over that entity or its actions. An annual evaluation of this 
control should occur in conjunction with the IFQ application process, 
and subsequent to this application, applicants should be prohibited, 
without prior approval by NMFS, from entering into any relationship 
with a PQS holder or affiliate that modifies the indica of control 
already evaluated.
    Response: The response to this comment is addressed in the response 
to comment 25. The rule does not specify that IFQ recipients notify 
NMFS after the issuance of IFQ and IPQ that they have entered into a 
relationship with a

[[Page 10186]]

PQS or IPQ holder that would result in them becoming affiliated or 
otherwise resulting in increasing control by the PQS or IPQ holder. 
NMFS did not make this a requirement for several reasons:
    (1) NMFS would not be able to reissue Class A or Class B IFQ once 
the season has begun. Because the amount of IPQ issued in a fishery is 
equal to the amount of Class A IFQ, modifying the amount of Class A IFQ 
issued to a person due to a mid-season change in affiliation would 
require reissuing IPQ as well and would significantly disturb the 
operation of the fishery;
    (2) In some cases an IFQ holder would not be aware of changes in 
corporate ownership that could increase the degree of control being 
exerted by an IPQ or PQS holder. As an example, IFQ could be held by a 
corporation that is in turn owned by several other corporations. If one 
of those corporations purchased IPQ, the IFQ holding corporation may 
not be aware of this change in affiliation unless private contracts 
stipulated that the IFQ holder be notified that such a purchase had 
occurred. In any case, the IFQ holder would not be able to exercise 
control over the actions of this party purchasing the IFQ.
    The Annual Application for IFQ or IPQ requires each applicant to 
annually submit their affidavit and provides a reasonable assurance 
that if affiliation were to change in mid-season, those changes would 
be reflected in the affidavit for the following year. NMFS established 
a time period shortly after the annual application is due until IFQ and 
IPQ is issued where no transfers of IFQ or IPQ would be approved. This 
will provide NMFS with time to determine affiliations, the amount of 
Class A IFQ and Class B IFQ to be issued to each IFQ holder, and issue 
that IFQ and IPQ. Once issued, transfers could occur that could result 
in Class B IFQ being transferred to IPQ holders or their affiliates. 
Because we are modifying the way in which Class A IFQ and Class B IFQ 
is allocated to PQS or IPQ holders and their affiliates, this would be 
permitted.
    Comment 29: An extremely unreasonable burden would be put on 
harvesters if processors affiliated harvesters were interpreted to 
include harvesters who have a gear loan from a processor, a tender 
contract, or some other unforseen link with a processor that would 
happen with normal business dealings. Ths could prohibit the harvester 
from receiving Class B IFQ, participating in arbitration, or joining a 
cooperative. The solution of signing a control affidavit stating that a 
processor has no control of landings seems unclear. The final rule 
should carefully define control and affiliation so as to avoid creating 
a disadvantage to harvesters or creating a risk of having to sign an 
affidavit that could later be interpreted as fraudulent.
    Response: The response to this comment is addressed in the response 
to comment 25.
    Comment 30: I am a fisherman with a partnership to two different 
crab vessels that will be participating in the upcoming crab 
rationalization. On one of these vessels I have been a partner for 
seventeen years with a group that also owns a small part of a 
processor. We have a co-ownership agreement that gives me complete 
control of when and where the vessel delivers. In the last seventeen 
years I have delivered many times to processors not owned by my 
partners, the choice has always been mine, as stated in our co-
ownership agreement. To deny me Class B IFQ shares under Sec.  
680.40(h)(4) gives an unfair advantage to the other unaffiliated 
vessels who may be able to receive a premium for this crab from outside 
(non-PQS) buyers. I believe if a vessel could make an annual 
declaration of control, that any concerns of anti-trust violations 
could be alleviated, especially with a co-ownership agreement showing 
the ``affiliated'' partner not in control of decision making for the 
vessel or its QS/IFQ.
    Response: The response to this comment is addressed in the response 
to comment 25.
    Comment 31: The allocation of only Class A IFQ to those vessels 
that are considered affiliated at Sec.  680.40(h)(4) will disadvantage 
those minority co-owners that have complete operational control over 
the deliveries of the vessel and IFQ. The definition of control should 
be revised to reflect the nature of control at issue, taking into 
account past operating practices. For instance, a vessels may have 
partial or full ownership by an entity that also has partial ownership 
in a processing operation. While these vessels might be considered 
``affiliated'' with a processor, they have historically acted 
independent of the processor and will continue to do so. The operator 
and in some cases the co-owners of the vessel and have full freedom to 
deliver wherever they wish, even to the point that a large portion of 
their QS will be in the Northern Region that their affiliated processor 
has never had operations. An annual declaration of control is a 
reasonable method for determining who will receive Class B IFQ.
    Response: The response to this comment is addressed in the response 
to comment 25.
    Comment 32: I have had a business relationship with a processing 
company for 16 years. I have been a partner in the vessel for 12 years. 
They have never told me where to deliver my catch. I do not fish for 
their processing company and have not for 14 yrs. I have delivered to a 
different processor mainly for the last 14 years. My partner's attitude 
has always been its my choice where to deliver my product. I think I 
have earned my Class B IFQ and deserve them. I think a simple letter 
stating that I control where I will deliver my product will be 
sufficient.
    Response: The response to this comment is addressed in the response 
to comment 25. The factors that this commenter raises would be supplied 
in the affidavit that he submits each year. If there are sufficient 
indicia to indicate that control exists, then that person would need to 
indicate that they are affiliated with an IPQ holder. If not, or if it 
is unclear, NMFS may request additional information.
    Comment 33: Comment strongly supports the dual definition of 
control (by any means) and the 10 percent affiliation standard 
identified by NMFS in the proposed rule. The Program was developed with 
PQS included, which is a new concept in fisheries management. Due to 
the uncertainties in how this will work, the Council stipulated that 
only those non-affiliated QS holders would receive the IFQ in an Class 
A/B IFQ split. This is to benefit the independent QS holders and help 
to maintain a competitive market place. The concept of a simple 
affidavit stating that control over deliveries is insufficient. Anyone 
can say that they are not under the control of a processor. The added 
10 percent ownership requirement, which is consistent with other 
definitions of affiliation by the Council and NMFS throughout the 
motion and the EIS, is appropriate and needed.
    Response: The response to this comment is addressed in the response 
to comment 25.
    Comment 34: Nowhere in the Council motion are recipients of Class B 
IFQ restricted in nearly so severe a manner as in the proposed rule at 
Sec.  680.40(h)(4)(ii). The Council motion clearly states that if the 
QS holder is appropriately able to execute an affidavit stating that no 
IPQ holder controls where the IFQ is delivered, that QS holder is 
entitled to receive Class B IFQ. If a QS holder executed such a 
document, and was discovered to have misrepresented the facts, then 
that QS holder would be liable for fraud under

[[Page 10187]]

federal law. By drawing the proposed rule so narrowly, NMFS has created 
new restrictions to prevent abuse, restrictions which were neither seen 
to be necessary by the Council nor which acknowledge the very real 
penalties which already exist under federal laws for fraud. NMFS should 
redraft the regulations to accurately reflect the Council motion, 
bearing in mind that industry participants are already appropriately 
held to the standard of making accurate representations to NMFS.
    Response: The response to this comment is addressed in the response 
to comment 25.
    Comment 35: In order to fully protect the independence of Class B 
IFQ harvesters, each affiliation evaluation should include 
consideration of a broad range of indicia of ``affiliation/control'', 
as well as ``affiliation/ownership''. ``Affiliation/control'' and 
``affiliation/ownership'' are two separate tests, both of which must be 
satisfied in order to be eligible for Class B IFQ. These separate tests 
are spelled out in the April 2003 Council motion on ``Processor 
Holdings of Harvest Shares'' It is crystal clear from the motion that 
the truly ``independent (non-affiliated) harvesters'' are to be the 
recipients of the full allocation of aggregate Class B IFQ. These are 
all or nothing tests, without any ``proportionality'' component 
relative to how much PQ is held, nor the degree of affiliation as a 
function of degree of processor ownership of the harvester QS holder.
    Though the words of the April motion do not indicate a specific 10 
percent ownership standard for defining ``affiliation,'' 10 percent was 
the standard that was used in the RIR analysis that was before the 
Council when it made the motion.
    Some have argued that discussion in section 1.6.4, of the EIS pg. 
2-41 suggests proportionality in distributing Class B IFQ to non-fully 
independent harvesters. However, the EIS was not available to Congress 
when it acted to require implementation of the program as ``approved by 
the North Pacific Fishery Management Council between June 2002 and 
April 2003, and all trailing amendments including those reported to 
Congress on May 6, 2003.'' Thus the `legislative' history on how to 
allocate Class B IFQ to independent harvests should rest not on section 
1.6.4 of the EIS which was not available, but on the RIR which was 
available in June 2002 and when the Council motion was made in April 
2003, and which consistently used a 10 percent affiliation standard to 
define ``independence'' as well as incorporating a separate test for 
``control.''
    Response: The response to this comment is addressed in the response 
to comment 25.
    Comment 36: The Council motion included a trigger mechanism for red 
king crab and snow crab that would end the Class A/B IFQ designations 
for harvesting QS. If the red king crab GHL exceeds 20 million pounds 
and/or the snow crab GHL exceeds 175 million pounds, all harvesting 
shares above those trigger amounts are to be unrestricted or Class B 
IFQ. If the proposed rule's definition of affiliation remains in place, 
what shares will affiliated vessels receive when the trigger numbers 
are reached? Under the proposed rule they cannot receive Class B or 
unrestricted IFQ. This outcome, while not yet realized in terms of 
demonstrated GHL, highlights the inconsistency between the proposed 
regulation and the intent of the Council. Again, the prohibition to 
receive Class B IFQ to anyone with a 10 percent ownership standard has 
far reaching consequences. If the regulation remains unchanged, no 
holder of QS will dare to invest in processing because he will forfeit 
his ability to receive Class B IFQ. CDQ groups wishing to increase 
their participation in crab processing and harvesting will not be able 
to do so. The vessels whose delivery are uncontrolled but have a 
greater than 10 percent ownership share held by a PQS holder are also 
penalized. The regulations should be amended to follow the Council 
intent to utilize the affidavit process to determine control over 
delivery as the basis for allocating Class A and B IFQ.
    Response: Portions of this comment are addressed in the response to 
comment 25. For the allocation of IFQ when the TAC for Bristol Bay red 
king crab or snow crab exceeds the specified amount, the final rule 
specifies at Sec.  680.4(j)(3) that the allocations are made as a 
modified form of Class A IFQ that would not be subject to delivery to 
an IPQ holder, but which still have regional designation requirements 
as provided in Amendment 18. This differs from Class B IFQ, which are 
not subject to regional delivery requirements
    Comment 37: Class B IFQ should not be held by processor-affiliated 
entities. The important point here, as in the case of cooperatives, is 
to achieve, through a definition of ``affiliation,'' a result that is 
consistent with objectives of the both rationalization program and the 
antitrust laws. Class B IFQ provide leverage for harvesters, who must 
bargain in a system which provides 90 percent of IFQ shares are Class A 
IFQ that must be matched to IPQ. This intended leverage on the part of 
harvesters is compromised, if processor-controlled entities hold Class 
B IFQ. However, where a harvester is not controlled by a processor, 
then the rationale for holding Class B IFQ properly applies. The 
commenter believes that skippers and crew members of vessels in which 
there is some, but not controlling, processor interest, should enjoy 
the intended benefit of Class B IFQ.
    Response: The response to this comment is addressed in the response 
to comment 25.
    Comment 38: The test for determining which harvesters are 
ineligible to receive Class B IFQ should be whether a PQS holder, by 
any means whatsoever, controls where the harvester's IFQ are delivered. 
With respect to this test, control should be evaluated on the basis of 
criteria similar to those employed by the MARAD when evaluating 
compliance with the AFA citizenship requirements. By focusing on IPQ 
holder ownership or control of an IFQ holder to the exclusion of other 
factors, the use of the affiliation standard at Sec.  680.2 leaves open 
the possibility that Class B IFQ could be controlled by PQS holders in 
a manner that contravenes the intent expressed in the Council motion.
    In order to fully protect the independence of Class B IFQ, each 
affiliation evaluation should include consideration of indicia of IPQ 
holder control of an IFQ holder and over IFQ delivery. Accordingly, the 
definition of affiliation used at Sec.  680.40(h)(4) should be expanded 
to include indica of direct or indirect control similar to those used 
for evaluating affiliation in the AFA context and control of U.S. flag 
fishing vessels (46 CFR 356.11). In each case, these regulations compel 
a thorough evaluation of both the ownership of an entity and other 
control factors that may permit a non-owner to none-the-less exercise 
control over that entity or its actions. An annual evaluation of this 
control should occur in conjunction with the IFQ application process, 
and subsequent to this application, applicants should be prohibited, 
without prior approval by NMFS, from entering into any relationship 
with a PQS holder or affiliate that modifies the indica of control 
already evaluated.
    Response: The response to this comment is addressed in the response 
to comment 25.
    Comment 39: While the affidavit process does go a long way towards 
defining processor affiliates, an ownership standard is also necessary, 
such as the MARAD's definition of the

[[Page 10188]]

25 percent rule for foreign ownership of U.S. flagged vessels. This 
standard should be adopted in both the issuance of Class B IFQ and 
binding arbitration standards.
    Response: The response to this comment is addressed in the response 
to comment 25. The 10 percent standard for ownership was chosen based 
on the preponderance of its use in Amendment 18 as a means of 
establishing linkages among various entities for a variety of 
applications. This same 10 percent standard was used for analysis in 
the EIS/RIR/IRFA supporting this action.
    Comment 40: The proposed rule at Sec.  680.42(b)(1)(i) could limit 
the benefits from the LLP license buyback to persons that purchased LLP 
licenses after June 10, 2002, that were put over the use caps by the 
buyback. Include a provision that would grandfather any initial 
allocation in excess of the use caps received from LLP licenses 
acquired after June 10, 2002, and prior to the referendum on the 
buyback, to the extent that the allocation would not have been in 
excess of the cap, but for the buyback.
    Response: The comment applies to the final rule at Sec.  
680.42(a)(1)(i), which addressed PQS issuance. Neither the proposed 
rule nor Amendment 18 provided specific guidance on the potential 
implications of the BSAI Crab Fisheries Capacity Reduction Program, or 
the ``Buyback'' on persons who received catch history by transfer of an 
LLP license after June10, 2002, that may result in an increased chance 
of that person receiving an allocation of QS in excess of the use caps 
established at Sec.  680.42(a). Amendment 18 notes that ``a cutoff date 
of June 10, 2002, was established for the QS ownership cap grandfather 
provision.'' Amendment 18 did not provide a specific exemption to this 
cut off date in the case of the Buyback being approved, although the 
Buyback was under development at the time that the Council took final 
action. Additionally, Congressional action on portions of the Buyback 
were approved prior to Congressional action on the Crab Rationalization 
Program.
    However, the legislation that enacted the Buyback required that a 
referendum of eligible voters approve the program before it could be 
enacted. The final results from the referendum were provided on 
November 24, 2004. Prior to this time, it is reasonable to assume that 
an individual would not have known if the Buyback would have been 
approved, or if it would have an impact on the amount of QS a person 
would be issued based on LLP licenses transferred after June 10, 2002. 
This November 24, 2004, deadline is after the publication of the 
proposed rule implementing the Crab Rationalization Program and NMFS 
was unable to incorporate the potential effects of the Buyback in the 
proposed rule because it had not yet been approved by the fleet.
    Due to the lack of clear guidance on this issue in Amendment 18, 
but the potentially adverse and unanticipated effect of the Buyback, 
NMFS may make specific exemptions to the cutoff date in Amendment 18 to 
accommodate transfers that occurred after June 10, 2002 but prior to 
the approval of the Buyback by referendum on November 24, 2004. NMFS 
has modified the final rule at Sec.  680.42(a)(1)(ii)(B) so that any 
person who applies to receive QS based on an LLP license transferred 
after June 10, 2002, but prior to November 24, 2004, will receive the 
amount of QS associated with that transferred LLP license in excess of 
the use cap for that crab QS fishery if that transfer would not have 
resulted in that person exceeding the QS use cap for that fishery if 
the total fishery catch history had not been reduced by the Buyback 
Program.
    Comment 41: The proposed rule does not provide for a modification 
of the QS ownership caps as a result of recently approved crab vessel 
buyback. The purpose of the QS cap was to eliminate speculative 
purchases of QS above a certain level after the Council's motion passed 
in June of 2002. The buyback will have the impact of increasing QS 
holders' percentage ownership by about 10 percent. It was generally 
understood that the buyback would function so that the ownership cap 
would increase by the same percentage as the increase resulting from 
the implementation of the buyback and the final rule should reflect 
this understanding. If not, those who owned QS at the capped level 
would not be able to receive the benefits of the buyback program.
    The buyback was a legal action that took place after the Council's 
June 2002 motion. The agency does have authority to implement 
regulations consistent with the Council's intent. In this case, no 
individual speculated on the purchase of QS that would put them over 
the cap. Instead, an industry approved buyback program resulted in 
every participant that remained in the fishery receiving a greater 
harvest share. It is in full compliance with the Council's intent that 
the QS cap be raised accordingly.
    Response. This response is addressed in the response to comment 40.
    Comment 42: The provisions Sec.  680.40(b)(4)(ii)(B) and (E) of the 
proposed rule prevent the separation of an LLP license from its 
history. The provision should allow separation in the case of a person 
acquiring an LLP license to remain in a fishery (Sec.  680.40 
(c)(1)(vii)). Insert a provision that permits the separation of an LLP 
license from its history to the extent necessary to achieve the purpose 
of Sec.  680.40 (c)(1)(vii) of the proposed rule.
    Response: The commenter is referring to Sec.  680.40(c)(2)(vii) in 
the final rule. This provision was intended to address the limited 
circumstance where a person transferred an LLP license for use on a 
vessel which otherwise would have been qualified to participate in the 
fishery. NMFS composed the proposed rule to limit this provision rather 
narrowly. Amendment 18 notes that ``the underlying principle of this 
program is one history per vessel.'' The specific provision at Sec.  
680.40(c)(2)(vii) is intended as a general exemption to this rule. NMFS 
modified Sec.  680.40(b)(4)(ii)(B) and (E) in the final rule to note 
that this general principle is not applied for purposes of complying 
with Sec.  680.40(c)(2)(vii).
    Comment 43: The provision at Sec.  680.40(c)(1)(vii) permits a 
person that purchased an LLP license to remain in a fishery to use the 
history of the vessel on which the LLP license was used or on which the 
LLP license was based. The requirement that the vessel using the LLP 
license have an interim LLP license could limit the application of this 
provision to situations where multiple license transfers were required 
to comply with vessel length limits on LLP licenses. Remove the 
limitation that the LLP license be an ``interim'' license. The rule 
should be clear that no history may be credited toward two different 
allocations and that only one history may be credited to an LLP 
license.
    Response: Amendment 18 does not explicitly limit the application of 
this exemption to persons with an interim LLP license. NMFS had 
established this limitation in the proposed rule to tightly constrain 
the applicability of this provision to the general rule that there 
should be only one catch history eligible to receive an allocation per 
vessel. NMFS has removed the exemption's limitation that the LLP 
license be an interim LLP license. Additionally, the provision at Sec.  
680.40(c)(2)(vii) clearly states that only one catch history may be 
credited to a person who applies to receive QS with a permanent, fully 
transferable LLP license. The catch history used by that QS applicant 
may be either that derived from that LLP license or the catch history 
from the vessel which that LLP was transferred and used, but not both.
    Comment 44: The January 1, 2002, cut-off date on the provision, in 
the

[[Page 10189]]

proposed rule at Sec.  680.40(c)(2)(vii), that would allow a person who 
applies to receive QS with an LLP license endorsed for a fishery to 
choose to receive the QS based either on the landings made by the 
vessel that was used to qualify for that LLP license or on the landings 
made by another vessel, is arbitrary. The cut-off date is unlawful and 
penalizes LLP license holders who purchased licenses after that date to 
remain in the fishery by not allowing them to receive QS based on the 
more extensive catch history of another vessel. Section 
680.40(c)(2)(vii) should be revised either to strike the January 1, 
2002, date or to accommodate the circumstance of a prospective 
applicant whose interim LLP license was not invalidated, and who did 
not purchase a permanent LLP license, until after that date.
    Response: The January 1, 2002, cut-off date is a provision of 
Amendment 18. Amendment 18 was approved by the Council and codified by 
section 313(j) of the Magnuson-Stevens Act. NMFS does not possess the 
discretion to alter this provision as it exists in statute. Any change 
to this provision requires an amendment to the Program and should be 
addressed with the Council. Therefore, NMFS will not make this change 
in the final rule. The Council did establish a clear control date prior 
to final decision on this Program to prevent speculative behavior by 
interim LLP license holders or those without an LLP license to avoid 
redistributing QS allocations to those who did not have a permanent LLP 
license.
    Comment 45: Clarification of Council intent is necessary to 
determine whether the Council meant to apply the January 1, 2002, cut-
off date to the provision that would allow a person who applies to 
receive QS with an LLP license endorsed for a fishery to choose to 
receive the QS based either on the landings made by the vessel that was 
used to qualify for that LLP license or on the landings made by another 
vessel. Thus, there appears to be considerable uncertainty concerning 
how these exceptions to the general rule are intended to operate.
    Response: NMFS disagrees that clarification of Council intent is 
necessary. Amendment 18 explicitly applies the January 1, 2002, date to 
this provision. Therefore, no uncertainty exists concerning 
implementation of these exceptions to the basis for QS distribution.
    Comment 46: The proposed rule is arbitrary and capricious, does not 
constitute reasoned decision-making, and is not consistent with 
standards for agency action set forth in the APA and judicial decisions 
applying those standards. There is simply no rational connection 
between the cut-off date and the invalidation/purchase criterion 
underlying the exemption, and no explanation was given for denying an 
allocation of QS to persons whose interim LLP licenses were invalidated 
by NMFS, and who thus did not purchase a permanent LLP license until 
after January 1, 2002. The Council selected the January 1, 2002, cut-
off date in substantial part to accommodate the circumstances of a 
particular individual, and did not consider the situation of other 
interim LLP license holders. The Council entirely failed to consider 
that claims for LLP licenses were still pending before NMFS as of 
January 1, 2002, and that interim LLP licenses of some participants 
would not be invalidated until after that date. Further, the cut-off 
date was selected retroactively, and did not give interim LLP license 
holders any notice that their ability to continue participating in the 
fishery would hinge on purchasing a permanent LLP license by a date 
certain.
    Response: This comment has been addressed in a previous response to 
comment 44.
    Comment 47: The January 1, 2002, cut-off date is inconsistent with 
the National Standards for implementing the Magnuson-Stevens Act, in 
particular, National Standard 4. The cut-off date unfairly and 
inequitably denies an allocation of CVO QS to applicants for whom the 
invalidation/purchase trigger of the exemption did not occur until 
after January 1, 2002. It penalizes an LLP license holder who exercised 
its rights under the LLP to appeal an initial administrative 
determination (IAD) by NMFS, but whose appeal was not resolved by NMFS 
until after January 1, 2002. A person who did not appeal an adverse 
IAD, or whose appeal was resolved by NMFS prior to January 1, 2002, may 
receive an allocation of CVO QS under the exemption, but a person whose 
appeal was not resolved until after that date may not. There is no 
rational basis for this distinction.
    Response: This comment has been addressed in response to comment 
44. Additionally, the January 1, 2002 cut-off date is part of Amendment 
18. Section 313(j) of the Magnuson-Stevens Act requires NMFS to 
implement the Program as specified in Amendment 18.
    Comment 48: Principles of equal protection and due process, as 
contained in the Fifth Amendment to the U.S. Constitution, are offended 
by a regulatory system that makes a distinction between similarly 
situated persons on the basis of a arbitrary cut-off date. Persons 
whose interim LLP licenses were invalidated after January 1, 2002, and 
who then purchased permanent licenses to insure that their vessels 
would remain authorized to participate in the fishery, are in the same 
position as persons for whom the invalidation/purchase trigger of the 
exemption occurred prior to that date. The timing of invalidation of an 
LLP license was governed by regulations implementing the LLP and 
largely under the control of NMFS. It simply is not fair to deny an 
allocation of CVO QS to a person based in the fortuitous timing of 
NMFS' decision to invalidate an LLP license. A participant in the 
fishery should not be penalized or denied an allocation of QS because 
it exercised its rights under the LLP regulations to pursue a claim for 
an endorsement but NMFS did not resolve that claim until after January 
1, 2002.
    Response: This comment has been addressed in response to comment 
44.
    Comment 49: The proposed rule at Sec.  680.40 contemplates an 
interim LLP license as a condition for a license history exemption 
contemplated by the Council. By requiring such a license and 
prohibiting the severability of catch history from an LLP license for 
initial allocation of QS, the proposed rule excludes a vessel for which 
there was no such license, but which otherwise would qualify for the 
exemption. The owners of two of the vessels in question were advised to 
obtain a complete LLP package or they would be denied a permanent LLP 
license. They did so, without first being so denied, and thus, were not 
issued an interim LLP License. The Council did not require an interim 
LLP License as a qualification for the history exemption, and it was 
not the intent of the Council to exclude the vessels in question. The 
final regulations should allow the history exemption for the very 
limited number of vessels in question. The commenter estimates no more 
than four LLP licenses will utilize this exemption.
    Response: This comment has been addressed in response to comments 
42 and 43.
    Comment 50: The exception at Sec.  680.40(b)(4)(vii) of the 
proposed rule permitting issuance of QS to persons who made landings 
under an interim LLP license by acquired a fully transferable LLP 
license to preserve their fishing eligibility prior to January 1, 2002, 
should be narrowly construed to permit the intended beneficiaries of 
that exception to take advantage of it, but not allow unintended 
beneficiaries to likewise benefit from the exemption. The commenter is 
opposed to any broader interpretation of this exemption than is 
necessary to give effect to the

[[Page 10190]]

Council's intent and therefore encourages NMFS to strictly construe the 
proposed exemption in accordance with the Council's motion.
    Response: NMFS has revised Sec.  680.40(b)(4)(vii) in the final 
rule to limit the applicability of the provision while meeting the 
intent of Amendment 18. This includes not expanding the dates by which 
the transfer needed to occur, nor the limitation that only one catch 
history may be used for purposes of receiving QS.

Crew Sector

    Comment 51: The provision at Sec.  680.40(b)(2)(i)(B)(2) suggests 
that regional designations apply to CVC QS ``prior to July 1, 2008.'' 
The provision should read, ``on and after July 1, 2008.''
    Response: NMFS agrees and changed the language at Sec.  
680.40(b)(2)(i)(B)(2) to read, ``on and after July 1, 2008.''
    Comment 52: The provisions in the proposed rule at Sec.  
680.40(h)(1) through (7) appear to make no IFQ allocations for CVC QS 
holders prior to July 1, 2008. The CVC IFQ should not be subject to 
region or processor landing restrictions during this time period. The 
provision should make clear that CVC QS holders receive an allocation 
prior to July 1, 2008.
    Response: NMFS agrees and has modified the provisions at Sec.  
680.40(h)(1) through (7) in the final rule to clarify how CVC IFQ 
allocations occur.
    Comment 53: The table at Sec.  680.41(c)(1)(i) in the proposed rule 
is incorrect concerning CVC or CPC in lines (E) and (F). In line (E), 
the initial recipient of QS is not relevant (no provision authorizing 
recipients of an initial allocation to receive shares is included for 
the acquisition of CVC and CPC shares). The only standard for 
eligibility to receive CVC or CPC shares is that the person acquiring 
the shares must be an individual that is a U.S. citizen and an ``active 
participant''. Similarly, in line (F), a cooperative cannot receive 
shares since it doesn't meet those criteria. The line concerning 
cooperative acquisition could be deleted. Alternatively, a cooperative 
could be permitted to receive shares through an individual that meets 
the requirements, if the agency would like to assume the added 
administrative burden of tracking those transactions and performance of 
owner on board requirements. Limit eligibility to receive CVC and CPC 
shares to individuals who are U.S. citizens and ``active 
participants.''
    Response: NMFS agrees and has restructured the table at Sec.  
680.41(c)(1)(v) so that it is clear that a person who wishes to receive 
CVC or CPC QS or IFQ by transfer must be a U.S. citizen, have met sea 
time requirements, and be a recent participant in a crab fishery in the 
365 days prior to applying for the transfer. The regulations at Sec.  
680.41(c)(1)(vi) have been modified so that CVC and CPC IFQ cannot be 
transferred to a cooperative because the regulations at Sec.  680.42 
have been modified so that owner onboard provisions would apply even if 
the CVC of CPC IFQ is being used in a crab harvesting cooperative. It 
should be noted that CVC and CPC IFQ may be used in a cooperative by a 
person who receives CVC or CPC IFQ by transfer and then converts that 
IFQ for use in the cooperative, provided that the owner on board 
provisions for use in a crab harvesting cooperative are met.
    Comment 54: The table at Sec.  680.42(b)(2)(i) specifies the use 
caps for CVC and CPC shares. Under the Council motion, these caps are 
to be equivalent to the CVO and CPO vessel use caps. As written, they 
are equivalent to the individual CVO and CPO use caps (in most cases 
one-half of the correct cap). Revise individual use caps for CVC and 
CPC shares to equal the vessel use caps.
    Response: NMFS agrees, Section 1.8.1.9 of Amendment 18 notes that 
``C share ownership caps for each species are the same as the vessel 
use cap for each species.'' The table at Sec.  680.42(b)(2)(i) in the 
final rule has been modified to correctly reflect Amendment 18.
    Comment 55: An eligible captain, who intended to continue fishing 
but happened to die between seasons of causes unrelated to fishing, 
should qualify to receive CVC QS. The proposed rule is unclear whether 
this is the case. Is it the intent of Amendment 18 and the regulations 
to determine what kind of death will qualify?
    Response: This comment is applicable to regulations at Sec.  
680.40(b)(3)(C)(2) in the final rule. Amendment 18 notes that ``[f]or 
captains who died from fishing related incidents, recency requirements 
shall be waived and the allocation shall be made to the estate of that 
captain.'' Amendment 18 clearly establishes that the limits under which 
the recency requirements to receive CVC or CPC QS can be waived. NMFS 
has interpreted a ``fishing related incident'' as one in which the 
person died while serving as a member of a harvesting crew in any U.S. 
commercial fishery. Section 313(j) of the Magnuson-Stevens Act requires 
NMFS to implement the Program provisions as specified in Amendment 18. 
Any change to this provision requires an amendment to the Program and 
should be addressed with the Council. The rule has not been modified.
    Comment 56: The proposed rule contains many references to CVC 
(Catcher Vessel Crew) QS and CVS (Catcher Vessel Skipper) QS. Table 2, 
Eligibility to Receive Catcher Vessel Crew (CVC) Quota Share (QS) and 
Qualifying Year Periods, in the preamble to the proposed rule, lists 3 
eligibility criteria, the second of which limits QS only to skippers. 
Since only 1 person on each vessel obtained an interim use permit in a 
given fishery, that person must be defined as the skipper. If the 
Council's intent was to award CVC QS to crew members, then it should 
add a phrase in eligibility requirement (2) that says, ``* * * being 
the individual named on a State of Alaska Interim Use Permit [OR BEING 
AN INDIVIDUAL WHO DECLARED TAXABLE INCOME FOR FISHING VESSEL PROCEEDS 
BASED ON IRS FORM 1099 FOR CRAB AND] and who made at least one 
delivery. If the Council's intent was not to award any CVC QS to crew 
members, then it should clarify its intent by requesting the removal of 
all references to CVC QS from Sec.  680, leaving only CVS (Catcher 
Vessel Skipper) QS.
    Response: The terms ``C shares,'' ``Captain's shares,'' and 
``Skipper shares'' are used interchangeably in Amendment 18 to refer to 
QS and IFQ that would be allocated to non-LLP license holders--these 
terms are called CVC and CPC QS and IFQ by NMFS in the final rule. The 
preamble to the proposed rule (69 FR 63201) notes that ``NMFS has 
determined that documentation necessary to allocate Crew QS, called C 
shares by the Council, would require that these shares be issued to 
individuals who hold a State of Alaska Interim Use Permit. Most likely, 
this individual would be the captain; however, the State does not 
require that the holder of the Interim Use Permit be the vessel 
captain.'' The phrase ``crew'' does not imply that persons other than 
those who made legal landings with an Interim Use Permit would qualify 
to receive CVC or CPC QS, and this is the skipper, or captain of the 
vessel in most cases. The rule has not been modified.
    Comment 57: Highline vessel owners expressed concern that awarding 
enough CVC QS to crew members to be consistent with crew share history 
could become too much overhead to vessel operators in the future. This 
is one likely reason that the Council specified that 3 percent of the 
QS be issued to skippers, rather than their historic share of about 15 
percent. In order to accommodate CVC QS for crew as well

[[Page 10191]]

as skippers, without a large negative impact on skippers, it would be 
fairer to allocate an additional maximum 3 percent for crew member 
quotas (CVC QS) qualified by evidence from IRS form 1099. This is 
because the average crew share is about \1/3\ of the average captain 
share, but there about 3 times as many crew as captains. The ratio of 
CVS QS to actual Skipper share for harvest years could be multiplied by 
the actual crew share to determine CVC QS.
    Response: Amendment 18 expressly limits the amount of QS that can 
be issued as CVC and CPC QS to 3 percent of the initial QS pool in a 
crab QS fishery. Issuing more than this amount would directly 
contradict Amendment 18. Section 313(j) of the Magnuson-Stevens Act 
requires NMFS to implement the Program provisions as specified in 
Amendment 18. Therefore, NMFS does not possess the discretion to alter 
the amount of QS that can be issued as CVC and CPC QS as it exists in 
statute. Any change to this provision requires an amendment to the 
Program and should be addressed with the Council. The rule has not been 
modified.
    Comment 58: Awarding crew QS only to interim use permit card 
holders is not fair to crew and captains who may have fished as many or 
more years but had only forms 1099 for evidence. It is also contrary to 
the stated intention that these shares are intended to provide long 
term benefits to captains and crew. Forms 1099 are verifiable evidence. 
To be consistent with the above intention, IRS Forms 1099 should be 
admitted as an alternative eligibility qualifier at Sec.  
680.40(b)(3)(iii). The following wording should be added: 
alternatively, crew may establish eligibility by submitting copies of 
IRS forms 1099 and/or crew settlement sheets for any 5 qualifying 
seasons. This is simple, fair, and consistent with the intention quoted 
above. It provides protection for crewmembers who may rely more heavily 
on crab in the recent years than in the earlier years. One good reason 
for the above intention is dependence on crab for livelihood of current 
crew.
    Response: This comment has been addressed in response to comment 
56. The 1099 IRS form does not indicate that a person made legal 
landings in a crab QS fishery, only that a person earned income in a 
fishery. Such a form is not sufficient for determining whether legal 
landings have been made in the fishery.
    Comment 59: Collateral damage of the crab rationalization will hurt 
most for crewmembers who do not receive CVC QS, who also do not find a 
new job soon. It would be irresponsible for our industry to shift all 
of the cost of retraining, placement, and needs-based care onto the 
Department of Labor and the Department of Health and Social Services at 
the expense of the general taxpayer. Perhaps a portion of the Cost 
Recovery tax can be allocated towards reimbursing these agencies for 
costs of helping unemployed crewmembers.
    Crewmembers have neither unemployment insurance nor a severance 
package. The federal government structured this crab plan in a manner 
that terminates about 1,000 crabbers or 80 percent of the industry's 
work force. They probably earned a modal value of $20,000-$30,000 per 
year crabbing. Most are desirable employees and will find work, but 
some may remain unemployed or underemployed for a long time. The 
taxpayers should not be saddled with having to bear the costs of 
maintaining the thousand crabbers about to be thrown out of work with 
neither severance pay nor unemployment. This burden on the taxpayers 
has not been evaluated, nor has the burden on the crew itself. It is as 
if a giant tax, amounting to a modal value of around $20-30,000 per 
year is taken out of the crewman's pocket and dropped into the pocket 
of the vessel owner. There should be a Federal acknowledgment of 
responsibility for those hurt most by the plan at the end of the 
section on Cost Recovery and Fee Collection.
    Response: The EIS/RIR/IRFA prepared to analyze the effect of 
Amendment 18 did examine the potential effects of this program on crew. 
This rule may result in fewer crew being employed as QS holders 
consolidate their fishing operations for improved economic efficiency--
one of the primary goals of the Crab Rationalization Program. The Cost 
Recovery and Fee Collection portion of this Program is intended to 
offset the administrative costs and provide funds for loans to entry-
level fishermen, including crewmembers who may not have received CVC or 
CPC QS.
    Comment 60: If the crab resource is to be fairly divided among the 
qualifying participants in the fishery, crew must be included. For the 
Council to neglect crew is irresponsible. For as long as crews have 
been crab fishing, a share of the crab resource has been allocated to 
each crewman. Crew's and owners' catch history are inextricably 
intertwined. Each vessel's crew and owners have signed a crew share 
agreement at the start of each fishery that defines the crew's share of 
the resource. The crew invested sweat equity in the operation by 
providing at least 10 days to 2 weeks of skilled services maintaining 
and improving vessels and gear before and after each fishery. As self-
employed individuals, the crew paid their own taxes, expecting no 
fringe benefits normally associated with labor, such as owner 
contributions to health care plans, pensions, or workman's 
compensation. The crew suffered the physical brutality of the fishery 
and put their lives and health at risk whether or not the owner was on 
board. Without good crews and skippers, it was not possible to achieve 
a good catch history. Many vessel owners did not spend any time on the 
Bering Sea during the qualifying years. The crew was there, exposed to 
the elements. Vessel owners choosing to retire would benefit from a 
lower tax bill in the future, and the satisfaction of knowing that 
their net crew allocation provides a fair distribution.
    Response: The effects of this Program on crew members were 
considered during its development by the Council. Please see response 
to comment 59. The distribution of QS among the various participants in 
the crab fisheries was discussed and debated extensively during the 
Program's development. The rule has not been modified.
    Comment 61: While recognizing broad safety, conservation, and 
economic benefits of the rationalization program that is to be 
implemented by the present rulemaking, the commenter is concerned that 
many skippers and crew members in the BSAI crab fisheries will be 
confronted with severe financial dislocation. Adverse consequences will 
arise from fleet consolidation and coordination through IFQ transfers 
and fishing cooperatives, from overwhelming vessel owner control of 
IFQs, and from IPQs. Inevitably, there will be lost employment among 
skippers and crew members, as vessels are retired or otherwise idled by 
cooperative agreements. Furthermore, while those skippers and crew who 
remain in the fisheries will see increased harvests, they will also see 
the resulting benefits flow overwhelmingly to vessel owners and 
processors, not to mention those communities that will enjoy 
development quotas and other, similar advantages.
    Response: This response was addressed in the response to comment 
59.
    Comment 62: There are measures that may be taken by rulemaking, 
consistent with the Program, the Magnuson-Stevens Act, other applicable 
law, that would provide some degree of protection and mitigation for 
skippers and crew members, so that they do not ultimately suffer the 
worst case. IPQs have a demonstrable potential for

[[Page 10192]]

adversely affecting skippers and crews (not to mention, independent 
vessel owners), and that this challenge should be addressed, as 
effectively as the law allows, in the present rulemaking. In short, the 
rulemaking should prevent processors from using the market power 
deriving from IPQs to achieve excessive leverage in price negotiations 
that affect not only vessel owners, but also skippers and crew members. 
Processors must not be provided an opportunity, by virtue of IPQs, to 
engage in the kinds of market-distorting practices proscribed by the 
antitrust laws. There are several, specific areas of concern in the 
proposed rule, with respect to the participation of processors: (1) 
Participation of processor-``affiliated'' entities in cooperatives, (2) 
holding of Class B IFQ by processor-affiliated entities, and (3) 
participation of processors or their affiliated entities in binding 
arbitration.
    Response: The ability of IPQ holders and their affiliates to 
participate in crab harvesting cooperatives, hold Class B IFQ, and use 
the Arbitration System, has been addressed in previous response to 
comments under those subjects, particularly the response to comments 25 
and 164. The final rule, Amendment 18, and the Magnuson-Stevens Act all 
prevent IPQ holders from using the market power deriving from IPQs to 
achieve excessive leverage in price negotiations and to engage in the 
kinds of market-distorting practices proscribed by the antitrust laws. 
Additionally, the economic data collection program was developed to 
allow such analysis in the future.
    Comment 63: Because of the adverse consequences to skippers and 
crew members, and because the rationalization program offers little of 
positive economic value to skippers and crew members, relative to 
vessel owners, processors, and communities, the proposed rule should, 
as a matter of principle, ensure that such value be maximized to the 
extent permitted by the Magnuson-Stevens Act and the Council-approved 
Program.
    Response: This Program was intended to provide additional economic 
benefits and efficiencies to a variety of participants. Achieving 
economic efficiency is one of several goals that this Program is 
mandated to meet under the Magnuson-Stevens Act.
    Comment 64: The Program has ignored the 1,500 to 2,000 crew members 
directly involved in the crab fisheries and has failed to include them 
in the decision-making. Many crew have been involved in crab fishing 
industry for their entire adult life. The crewmembers are directly 
responsible for the catch records on every one of the vessels. The 
Program will create a devastating effect on the livelihood of 50-60 
percent of the fleet's crew. Under the Program, every boat will drop a 
crewmember. Owners with multiple boats will put the IFQ on select boats 
while their other boats pursue other options. Boats will be bought and 
sold for no other reason than to obtain their IFQ. What happens to the 
crewmembers of those vessels? Is it not the responsibility of 
government in a democratic society to make available programs so that 
the people they are putting out of work have the opportunity to seek 
gainful employment in other occupations? Economic stability/benefit is 
a good thing for everyone, however NMFS simply has not considered 
everyone involved. NMFS' analysis regarding the effects of the Program 
on crew members is extremely poor.
    NMFS has taken away our life, our livelihood, everything we depend 
on to live. We may not deserve much but we do deserve to be treated 
fairly by the Federal Government. Owners and processors get a 
percentage of IFQ for nothing, give us a percentage for nothing. Maybe 
buy us out so we can be retrained and enter another occupation.
    Response: In developing Amendment 18, the Council analyzed the 
potential effects of this Program on crew members and provided some 
allocation of QS to crew who have participated in the fishery. The 
distribution of the benefits from the program include a variety of 
industry participants. This Program was developed over a six year 
period by the Council which included input from crew and other industry 
participants. The effects of this Program on crew are discussed 
extensively in the EIS/RIR/IRFA supporting this action.
    Comment 65: It is important that the CVC and CPC QS ownership caps 
in the regulations be listed at the correct levels from Amendment 18, 
which are equal to the use caps for the vessels in all fisheries. For 
example, in the case of snow crab and Bristol Bay red king crab, vessel 
use caps are 2 percent and CVC and CPC QS ownership caps are also 2 
percent.
    Response: NMFS agrees. This comment has been addressed in response 
to comment 54.
    Comment 66: The provision in the proposed rule at Sec.  
680.42(b)(1)(iii) creates ambiguity concerning non-individuals holding 
CVC IFQ and QS. CVC IFQ and QS may be held only by individuals. Limit 
CVC and CPC share holdings to individuals.
    Response: NMFS agrees, the language in the final rule at Sec.  
680.42(b)(1)(iii) has been clarified to note that CVC and CPC IFQ and 
QS may be held only by individuals who are qualified to do so. This 
change better reflects the provisions established in Amendment 18.

Processing Sector

    Comment 67: The proposed rule does not correctly implement the 
Council's intent for this fishery concerning the community of Adak. The 
clear intent of the Council was that 50 percent of the WAI golden king 
crab QS was to be processed in the WAI region. The problem has to do 
with some confusion in the Council's motion because harvesting history 
for WAI golden king crab does not match the processing history and does 
not match the recent golden king crab processing activities in Adak. 
The proposed rule does not meet the Council intent to process 50 
percent of the IPQ in the WAI region. The fact that Adak is excluded 
from the ROFR provision suggests the Council felt ROFR was unnecessary 
because they were guaranteed 50 percent of the WAI golden king crab 
could be processed without IPQ. Another inconsistency is that Adak 
would be precluded from acquiring 50 percent of the IPQ by the 30 
percent ownership cap. If inadequate IPQ is available for lease or 
purchase, the requirement to process 50 percent of the WAI golden king 
crab in the western region can only be achieved by allowing the crab to 
be processed without IPQ.
    Response: Persons who apply for PQS and receive PQS in excess of 
the use caps will be grandfathered in at that amount as long as that 
amount is not based on transfers of processing history after June 10, 
2002. The rule has not been modified. Neither Amendment 18 nor the rule 
require that only one PQS or IPQ holder hold 50 percent of the PQS or 
IPQ in the Western Aleutian golden king crab fishery. The rule 
establishes that 50 percent of the total PQS and IPQ issued in this 
fishery must be processed West of a line at 174[deg] W. longitude, as 
established in Amendment 18. The remaining PQS or IPQ does not have a 
regional designation and may be used West of 174[deg] W. longitude as 
well. Nothing in this rule restricts the use of undesignated PQS or IPQ 
in Adak. In addition, at Sec.  680.40, the final rule requires that 50 
percent of the CVO and CVC QS in the Western Aleutian golden king crab 
fishery be designated for delivery West of a line at 174[deg] W. 
longitude. This provision would not be implemented for CVC QS until 
July 1, 2008, as established under Amendment 18.
    Comment 68: The provision in the proposed rule at Sec.  
680.40(e)(1)(i) and

[[Page 10193]]

(e)(1)(ii)(D) refers to the Total Processing Denominator (TPD) for each 
year. When taken together with the reference to the ``average 
percentage of the TPD for a person'' at (e)(1)(ii)(D), the provisions 
suggest that the ``average annual percentage'' approach to determining 
allocations will be used for processors, which is not correct. Clarify 
method of allocation of processor individual allocations is total 
individual qualified history divided by all qualified history.
    Response: NMFS agrees and has clarified the provisions at Sec.  
680.40(e)(1)(i) and (e)(1)(ii)(D) in the final rule to note that a 
person's initial allocation of PQS is equivalent to that person's total 
qualifying legal processing history divided by all qualified history in 
that crab QS fishery.
    Comment 69: The provision at Sec.  680.42(c)(4) prevents the 
issuance of IPQ in excess of the ``IPQ cap'' in the Bristol Bay red 
king crab fishery and the Bering Sea snow crab fishery. It is very 
confusing to have this provision in the section on ``use limitations'' 
since it is not a use limit, but an allocation limit. The provision 
should likely be moved to Sec.  680.40(h) and/or (i), which concern the 
allocation of Class A IFQ and IPQ.
    Response: NMFS agrees and has moved the provision from Sec.  
680.42(c)(4) to Sec.  680.40(h)(10) and Sec.  680.40(j)(3), IPQ 
issuance limits, to avoid confusion with the use caps at Sec.  680.42.
    Comment 70: The legislation authorizing the program provided at 
section 313(j) of the Magnuson-Stevens Act provides that IPQ should not 
create a right, title, or interest in any crab, until that crab is 
purchased from a fisherman. No similar language appears in the 
regulation. Include the language from the legislation in the regulation 
at Sec.  680.40(l).
    Response: NMFS agrees. Section 680.40(l) notes that the QS and PQS 
permits issued under this Program do not constitute absolute rights to 
the resource. These limitations extend to the IFQ and IPQ resulting 
from the QS or PQS. NMFS modified the final rule at Sec.  680.40(1) to 
more accurately reflect the legislative language at Sec.  313(j)(7) of 
the Magnuson-Stevens Act.
    Comment 71: Section 313(j)(2) of the Magnuson-Stevens Act states 
that if the Secretary determines a processor has leveraged its IPQ to 
acquire Class B IFQ, the processor's IPQ shall be forfeited. If a 
specific regulatory re-statement of the ability of the Secretary to 
forfeit IPQ held by a processor that have acquired Class B IFQ is not 
included in the proposed rule, it should be included in the final rule.
    Response: The regulatory text in the final rule at Sec.  680.7(f) 
states that it is a prohibition to use IPQ to acquire an interest in 
Class B IFQ. The specific requirement to forfeit those shares would be 
determined after investigation by NOAA Enforcement. Nothing in these 
regulations restricts the ability of NOAA Enforcement to require 
divestiture of PQS or IPQ if a person leveraged IPQ to acquire 
ownership interest in Class B IFQ.
    Comment 72: Section 680.42(b)(2) creates an ambiguity concerning 
individuals holding PQS and IPQ being exempt from the cap. Only 
corporations and other non-individuals that directly hold PQS and IPQ 
are exempt from this cap. In addition, the exemption should be limited 
under the cap described at (b)(4), not generally. Section 680.42(b)(2) 
should read, ``Except for corporations and other non-individuals as 
provided at (b)(4) and CDQ groups as provided for at (b)(3).''
    Response: NMFS agrees. These comments now refer to the final rule 
at Sec.  680.42(a)(2). Amendment 18 notes that ``[a]ll individuals and 
subsidiaries will be subject to the general caps on QS holdings.'' NMFS 
modified the final rule at Sec.  680.42(a)(2) so that it is clear that 
except for corporations and other non-individuals and CDQ groups, the 
general cap that applies to QS and IFQ use would apply. This means that 
individuals that are holders of IPQ, or an affiliate, but not a direct 
corporate entity holding PQS would be subject to the QS and IFQ use 
caps at Sec.  680.42(a)(2)(i).
    Comment 73: (C48-80) For PQS holders, the AFA-style 10 percent 
limited threshold rule is used for determining compliance with the 
vertical integration cap on IFQ holdings. Under this approach all QS 
and IFQ holdings of the holder of the PQS and all of its affiliates are 
counted toward the cap. The application of this rule is not clear from 
the proposed rule at Sec.  680.42(b)(4). A second issue arises in this 
provision of the regulation because this is an additional cap to the 
cap at Sec.  680.42(b)(2)(i). This cap supersedes the cap at Sec.  
680.42(b)(2)(i) only for a corporation or other non-individual directly 
holding the PQS. In other words, all individuals will still be subject 
to the individual caps at Sec.  680.42 (b)(2)(i). Clarify the method of 
calculating holdings and the application of the cap and the limited 
exemption.
    Response: NMFS agrees and has modified the final rule at Sec.  
680.42(a)(4) accordingly. Amendment 18 notes that ``[v]ertical 
integration ownership caps on processors shall be implemented using 
both the individual and collective 10 percent minimum ownership 
standards for inclusion in calculating the general cap'' which is 
``similar to the AFA common ownership standard used to implement 
ownership caps.'' The intent behind these phrases are clarified in the 
EIS/RIR/IRFA. This approach would function so that a non-individual 
person that holds PQS would be limited to a QS and IFQ cap that would 
be calculated based on the sum of all QS or IFQ held by that PQS holder 
and all QS or IFQ held by any entity that is affiliated with that PQS 
holder. This method would comply with the Council's intent in this 
provision that a corporate entity would have an exemption but that 
entities linked to that PQS holder through common ownership would be 
considered as holding QS or IFQ for purposes of applying this higher 
cap. The commenter is correct in that the use caps at Sec.  
680.42(a)(1)(i) would apply to all individuals, or other entities that 
do not hold PQS. Section 680.42(a)(4) has been modified.
    It should be noted that this ``AFA 10 percent threshold'' method of 
computation is used only for purposes of computing the amount of QS and 
IFQ holdings that apply to QS and IFQ use caps for non-individuals that 
hold PQS. In the case of individuals who hold PQS, other persons that 
hold QS or IFQ but not PQS, or CDQ groups, QS and IFQ use caps are 
computed using an ``individual and collective'' rule. Under this 
standard, the amount of QS or IFQ that is computed as applying to a 
person is equal to the sum of the QS or IFQ held by the person and an 
amount equal to the percentage of holdings by that person in any entity 
in which that person has an interest. As an example, if an individual 
held QS and a 20 percent interest in another entity that held QS, the 
``individual and collective'' rule would sum the holdings by that 
individual and 20 percent of the QS holdings by the other entity for 
purposes of computing how much QS that individual could hold. The same 
method would be used for IFQ holdings and IFQ use cap calculation. This 
``individual and collective'' standard is similar to the one applied in 
the halibut and sablefish IFQ program for computing QS use caps under 
that program. The ``individual and collective'' rule does not require 
that a minimum of 10 percent ownership be triggered to count any 
collective holdings by a person.
    Comment 74: Caps on PQS and IPQ should use the AFA-style 10 percent 
limited threshold rule, not the individual and collective rule. Under 
this approach all PQS and IPQ holdings of the holder of the PQS and all 
of its affiliates are counted toward the cap.

[[Page 10194]]

The application of this rule is not clear from the proposed rule at 
Sec.  680.42(c)(1). Clarify the method of calculating holdings.
    Response: NMFS agrees. The comment now refers to the final rule at 
Sec.  680.42(b)(3). Amendment 18 notes that ``PQS ownership caps should 
be applied using the individual and collective rule using 10 percent 
minimum ownership standards for inclusion in calculating the cap.'' The 
application of this standard is similar to that which is being used in 
the application of the rule for calculating the amount of QS or IFQ 
that can be used by a non-individual that holds PQS. This approach 
would function so that a non-individual person that holds PQS would be 
limited to a PQS and IPQ cap that would be calculated based on the sum 
of all PQS or IPQ held by that PQS holder and all PQS or IPQ held by 
any entity that is affiliated with that PQS holder. This method would 
comply with the Council's intent that PQS or IPQ holder through common 
ownership would be considered as holding PQS or IPQ for purposes of 
applying the PQS use cap to that person at Sec.  680.42(b)(3).
    Comment 75: Processing quota share, at Sec.  680.40(e) of the 
proposed rule, is also calculated as a simple average, when Council 
intent was a weighted average. Total Processing Denominator 
(denominator is defined as ``pounds * * * in each qualifying year'') 
appears to be an annual number. Both the pounds for each person and 
pounds for the TPD should be summed over the history years, and then 
divided to obtain the percentage.
    Response: The response to this comment has been addressed in 
response to comment 68.
    Comment 76: Cooling-off period waiver in the proposed rule, at 
Sec.  680.42(c)(5), should be brought into compliance with Amendment 
18. The ECC may not waive the cooling-off period, even for a temporary 
move. The ECC may waive the ROFR after the two-year period expires, as 
specified in the Council motion on civil contract terms for ROFR. 
Amendment 18 allows a community group or CDQ group to waive any right 
of first refusal.
    Response: The cooling off period established in Amendment 18 is 
reflected in the final rule at Sec.  680.42(b)(4). The ``cooling off'' 
period that is established is based on the language used in Amendment 
18. A community as defined for the ``cooling off'' period cannot waive 
the cooling off period, and nothing in these regulations would permit 
them to do so. An IPQ holder may use IPQ outside of a community during 
the ``cooling off'' period only under the limited exemptions provided 
by Amendment 18 and in Sec.  680.42(b)(4) for a small amount of IPQ and 
to address unforseen circumstances.
    Comment 77: Council intent was that any PQS earned based on 
processing history in the West region would be designated as west 
region PQS. However, the regulations at Sec.  680.40(e)(2) state that a 
person will receive only west PQS if, at the time of the application, 
that person owns a crab processing facility that is located in the West 
region.
    Response: Amendment 18 notes that the allocation of West regionally 
designated PQS in the WAG crab QS fishery would be made to ``to 
participants with processing facilities in the West.'' This statement 
is distinct from the criteria used in designating the allocation of PQS 
in the other fisheries. The allocation criteria here are explicit in 
that the allocation of West region QS is based on the ownership of a 
processing facility in the West region, and NMFS has determined this to 
mean ownership of a processing facility in the West region at the time 
of application. The rule has not been modified.
    Comment 78: Public Law 108-199 Section 801(j)(6) states that the 
Secretary may revoke any IPQ held by any person found to have violated 
a provision of the antitrust laws of the United States. If a specific 
regulatory re-statement of the ability of the Secretary to revoke IPQ 
held by a person found to have violated antitrust law is not included 
in the proposed rule, it should be included in the final rule.
    Response: NMFS does have the ability to revoke any IPQ held by a 
person that has violated an antitrust law of the United States as 
granted by this provision. This statutory authority was not part of the 
proposed rule but is an authority that exists under section 313(j) of 
the Magnuson-Stevens Act. An explicit regulatory statement was not 
placed in the proposed rule because it was not deemed necessary to 
reiterate the authority that NMFS has to revoke IPQ under these 
conditions. The rule has not been modified, but NMFS has the statutory 
authority to revoke IPQ for antitrust violations if necessary after 
review under the Magnuson-Stevens Act.
    Comment 79: The Council motion recommends that NOAA Fisheries award 
PQS to processors that purchased crab during the relevant processing 
history years based on the entity that signed the fish ticket and did 
not base the award of PQS on the location where the crab was physically 
processed. The Council recognized and acknowledged the use of custom 
processing and the regulation correctly reflects that Council intent in 
its definition of the initial award of PQS. The regulations do not 
specify how custom processing affects processor use caps; IPQ 
transfers; and community protection provisions. We believe that in 
order to achieve the efficiencies envisioned, custom processing will be 
used extensively in the future. Therefore we believe the final rule 
should treat custom processing as follows: Custom Processing and IPQ 
leasing should each be counted against the use cap of the processor 
doing the physical processing. For example, PQS holder X holds IPQ and 
purchases crab, which is processed by PQS holder Y. PQS holder X is 
subject to the use cap because it holds the IPQ. Processor Y's use cap 
calculation should include both its own IPQ and the amount that it is 
physically processing for PQS holder X.
    Response: Amendment 18 notes that ``limits on ownership and use 
would count any crab custom processed by a plant toward the cap of the 
plant owner. The application of the cap to custom processing is 
intended to prevent consolidation which could occur if custom 
processing is not considered.'' The proposed rule does not require that 
the processing which is occurring at a facility be counted against the 
owner of the facility if the owner also holds IPQ. Under Amendment 18, 
any IPQ that is ``custom processed'' at a facility would be counted 
against both the IPQ holder (the custom processor) and the IPQ holder 
that owns the facility. This accounting is potentially problematic in 
that there may be cases in which a processing facility is owned by 
multiple IPQ holders, or is not owned by an IPQ holder at all. In cases 
of multiple IPQ holders owning a processing facility, it is not clear 
whether the amount of IPQ crab custom processed at a facility would be 
counted against all IPQ holders on a pro rata basis, or in proportion 
to their ownership in the processing facility. It would also create a 
situation where IPQ use would be ``double counted'', resulting in less 
IPQ being available to Class A IFQ holders that is needed.
    To implement this provision of Amendment 18, NMFS modified the 
final rule at Sec.  680.7(a)(7) to note that no IPQ holder may use more 
IPQ crab than the maximum amount of IPQ that may be held by that person 
including all crab that are received by any RCR at any shoreside crab 
processor or stationary crab processor in which that IPQ holder has a 
10 percent or greater direct or indirect ownership interest. Therefore, 
a person that holds IPQ is limited to an

[[Page 10195]]

IPQ use cap based on: The sum of all IPQ held by that IPQ holder and 
all IPQ held by any entity in which that PQS holder has a 10 percent or 
greater direct or indirect ownership interest; and any IPQ crab that is 
received at a shoreside crab processor or stationary floating crab 
processor owned by that IPQ holder.
    Ownership of a processing facility is defined as having a 10 
percent or greater direct or indirect interest in the processing 
facility. This modification better comports with the intent of 
Amendment 18. NMFS will not directly collect ownership information on 
processing facilities, however, any IPQ holder that owns a processing 
facility is responsible for maintaining records adequate to ensure that 
the IPQ use caps are not exceeded through custom processing 
arrangements established by IPQ holders that also own processing 
facilities. NMFS will be able to account for processing facility 
ownership using the EDR required under this Program, should a specific 
facility or IPQ holder need to be investigated.
    In addition, NMFS has added a prohibition to the final rule at 
Sec.  680.7(a)(8) so that in those cases where a processing facility is 
not owned by an IPQ holder, no RCR or group of RCRs may receive more 
than 30 percent of the IPQ in any crab QS fishery at any shoreside crab 
processor or stationary crab processor. This limitation meets the 
requirements of Amendment 18 to limit the amount of processing that 
could be done at any one facility and limits the ability for IPQ 
holders to simply divest themselves of ownership in a processing 
facility as a means of avoiding the limitations on IPQ use through 
custom processing arrangements.
    Comment 80: Lease of IPQ or physical processing outside the 
community should each count for purposes of community protections and 
should require agency transfer approval.
    Response: Use of IPQ outside of an ECC would be considered as 
subjecting those IPQ shares and the underlying PQS to the cooling off 
and ROFR provisions as revised in this final rule. Any transfer of IPQ 
for use outside of that ECC subject to the cooling off provision or 
ROFR would need to be approved by NMFS under the current regulations. 
The rule has not been modified.
    Comment 81: Processor interests should be made entirely transparent 
to authorized fisheries managers and enforcement officials, as well as 
to the antitrust authorities, and all available tools for preventing 
and punishing anti-competitive processor behavior should be employed 
aggressively. The important safeguards contemplated by the Magnuson-
Stevens Act and the antitrust laws, and reflected in the proposed rule, 
should be preserved.
    Response: This Program requires extensive reporting of data by both 
harvesters and processors in order to ensure that existing antitrust 
laws are not violated and that the goals of this Program are met. These 
data can be used to investigate activities of concern.
    Comment 82: The allocations of PQS are not equitable because 
processors with history processing crab in Alaska that do not meet the 
eligibility qualifications at Sec.  680.40(d)(3) would not receive PQS. 
Specifically, if a processor lost its facility due to fire, and did not 
make $1,000,000 worth of improvements to that facility, it would not 
qualify for the hardship exemption for eligibility at Sec.  
680.40(d)(3)(ii)(B). These regulations eliminate competition and 
prevent boats from delivering to a native-Alaskan owned processor with 
a long history of processing crab in the BSAI area.
    Response: NMFS encourages all processors to complete an application 
for QS or PQS. The eligibility requirements in the regulations are 
provisions of Amendment 18. Section 313(j) of the Magnuson-Stevens Act 
requires NMFS to implement the Program provisions as specified in 
Amendment 18.
    Comment 83: The unique concentration of PQS holders in the golden 
king crab fishery presents a problem in terms of economic efficiencies 
the Program envisioned for processing in small fisheries. Two 
processors will receive greater than three-quarters of the initial PQS 
pool in the EAI golden king crab fishery, creating a problem with the 
30 percent use cap. This is similar to the snow crab fishery where a 
few processors will hold north region PQS. In that case, the Council 
allowed an IPQ use cap up to 60 percent of the IPQ issued with a north 
region designation. The commenter requests an amendment that allows for 
an IPQ use cap of 60 percent of the IPQ issued in the EAI golden king 
crab fishery. This would allow processors to achieve efficiencies 
envisioned by the Program.
    Response: Persons who apply for PQS and receive PQS in excess of 
the use caps will be grandfathered in at that amount as long as that 
amount is not based on transfers of PQS catch history after June 10, 
2002. The rule has not been modified.

Crab Harvesting Cooperatives

    Comment 84: The requirement at Sec.  680.21 of the proposed rule, 
that prohibits participation in crab fishery cooperatives by a QS 
holder who also holds PQS or IPQ, is affiliated with holders of PQS or 
IPQ, processes Class B IFQ, or is affiliated with a person that 
processes Class B IFQ, is overly restrictive and does not meet the 
intent of the overall Crab Rationalization program. Section 680.21 
assumes that ``harvest cooperatives'' under the Council motion are 
intended to be FCMA cooperatives. This interpretation appears to have 
led NMFS to conclude that any processor affiliated QS holder could not 
join a cooperative. The Council motion intended cooperatives for the 
limited purpose of coordinating harvest activity to allow all holders 
of harvest shares to achieve efficiencies and should not require FCMA 
qualification. We also note that the December 3, 2004, memorandum of 
NOAA General Counsel on Harvesting Cooperatives under the Crab 
Rationalization Program clarifies that the cooperative system intended 
by the Council can be implemented consistent with antitrust law, 
providing NMFS with the latitude to address this critical flaw.
    It is by no means clear that the Council, or the Congress, intended 
that cooperatives for BSAI crab harvesting should be only those as 
provided for in the FCMA for joint marketing purposes, as prescribed in 
the proposed rule at Sec.  680.21. The language of the Council motion 
distinguishes and requires FCMA cooperatives in the arbitration 
program, the only portion of the motion in which a cooperative would 
engage in negotiation. In the arbitration section of the motion, FCMA 
cooperatives are distinguished as the only cooperatives that may 
negotiate on behalf of their members. In addition, the motion 
specifically identifies the role of its harvest cooperatives. The 
Council motion establishes a ``harvesting cooperative'' that is 
intended to coordinate harvests of its members' IFQ to achieve 
efficiencies in the fisheries. The terms that govern these harvesting 
cooperatives are delineated in the Council motion. The motion and 
clarification describe a system of coordination of harvests that would 
be used to pursue fleet consolidation. Similarly, the clarification 
describes systems of leasing and use of allocations. No mention of 
marketing or negotiation activities is made in either the motion or 
clarifications.
    The Council envisioned all crab harvesting vessels having the 
opportunity to form harvesting cooperatives to achieve the benefits of 
fleet consolidation through the operation of leasing and transferring

[[Page 10196]]

crab harvesting quota share among the cooperative members. In fact, the 
Council motion encourages the formation of harvesting cooperatives by 
including incentives such as exemption from individual use caps for 
cooperative members and by allowing only cooperative members the 
ability to lease quotas five years following implementation of the crab 
rationalization regulations. The only distinction is that affiliated 
vessels cannot participate in price formation. It is critical to note 
that non-FCMA operational cooperatives, comprised of non-processor 
affiliated vessels, processor-affiliated vessels and processors, were 
envisioned by the Council to maximize operational efficiencies and net 
national benefits, and to broadly distribute those rationalization 
benefits across harvesters, processors and fishery-dependent Alaska 
coastal communities.
    Participants in both federal and state crab rationalization working 
groups have always proceeded with an underlying assumption that all 
harvesters--both affiliated and non-affiliated--would be allowed to 
join harvesting cooperatives to achieve efficiencies and lessen the 
enforcement burden. Also, as the Council reiterated at its December 
2004 meeting, it intended for all crab harvesting vessels to have the 
option to join crab harvesting cooperatives.
    Given the limited scope of harvest cooperative actions and the 
distinction of FCMA cooperatives in the arbitration provisions of the 
motion, harvest cooperatives should not be required to be FCMA 
cooperatives and NMFS should remove requirement that harvest 
cooperatives be FCMA cooperatives.
    The proposed rule has taken a conservative, zero-risk approach to 
antitrust that is inconsistent with Council intent. In so doing, the 
proposed rule, at Sec.  680.21, defines the entire universe of 
cooperatives as only program-compliant FCMA (bargaining) cooperatives 
that need limited antitrust exemption. The preamble explains the 
proposed rule's cooperative membership restriction is due to Congress' 
inclusion in its codification of the Council plan amendments, that 
nothing in their approval shall be construed to create an implied or 
explicit exemption from the antitrust laws and regulations. The 
proposed rule interpreted that statutory language to mean that the only 
cooperatives available to the crab harvesting vessels are those allowed 
under the FCMA.
    The justification in the proposed rule, at Sec.  680.21, for FCMA 
status is flawed. The proposed rule claims crab harvesting cooperatives 
are FCMA cooperatives because they combine and collectively manage 
their crab IFQ. This claim in untrue. All crab harvesters receive QS 
prior to forming a cooperative. The QS for each participant in a 
harvesting cooperative has been decided and NOAA will issue the QS. The 
cooperative members will not do the segmentation of the crab resource. 
They need no FCMA limited antitrust exemption to collectively catch 
because such activity is not engaged in market segmentation. They only 
need FCMA protection when engaged in collective bargaining or binding 
arbitration. Additionally, NMFS' position in the proposed rule ignores 
the fact that antitrust law already applies to all industry 
participants, that this fact was reiterated in Senator Stevens' 
statutory language, and that the simplest way to avoid any additional 
concerns would simply be to create a rule prohibiting any affiliated 
vessel from participating in price negotiations. The current regulation 
disregards the critical distinction in the Council's motion between 
FCMA cooperatives and non-FCMA harvesting cooperatives, treating all 
cooperatives as FCMA cooperatives and thereby limiting the ability of 
processors and their affiliates to realize the benefits of coordination 
of harvest activity that could be achieved through the harvest 
cooperative structure the Council has developed. The final regulations 
should be amended to allow the fullest participation possible by 
processor affiliated vessels in crab harvesting cooperatives so that 
each crab QS holder is able to meet the goals of crab rationalization.
    The penalties imposed on the processor-affiliated vessels 
prohibited from cooperative participation under the proposed regulation 
are severe. Requiring crab harvesting cooperatives to be FCMA 
cooperatives causes the following problems: (1) Fishermen that cannot 
join a cooperative because of their affiliated partners are severely 
disadvantaged from their fellow fishers; (2) without the ability to 
form cooperatives, many of the benefits of the entire rationalization 
program will be lost to many vessels which find themselves, in one way 
or another affiliated with a processor; and (3) vessels that are 
affiliated with processors would be unfairly penalized by not being 
allowed to ``stack'' their quota on vessels, be restricted to vessel 
use caps, and face more restrictive transfer provisions. Such vessels 
will not be able to achieve the operational efficiencies intended by 
cooperatives such as lower operational costs (dramatic savings on fuel, 
harvesting equipment, insurance), higher product recovery rates, higher 
quality and more diverse finished products, reduced bycatch of non-
target species, and reduced environmental impact. Additionally, 
processors and processor-affiliated vessels would not be allowed to 
receive Class B IFQ. Other lost rationalization benefits include: 
improved management capability for harvests resulting in overage/
underage; improved management capability for dealing with sideboard 
limitations; reduced administrative and enforcement costs; and improved 
safety (fewer and safer vessels fishing). The Council did not intend 
these benefit deprivations that derive from the errant definition of 
``cooperatives'' used in the proposed rule.
    We believe requiring all cooperatives to be FCMA cooperatives is 
neither warranted nor encouraged by antitrust law. We believe 
harvesting cooperatives can include vessels affiliated with holders of 
PQS. The antitrust laws are intended to prohibit anti-competitive 
behavior among competitors. Such conduct typically includes agreements 
among competitors to (a) increase prices or (b) reduce output in order 
to increase prices. At the same time, the antitrust laws encourage 
business to achieve efficiencies by lowering costs. Crab harvesting 
cooperatives and the harvesting allocation agreement among vessels, 
(including vessels affiliated with PQS holders) are not anti-
competitive. They do not reduce output and are incentivized to maximize 
their production. A harvesting cooperative will simply divide the 
harvest of its government allocated QS in a manner to maximize 
efficiency. The efficiencies are reflected in lower operational costs 
(dramatic savings on fuel, harvesting equipment, insurance), higher 
product recovery rates, higher quality and more diverse finished 
products, improved safety, reduced bycatch of non-target species, and 
reduced environmental impact.
    Given that the antitrust laws do not summarily condemn, and, 
indeed, encourage, cooperatives, associations, and other joint ventures 
that, as here, do not involve price fixing or other plainly anti-
competitive practices, adopting a proposed rule that imposes a per se 
ban on such cooperatives in the BSAI is without justification. That is 
especially so in this instance because the underlying rationale for 
such a ban is the mistaken notion that such cooperatives in fact 
violate--or at least pose a significant risk of violating--the 
antitrust laws. For this reason alone, the proposed rule should not 
prohibit crab

[[Page 10197]]

processor-affiliated participation in crab harvesting cooperatives, as 
defined by the rule.
    Participation of processor-affiliated entities in cooperatives 
should be permitted only where there is no price negotiation, that is, 
only in cooperatives that are established solely for operational 
fishing purposes. Processor affiliated vessels that form ``non-FCMA'' 
cooperatives should be prohibited from participating or voting in the 
price formation process under the Binding Arbitration system. In other 
words, participation in cooperatives authorized by the FCMA must be 
restricted to entities that are not affiliated with processors. By this 
means, the safety, conservation, and economic efficiency objectives of 
the rationalization program can be realized through operational 
cooperatives, without compromising competition that is the purpose of 
the antitrust laws to protect, or reducing the market leverage accorded 
harvesters not controlled by processors through FCMA cooperatives.
    Section 680.21(b)(3) of the proposed rule that requires crab 
harvesting cooperatives to be established under the FCMA was based on 
antitrust concerns. However, a cooperative formed for the purposes of 
making harvesting more efficient would by analyzed under the ``rule of 
reason'' antitrust doctrine. Under this doctrine, a cooperative would 
be legal unless the pro-competitive benefits of the venture and its 
practices are outweighed by the anti-competitive effects that the 
arrangement cause.
    Harvesting cooperatives that include vessels affiliated with 
processors greatly increase the efficiency of harvesting crab and pose 
no threat to competition. Simply put, excluding processor affiliated 
vessels from the ability to join cooperatives would deny a substantial 
percentage of the fleet many of the benefits contemplated by 
rationalization. As long as processor affiliated vessels are not 
involved in the negotiation of prices with the processor to whom they 
are affiliated, there is no anti-competitive impact from these 
cooperatives.
    Non-FCMA operational cooperatives need no limited antitrust 
exemption because they involve neither market segmentation nor price 
formation and they pose no significant anti-competitiveness risks. 
Segmentation in the form of crab IFQ and IPQ occurred by statute, 
unlike the Pacific whiting cooperatives or AFA cooperatives, in which 
segmentation (issuance of IFQ) was conditional on cooperative formation 
and collective catching behavior. Therefore, we urge that the 
regulations be modified to allow processor affiliated vessels to be 
members of crab harvesting cooperatives.
    In light of the explicit Congressional intent that crab harvesting 
cooperatives not be given a special antitrust exemption, non-FCMA 
cooperatives must be strictly scrutinized to ensure compliance with 
applicable antitrust laws. As is the case for AFA catcher-vessel 
cooperatives, crab harvesting cooperatives whose membership includes 
one or more affiliated harvesters should be required to seek and obtain 
a favorable business review by the Department of Justice, Antitrust 
Division. However, because (unlike under the AFA) there is no argument 
that crab harvesting cooperatives have special status under antitrust 
laws, non-FCMA harvesting cooperatives should also be subject to 
initial and on-going scrutiny that is more stringent than that applied 
to AFA cooperatives.
    The regulations should allow other forms of cooperatives, subject 
to review by the Department of Justice. In the first year of the crab 
harvesting cooperatives' existence, NMFS should condition the 
allocation of IFQ to a non-FCMA cooperative on that cooperatives' 
submission of a business review request to the Justice Department, and 
should require a copy of the business review request be submitted to 
NMFS with the cooperative's IFQ application. In subsequent years, the 
cooperative should be required to provide evidence of a favorable 
business review and should also provide both the Department of Justice 
and NMFS with prompt notice of any changes in its membership, 
governance, or activity. Finally, since non-FCMA cooperatives are not 
entitled to any antitrust exemption, the final rule should contain an 
explicit acknowledgment that NMFS's allocation of IFQ to a cooperative 
whose membership includes one or more affiliated harvesters in no way 
constitutes a determination that the cooperative was formed or is 
operating in compliance with applicable antitrust law. NMFS's 
allocation activity would not therefore provide a cooperative with an 
affirmative defense against antitrust liability, and the cooperative 
and its members would bear full responsibility for any violation of 
antitrust law.
    The two types of cooperatives intended by the Council should be 
defined in the regulations at Sec.  680.2: (1) For program-compliant 
FCMA cooperatives, a definition of voluntary cooperatives consisting 
only of harvesters with no affiliation to processors that are organized 
for the purpose of bargaining and negotiating price, per the Council 
intent, and (2) for program-compliant non-FCMA cooperatives, a 
definition of voluntary cooperatives consisting of harvesters that are 
not affiliated with processors, processor-affiliated harvesters and one 
or more processors. The purpose of the second type of cooperative is to 
capture operational efficiencies in harvesting and processing, and to 
broaden the rationalization benefits to both sectors, per the Council 
intent. Inclusion of program-compliant non-FCMA cooperatives will 
require modifying some text throughout the regulations, especially at 
Sec.  680.21, in order to correctly explain the intended program 
operation and benefits.
    Response: NMFS has removed the requirement that crab harvesting 
cooperatives under Sec.  680.21 be FCMA cooperatives and has modified 
the structure of the crab harvesting cooperative regulations to allow 
the formation of crab harvesting cooperatives by affiliated entities 
for the sole purpose of harvesting their crab IFQ. NMFS also has added 
regulatory definitions of crab harvesting cooperatives and FCMA 
cooperatives to Sec.  680.2 of the final rule. The final rule, at Sec.  
680.21, continues to require FCMA cooperatives for the price 
arbitration system.
    The rationale for the proposed requirement that crab harvesting 
cooperatives under Sec.  680.21 be FCMA cooperatives is provided in the 
preamble to the proposed rule (69 FR 63226-63227). Subsequent to 
publication of the proposed rule, NMFS determined that affiliated 
harvesters could form an association to pool their crab QS and harvest 
the QS from one vessel with the likelihood that such activity would not 
violate the antitrust laws. Under the ``Antitrust Guidelines for 
Collaboration Among Competitors,'' issued by the Department of Justice 
(DOJ) and the Federal Trade Commission (FTC), affiliated and non-
affiliated harvesters could pool their crab QS and harvest it from one 
vessel with the likelihood that such activity would not be an antitrust 
violation as long as the activity of the cooperative promotes 
efficiency, does not have an anti-competitive effect, and is otherwise 
found to comply with the guidelines.
    NMFS has decided that allowing holders of QS/IFQ that also holds 
PQS/IPQ or are affiliated with holders of PQS/IPQ to join crab 
harvesting cooperatives complies with Amendment 18 and Council intent 
in designing the Program. With this change, more participants will be 
able to participate in crab harvesting cooperatives for the

[[Page 10198]]

purpose of harvesting their IFQ and benefit from efficiencies gained 
through cooperatives.
    NMFS agrees with the commenters that crab harvesting cooperatives 
that are not formed in accordance with the FCMA will not benefit from 
the antitrust immunity FCMA cooperative formation provides. Some 
activities by members of non-FCMA crab harvesting cooperatives could, 
under some circumstances, violate the antitrust laws. NMFS recognizes 
that withdrawing the requirement that crab harvesting cooperatives be 
formed under the FCMA will increase the risk of possible antitrust 
violations for the participants in the crab rationalization program who 
are not members of an FCMA cooperative. Therefore, NMFS strongly 
encourages members of non-FCMA crab harvesting cooperatives to consult 
counsel before commencing any activity if the members are uncertain 
about the legality under the antitrust laws of the crab harvesting 
cooperative's proposed conduct. NMFS has included a sentence in the 
final rule that includes this recommendation at Sec.  680.21, as well 
as a statement that issuance by NMFS of a crab harvesting cooperative 
IFQ permit to a crab harvesting cooperative is not a determination that 
the crab harvesting cooperative is formed or is operating in compliance 
with antitrust law at Sec.  680.21(b)(3).
    Although NMFS has included this precautionary advice in the 
preamble and the final rule, NMFS declines to include regulatory 
requirements conditioning the allocation of IFQ to a non-FCMA 
cooperative on the submission of a business review letter request to 
DOJ in the final rule as the commenters suggest. NMFS has determined 
that such regulations would impose unnecessary administrative burdens 
on the public, NMFS, and the DOJ.
    Comment 85: The provision at Sec.  680.21(b)(3) prohibits PQS and 
IPQ holders and their affiliates to join crab harvesting cooperatives. 
This limits the ability of vertically integrated harvesters to achieve 
harvest coordination efficiencies.
    Response: NMFS agrees, and for the reasons described in the 
response to comment 84, has removed this prohibition in the final rule.
    Comment 86: The prohibition at Sec.  680.21(f)(4) on crab 
harvesting cooperative members holding or transferring PQS and IPQ is 
likely to limit the achievement of efficiencies in the fisheries for a 
substantial number of vertically integrated share holders. This 
provision is unnecessary, if crab harvesting cooperatives are not 
required to be FCMA cooperatives. Remove the prohibition on crab 
harvesting cooperative members holding or acquiring IPQ and PQS.
    Response: NMFS agrees, and for the reasons described in the 
response to comment 84, has removed this prohibition from the final 
rule.
    Comment 87: In the proposed rule, at Sec.  680.21(f)(4), all non-
affiliated cooperatives must be FCMA cooperatives and members may not 
hold or acquire IPQ. The reason for this is that the harvester 
Arbitration Organization and a collective bargaining cooperative is an 
FCMA cooperative and may be exposed to antitrust violation if this 
provision is removed.
    Response: NMFS agrees that members of FCMA cooperatives may not 
hold or acquire PQS or IPQ and that only FCMA cooperatives can 
participate in collective negotiation. However, NMFS has removed the 
requirement that crab harvesting cooperatives under Sec.  680.21 must 
be formed in accordance with the FCMA. See response to comment 84.
    Comment 88: FCMA cooperatives are allowed under cooperative law to 
vertically integrate by collectively owning a processor(s). Yet, the 
proposed rule in Sec.  680.21(g)(1) disallows this activity. 
Furthermore, the Council clearly intended for harvesters to 
individually or collectively direct-market Class B IFQ, if they so 
desired. Doing so under the proposed rule, however, would render the 
harvesters processor-affiliated and deny them all program benefits, 
including collective price bargaining. This oversight needs to be 
corrected.
    Response: Under the final rule, crab harvesting cooperatives can 
direct-market crab caught with Class B IFQ. NMFS removed the limitation 
on processing Class B IFQ at Sec.  680.21(b)(3) in the final rule with 
the removal of the requirement that all crab harvesting cooperatives be 
formed under the FCMA. See response to comment 84. PQS and IPQ are not 
required for the processing of crab caught with Class B IFQ. However, 
the final rule still contains the restriction on crab harvesting 
cooperatives owning PQS, IPQ, and QS. This prohibition is necessary to 
maintain the regulatory distinctions between IFQ held by entities that 
are not crab harvesting cooperative and IFQ held by crab harvesting 
cooperatives, and to simplify the administration of the Program. If the 
regulations allowed crab harvesting cooperatives to hold QS, PQS or 
IPQ, then the crab harvesting cooperatives would function like all 
other business entities under the Program. Therefore, crab harvesting 
cooperatives would no longer function as a crab harvesting cooperative, 
and not be exempt from the vessel use caps, which is contrary to the 
intent of the Council motion. Additionally, the Council did not 
establish QS, PQS, or IPQ ownership caps for crab harvesting 
cooperatives.
    NMFS declines to respond to the comment concerning the legality of 
vertical integration by FCMA cooperatives as that subject is outside of 
NMFS' area of expertise.
    Comment 89: The agency discussion in the preamble to the proposed 
rule (on page 63226 and 63227) sets the appropriate precautionary 
standard relative to antitrust constraints on cooperative membership 
relative to binding arbitration and limiting participation in FCMA 
cooperatives.
    However, allowing the formation of a separate type of non-FCMA 
cooperative for the sole purpose of coordinating harvest arrangements 
and taking advantage of the exemption from leasing restrictions should 
be provided to processor-affiliated QS holders. This revision should 
require anyone forming or participating in such a cooperative to submit 
a request to the DOJ Anti-trust division for a Business Review Letter. 
Any change in membership of such a cooperative should require 
submitting a request for a new Business Review Letter.
    If the agency allows for these non-FCMA cooperative for affiliate 
QS holders, the definition section should be updated to create clear 
definitions of FCMA cooperatives and non-FCMA cooperatives. The section 
on Binding Arbitration should be updated so that all the current 
generic references to ``cooperative'' are replaced with the term ``FCMA 
cooperatives.'' The revisions of the proposed regulations should make 
it absolutely clear that non-FCMA cooperatives would not be provided 
any of the shelter from antitrust constraints embodied in the FCMA.
    Additionally, non-FCMA cooperatives should not receive any Class B 
IFQ allocations.
    Response: For the reasons discussed in response to comment 84, NMFS 
agrees that QS holders affiliated with processors should be permitted 
to join non-FCMA cooperatives and has changed the regulations 
accordingly. Additionally, NMFS has added definitions at Sec.  680.2 
for crab harvesting cooperatives and FCMA cooperatives. NMFS also 
agrees that the Arbitration System regulations at Sec.  680.20 need to 
make it clear that, for the Arbitration System, cooperatives that wish 
to negotiate collectively must be formed

[[Page 10199]]

under the FCMA, and NMFS has changed the regulations to reflect this.
    NMFS has included a sentence in the final rule at Sec.  680.21 that 
members of crab harvesting cooperatives that are not FCMA cooperatives 
should consult counsel before commencing any activity if the members 
are uncertain about the legality under the antitrust laws of the crab 
harvesting cooperative's proposed conduct. NMFS also included a 
statement, in the final rule at Sec.  680.21(b)(3), that issuance by 
NMFS of a crab harvesting cooperative IFQ permit to a crab harvesting 
cooperative is not a determination that the crab harvesting cooperative 
is formed or is operating in compliance with antitrust law. Although 
NMFS has included these statements in the final rule, NMFS declines to 
include regulations requiring members of crab harvesting cooperatives 
to request a business review letter from DOJ. NMFS has determined that 
such regulations would impose unnecessary administrative burdens on the 
public, NMFS, and DOJ.
    Crab harvesting cooperatives with affiliated members will receive 
Class A and Class B IFQ that is converted for use in the crab 
harvesting cooperative according to the provisions set forth at Sec.  
680.40(h)(3). These provisions would apply to the IFQ that would be 
issued to the members of the crab harvesting cooperative if they were 
receiving the IFQ directly. As an example, if a crab harvesting 
cooperative had 5 members, all of whom were affiliated, or held IPQ, 
and 50 percent of their IFQ would be issued as Class A IFQ only, the 
amount of Class A IFQ that would be issued for use by the crab 
harvesting cooperative would be in the same proportion--50 percent of 
the IFQ issued to the cooperative would be issued as Class A IFQ only. 
The remaining IFQ issued to the cooperative would be issued as both 
Class A and Class B IFQ.
    Comment 90: The proposed rule at Sec.  680.21(g) allows a crab 
harvesting cooperative to freely engage in intercooperative transfers 
without regard to individual use caps. The motion intended 
intercooperative transfers to be conducted through members to allow the 
application of use caps. Once IFQ are inside a crab harvesting 
cooperative, any individual or vessel caps do not apply to the movement 
of those IFQ within the cooperative. In the absence of a requirement 
that intercooperative transfers be accounted for by individuals in a 
cooperative for purposes of applying use caps, the program is without 
any effective use caps. The final rule should require cooperatives to 
conduct intercooperative transfers through members, as described in the 
Council motion. The provisions at Sec.  680.41(h) should require 
designation of the member(s) of the cooperatives that are engaged in 
the transaction for purposes of applying use caps to the shares a 
person may bring to a cooperative. In the absence of this limitation, 
persons could join a cooperative and acquire shares in excess of the 
cap, making individual use caps ineffective.
    Response: NMFS agrees that individual use caps should apply to 
intercooperative transfers, as required by Amendment 18. In the final 
rule, intercooperative transfers were moved from Sec.  680.41(h) to 
Sec.  680.21(f). The final rule at Sec.  680.21(f) requires, on the 
application for intercooperative transfer, designation of the members 
of the crab harvesting cooperatives that are engaged in the transaction 
for purposes of applying the use caps of the members to the cooperative 
IFQ that is being transferred between the crab harvesting cooperatives.
    Comment 91: The application of a ownership cap to intercooperative 
transfers at Sec.  680.21(f) actually has the potential to disadvantage 
cooperative members and minimizes the potential efficiencies, in 
comparison to individual IFQ harvesters. The Council motion does not 
appear to effectively limit the IFQ that cooperative members could 
lease, in addition to the individual membership ownership caps. A lease 
is the use of an annual allocation that is generated in association 
with QS. In this circumstance it is not clear that it necessarily 
involves the possession of the QS which would trigger its application. 
Five unique QS holders, each fishing their own vessel, have the 
opportunity to collectively harvest twice the ownership/use cap as a 
cooperative association of the same number of individuals. This issue 
is important and deserves to be addressed in light of the objective to 
promote cooperative membership, minimize management complexity, and 
promote efficiencies in the long term.
    Response: Amendment 18 does limit the amount of IFQ that crab 
harvesting cooperative members can lease through the application of the 
use caps to intercooperative transfers of IFQ. Use caps apply to both 
the QS and the IFQ a person holds. Amendment 18 clearly states that 
transfers (i.e. leases) of IFQ between crab harvesting cooperatives 
will be undertaken by the members individually, subject to use caps. 
Requiring an intercooperative transfer to occur through members is 
necessary for the application of the use caps. Section 313(j) of the 
Magnuson-Stevens Act requires NMFS to implement the Program provisions 
as specified in Amendment 18. Note that although Amendment 18 uses the 
term `ownership caps', in the final rule NMFS uses the term `use caps' 
because persons do not own QS or IFQ.
    Comment 92: The term ``crab harvesting cooperative,'' which is used 
frequently throughout the rule, is not defined at either Sec.  679.2 or 
Sec.  680.2. The final rule should include definitions for ``FCMA crab 
harvesting cooperatives'' (made up of those who are eligible to receive 
``Arbitration IFQ'') and ``non-FMCA crab harvesting cooperatives'' 
which would be limited in scope. Section 680.21(c)(2) should also be 
revised in a manner that is consistent with this approach.
    Response: At Sec.  680.2, NMFS has added a definition for crab 
harvesting cooperative, for the purposes of 50 CFR part 680, to mean a 
group of crab QS holders who have chosen to form a crab harvesting 
cooperative, under the requirements of Sec.  680.21, in order to 
combine and collectively harvest their crab IFQ through a crab 
harvesting cooperative IFQ permit issued by NMFS. NMFS has also added a 
definition for FCMA cooperative, for the purposes of 50 CFR 680, to 
mean a cooperative formed in accordance with the Fishermen's Collective 
Marketing Act of 1934 (15 U.S.C. 521). Additionally, at Sec.  680.20, 
NMFS has clarified that only FCMA cooperatives can participate in the 
Arbitration System. See NMFS' response to comment 84 as to why NMFS 
removed the proposed requirement that crab harvesting cooperatives be 
FCMA cooperatives.
    Comment 93: Because of the potential for antitrust violations, two 
types of crab cooperatives should be allowed to be formed: (1) 
Unaffilitated cooperatives (FCMA type) that can hold, fish and trade 
Class A and Class B IFQ and CVC and CPC IFQ and enter into binding 
arbitration based on their best financial interest and efficiency; and 
(2) A non-FCMA ``operational cooperative'' for purposes of economic 
efficiency of processor affiliates, that allows processor affiliates to 
form cooperatives for purposes of Class A IFQ fishing but prohibits 
participation in arbitration and the fishing of Class B IFQ and CVC and 
CPC IFQ due to antitrust violation potential.
    Response: The final rule distinguishes between FCMA cooperatives 
for the Arbitration System at Sec.  680.20 and crab harvesting 
cooperatives at Sec.  680.21. However, NMFS disagrees that crab 
harvesting cooperatives with affiliated members should be prohibited 
from

[[Page 10200]]

fishing Class B IFQ and CVC and CPC IFQ. Under the final rule, NMFS 
will issue Class B IFQ based on the amount of Class B IFQ that would be 
issued to each member individually, as discussed under comment 89.
    Comment 94: The proposed rule at Sec.  680.21 prohibits CDQ groups 
that share ownership of crab vessels with processors from being able to 
achieve the efficiencies of participating in crab harvesting 
cooperatives. Also, the proposed rule at Sec.  680.40 prohibits CDQ 
groups that are affiliated with processors from receiving Class B IFQ. 
These prohibitions will severely affect CDQ groups who have made 
investments in crab harvesting vessels jointly with holders of PQS. 
These regulations will hamper the ability of CDQ groups to further 
integrate into the processing of king and Tanner crab and to consider 
processing crab for markets not yet utilized. CDQ groups could not be 
expected to purchase QS under these regulations that deny them the 
ability to join a crab harvesting cooperative and the ability to 
receive unrestricted Class B IFQ.
    Response: NMFS agrees and has changed the regulations at Sec.  
680.21 to allow CDQ groups that are affiliated with processors to join 
crab harvesting cooperatives. See response to comment 84. Additionally, 
NMFS has changed the regulations in the final rule at Sec.  680.40(h) 
to allocate Class B IFQ to persons that hold PQS/IPQ or are affiliated 
with PQS/IPQ holders. See response to comment 25.
    Comment 95: Non-FCMA cooperatives are disallowed under Sec.  
680.21. If the final rule were to allow processor-affiliated vessels to 
join a non-FCMA cooperative that could participate in Program benefits, 
the four unique entity rule would be problematic. A single processor 
that owns multiple vessels could not form a cooperative because it 
could not pass the four-independent entity rule stipulated by the 
Council and by the proposed rule. Note however, the proposed rule 
applies to FCMA and are silent on Non-FCMA. If the four-entity rule 
applied to Non-FCMA cooperatives and if Non-FCMA cooperatives were 
allowed, then processors could cooperate and aggregate processor-
vessels across multiple processors. Operational efficiencies intended 
by the Council require coordinated decision making among harvesters and 
processors with mutual interest. These efficiencies may be achieved 
only if Non-FCMA cooperatives are allowed.
    Response: See Response to comment 84. NMFS has revised the 
regulations regarding FCMA cooperative formation and provided 
additional advice for reducing potential antitrust risk. Non-FCMA crab 
harvesting cooperatives are permitted under this final rule.
    NMFS proposed that any QS holder could be considered a ``unique 
entity'' for the purposes of crab harvesting cooperative formation. 
However, whether the QS holder is a ``unique entity'' for purposes of 
meeting the minimum requirement of four unique entities for crab 
harvesting cooperative membership depends on whether the QS holder is 
``affiliated'' with another entity seeking membership in the same crab 
harvesting cooperative. NMFS has revised the definition of 
``affiliation'' at Sec.  680.2 to better accommodate the needs of the 
affected public. However, Amendment 18 does not distinguish between 
FCMA and non-FCMA cooperatives regarding affiliation and the four 
unique entity rule. Therefore, the definition of affiliation and the 
four unique entity rule apply equally to FCMA and non-FCMA cooperatives 
under this final rule.
    Comment 96: The proposed regulations at Sec.  680.21(d)(4) provide 
that IFQ resulting from CVC and CPC QS would be converted to standard 
IFQ, if the holder joins a crab harvesting cooperative, effectively 
removing any owner on board requirements for CVC or CPC QS. The motion 
intended the C share pool to benefit persons actively on board vessels 
in the fisheries. The final rule should not convert CVC and CPC IFQ to 
CVO and CPO IFQ when held by a crab harvesting cooperative and should 
require that the owner of the CVC or CPC IFQ be on board when the crab 
harvesting cooperative is fishing its CVC or CPC IFQ. Additionally, the 
regulations should clarify that CVC IFQ issued to a crab harvesting 
cooperative are not subject to the Class A/Class B IFQ split during the 
first three years of the program.
    Response: Amendment 18 states that holders of CVC or CPC QS or 
qualified lease recipients are required to be on board the vessel used 
to harvest CVC or CPC IFQ and that CVC and CPC QS holders are eligible 
to join crab harvesting cooperatives. Amendment 18 does not provide any 
exemption to the owner on board requirements for CVC or CPC QS holders 
if the QS holder joins a crab harvesting cooperative. In developing the 
proposed rule, NMFS, for reasons provided in the preamble of the 
proposed rule (69 FR 63200, 63228, October 29, 2004), emphasized the 
Council's intent for crab harvesting cooperatives to maximize 
efficiencies and benefits through consolidation and collective 
management of the members' QS holdings by proposing to convert CVC and 
CPC QS to CVO and CPO IFQ when held by a crab harvesting cooperative. 
However, comments received from the Council as well as comments 
received from the general public indicate that NMFS inappropriately 
allowed the rationale for maximizing crab harvesting cooperative 
efficiencies to override the legislated owner on board requirements for 
holders of CVC and CPC QS or qualified lease recipients. NMFS 
recognizes that the owner on board requirement is fundamental to 
supporting active participation in the crab fisheries and was intended 
to extend to CVC and CPC QS holders if the QS holder joins a 
cooperative. Therefore, NMFS has removed the requirement that all CVC 
and CPC QS held by the members of a crab harvesting cooperative be 
converted to CVO and CPO IFQ. Additionally, the final rule at Sec.  
680.42(c)(5) clearly provides that all CVC or CPC QS holders must be on 
board the vessel at all times when harvesting his or her CVC or CPC 
IFQ.
    NMFS agrees that CVC QS is not subject to the Class A/Class B IFQ 
split during the first three years of the program. The final 
regulations clearly indicate at Sec.  680.40(b)(1)(ii) and (h)(6)(ii) 
that CVC QS and the resulting IFQ will not be subject to the Class A/
Class B IFQ split until July 1, 2008. Therefore, any CVC QS committed 
to a cooperative will not be subject to the Class A/Class B IFQ split 
until July 1, 2008.
    Comment 97: The Program pushes all individual harvesters to join 
cooperatives by providing advantages to cooperative members over 
individual harvesters, such as in arbitration, price formation, 
overages, and QS transfer. Harvesters will be forced to join a 
cooperative in 5 years. While cooperatives will be easier for NMFS to 
manage, this is not sufficient reason to dictate the structure of how 
an individual harvester does business. Financial advantages will 
encourage most harvesters to join crab harvesting cooperatives. It 
should be a harvester's decision, based on what is best for the 
harvester.
    Response: Amendment 18 specifically states that, for IFQ holders 
that are not crab harvesting cooperative members, leasing would be 
allowed for the first 5 years of the Program. NMFS does not possess any 
discretion to vary the implementation of the 5-year leasing provision 
at this time. Any change to the 5-year leasing provision requires an 
amendment to the Program and should be addressed through the Council 
process.

[[Page 10201]]

    NMFS agrees that management of a few, well-organized cooperatives 
will be easier than management of multiple individual harvesters. 
Although the Council and NMFS designed the Program to encourage crab 
harvesting cooperative membership, membership in a crab harvesting 
cooperative is entirely voluntary and remains the decision of the 
individual harvester. Each harvester has the choice whether to join a 
crab harvesting cooperative based solely on their individual financial 
and operational needs.
    Comment 98: It is important that a skipper or crew member's Class B 
IFQ do not automatically become crab harvesting cooperative shares by 
virtue of his or her vessel's participation in that crab harvesting 
cooperative. The decision whether to transfer his or her Class B IFQ to 
an eligible fisherman on a vessel in a different crab harvesting 
cooperative or on a vessel not participating in a crab harvesting 
cooperative must remain open to the skipper or crew member.
    Response: NMFS agrees. However, during the first three years of the 
Program, CVC QS will not be subject to the Class A/Class B IFQ split 
(see response to comment 96). During the first three years of the 
Program, CVC QS holders will not be able to withhold their Class B IFQ 
from conversion to Cooperative IFQ when they join a cooperative because 
no Class B IFQ will exist for CVC QS holders. Therefore, if a CVC QS 
holder wishes to join a cooperative in any crab fishery during the 
first three years of the Program, he or she must commit all of his or 
her IFQ for that crab fishery to that cooperative.
    Nonetheless, NMFS believes that allowing CVC QS holders to withhold 
their Class B IFQ from submission to a crab harvesting cooperative will 
allow for greater flexibility in fishing those shares and provides the 
greatest advantage to skippers and crew. Under this rule, the 
regulations have been clarified at Sec.  680.21(a)(1)(iii)(B) to permit 
CVC QS holders to withhold their Class B IFQ from submission to a crab 
harvesting cooperative for use as individual IFQ when joining a crab 
harvesting cooperative after the third year of the Program.
    Comment 99: The application of a 10 percent criterion to crab 
harvesting cooperative membership is unreasonably restrictive, and as a 
result, the proposed rule runs counter to the key policy objectives of 
the rationalization program: improved conservation and safety, and 
increased economic efficiency. The Council could not have intended this 
result, and there is a strong argument to be made that the antitrust 
laws do not require such restrictive criteria, and in fact, that the 10 
percent criterion, as applied in the manner provided in the proposed 
rule, would inhibit, not protect, competition.
    This overly restrictive criterion for affiliation unduly limits the 
formation of crab harvesting cooperatives in the following ways: The 
effect of the 10 percent criterion will be to prohibit harvesters from 
participation in crab harvesting cooperatives, if they enter into 
agreements to invest in PQS; Holders of Class B IFQ who engage in 
custom processing of that IFQ with their own company, or are affiliated 
with an entity doing custom processing, including live crab sales, 
would be prohibited from participation in crab harvesting cooperatives; 
Holders of harvester QS who invest in any amount of PQS will be 
restricted to the issuance of only Class A IFQ, and forego market 
leverage opportunities of Class B IFQ; Under the 10 percent criterion, 
processors will realistically only be able to transfer or sell PQS to 
other processors. This will encourage consolidation of PQS among the 
existing processors and eliminate opportunities for harvester 
investment in PQS.
    The Proposed Rule should allow for affiliated QS holders to 
participate in non-FCMA ``operational cooperatives'' for purposes of 
economic efficiency, but affiliated QS holders should be prohibited 
from participation in price formation negotiations.
    Response: Amendment 18, clearly establishes that four unique 
entities may join to form a crab harvesting cooperative with the 
requirement that ``entities must be less than 10 percent common 
ownership without common control.'' The decision to measure affiliation 
as a linkage between two or more entities with a 10 percent or greater 
common ownership interest is discussed in NMFS's response to comment 
25. As discussed in the response to comment 84, NMFS has modified the 
final regulations to allow persons affiliated with PQS and IPQ holders 
to join crab harvesting cooperatives, provided that they are ``unique 
entities'' according to the standard set forth in Amendment 18 and 
under this rule.
    The unique entity rule applies to the formation of crab harvesting 
cooperatives. For purposes of collective negotiation under the 
Arbitration System, only cooperatives formed under the FCMA may 
collectively negotiate. The Arbitration System does not permit 
``affiliated'' IFQ holders to participate collectively in an FCMA 
cooperative for purposes of collective negotiation. Therefore, a crab 
harvesting cooperative of IFQ holders without ``affiliations'' to PQS/
IPQ holders that forms under the requirements of the FCMA could 
collectively negotiate, but a crab harvesting cooperative with 
affiliated IFQ holders could not collectively negotiate for purposes of 
the Binding Arbitration procedure under the Arbitration System.
    Comment 100: Waiving the owner on board provision for C shares 
within a crab harvesting cooperative as outlined in the proposed rule 
at Sec.  680.21(d)(4) greatly facilitates the use of those shares in a 
crab harvesting cooperative as long as the definition of ``active 
participant'' is attached to all CVC and CPC QS initially issued and 
subsequently transferred. ``Active participant'' means recent 
participation in a rationalized crab fishery in the 365 days prior to 
the use of the CVC or CPC IFQ. Class C shares should be kept ``on the 
vessel'' so that they not get locked up ``on shore,'' which would 
happen if the owner on board requirement were dropped in a crab 
harvesting cooperative without requiring the C share holder to be an 
active participant in the fisheries. Dropping the owner on board 
requirement for C shares when in a crab harvesting cooperative greatly 
improves flexibility for the C share holder, especially in the case of 
small distant fisheries like St. Matthew blue king crab where, in the 
case of a small TAC, only a few boats may participate and it may be 
impossible to accommodate all the C share IFQ holders. Dropping the 
owner on board requirement in a crab harvesting cooperative will also 
reduce the burden put on the agency for tracking and managing CVC and 
CPC IFQ as a separate and distinct type of IFQ in the crab harvesting 
cooperative. If the active participant requirement were made the sole 
requirement for holders of CVC or CPC QS in a crab harvesting 
cooperative, then the CVC or CPC QS holder would only have to provide 
proof at the time of application for that season's IFQ that they had 
made a landing in a rationalized crab fishery in the past 365 days, 
reducing the workload on NMFS management and enforcement during the 
fishery itself.
    Response: See response to comment 96. Amendment 18 does not include 
any exemptions from the owner on board requirement. NMFS agrees with 
the Council that CVC and CPC QS used in a crab harvesting cooperative 
is subject to owner on board requirements to be consistent with 
Amendment 18. NMFS also recognizes that the Council considered CVC and 
CPC QS owner on board requirements fundamental to supporting active 
participation in the crab fisheries. The final rule clearly

[[Page 10202]]

provides, at Sec.  680.42(c)(5), that all CVC or CPC QS holders must be 
on board the vessel at all times when harvesting his or her CVC or CPC 
IFQ.
    Nonetheless, NMFS does not agree that the proposed ``active 
participant'' designation alone would sufficiently prevent CVC and CPC 
QS from being fished in a crab harvesting cooperative by absentee 
owners. Active participation in the BSAI crab fisheries is demonstrated 
by a landing in a crab fishery in the last 365 days. Documentation of 
``active participation'' includes an ADF&G fish ticket, an affidavit 
from the vessel owner, or other verifiable documentation. This would 
allow for an individual to be on board the vessel for a single landing 
in any given year and remain an absentee owner for the remainder of the 
year.
    Comment 101: Because permitting affiliated crab harvesting 
cooperatives to hold Class B IFQ issued on the basis of membership in 
the cooperative by non-affiliated harvesters could result in IPQ holder 
control over Class B IFQ, non-FCMA crab harvesting cooperatives with 
affiliated members should not be permitted to hold Class B IFQ. Even if 
a non-FCMA crab harvesting cooperative limits its activity to 
harvesting allocation, that harvesting allocation function could permit 
a non-affiliated harvester to assign his or her Class B IFQ to an 
affiliated harvester, in direct contravention of the Council motion and 
the fundamental purpose of the Class A/Class B IFQ distinction.
    Response: Amendment 18 does not preclude the ability of persons 
affiliated with PQS or IPQ holders from holding Class B IFQ. 
Prohibiting the issuance of Class B IFQ to a crab harvesting 
cooperative if it has members who are affiliated with an IPQ or PQS 
holder is not appropriate given the lack of restriction on affiliated 
entities that do not join crab harvesting cooperatives. Class B IFQ is 
not issued to individual members in a cooperative, but rather is issued 
to the crab harvesting cooperative as a single entity, and the specific 
use of Class B IFQ by members of a crab harvesting cooperative is 
determined by internal contractual agreements among members. If a crab 
harvesting cooperative operates in a manner that results in a violation 
of antitrust laws, DOJ has the ability to investigate any claims.
    The goal of the Class B IFQ allocation is to provide additional 
negotiating leverage for harvesters when it comes to price negotiation 
with IPQ holders for their Class A IFQ. Joining a crab harvesting 
cooperative is a voluntary arrangement and parties to that arrangement 
should be aware of the affiliations of the other members of the 
cooperative. If a person does not want to join a crab harvesting 
cooperative with affiliated IFQ holders out of concerns about potential 
use of Class B IFQ by the crab harvesting cooperative, that person does 
not have to join the crab harvesting cooperative, or could establish 
private contractual arrangements with other crab harvesting cooperative 
members concerning the use of the person's Class B IFQ. Allowing 
affiliated IFQ holders to join crab harvesting cooperatives is not in 
direct contravention to Amendment 18.
    Comment 102: Why are CPs exempt from the processor restrictions on 
cooperative formation and able to fully benefit from rationalization? 
The answer seems to be that the proposed rule only considered antitrust 
risk at the point of ex-vessel pricing. Catcher processors are 
processors and in the AI golden king crab market, they have 
sufficiently large market share in which collusive marketing behavior 
could adversely affect the consumer. However, CPs also buy crab from 
catcher vessels. So, the fact that CPs can join FCMA cooperatives is a 
double standard. Shoreside processors must pass the standard of zero 
risk of potential collusion in the ex-vessel market or the first-
wholesale market, while at-sea, vertically integrated CPs must pass a 
lesser standard of no likely price collusion at first-wholesale. 
Catcher processors need two limited antitrust exemptions: (1) 
Downstream wholesale pricing, especially in WAI golden crab, where CPs 
process a majority of the harvest and could adversely impact consumers, 
and (2) ex-vessel price formation with ``over-the-side'' purchases. The 
regulations should be consistent in their treatment of all processors, 
unless Amendment 18 explicitly differentiates between on-shore 
processors and CPs.
    Response: The decision to exclude PQS and IPQ holders from crab 
harvesting cooperatives but permit CPs to join crab harvesting 
cooperatives stemmed from the proposed requirement that crab harvesting 
cooperatives be FCMA cooperatives. As stated in the preamble to the 
proposed rule, NMFS proposed to prohibit PQS and IPQ holders (or those 
affiliated with persons that hold PSQ or IPQ) from membership in crab 
harvesting cooperatives because, at the time of the issuance of the 
proposed rule, NMFS determined that, while there was some legal 
uncertainty, there was a significant risk that a crab harvesting 
cooperative with such members would fail to meet the requirements for 
FCMA cooperatives and thereby lose the antitrust immunity provided by 
the FCMA. The proposed rule did not prohibit CPs from membership in 
FCMA crab harvesting cooperatives because the risk of inconsistency 
with the FCMA was less certain. NMFS has revised the regulations 
regarding crab harvesting cooperative formation by removing the FCMA 
requirement for crab harvesting cooperatives and permitting affiliated 
harvesters to join crab harvesting cooperatives, and has provided 
additional advice for reducing potential antitrust risk (see response 
to comment 84). These changes should eliminate any perceived disparity 
between the requirements imposed on CPs in relation to those imposed on 
shoreside processors regarding antitrust risk and participation in crab 
harvesting cooperatives.
    NMFS does not have the statutory authority to impose the limited 
antitrust exemptions contained in the comment. Furthermore, section 
313(j)(6) of the Magnuson-Stevens Act states that nothing in the 
Magnuson-Stevens Act constitutes either an express or implied waiver of 
the antitrust laws of the United States.
    Comment 103: The proposed rule at Sec.  680.21(b)(4) and (5) 
provides for ``all or nothing'' membership by a harvester in a single 
cooperative, thus prohibiting membership in multiple cooperatives in 
different fisheries. Restricting membership to only one cooperative 
will limit the ability of participants to achieve efficiencies. 
Additionally, benefits from leasing across cooperatives are not likely 
to be as large as membership in multiple cooperatives. This provision 
should be replaced with a provision that allows one cooperative per 
fishery or one cooperative per fishery and region to allow harvesters 
to more efficiently and safely harvest their IFQ.
    Response: After extensive public comment and further consideration, 
NMFS has determined that QS holders may participate in more than one 
crab harvesting cooperative. NMFS initially determined that because the 
Program would allow unrestricted leasing between crab harvesting 
cooperatives, each cooperative would be free to focus on harvesting IFQ 
for the fisheries of its choice and through leasing would achieve the 
same benefits as allowing QS holders to join multiple cooperatives. 
NMFS now understands that QS holders would not be able to achieve the 
same level of efficiency by leasing as they would through joining 
multiple crab harvesting cooperatives. Additionally, NMFS initially 
determined that allowing QS holders to join multiple cooperatives would 
result

[[Page 10203]]

in an administratively unmanageable system. NMFS has since developed a 
method for simplifying the administration of multiple crab harvesting 
cooperatives.
    NMFS also was concerned that if membership were allowed in more 
than one crab harvesting cooperative it would be easy for QS holders to 
allocate a nominal amount of IFQ to a crab harvesting cooperative and 
effectively result in single member crab harvesting cooperatives that 
undermine the Council's intent for a minimum membership of four 
entities. In the final rule, NMFS is requiring a QS holder to commit 
all of his or her QS holdings for a particular fishery for conversion 
to cooperative IFQ upon joining a cooperative in that fishery. NMFS has 
concluded that this requirement will deter the nominal donation of IFQ 
and subsequent formation of single member crab harvesting cooperatives.
    Furthermore, NMFS was concerned that bycatch may increase if 
single-species crab harvesting cooperatives were formed because the 
crab harvesting cooperative would have to discard all legal crab 
species for which the cooperative did not possess IFQ. NMFS remains 
concerned about potential bycatch, but has concluded that diverse QS 
ownership by members in crab harvesting cooperatives and the ability to 
lease between crab harvesting cooperatives will help reduce potential 
bycatch concerns. Finally, NMFS was concerned that crab harvesting 
cooperative management would be diluted by members who have joined 
multiple cooperatives resulting in reduced effectiveness managing the 
harvesting of the cooperative's IFQ. By limiting crab harvesting 
cooperative membership by fishery, NMFS has concluded that it has 
sufficiently reduced the potential for membership dilution and has been 
convinced by public comment that multiple cooperatives can be 
effectively managed by their members.
    Therefore, NMFS has been persuaded by public comment that the 
reasons articulated in the proposed rule preamble as to why QS holders 
may only join one crab harvesting cooperative are no longer valid. NMFS 
has revised the final rule at Sec.  680.21(a)(1)(iii) to permit crab 
harvesting cooperative membership by a QS holder to one crab harvesting 
cooperative per fishery. A minimum standard of one crab harvesting 
cooperative per fishery is necessary to balance NMFS'' desire to reduce 
administrative burden while continuing to allow participants to realize 
the efficiency benefits of cooperatives. However, NMFS continues to 
require that all of a QS holder's IFQ for any fishery must be committed 
to the crab harvesting cooperative they wish to join. For instance, if 
a QS holder holds 10 units of IFQ in the Bristol Bay Red (BBR) king 
crab fishery and 20 units of IFQ in the Western Aleutian golden (WAG) 
king crab fishery and wishes to join a crab harvesting cooperative in 
the WAG fishery, he or she must commit all 20 units of WAG IFQ to the 
WAG crab harvesting cooperative he or she chooses to join. The QS 
holder may choose to fish his or her BBR IFQ independently or may 
commit all 10 units of BBR IFQ to a cooperative in the BBR fishery. 
Therefore, NMFS revised the final rule at Sec.  680.21(a)(1)(iii)(B) to 
permit QS holders to join one crab harvesting cooperative per fishery, 
but it requires QS holders to commit all their IFQ to the crab 
harvesting cooperative in the fishery that they wish to join.
    NMFS rejected further restrictions on crab harvesting cooperative 
membership by region because complicated crab harvesting cooperative 
relationships based on regional differences may unnecessarily hinder 
the efficiencies that NMFS is attempting to achieve with multiple crab 
harvesting cooperatives. Individual crab harvesting cooperatives must 
ensure compliance with the appropriate regional delivery requirements 
of crab harvesting cooperative IFQ.
    Comment 104: The regulations should allow QS holders to be members, 
simultaneously, of different cooperatives in different fisheries or in 
the same fisheries in order to maximize economic efficiency and achieve 
other benefits.
    Response: See response to comment 103. NMFS has determined that one 
cooperative per fishery will achieve a balance between minimizing 
administrative burden while continuing to allow participants to realize 
the efficiency benefits of crab harvesting cooperatives. NMFS also has 
determined that one crab harvesting cooperative per fishery is 
consistent with statutory and Council intent. However, NMFS has 
determined that membership in multiple crab harvesting cooperatives 
within a single fishery would result in an administrative burden that 
outweighs any additional corresponding efficiency benefits to the 
industry. NMFS has revised the regulations in the final rule to limit 
QS holders to membership in one crab harvesting cooperative per 
fishery.
    Comment 105: The proposed rule at Sec.  680.21(e)(3) provides that 
all members of a cooperative are liable for violations of any 
individual member. What kinds of violations are swept up in this? The 
Council's intent was to hold all members of the cooperative accountable 
for violations like exceeding caps, bycatch, etc., not, for example, a 
personal violation, like a crewmember retaining undersized crab for 
personal consumption. Nor did the Council intend that one individual's 
failure to comply with the economic and social data requirements be 
applied to all members. This accountability needs to be clarified and 
brought into compliance with Council intent.
    Response: NMFS has determined that the provision for crab 
harvesting cooperative joint and several liability as presented in the 
proposed rule is consistent with the Magnuson-Stevens Act and Council 
intent. NMFS was directed by statute that monitoring and enforcement of 
harvest allocations will be at the crab harvesting cooperative level 
and that crab harvesting cooperative members will be jointly and 
severally liable for the actions of the crab harvesting cooperative. 
This means that any violation by any member of a crab harvesting 
cooperative will be subject to joint and several liability. Joint and 
several liability means each liable party is individually responsible 
for the entire obligation, although the parties may decide among 
themselves how to apportion a particular penalty.
    For instance, if NMFS finds an individual cooperative harvester 
retaining undersized crab, depending on the facts of the case, the 
harvester and the crab harvesting cooperative may both be the subjects 
of an enforcement action.
    However, payment of fees and submission of an EDR are application 
requirements that must be completed before a PQS or QS holder may 
receive IPQ or IFQ. Any QS holder must first receive his or her IFQ 
before he or she can dedicate that IFQ to a crab harvesting 
cooperative. A complete application includes the submission of an EDR 
and payment of any fees. Applications for IFQ must also be timely to be 
considered by NMFS. If an individual does not receive his or her IFQ 
because they failed to submit a complete and timely application, no IFQ 
will exist for that person to convert into crab harvesting cooperative 
IFQ. Submission of a complete and timely application is not a matter of 
joint and several liability, but is a matter of individual 
responsibility and permit administration.
    Comment 106: The proposed rule, at Sec.  680.21(b)(2), does not 
apply a standard for a crab harvesting cooperative to reject any QS 
holder. Because a QS holder loses the benefits of QS

[[Page 10204]]

consolidation, leasing after five years, and elimination of the vessel 
cap, a change needs to be made to the regulations so that private 
persons may not deny a government benefit to a QS holder. One 
possibility would be a default cooperative, that any QS holder could 
join.
    Response: Amendment 18 clearly directs that membership in crab 
harvesting cooperatives is voluntary. The term ``voluntary'' is 
generally defined as unconstrained by interference or not impelled by 
outside influence. Consistent with this definition, NMFS did not impose 
any regulations for membership requirements regarding crab harvesting 
cooperatives. NMFS took a minimalist approach and determined that no QS 
holder is required to join a crab harvesting cooperative to receive or 
harvest IFQ and no crab harvesting cooperative is required to accept a 
member as a QS holder that the crab harvesting cooperative does not 
wish to admit. Therefore, the regulations do not address any 
requirements for acceptance or denial regarding crab harvesting 
cooperative membership.
    If a crab harvesting cooperative denies membership to a person, it 
is not a denial of a government benefit, but is simply a denial of 
membership to that person by that crab harvesting cooperative. The 
government benefit of participation in a crab harvesting cooperative 
continues to be available to any person regardless of whether the 
person joins or is rejected from a crab harvesting cooperative. NMFS 
anticipates that many crab harvesting cooperatives will exist for each 
fishery. A person rejected by one crab harvesting cooperative could 
continue to solicit other crab harvesting cooperatives for admission. 
Given the voluntary nature of crab harvesting cooperatives and the 
large number of crab harvesting cooperatives that NMFS anticipates will 
exist for each fishery under the Program, NMFS has determined that the 
creation of a NMFS sanctioned ``default crab harvesting cooperative'' 
is unnecessary.
    Comment 107: The regulations require a minimum of four unique QS-
holding entities for the formation of a crab harvesting cooperative, 
but do not clearly state that C share holders are considered ``unique 
entities'' for the purposes of crab harvesting cooperative formation. 
Each QS holding individual should be considered a unique entity, 
whether or not that individual holds some interest in a commonly held 
corporation. The final rule should clarify that C share holders are 
considered ``unique entities'' for the purposes of crab harvesting 
cooperative formation.
    Response: NMFS proposed that any QS holder, including CVC and CPC 
QS holders, could be considered ``unique entities'' for the purposes of 
crab harvesting cooperative formation and has continued this provision 
in the final rule. However, whether a CVC or CPC QS holder is a 
``unique entity'' for purposes of meeting the minimum requirement of 
four unique entities for crab harvesting cooperative membership depends 
on whether the CVC or CPC QS holder is ``affiliated'' with another 
entity seeking membership in the same crab harvesting cooperative. If a 
CVC or CPC QS holder is ``affiliated'' with another entity seeking 
membership in the same crab harvesting cooperative, then NMFS will 
consider the CVC or CPC QS holder and the affiliated entity as 
representing only one unique entity. Conversely, if a CVC or CPC QS 
holder is not ``affiliated'' with any other entity seeking membership 
in the same crab harvesting cooperative, then NMFS will consider the 
CVC or CPC QS holder as one unique entity. NMFS has revised the 
definition of ``affiliation'' in section 680.2 to clarify that any 
individual QS holder, including CVC and CPC QS holders, qualify as 
unique entities for the purposes of crab harvesting cooperative 
formation provided they are not considered ``affiliated.''

Community Protection Measures

    Comment 108: NMFS is giving away the fisheries resources forever to 
corporate interests outside of the Aleutians, including Japanese 
corporate interests with lobbying ties to Washington, DC. This amounts 
to economic genocide and strips local residents of economic opportunity 
that would provide them with the ability to continue to live in the 
region.
    Response: Allocating QS to fishery participants is a provision of 
Amendment 18. Section 313(j) of the Magnuson-Stevens Act requires NMFS 
to implement the Program provisions as specified in Amendment 18. 
Additionally, the Program contains provisions to allocate the crab 
resources to Alaskan communities, including communities in the Aleutian 
Islands. The CDQ allocation increased from 7.5 percent to 10 percent of 
the TAC, and the CDQ crab species are increased to include Eastern 
Aleutian Islands golden king crab and Western Aleutian Islands red king 
crab. Adak will be allocated 10 percent of the Western Aleutian Islands 
golden king crab fishery, and 50 percent of this fishery must be 
processed in Adak. These provisions provide local residents with 
economic opportunities in the BSAI crab fishing industry to support 
their ability to live in the region.
    Comment 109: The Council motion outlines the terms that should 
govern the management of the Adak allocation of WAI brown king crab. No 
provision is made in the regulations for management of that allocation.
    Response: NMFS regulations define the Adak community entity at 
Sec.  680.2 and provide for the allocation of 10 percent of the TAC of 
Western Aleutian Islands golden king crab to the Adak community entity 
at Sec.  680.40(a).
    With respect to management or oversight of the use of this 
allocation by the Adak community entity, Amendment 18 states, in part, 
a ``set of use procedures, investment policies and procedures, auditing 
procedures, and a city or state oversight mechanism [emphasis added] 
will be developed. Funds collected under the allocation will be placed 
in a separate trust until the above procedures and a plan for utilizing 
the funds for fisheries related purposes are fully developed. Funds 
will be held in trust for a maximum of 2 years, after which the Council 
will reassess the allocation for further action * * *. Use CDQ type 
management and oversight to provide assurance that the Council's goals 
are met. Continued receipt of the allocation will be contingent upon an 
implementation review conducted by the State of Alaska [emphasis added] 
to ensure that the benefits derived from the allocation accrue to the 
community and achieve the goals of the fisheries development plan.''
    NMFS interpretation of Amendment 18 is that the State of Alaska is 
primarily responsible for oversight of the use of the allocation for 
fisheries related purposes. Therefore, oversight of the use of the 
allocation by the Adak community entity for ``fisheries related 
purposes'' is deferred to the State of Alaska under the FMP. The FMP 
contains the Council's motion about oversight of the Adak allocation to 
provide specific direction to the State. NMFS will have no direct role 
in management or oversight of the use of the allocation and NMFS will 
not direct the State through Federal regulations about how to conduct 
its oversight responsibilities. The State will implement State 
regulations that are consistent with the FMP. Any persons believing 
that the State is acting inconsistently with the FMP may follow the 
appeal procedures in the FMP or raise the issue with the Council and 
request regulatory action to further clarify or define the State's 
oversight role.

[[Page 10205]]

    In addition, the FMP directs the State to conduct an implementation 
review for the Council to ensure that the benefits derived from the 
allocation accrue to the community and achieve the goals of the 
fisheries development plan. The Council's motion did not specify when 
this implementation review should be conducted. Therefore, it will be 
up to the Council and the State to determine an appropriate time for 
this review to be presented to the Council.
    Comment 110: The proposed rule Sec.  680.40(m) and Sec.  680.41(c) 
and (d) incorrectly revised the rules of the right of first refusal. 
The motion clearly identifies the terms of the right of first refusal.
    Response: NMFS agrees and the final rule has been revised from the 
proposed rule to remove Sec.  680.40(m) and to reference the civil 
contract terms for the establishment of ROFR as set forth at section 
313(j) of the Magnuson-Stevens Act. A list of contract terms is 
available from the NMFS Alaska Region Web site at http://www.fakr.noaa.gov. This approach ensures consistency with Amendment 18 
and is appropriate because NMFS would not monitor or enforce these 
contract terms. Regulations at Sec.  689.41(c) and (d) have been 
revised to more closely reflect Council intent regarding the discretion 
of an ECC to designate an ECC entity and enter into civil contracts for 
ROFR.
    Comment 111: The rationale for having both ECCOs and ECC entities 
is not clear. The ECCO seems to be the entity that holds shares for a 
community, while the ECC entity has the right of first refusal. The 
Council motion contemplates a single entity to serve both of these 
purposes. In addition, it is unclear that one entity would have the 
ability to exercise a ROFR, but not be able to take possession of 
shares on the exercise of that right. In addition, given the 
administrative burden of the program, it is unclear why the agency 
would like to oversee additional entities/organizations. The final rule 
should establish a single entity to hold the right of first refusal and 
any community shares.
    Response: NMFS disagrees that Amendment 18 states that a single 
entity would serve both the ECCO function for purchase and holding of 
QS and the ECC entity function of representing a non-CDQ ECC in the 
exercise of ROFR. Amendment 18 states: ``Ownership and management of 
harvest and processing shares by community entities in non-CDQ 
communities [ECCOs] will be subject to rules established by the halibut 
and sablefish community purchase program.'' This ``program'' refers to 
the regulations established under Amendment 66 to the FMP for 
Groundfish of the GOA for the restrictions associated with the 
designation of an ECCO, including the requirement that these 
organizations be non-profit. No such restrictions were set forth in 
Amendment 18 for an ECC entity. While an ECCO could also serve as an 
ECC entity, an entity designated by an ECC to represent it in the 
exercise of ROFR may not meet the conditions and criteria for an ECCO. 
Thus, an ECC that wishes to purchase QS and designate an ECCO for that 
purpose could also designate the ECCO as its ECC entity for purposes of 
ROFR, but is not required to do so.
    Comment 112: The requirement of a ROFR contract at the time of 
application at Sec.  680.40(f)(3) and (7) is inconsistent with the 
Council motion. PQS applicants need to enter the contract only if the 
ECC entity is designated by a time certain. Instead, applicants for PQS 
should provide notice to an eligible community that they intend to 
apply for PQS that could be subject to a ROFR. If the community 
notifies the agency and the PQS applicant that it has formed an entity 
(and provides contact information for the entity) the PQS allocation 
would be made only on completion of the contract establishing the terms 
of ROFR. If the contract is not executed, the parties could seek 
remedies in civil court to the extent necessary.
    Response: NMFS agrees and has changed the final rule to reflect 
that the designation of an ECC entity is a choice and not a 
requirement. Only if such a designation is made within 30 days prior to 
the ending date of the initial application period for crab PQS (Sec.  
680.41(l)) would an ECC have opportunity to exercise ROFR in the 
future.
    Comment 113: The contract terms for ROFR at Sec.  680.40(m) are not 
those in the Council motion. A cleaner approach would be to just copy 
the Council motion, rather than reinterpret it.
    Response: NMFS agrees and has removed Sec.  680.40(m) from the 
final rule and cross referenced section 313(j) of the Magnuson-Stevens 
Act concerning civil contract terms for ROFR as statute provisions 
under Sec.  680.40(f)(3). See also response to comment 110.
    Comment 114: For purposes of implementing the ROFR at Sec.  
680.40(m), ``movement of shares from a first or second class city, if 
one exists, and borough, if a first or second class city does not 
exist,'' constitutes ``movement of shares from the community''. Note 
that this differs from the cooling off period. Clarify provisions that 
apply to movement of PQS/IPQ from the community.
    Response: See response to comment 110. The final rule also has been 
revised to clarify that the definition of ``community'' for purposes of 
movement of PQS/IFQ during the cooling off period has been added to the 
final rule at Sec.  680.42(b)(4) to differentiate these restrictions 
from the movement of PQS/IFQ for purposes of ROFR after the cooling off 
period (see response to comment 136 for additional information on the 
application of community for the cooling off period.)
    Comment 115: The provision at Sec.  680.40(m)(2) states that ``any 
sale must be provided on the same terms'' to the EEC entity. This 
wording is not a complete description of the right of first refusal, 
since the ability to exercise the right applies for a limited period 
and is exercised by performing the terms, not receiving an offer. Use 
the language from the motion.
    Response: NMFS agrees. See response to comment 110.
    Comment 116: Since ROFR applies to IPQ, the provision at Sec.  
680.40(m)(6) should be broadened to include waivers with respect to 
IPQ. Since ROFR applies to IPQ, the provision at Sec.  680.40(m)(7) 
should be broadened to include ROFR with respect to IPQ, under the 
terms of the motion.
    Response: NMFS agrees. See response to comment 110.
    Comment 117: It is unclear at Sec.  680.41(c)(3)(i) and (ii) 
whether the ECCO can hold and transfer PQS. The ECCO should be able to 
hold and transfer both QS and PQS. Clarify that ECCOs can hold PQS.
    Response: NMFS agrees that an ECCO can hold and transfer both QS 
and PQS. Any person, including an ECCO, may apply to receive and hold 
PQS or IPQ by transfer. The final rule at Sec.  680.41(c)(1)(i) makes 
this clear. Restrictions exist, however, on who can purchase QS and 
special provisions for transfer to and holding of QS by an ECCO must 
therefore be set forth in regulations.
    Comment 118: The provision at Sec.  680.41(c)(3)(i) and (ii) states 
that each ECC must designate an ECCO. The rationale for this absolute 
requirement is unclear. Communities have the option of designating an 
ECC entity, but would waive the ROFR and not be permitted to use the 
community purchase privilege, if they chose not to. ``Must'' should be 
changed to ``may''.
    Response: The commenter is confusing ECCO provisions for the 
purchase of QS with ECC entity provisions for purposes of exercising 
ROFR. NMFS agrees that a non CDQ

[[Page 10206]]

ECC is not required to designate either an ECCO for purposes of 
purchasing and holding PSQ, IPQ or QS or an ECC entity to exercise 
ROFR. The final rule at Sec.  680.41(l)(2)(ii) provides a 30-day time 
limit within which an ECC must designate an ECC entity if it wishes to 
do so. If an ECC entity is not designated, then opportunity for ROFR by 
the ECC is permanently waived.
    Comment 119: The provision at Sec.  680.41(d)(2)(i)(C) requires a 
statement from an authorized representative of a community that the 
ROFR has been offered on sale of shares outside a community. Several 
aspects should be clarified here. First, a signature from an authorized 
representative is too strict of a requirement. A provision that 
requires a PQS/IPQ holder that is subject to ROFR to provide notice to 
ECC entity (and the agency) of the sale is all that should be included 
here. Otherwise, reluctance to sign the authorization could lead to a 
delay in the transaction despite proper notice of the sale.
    Second, the notice is only required if the sale meets the 
requirements for the ROFR (i.e., some transfers do not trigger the 
ROFR). Intra-company transfers, transfers for use in the community, and 
some transfers of IPQ are not subject to the ROFR. This is not clear 
from the way the provision is drafted.
    Third, somewhere in the regulation the process of completing a sale 
on which the ROFR is exercised should be stated. Under the Council 
motion, the EEC entity should notify the PQS/IPQ holder (and agency) of 
its intent to exercise ROFR (and evidence of its earnest money 
payment). Then regulations should require confirmation of performance 
for the agency to finish the transaction. The rule should be changed to 
only require notice of the transaction to the holder of the ROFR if the 
proposed transfer is subject to the ROFR. Regulations should be revised 
to better define the process for exercising ROFR.
    Response: NMFS agrees and has changed the final rule at Sec.  
680.41(h)(2)(i)(C) to clarify that a holder of PQS/IPQ who wishes to 
transfer any PQS or IPQ subject to ROFR for use outside an ECC that has 
designated an entity to represent it in exercise of ROFR, must include 
an affidavit in the application for transfer stating that notice of the 
desired transfer has been provided to the ECC entity under civil 
contract terms enacted under section 313(j) of the Magnuson Stevens 
Act. The final rule at Sec.  680.41(i)(8) and (9) also has been revised 
to clarify the process for approval of a transfer application subject 
to ROFR. In summary, the Regional Administrator will not act upon the 
application for a period of 10 days. At the end of that time period, 
the application will be approved pending meeting the general criteria 
for transfer of PQS or IPQ under Sec.  680.41(i), unless a court order 
is issued to NMFS to prohibit transfer based on a breech of civil 
contract terms referenced under Sec.  680.41(f)(3). A 10-day stand down 
period by NMFS before approval of a transfer should allow sufficient 
time for an aggrieved signatory to a civil contract for ROFR to obtain 
a court order to stop a transfer of PQS/IPQ subject to ROFR so that 
contract terms may be fulfilled through civil court proceedings.
    In the case of an application for transfer of PQS within an ECC 
that has designated an entity to represent it in exercise of ROFR, the 
Regional Administrator will not approve the application unless either 
the ECC entity provides an affidavit to the Regional Administrator that 
the ECC wishes to permanently waive ROFR for the PQS or the proposed 
recipient of the PQS provides an affidavit affirming the completion of 
a contract for ROFR that includes the terms enacted under section 
313(j) of the Magnuson Stevens Act.
    Comment 120: The community of Adak does not receive the ROFR. It 
should be expressly excluded from ROFR at Sec.  680.41(j)(1)(ii).
    Response: NMFS agrees that the community of Adak is not eligible 
for exercise of ROFR and noted that elsewhere in the regulations. The 
suggested regulatory clarification has been made to the final rule.
    Comment 121: The community does not need to designate an ECC 
entity. If they do not the ROFR is waived. Change ``must'' to ``may'' 
at Sec.  680.41(j)(2)(ii).
    Response: NMFS agrees that under Amendment 18, an ECC is not 
required to designate an entity to represent it in the exercise of ROFR 
and has changed the final rule at Sec.  680.41(l)(2) to clarify that 
such a designation is discretionary. Any such designation must be made 
at least 30 days prior to the ending date for the initial application 
period for crab PQS. If an eligible ECC does not designate an entity 
within that time period, opportunity to exercise ROFR for transfer of 
PQS or IPQ will be permanently waived. NMFS notes that an ECC that is 
also a CDQ community is not required to designate an ECC entity because 
Amendment 18 specifically states that the CDQ group to which that ECC 
is a member also will be the ECC entity in the exercise of any ROFR. 
See also response to comment 111.
    Comment 122: Requiring the ECC entity to be a signatory to the 
transfer at Sec.  680.41(j)(3) is inappropriate and should be removed. 
A ROFR only requires notice and the opportunity to exercise the right. 
It may be useful to have PQS holders submit an annual report 
identifying the amount of IPQ that it used in a community during the 
year and if used outside a community, who used the IPQ (which would be 
used to determine whether the ROFR would apply to a future 
transaction). Require that the transferor provide evidence of notice to 
the ECC entity.
    Response: NMFS agrees that an ECC entity does not need to be a 
signatory to the transfer of PSQ or IPQ and has changed the final rule 
accordingly; see response to comment 119. To the extent that 
information on the use of IPQ within and outside an ECC can be 
publically released under federal and state data confidentiality 
standards, NMFS will plan to do so on an annual basis. This commitment 
does not require a regulatory provision.
    Comment 123: The proposed provision at Sec.  680.41(j)(4) seems to 
confuse the process of passing on the ROFR to a successor. If the 
transfer is within the ECC, the recipient of the PQS would need to sign 
a contract granting the ROFR to the ECC organization (not ``exercising 
the right'') and agree to terms concerning the use of the shares in the 
community in future years. In addition, the ECC entity need not have 
signed the contract on application. The submission of the contract 
signed by the recipient of the shares will allow the agency to deliver 
the contract to the ECC entity for signature. If the ECC entity does 
not sign the contract the ROFR would be waived. Revise process for 
intra-community transfers consistent with the Council motion.
    Response: The final rule at Sec.  680.41(i) clarifies the process 
for transfer of PSQ within an ECC. See response to comment 119. The 
final rule at Sec.  680.40(f)(3) also was revised to clarify the role 
of a civil contract for ROFR in the PQS application process. NMFS will 
not be involved in the completion of these civil contracts. Instead, an 
application for crab QS or PQS from a person based on legal processing 
that occurred in an ECC, other than Adak, must also include an 
affidavit signed by the applicant stating that notice has been provided 
to the ECC of the applicant's intent to apply for PQS 60 days prior to 
the end of the application period. If the ECC designates an entity to 
represent it in the exercise of ROFR in the designated time period, 
then the application also must include an affidavit of completion of a 
contract for

[[Page 10207]]

ROFR that includes the terms enacted under section 313(j) of the 
Magnuson Stevens Act. The affidavit must be signed by the applicant for 
initial allocation of PQS and the ECC entity designated under Sec.  
680.41(l)(2). Also see responses to comments 121 and 112.
    Comment 124: The provisions at Sec.  680.41(j)(5) defining the ROFR 
in the North Gulf need to limit the ROFR to the same terms generally as 
the general ROFR. This means that the ROFR applies only to the first 
transfer from the community of origin. These terms are not clear in the 
current regulation. Revise regulation consistent with the Council 
motion.
    Response: The final rule at Sec.  680.40(f)(3)(ii) has been revised 
to clarify that the civil contracts between the ECC (only the ECC 
comprised of the City of Kodiak and Kodiak Island Borough is eligible) 
and applicants for PQS based on legal processing that occurred in the 
GOA north of a line at 56[deg]20' N. lat. must adhere to the same terms 
for civil contracts established under section 313(j) of the Magnuson 
Stevens Act as the general ROFR contract agreements. Also see response 
to comment 110.
    Comment 125: The cooling off provision allows IPQ to be used inside 
the borough, if one exists, and inside the first or second class city, 
if a borough does not exist. The provision at Sec.  680.42(c)(5) 
appears to limit use of shares outside of the first or second class 
city in all cases. Revise provision to define boundaries based on 
Council criteria.
    Response: NMFS agrees and has clarified the different definition of 
``community'' to which the ``cooling off'' period applies at Sec.  
680.42(b)(4) that applies specifically to PQS/IPQ transfers during the 
cooling off period. See also response to comment 114.
    Comment 126: An initial recipient of PQS (i.e., a shore-based 
processor) must submit a signed community ROFR with his/her 
application. The proposed rule at Sec.  680.40(f)(3) and (m), does not 
address what happens if a community fails to establish an entity to 
negotiate the community ROFR, or otherwise fails to consummate a ROFR 
deal with the processor during the application period. There is no 
remedy for the PQS holder, which runs the risk of losing IPQ for the 
crab year. The Council anticipated this situation and incorporated 
language in Amendment 18 that states an ECC (both CDQ and non-CDQ) must 
establish the entity to negotiate the ROFR prior to the application 
period; otherwise that community loses its ROFR rights. If an ECC does 
not establish an appropriate entity within 60 days of the initial 
application period, that community loses its ROFR rights.
    Response: NMFS agrees and has changed the final rule accordingly. 
See response to comments 121 and 111.
    Comment 127: The proposed rule's ``affiliation'' standard adversely 
impacts CDQ groups and eliminates Council-intended community 
protection. Most, if not all CDQ groups invested in crab harvesting 
assets, either as partners or sole owners, following passage of the 
June 10, 2002, Council motion. They did so cognizant of the fact that 
the motion assigns CDQ groups the community ROFR rights for PQS earned 
in their communities, as a form of community protection. But the 
proposed rule's narrow definition of ``affiliation'' undermines the 
community protection from ROFR rights. ROFR rights are rendered 
meaningless if a CDQ group exercises its ROFR rights and purchases 
processing assets to keep them in the community. The CDQ crab 
harvesting investments become ``processor-affiliated.'' Those CDQ 
vessels and all that may be indirectly affiliated with them lose their 
Class B IFQ. They may not join cooperatives under Sec.  680.21. They 
lose all rationalization benefits, like the vessel cap exemption, 
leasing rights after 2010, and the right to lease IFQ from a 
cooperative. The Council never intended this benefit deprivation.
    The Council anticipated these sorts of problems and established a 
context-specific definition of ``affiliation.'' With regard to Class B 
IFQ, the definition focused on control of landings, not the 10 percent 
rule that is uniformly applied in the proposed rule. The proposed rule 
should be modified to reflect Council intent. An affidavit approach re-
establishes a functional ROFR process; in the absence of it, ROFR is a 
meaningless right that offers no community protection.
    Response: In response to other comments, NMFS has revised the final 
rule to allow processor affiliated vessels to join crab harvesting 
cooperatives and therefore to gain the benefits from participating in 
crab harvesting cooperatives. See response to comment 84. Further, the 
definition of ``affiliation'' under Sec.  680.2 has been modified to 
allow crab harvesting cooperatives or other processor affiliated 
entities to receive Class A/Class B IFQ in amounts proportional to the 
amount of IPQ held by the person with whom the QS holder is affiliated. 
See response to comment 25 for a more specific discussion of this 
change.
    Comment 128: The Council recognized CDQ organizations as the ECCO 
for CDQ communities, because CDQ organizations are already established 
to buy, sell and lease QS and other assets in a manner consistent with 
the NPFMC's intent for this program. Therefore, the rationale for 
requiring at Sec.  680.41 that a CDQ group apply on behalf of the ECC 
and also establish a separate ECCO is inefficient and perhaps even 
inconsistent with Council intent. CDQ groups are already authorized to 
hold shares for their community(s) and the NPFMC has also given the CDQ 
groups the right of first refusal. This suggests that the Council 
motion contemplates a single entity to serve both of these purposes.
    Response: NMFS agrees that Amendment 18 contemplates that the CDQ 
group to which an ECC is a member would serve both as the ECCO for 
purposes of purchasing and holding PQS or QS and as the ECCO for 
purposes of ROFR. Given the nondiscretionary nature of this 
designation, CDQ communities do not need to identify either the ECCO or 
ECC entity because that ECCO or entity already is specified under the 
Council's motion and in regulations.
    Comment 129: The requirement that a PQS applicant must submit a 
signed ROFR prior to PQS issuance at Sec.  680.40 (f)(3) and (f)(7) is 
not practical in cases where the ECC has not established an ECC entity 
within the appropriate time frame; or where the ECC entity has over-
stepped the Council's ROFR terms. The Council specified ROFR contract 
terms that should be incorporated into the proposed rule. These terms 
are specific, yet at the same time they do not pose any enforcement 
liability on the NMFS.
    Response. The final rule at Sec.  680.41(l) establishes time 
limitations for the designation of an ECC entity to represent a non CDQ 
ECC in the exercise of ROFR. Signed ROFR contracts will not be required 
to be submitted, only an affidavit that such a contract has been 
completed consistent with the terms set forth under the Council's 
motion. These terms have been removed from regulations at Sec.  
680.40(m) because they are already set forth specifically in statute 
and to avoid any inconsistency between regulations and statutory 
language. Additionally, these contract terms will not be monitored or 
enforced by NMFS. NMFS is requiring PQS holders to submit an affidavit 
attesting that the contract has been completed. Also see response to 
comment 112.
    Comment 130: As an ECC, ROFR rights are very important to our 
community. But the proposed rule at Sec.  680.41(d)(2)(i)(C) does not 
implement these rights in a manner that is both clear and consistent 
with the Council motion. We offer these suggestions:

[[Page 10208]]

    The ROFR provision in the proposed rule requires a statement from 
an authorized representative of a community that the ROFR has been 
offered on sale of shares outside a community. This could be a problem. 
A provision that requires a PQS/IPQ holder that is subject to ROFR to 
provide notice to ECC entity (and the agency) of the sale is important 
and necessary; but the signature-requirement is not. An ECCO's 
reluctance to sign the authorization could lead to a delay in the 
transaction despite proper notice of the sale.
    Also, the notice is only required if the sale meets the 
requirements for the ROFR (i.e., some transfers do not trigger the 
ROFR). Intra-company transfers, transfers for use in the community, and 
some transfers of IPQ are not subject to the ROFR. The proposed rule 
needs to be more specific in this regard.
    Response: NMFS agrees that the ROFR provisions of the proposed rule 
should be changed to more accurately reflect the intent of the Council 
and statute provisions of section 313(j) of the Magnuson Stevens Act. 
The final rule at Sec.  680.41(h)(2)(i)(C) and (i)(8) reflects the 
recommended changes.
    Comment 131: The ROFR requirement was approved by the Council to 
protect a crab community from losing its processing industry. The 
proposed regulation establishes a timetable that requires a ROFR 
contract be submitted prior to the award of PQS. This does not meet the 
intent of the Council and does not aid in the protection of the 
community. There may be occasions when the proper community entity 
simply cannot act in a timely fashion and the processor awaiting PQS is 
penalized by not receiving PQS due to circumstances completely beyond 
his control. We believe the regulation should be revised to require 
that the ROFR be fully executed prior to a holder of PQS completing a 
permanent sale of his PQS.
    The proposed regulation also conflicts with Council intent in that 
it would require the community group or CDQ group to affirmatively 
reject the option to purchase. The Council motion required the exact 
opposite--the Council plan required a community group or CDQ group to 
affirmatively accept the option. The Council interpretation is critical 
because it requires the community to take action and will protect from 
community inaction for any reason. The ROFR requirement in the proposed 
regulation with regard to leasing is inconsistent with Council intent. 
The proposed regulation states that the ROFR is required if PQS is 
leased in excess of one year. The Council test stated that the ROFR 
arises if the 80 percent of the PQS is leased in any three of five 
years. The regulation should be revised to reflect that original intent 
of the Council.
    Response: The terms of a civil contract for ROFR have been removed 
from regulations at Sec.  680.40(m), including the terms associated 
with leasing of PQS referred to in the comment, because these terms are 
enacted by statute. This approach also avoids any regulatory conflict 
with Amendment 18 concerning these terms and conditions. See also 
response to comment 113.
    NMFS has changed the final rule at Sec.  680.40(f)(3) and (f)(7) to 
require only that an affidavit be signed by the PQS applicant that a 
civil contract for ROFR has been completed. NMFS will not issue an IAD 
on unverified claims or issue PQS until such an affidavit is received. 
The final rule also has been changed so that an ECC entity would not be 
required to affirmatively reject an option to exercise ROFR. See 
response to comment 119.
    Comment 132: Add the following definition for a non-profit to Sec.  
680.2 to clarify the phrase non-profit organization used in the 
regulations: Non-profit organization means: (1) An Alaskan municipal 
corporation in a non-CDQ ECC; or (2) a corporation organized under the 
Alaska Nonprofit Corporation Act. A municipal corporation is not a 
profit entity. This definition is consistent with the intent of 
requiring a non-profit organization to serve as the representative of 
an ECC and provide a community with the option of designating a 
municipal corporation as the non-profit organization EEC entity for the 
ECC.
    In smaller communities, establishing a limited purpose non-profit 
entity for the EEC entity will be inefficient. For example, an 
additional volunteer board would need to be recruited, separate 
insurance, legal and accounting services would be required, and the 
rules for participation in the ECC entity and election and meeting 
procedures would need to be determined. Allowing a municipal 
corporation would avoid these inefficiencies because all of the 
organizational infrastructure is already in place within a municipal 
corporation. Moreover, publically elected officials, who operate in 
what they feel is in the best interest of the public, would be the 
final decision makers.
    Response: Amendment 18 for community purchase and management of PQS 
and QS states: ``* * * Ownership and management of harvest and 
processing shares by community entities in non-CDQ communities will be 
subject to rules established by the halibut and sablefish community 
purchase program.'' This program was implemented under the final rule 
implementing Amendment 66 to the FMP for Groundfish of the GOA (69 FR 
23861, April 30, 2004). The proposed and final rules implementing 
Amendment 18 for community purchase and management of crab QS and PQS 
are consistent with Amendment 66 provisions. Thus, NMFS believes that 
the commenter's suggestion is inconsistent with Amendment 18 and would 
require a subsequent FMP amendment to the Program in the future.
    Comment 133: Section 680.40(f) makes it seem that the ROFR can be 
used on QS purchase and it should be clarified that ROFR can only be 
used on PQS and IPQ.
    Response: NMFS agrees and has changed the final rule accordingly.
    Comment 134: Clarify at Sec.  680.41(j)(4) that ROFR does not apply 
for transfers of IPQ inside an ECC.
    Response: The proposed and final regulatory text only refers to 
applicability of ROFR to transfer of PQS within a community to maintain 
the opportunity for ROFR contract provisions between an ECC entity and 
all PQS holders in the community. NMFS agrees that ROFR does not apply 
to the transfer of IPQ within a community because this activity only is 
an annual transfer that maintains processing history within the 
community. NMFS does not believe that regulatory changes are necessary 
to clarify this point.
    Comment 135: The proposed rule at Sec.  680.40(a)(1) stipulates 
that ``with the exception of the WAI golden king crab fishery, the 
Regional Administrator shall annually apportion 10 percent of the TAC 
specified by the State of Alaska for each of the fisheries described in 
Table 1 to this part to the Western Alaska CDQ Program.'' CDQ groups 
strongly support this above provision as a community protection measure 
under the Crab Rationalization program. The increase in CDQ allocations 
of Crab species from 7.5 percent to 10 percent is consistent with 
National Standard 8 of the Magnuson-Stevens Act. National Standard 8 
includes the requirement that conservation and management measures, 
consistent with the conservation requirements of the Magnuson-Stevens 
Act, take into consideration the importance of fishery resources to 
fishing communities. This standard establishes the goals of providing 
for the sustained participation of those communities and of minimizing

[[Page 10209]]

adverse economic impacts to the extent practicable.
    Response: The increase in the allocation of crab TACs to the CDQ 
Program and the addition of two new CDQ allocations for Eastern 
Aleutian Islands golden king crab and Adak red king crab are required 
by section 313(j) of the Magnuson-Stevens Act.
    Comment 136: ROFR has distinct characteristics that differ between 
the ``Cooling Off'' period and after the cooling off period. This is 
not clear in the proposed rule. If the IPQ holder and the physical 
processor are in the same community, agency transfer approval should 
not be required and the activity should not count for purposes of 
community protections. We believe that the Council intended that use 
caps and community protections should not be circumvented by the use of 
custom processing arrangements. We also believe that the Council did 
not intend to require a formal agency transfer approval for custom 
processing arrangements in a single community.
    Response: NMFS agrees. Amendment 18 clarifies that the ``cooling 
off provision'' would limit the transfer of PQS or IPQ outside of a 
community for the first two years of the Program. However, Amendment 18 
defines a community for purposes of the ``cooling off'' provision as 
``the boundaries of the Borough, or if no Borough exists, the first 
class or second class city as defined by applicable state statute.'' 
NMFS incorrectly applied the same geographic boundaries to both the 
ROFR provisions and the ``cooling off'' provisions at Sec.  
680.42(b)(4). The commenter's concern is addressed by modifying Sec.  
680.42(b)(4)(iv) to clarify the geographic boundaries to which the 
``cooling off `` provisions apply.

Arbitration System

    Comment 137: The provisions in the proposed rule at Sec.  
680.20(h)(2)(ii)(B), (h)(3)(iii)(C), (h)(3)(iv)(D), and (h)(3)(v) 
permit IPQ holders to initiate arbitration. Only IFQ holders are 
permitted to initiate arbitration under the Council's arbitration 
program. The final rule should limit arbitration initiation to IFQ 
holders.
    Response: NMFS agrees, Amendment 18 and 19 state that the Binding 
Arbitration procedures can be initiated by the Arbitration IFQ holder 
only. The reference to the IPQ holder initiating binding arbitration 
has been removed from Sec.  680.20(h)(2)(ii)(B), (h)(3)(iii)(C), 
(h)(3)(iv)(D), and (h)(3)(v).
    Comment 138: CVC QS holders should not be required to be in 
Arbitration Organizations in the first three years of the program, as 
required in the proposed rule at Sec.  680.20(a)(1). In Amendment 18, 
arbitration is optional for these share holders until July 1, 2008. 
They could elect to join the arbitration process by joining an 
Arbitration Organization, but should not be required to join. The final 
rule should make membership in Arbitration Organizations optional for 
CVC QS holders prior to July 1, 2008. Additionally, the reference to 
paragraph (b)(1) at Sec.  680.20(d)(1) of the proposed rule should be 
clear that CVC QS holders may (not must) join Arbitration Organizations 
prior to July 1, 2008.
    Response: NMFS agrees, CVC QS and IFQ holders may participate in 
the Arbitration System, but are not required to do so prior to July 1, 
2008. This interpretation is consistent with Amendments 18 and 19. NMFS 
has corrected the final rule at Sec.  680.20(a)(1) and Sec.  
680.20(d)(1) to note that participation in the Arbitration System by 
CVC QS holders is not required prior to July 1, 2008.
    Comment 139: The proposed rule at Sec.  680.20(a)(2) should not 
limit negotiations to the preseason period. Although the process for 
arbitration states that negotiations should be conducted in the 
preseason, the purpose of that language is to define the matching of 
shares for purposes of the arbitration procedure. The regulation 
suggests that IFQ and IPQ cannot be used if parties do not reach a 
preseason negotiation. Nothing is lost in the arbitration process from 
allowing voluntary negotiations between holders of uncommitted shares 
to occur after the season is begun.
    Response: Amendments 18 and 19 state that ``at any time prior to 
the season opening date, any IFQ holders may negotiate with any IPQ 
holder on price and delivery terms for that season (price/price 
formula; time of delivery; place of delivery; etc.).'' Although this 
statement could suggest that the open negotiation process was 
anticipated to be limited to the preseason period, the use of the word 
``may'' as opposed to ``must'' would allow the process to extend beyond 
the preseason period. This statement is made under the general heading 
of ``Last Best Offer Binding Arbitration.'' It is presumed that the 
limitation on the use of open negotiations would apply to persons who 
are using the negotiation methods that are established under the 
Arbitration System (i.e., share matching and binding arbitration), but 
not necessarily to those IFQ and IPQ holders who are ineligible to use 
the Arbitration System or to those Arbitration IFQ holders that have 
not yet committed shares to a specific IPQ holder. Under this revision, 
an Arbitration IFQ holder that has committed shares to a specific IFQ 
holder would not be permitted to reenter open negotiations as is 
expressed under Amendments 18 and 19. However, if an Arbitration IFQ 
holder has not yet committed shares, open negotiation would be 
available to that person after the season has begun.
    NMFS is revising this portion of the regulations at Sec.  
680.20(a)(3) to clarify that if Arbitration IFQ holders choose to use 
the Arbitration System, they may enter into open negotiation prior to, 
and during the crab fishing season. Once the season begins, those 
persons who have committed shares to an IPQ holder would be subject to 
the limitations established under Amendments 18 and 19. Persons who are 
affiliated with PQS or IPQ holders would continue to be eligible to use 
open negotiation after the fishing season has begun.
    Comment 140: The word ``uncommitted'' has been omitted in front of 
IPQ in a few places in the proposed rule at Sec.  680.20(a)(3). Only 
uncommitted shareholders can negotiate deliveries with holders of 
uncommitted IFQ.
    Response: NMFS agrees that Amendments 18 and 19 are intended to 
limit the ability to negotiate to uncommitted IPQ holders. NMFS has 
changed the final rule at Sec.  680.20(a)(2) to clarify this point.
    Comment 141: The provision at Sec.  680.20(d)(1)(iv) of the 
proposed rule permits a person to be a member of only one Arbitration 
Organization. If a person is only permitted to be a member of a single 
organization, holders of both IFQ and IPQ cannot meet the requirements 
of the regulation to be members of separate organizations for IFQ and 
IPQ. The final rule should be revised to allow membership in one IFQ 
Arbitration Organization and one IPQ Arbitration Organization.
    Response: NMFS agrees that the regulations in the proposed rule do 
not accommodate the situation of a person who holds both PQS/IPQ and 
QS/IFQ. The regulations at Sec.  680.20(d)(1)(iv) have been modified to 
allow a person who holds PQS/IPQ to join only one PQS/IPQ Arbitration 
Organization, a person who holds Affiliated QS/IFQ to join only one 
Affiliated QS/IFQ Arbitration Organization, and a person who holds 
Arbitration QS/IFQ to join only one Arbitration QS/IFQ Organization. 
This section has been renumbered based on responses to comments, and 
the text to which the commenter refers is now found at Sec.  
680.20(d)(1)(iii) not at Sec.  680.20(d)(1)(iv).

[[Page 10210]]

    Comment 142: The provision at Sec.  680.20(e)(2)(ii) of the 
proposed rule requires the use of the ``Share Matching Approach,'' the 
``Lengthy Season Approach,'' and ``Binding Arbitration.'' None of these 
should be required of all participants since arbitration is intended to 
be voluntary. The regulation requires Arbitration Organization 
membership and contracts that define the terms that govern arbitration 
participation. This provision is over broad. The final rule should be 
revised to state that participants shall engage in arbitration subject 
to the rules and to the extent specified in the contracts.
    Response: The regulations are intended to require that if a member 
of an Arbitration Organization intends to use the Arbitration System, 
that member would be required to use the negotiation approaches of open 
negotiation, Lengthy Season, and Share Matching outlined at Sec.  
680.20(h). NMFS agrees that the wording in this regulation may not 
reflect the intent that members of an Arbitration Organization that 
choose to use the Arbitration System, may use any of the negotiation 
approaches that are described at Sec.  680.20(h). Regulations governing 
the use of the negotiation approaches are already defined at Sec.  
680.20(h) and additional contractual requirements on the members of 
Arbitration Organizations are not required. The regulation at Sec.  
680.20(e)(2)(ii) has been removed to reduce confusion and more 
accurately reflect the Statute.
    Comment 143: The provision at Sec.  680.20(e)(2)(v) of the proposed 
rule is over broad and should be deleted. All information generated 
pursuant to Sec.  620.20 would require each Arbitration Organization to 
obtain documents that it and its members have no access to.
    Response: The provisions governing the use of information in the 
Arbitration System is intended to facilitate the ability of uncommitted 
IPQ holders to communicate to uncommitted IFQ holders the amount of IPQ 
that may be available. The role of the Arbitration Organizations in 
this process is to help ensure that information is communicated to 
their members in a manner that minimizes the potential risks of 
violating antitrust statutes. The goal of the information exchange is 
not to place undue burdens on the participants. NMFS agrees and has 
modified the regulations so that the delivery of information from 
uncommitted IPQ holders to the uncommitted Arbitration IFQ holders 
could be accomplished by requiring Arbitration Organizations to hire 
administrative personnel or contract with a third party data collection 
agency, that does not have a linkage with either the IPQ holders or IFQ 
holders, for the delivery of that information to Arbitration QS/IFQ 
Arbitration Organizations. Arbitration Organizations therefore will not 
be required to obtain documents that their members cannot see in a 
manner that requires their members to see them. The regulations in this 
section have been modified to improve the ability of uncommitted IPQ 
holders to communicate the amount of shares available through the 
Arbitration Organizations or through a third-party data collection 
agent. NMFS has renumbered the regulations based on changes from other 
comments, and has modified and redesignated the text to which the 
commenter refers to at Sec.  680.20(e)(2)(iv).
    Comment 144: The provisions at Sec.  680.20(e)(2)(v)(B)(1) and (2) 
of the proposed rule require the Arbitration Organizations to deliver 
notices to uncommitted Arbitration IFQ holders. IPQ Arbitration 
Organizations, however, have no way of knowing who holds uncommitted 
IFQ. The provisions should be revised so that persons required to 
deliver notices (1) have access to the names of those required to 
receive the notice; (2) have access to the information required to be 
delivered; and (3) are required to maintain confidentiality.
    Response: This concern has been addressed by modifying the 
information distribution system as per the previous comment response in 
comment 143. However, IPQ holders will not be allowed access to 
information about who holds uncommitted IFQ. All information exchanges 
will be subject to existing antitrust laws.
    Comment 145: As drafted, the arbitration requires the Arbitration 
Organizations to deliver several different notices and pieces of 
information to members that meet certain criteria. The regulation also 
places strict limitation on the persons who may receive this 
information (i.e., only holders of uncommitted IFQ are permitted to 
receive the terms of the arbitration finding or the identities of the 
holders of uncommitted IPQ that are parties to an arbitration 
proceeding). The provisions create a paradox under which the persons 
(or organizations) required to deliver the notices are unlikely to be 
able to deliver the notices, because no person would be in a position 
to receive the information that needs to be disseminated or know the 
identities of the persons that need to receive the information. The 
regulations could overcome this problem by providing Arbitration 
Organizations with the ability to hire a third party for the delivery 
of notices. That third party should be required to be independent of 
any associations with any IFQ holders or IPQ holders (except for the 
management of Arbitration Organization notices) and be bound to hold 
all information received confidential.
    Response: This concern has been addressed by modifying the 
information distribution system. See response to comment 143.
    Comment 146: The timeline at Sec.  680.20(f)(4) may not be 
appropriate for the first year delivery of the arbitration formula. The 
final rule should allow the same time as permitted at Sec.  
680.20(e)(6) for the Market Report.
    Response: NMFS agrees. The timeline that has been developed may not 
adequately address the timing of the fishery in the first year of the 
program. The best available estimate is that QS/PQS and IFQ/IPQ will 
not be issued until August 1. In order to make the arbitration system 
available to the participants in the first year of the program, the 
timeline for joining an Arbitration Organization, selecting the market 
analyst, formula arbitrator, and formula arbitrator has been modified 
so that it will occur after the expected date of QS issuance. NMFS has 
modified the timelines for the Arbitration System in 2005 at Sec.  
680.20(c)(3), (d)(3)(i), (e)(6) and (f)(4) and (g)(4)(viii) as follows:
    (1) The deadline for QS and PQS holders to join an Arbitration 
Organization is August 15, 2005;
    (2) The deadline for Arbitration Organizations with members who are 
QS or PQS holders to submit a complete Annual Arbitration Organization 
Report is August 20, 2005;
    (3) The deadline for the selection of the Market Analyst, Formula 
Arbitrator, and Contract Arbitrators is September 1, 2005; and
    (4) The deadline for the completion of the Market Report and Non-
Binding Price Formula is September 30, 2005 or 25 days prior to the 
date of the start of the crab season for that crab QS fishery.
    NMFS understands that this new timeline may be problematic for 
participants in the golden king crab fisheries which typically begin in 
mid-August. Given these deadlines, the Arbitration System may not be 
available to participants in this fishery prior to the start of the 
season given current season opening schedules.
    Consistent with Council intent, IFQ/IPQ will not be issued for this 
or any other crab QS fishery under Sec.  680.20(e)(7) until the market 
analyst, formula arbitrator and contract arbitrator have been selected. 
The extent to which these activities can be

[[Page 10211]]

completed by mid August will be dependent upon voluntary cooperation 
among fishery participants prior to issuance of IFQ/IPQ. The time lines 
in the final rule are deadlines, but the required activities could 
occur earlier, thus perhaps allowing for issuance of IFQ/IPQ for the 
golden king crab fishery by mid August. However, if fishery 
participants cannot conclude these activities by mid August, their IFQ/
IPQ will not be issued prior to the August 15 start date, but CPO IFQ 
will be available for harvest.
    Any concern about different start dates for the CV and CP fisheries 
may be attenuated by a delayed start date in the golden king crab 
fishery for the first year of the program. A change in the start date 
of the fishery is deferred to the authority of the State of Alaska 
Board of Fisheries, and is not addressed in these regulations.
    Comment 147: Section 680.20(h)(3) describes the arbitration 
procedure. The regulation should also provide that a single binding 
arbitration proceeding (excluding quality disputes, performance 
disputes, and the lengthy season approach) is permitted for each IPQ 
holder per fishery per year. The final rule should include a provision 
that limits each IPQ holder to a single binding arbitration proceeding 
per fishery per year.
    Response: Amendments 18 and 19 do not provide a specific provision 
to this effect. However, given the fact that binding arbitration 
proceedings are limited to arbitration during a five day period that 
occurs from 15 days prior to the season until 10 days prior to the 
start of the crab fishing season, the practical effect may be that 
there is a single arbitration per IPQ holder per crab QS fishery during 
this five day period. However, this would not preclude additional 
arbitration proceedings that could arise from a lengthy season 
approach, quality dispute, or performance dispute. Section 680.20(h)(3) 
has been modified to note that there can only be one arbitration 
proceeding for an IPQ holder during this 5-day period.
    Comment 148: Section 680.20(h)(3)(ii) generally sets out the 
process by which arbitration is initiated. Although the commitment of 
shares is defined in the definitions section of the proposed rule 
(Sec.  680.2, Committed IFQ and Committed IPQ), the regulation could be 
clarified, if the process for negotiated commitments were included 
here. The final rule should include description of commitment 
definition at Sec.  80.20(h)(3)(ii).
    Response: As the commenter notes, this process is clarified in the 
definitions section. The regulatory text provides that open negotiation 
is possible until an Arbitration IFQ holder has committed IFQ to an IPQ 
holder. Once that commitment has occurred, the IFQ holder is subject to 
the provisions established under the Lengthy Season approach, Share 
Matching and Binding Arbitration. The regulations at Sec.  
680.20(h)(3)(ii) have been modified to more clearly state that once IFQ 
are committed, open negotiation is no longer possible.
    Comment 149: The provisions at Sec.  680.20(h)(3)(iii) concerning 
the ``Lengthy Season Approach'' should specify that the adoption of 
this negotiation/arbitration approach is available only to persons that 
have committed shares. The final rule should require share commitments 
for participants to use the lengthy season approach.
    Response: NMFS agrees and has modified Sec.  680.20(h)(3)(iii)(A) 
to note that the Lengthy Season approach requires a commitment of 
shares by the IFQ and IPQ holder.
    Comment 150: The inclusion of the provisions at Sec.  
680.20(h)(3)(iii) concerning the ``Lengthy Season approach'' at this 
point in the regulations adds confusion to the arbitration process. 
This paragraph primarily concerns the commitment of shares and the 
process that share holders undertake preceding, and possibly leading up 
to, Binding Arbitration. The lengthy season approach is an alternative 
to that standard procedure. The provisions concerning the lengthy 
season approach should be included in the contract for the Contract 
Arbitrators, but as a separate provision outside the process 
description here.
    Response: The Lengthy season approach is described as an 
alternative mechanism to allow for committed Arbitration IFQ holders 
and committed IPQ holders to negotiate specific contract terms later in 
the season, or enter into binding arbitration if those processes are 
unsuccessful. The regulations at Sec.  680.20(h)(3)(iii) have been 
modified to more clearly state that the Lengthy Season approach is an 
alternative approach to the standard binding arbitration procedure.
    Comment 151: The process for arbitration of the lengthy season 
approach is not well defined in the Council motion. The regulation at 
Sec.  680.20(h)(3)(iii) should not attempt to specifically define that 
process. The regulation should state that industry should define the 
procedure for arbitration of the lengthy season approach, including the 
timing of the proceeding and the ability of any IFQ holders to join the 
proceeding or opt-in to the outcome of the proceeding.
    Response: The requirements of when binding arbitration may occur 
under a Lengthy Season approach provide considerable flexibility to the 
participants. The regulation has not been modified.
    Comment 152: The provision at Sec.  680.20(h)(3)(iv)(B) of the 
proposed rule requires an arbitration IFQ holder to commit at least 50 
percent of the IFQ held to an IPQ holder to make a unilateral 
commitment. The provision should provide for the commitment of the 
lesser of 50 percent of the IFQ held and an amount of IFQ that results 
in the commitment of all the processor's IPQ. In the absence of this 
provision, a harvester may be unable to commit any IFQ to a processor 
under the provision because the processor does not hold sufficient IPQ 
to take most of the harvester's IFQ. In addition, the regulation should 
consider a lower level than 50 percent for a cooperative to make a 
unilateral commitment, since a cooperative represents several share 
holders. A more appropriate threshold might be 50 percent of the 
average share holding in the cooperative. Revise the provision 
concerning the minimum commitment. For a cooperative unilateral 
commitment, a more appropriate threshold might be 50 percent of the 
average CVO share holding in the cooperative.
    Response: Amendments 18 and 19 state that the IFQ offered must be a 
``substantial amount'' of the IFQ holders uncontracted (uncommitted 
IFQ). The 50 percent commitment of shares was based on the assumption 
that it would represent a substantial amount of shares that a single 
IFQ holder could commit. NMFS has revised the final rule at Sec.  
680.20(h)(3)(iv)(B) to allow for an offer of uncommitted Arbitration 
IFQ equal to the total amount of uncommitted IPQ available, if that 
amount is less than 50 percent of the Arbitration IFQ holders 
uncommitted Arbitration IFQ. Because a cooperative is an association of 
multiple persons, it is reasonable to reduce the amount of IFQ that a 
cooperative must commit. Rather than linking this to a percentage of 
the average IFQ converted by members in the cooperative, a more 
administratively simple approach would be to require that cooperatives 
commit at least 25 percent of the IFQ held by the cooperative to an IPQ 
holder. Because cooperatives are likely to hold larger amounts of IFQ 
than a single IFQ holder, a 25 percent standard would be a substantial 
amount of the total holdings of the cooperative, and likely, would be 
at least equivalent to an

[[Page 10212]]

amount equal to 50 percent of any single IFQ holder. This 25 percent 
threshold for FCMA cooperatives has been added to the final rule at 
Sec.  680.20(h)(3)(iv)(B).
    Comment 153: The time period to initiate arbitration at Sec.  
680.20(h)(3)(iv) must be limited on both sides, since only one 
arbitration proceeding is allowed for each processor. The share 
matching limit of 25 days before the start of the season is intended to 
also operate as a limit on the ability to initiate arbitration. In the 
absence of a limit, a harvester could initiate an arbitration 
proceeding several months prior to the season, which is unreasonable 
for all parties including other harvesters that may wish to deliver to 
that processor. The final rule should limit IFQ holders from initiating 
binding arbitration more than 25 days prior to the season opening.
    Response: Amendment 18 states a Binding Arbitration proceeding must 
begin ``no later than'' 15 days before the season opening date. The 
regulations at Sec.  680.20(h)(3) are consistent with Amendment 18 and 
provide that a Binding Arbitration proceeding may begin at any point 
prior to 15 days before the start of the crab fishing season, except in 
the case of Share Matching. NMFS agrees it is reasonable to also 
include a date before which a harvester could not initiate a Binding 
Arbitration proceeding to limit a harvester's initiating a Binding 
Arbitration several months prior to the season. NMFS has modified the 
final rule at Sec.  680.20(h)(3)(v) to include a requirement that the 
Arbitration IFQ holder must initiate the Binding Arbitration procedure 
between 25 days and 15 days prior to the date of the first crab fishing 
season and a requirement that decisions would need to be issued not 
later than 10 days prior to the start of the crab fishing season. These 
requirements would effectively provide a 5-day period during which all 
arbitration proceedings must be decided.
    Comment 154: The provision at Sec.  680.20(h)(3)(v) needs to limit 
arbitration to holders of shares that are committed to one another. 
Revise provision so that an IFQ holder may initiate arbitration with an 
IPQ holder to which the IFQ holder has committed shares.
    Response: NMFS agrees and has modified the final rule at Sec.  
680.20(h)(3)(v) to more clearly state that arbitration is limited to 
IFQ and IPQ holders to whom shares have been committed.
    Comment 155: The provisions Sec.  680.20(h)(3)(v)(A), (B), (C), and 
(D), which reference the use of Open Negotiations, the Lengthy Season 
Approach, Share Matching, and Performance Disputes, do not work here 
because of the timing of these actions and the timing for initiating 
arbitration. For example, performance disputes will not arise until 
during the season, while the arbitration referred to here is limited to 
preseason. These references should be removed, as the preceding 
language defining the terms of arbitration are clear. The procedures 
for the lengthy season approach and performance disputes should be 
defined in the contract, but not specifically defined in the 
regulation. Remove the references at Sec.  680.20(h)(3)(v)(A), (B), 
(C), and (D) to the open negotiations, lengthy season approach, share 
matching, and performance disputes.
    Response: NMFS agrees and has changed the final rule at Sec.  
680.20(h)(3)(v) to clarify the issue raised in this comment. Section 
680.20(h)(3) applies to the timeframe for initiating Binding 
Arbitration prior to the season, if an open negotiation process is 
unsuccessful. It does not apply to the lengthy season approach, 
performance disputes, or quality disputes.
    Comment 156: There needs to be a limit at Sec.  680.20(h)(3)(vi) of 
the proposed rule on the time during which a person can join an 
arbitration proceeding in order to prevent parties joining during the 
proceeding to disrupt the proceeding. Require the contract with the 
Contract Arbitrator to specify the terms and timing of joining the 
proceedings.
    Response: Amendments 18 and 19 do not specify a time frame by which 
arbitration proceedings must be initiated. The proposed rule did not 
specify a particular time during which binding arbitration must be 
joined, but did note that binding arbitration could be concluded in a 
fashion so that post-arbitration opt-in could occur. This effectively 
created the need for an end of arbitration at some point before the end 
of the season. The contracts that establish the binding arbitration 
system could include terms that specify a time period during which 
binding arbitration may be joined. The final rule at Sec.  
680.20(h)(3)(vi) has been modified to clarify that the contract with 
the Contract Arbitrator may specify the terms and timing of joining the 
proceedings.
    Comment 157: The ability to join in a binding arbitration under 
Sec.  680.20(h)(3)(vi) of the proposed rule should be contingent on the 
IPQ holder having uncommitted shares and the harvester making a 
commitment of IFQ. Limit joining by requiring a commitment under Sec.  
680.20(h)(3)(iv).
    Response: The proposed regulations do not explicitly state that 
this is the case. The final regulations at Sec.  680.20(h)(3)(vi) have 
been modified to provide that joining an arbitration requires that 
uncommitted IPQ be available.
    Comment 158: The rationale for requiring separation of the schedule 
meeting and the meeting defining terms of last best offers, at Sec.  
680.20(h)(3)(vii) and (viii) of the proposed rule, is not clear. It may 
be that antitrust concerns dictate that IFQ holders that are not part 
of an FCMA cooperative should not participate in a joint meeting. If 
that is the case, a provision should be added to that effect.
    Response: The commenter is correct in that the intent of this 
provision is to ensure that IFQ holders who are not members of an FCMA 
should not participate in a joint meeting regarding Last Best Offers. 
Such joint meetings could increase participant's risk of antitrust 
violations. The regulations have not been modified, but this response 
provides the rationale for the structure of the regulations.
    Comment 159: The provisions at Sec.  680.20(h)(3)(viii), (ix), and 
(x) should make it clear that the arbitration will apply to all 
committed IFQ of the IFQ holder and the corresponding committed IPQ of 
the IPQ holder. The arbitration outcome should decide the delivery 
terms of all shares that the parties have committed to one another. 
Revise to make arbitration apply to and fully binding on all deliveries 
of committed shares of the parties.
    Response: The regulations have been modified to more explicitly 
state that the arbitration decision will apply to all committed IFQ of 
the IFQ holder and the corresponding committed IPQ of the IPQ holder. 
This modification is made in the final rule at Sec.  680.20(h)(3)(x).
    Comment 160: Under the provision at Sec.  680.20(h)(5), information 
flow in binding arbitration is limited to the information submitted by 
parties and market report and formula. The broad availability of data 
to IFQ holders under notice requirements and FCMA cooperatives could be 
argued to create an imbalance in the proceedings.
    Response: The flow of information in this program is intended to 
provide both parties to an arbitration adequate access to information. 
Information being provided to the Arbitration IFQ holders is intended 
to facilitate their ability to make a last best offer to that IPQ 
holder within the time frame required and under the limitations that 
all IFQ holders would be required to make their

[[Page 10213]]

last best offer to the IPQ holder at the same time. The exchange of 
information does not imbalance the information available to either 
party to make an adequate last best offer. The regulation has not been 
modified.
    Comment 161: The provision at Sec.  680.20(h)(8) makes reference to 
(h)(6)(v), which does not exist.
    Response: The citation at Sec.  680.20(h)(8) is incorrect and 
should be a reference to (h)(6). This is corrected in the final rule.
    Comment 162: At Sec.  680.20(h)(11)(ii) in the proposed rule, using 
the same procedure for performance disputes as for other arbitration is 
not possible because of the timing of arbitration and the timing of 
performance disputes. The specific process should be defined by 
industry in the contract with the contract arbitrator. The contract 
with the Contract Arbitrator should define the process for resolution 
of performance disputes through arbitration.
    Response: The regulation at Sec.  680.20(h)(10)(ii) has been 
clarified that applicable procedures in the binding arbitration process 
would apply to a performance dispute arbitration. The regulation 
clarifies that the contract with the contract arbitrator would specify 
the time frame for the process. Due to renumbering of this section, the 
pertinent regulation is now found at Sec.  680.20(h)(10)(ii).
    Comment 163: At Sec.  680.20(h)(11)(iii) in the proposed rule, it 
is unclear how arbitration can be ``unsuccessful''. The reference to 
``unsuccessful'' arbitration should be removed or explained.
    Response: NMFS agrees and has removed the reference to unsuccessful 
arbitration at Sec.  680.20(h)(10)(iii). It does not affect the ability 
of parties to pursue contract remedies if the contract is not met.
    Comment 164: Fleetwide arbitration was considered and rejected by 
the Council in favor of a last-best-offer system built on distinct, 
independent arbitrations. Yet, the proposed rule Sec.  
680.20(h)(3)(i)(D) allows a binding arbitration system that mirrors 
fleetwide arbitration by violating Council intent concerning the 
sharing of confidential data. The proposed rule permits a framework in 
which confidential cost data may be gathered by one harvester 
Arbitration Organization and shared across all harvester Arbitration 
Organizations and thus, all harvesters. A single, omnibus FCMA 
cooperative is allowed to form multiple Arbitration Organizations 
(AOs), each under the leadership of member(s)--or representative(s)--
in-common with the FCMA cooperative. Data pertinent to a bilateral 
price dispute could be shared back to the FCMA cooperative. The entire 
membership of the FCMA cooperative would be allowed to see the cost 
data from all processors. Furthermore, the Contract Arbitrator ``must 
receive and consider all data submitted by the parties'' (see Sec.  
680.20(h)(4)(iii)), including data that are not germane to the 
bilateral dispute. Each AO may invoke Binding Arbitration to collect 
processor cost data rather than resolve price disputes.
    There are compelling economic incentives for harvesters to 
structure such a fleetwide system of mandatory Binding Arbitration in 
order to capture cost of production data from all processors. This 
possibility poses a serious antitrust/anti-competitiveness risk. It 
also clearly violates Council intent that Binding Arbitration is the 
last resort to resolve failed price disputes.
    Sharing of Binding Arbitration data in violation of Council intent 
is manifest in the proposed rule. For example the Contract Arbitrator 
is also allowed to share information with parties other than those 
engaged in the Binding Arbitration, violating the Council's 
confidentiality requirements. The proposed rule, at Sec.  
680.20(h)(6)(iii) requires the contract arbitrator to provide NMFS with 
confidential information. Yet, Amendment 18 unambiguously stipulates 
the contrary.
    In sum, the proposed rule allows and promotes: (a) Fleetwide 
Binding Arbitration that was rejected by the Council, (b) sharing of 
proprietary and confidential data that poses serious antitrust and 
anti-competitiveness risks, and (c) dispute resolution between two 
parties based on information regarding disputes between other parties. 
To resolve this problem, no member common to an FCMA cooperative may be 
involved in more than two arbitrations (two because of the 50 percent 
matching rule). This requirement would mean the language at Sec.  
680.20(h)(3)(i)(D) must be eliminated or revised to prevent sharing and 
collecting cost data from multiple processors. More generally, 
information sharing should be restricted only to the specific parties 
of the Binding Arbitration, per the Council intent.
    Response: The Arbitration System is designed to permit members of 
an FCMA cooperative to participate cooperatively. Amendments 18 and 19 
provide ``[a]ny parties eligible for collective bargaining under the 
FCMA will be eligible to participate collectively as a member of that 
FCMA cooperative in binding arbitration.'' Amendments 18 and 19 also 
provide that ``[a]ll participants to an arbitration shall sign a 
confidentiality agreement stating that they will not disclose any 
information received from the arbitrator.'' The rule establishes that 
members of an FCMA cooperative that are engaged in an arbitration may 
arbitrate collectively as part of the FCMA cooperative (see Sec.  
680.20(h)(3)(i)). The Program does not amend the FCMA or existing 
antitrust laws of the United States. Under the FCMA, cooperative 
negotiation is permissible. The regulations also require that the 
contract among the Arbitration Organizations and the Contract 
Arbitrator require that members of different FCMA cooperatives shall 
not participate collectively (see Sec.  680.20(h)(3)(i)(B)). Of course, 
if otherwise consistent with the FCMA, two cooperatives could combine 
to form one cooperative and thereby act collectively. The Arbitration 
Organizations are not directly parties to a negotiation and therefore 
would not receive information on particular arbitration proceedings 
during their negotiation. They would be permitted access to arbitration 
decisions and on the amount of uncommited IPQ available to facilitate 
the ability of uncommited IFQ holders to access data.
    Cooperatives may negotiate with several IPQ holders, as may 
individual IFQ holders and a person may enter multiple arbitrations 
subject to the limitations of the Arbitration System. This type of 
negotiation is not prohibited under Amendment 18. NMFS disagrees that 
the rule permits a framework in which confidential cost data may be 
gathered by one harvester Arbitration Organization and shared across 
all harvester Arbitration Organizations and thus, all harvesters. 
Section 680.20(h)(5) establishes limits on the release of data obtained 
in an arbitration and limits the release of data. Specifically, Sec.  
680.20(h)(5)(iv) limits the release of data by persons in an 
arbitration proceeding to persons who were not party to that 
proceeding. The proposed rule has not been modified under this 
particular comment.
    Comment 165: The entire Arbitration System in the proposed rule is 
set up as though it is mandatory, rather than the path of last resort 
to resolve ``failed price negotiations'', as specified in Amendment 18. 
As such, it is set up as an analog to harvester-only pricing because 
everyone is forced in. It is unclear what oversight NMFS will have in 
this process or why it will or should have any oversight of private 
arbitrations.
    Response: The Arbitration System is established as a mechanism that 
is

[[Page 10214]]

available to IFQ and IPQ holders if open negotiation fails. The 
Arbitration System requires contractual arrangements among the various 
parties that may choose to use the Arbitration System. The requirement 
that QS holders to join an Arbitration Organization is intended to 
facilitate cost sharing for the program and provide all fishery 
participants with a market report and non-binding price formula prior 
to the start of the season. Once a binding arbitration proceeding is 
entered, the participants are bound to the contractual requirements for 
the system. These requirements would be enforced through civil 
contracts. NMFS would be able to receive information on specific 
arbitration proceedings for purposes of oversight should concerns arise 
about the potential antitrust implications of particular proceedings or 
the Arbitration System as a whole. The rule has not been modified.
    Comment 166: The binding arbitration procedure described in the 
proposed rule allows for and provides an incentive for harvesters to 
join one omnibus FCMA that uses multiple Arbitration Organizations, 
that could invoke Binding Arbitration for the purpose of securing 
confidential cost information across all processors, and exert monopoly 
power, rather than to resolve failed price negotiations. Harvesters 
would extract maximum rents because they would be able to see all 
arbitration information across all processors, whereas processors would 
not be accorded the same privilege. This asymmetry is inconsistent with 
the zero-risk antitrust concerns expressed throughout the document. 
Most importantly, such behavior by harvesters would be an antitrust 
violation.
    Response: The Arbitration System limits the release of information 
received during a particular arbitration proceeding to the parties to 
that arbitration proceeding (see Sec.  680.20(h)(5)). The limit on the 
release of data ensures that only the parties to an arbitration, that 
is the Arbitration IFQ holders and IPQ holders that are in an 
arbitration proceeding, have access to data submitted to the Contract 
Arbitrator as part of that proceeding. Section 680.20(h)(5) has been 
modified to explicitly state that persons who are not parties to an 
arbitration shall not have access to information from that arbitration 
proceeding, other than the result of an arbitration decision which will 
be released. This provision is required so that uncommited IFQ holders 
would be able to participate in post-arbitration opt-in. Under this 
revision, an ``omnibus'' FCMA cooperative would not have access to an 
arbitration proceeding unless the omnibus cooperative was directly 
party to an arbitration proceeding.
    If a single FCMA cooperative formed and all members of the 
cooperative participated in all arbitration proceedings with all IPQ 
holders, it could be possible for the members of that FCMA cooperative 
to have access to information from all IPQ holders. If this 
circumstance did arise, DOJ would have the ability to review the 
potential antitrust implications of this situation and pursue 
enforcement actions if necessary. Nothing in Amendment 18 prohibits a 
cooperative from forming and initiating multiple arbitration 
proceedings with different IPQ holders. As noted in comment 164, the 
Program is not intended to amend the FCMA, or other antitrust laws of 
the United States that permit cooperative negotiations. This is clearly 
stated in the authorizing language in section 313(j) of the Magnuson-
Stevens Act. The rule is not being modified at this time to limit the 
ability of an FCMA cooperative to participate in multiple binding 
arbitration proceedings.
    Comment 167: Mandatory membership in an Arbitration Organization 
seems OK if the purpose is solely to initiate timely collection of 
relevant data that would be needed in the event of an arbitration. It 
should not be the springboard to easy arbitration. Nothing beyond 
choosing a Contract Arbitrator should be mandatory, unless a party 
initiates binding arbitration.
    Response: In order for the Arbitration System to function the 
Market Report and Non-Binding Price Formula must be generated prior to 
the start of the season. These documents are intended for use both 
during the open negotiation stage and during any binding arbitration 
proceedings. The rule has not been modified.
    Comment 168: Amendments 18 and 19 give no authority to NMFS to 
collect confidential, proprietary information. And contrary to the 
justification given in the preamble, DOJ has no authority to oversee 
private negotiations. Their authority only arises in the event that one 
of the parties claims an antitrust violation. Amendments 18 and 19 
clearly state that binding arbitration is between private parties and 
enforced through civil damages. Furthermore Amendment 18 states 
``Oversight and administration of the binding arbitration should be 
conducted in a manner similar to the AFA cooperative administration and 
oversight.'' There is no similar DOJ oversight under AFA.
    Response: The provision of information to NMFS, under Sec.  
680.20(h)(6), is not inconsistent with Amendments 18 and 19 and is 
consistent with the legislation that enacted the Program. Section 
313(j)(6) of the Magnuson-Stevens Act provides that NMFS, in 
consultation with the DOJ and FTC shall develop a data collection 
program necessary ``to determine whether any illegal acts of anti-
competition, anti-trust, or price collusion have occurred among persons 
receiving individual processing quota under the program.'' This 
provision has been interpreted to allow the agency to gather 
information that may be required to assist DOJ and the FTC in their 
review process. The final rule has not been modified.
    Comment 169: The ``fleetwide'' arbitration system was considered 
and rejected by the Council in favor of the ``last best offer'' system, 
which is built on distinct, independent arbitrations. Each arbitration 
is between one IPQ Holder Arbitration Organization and one or more IFQ 
Holders in an Arbitration Organization, to determine the price and 
delivery terms for the specific IFQ Shares committed between those 
quota holders in the share-matching period. Amendment 18 requires 
information used and exchanged in an arbitration to be kept 
confidential to the parties and must not be shared outside the 
arbitration, even within a cooperative. The Council's confidentiality 
requirement and its rejection of fleetwide Binding Arbitration can be 
subverted by the data verification standards Sec.  680.20(h)(6)(iii) 
and (iv) and by allowing multiple Arbitration Organizations to 
negotiate on behalf of an Omnibus FCMA bargaining cooperative Sec.  
680.20(h)(3)(i)(D).
    The proposed rule, at Sec.  680.20(h)(5), not only: (a) Allows a 
fleetwide arbitration by organizing a fleetwide FCMA cooperative that 
forms multiple Arbitration Organizations, but (b) allows those 
Arbitration Organizations to negotiate separately with all IPQ Holders. 
Such a possibility has antitrust implications by allowing the FCMA to 
collect cost data from all processors involved in binding arbitration. 
The proposed rule needs to be rewritten to prevent antitrust risk 
stemming from binding arbitration design/organization.
    Response: This comment has been addressed in the responses to 
comments 164 and 166.
    Comment 170: Why are open negotiations, in the proposed rule at 
Sec.  680.20(h)(3)(ii), limited to the period prior to the season? Why 
can't negotiations on price and delivery terms occur anytime throughout 
the season? And why are they limited to

[[Page 10215]]

uncommitted IFQ/IPQ? Surely disputes could arise mid-season? Suppose 
wholesale prices rose dramatically mid-season. Surely all crew would 
want to re-negotiate contracts, unless the original contract stipulated 
an automatic adjustment mechanism.
    Response: This comment has been addressed in response to comment 
148. While it is possible that mid-season disputes could arise and 
parties would want to renegotiate terms, those terms could be addressed 
by stipulating that adjustment mechanisms, retroactive payments and the 
like could be part of the original contract. The rule has not been 
modified.
    Comment 171: The proposed rule language at Sec.  
680.20(h)(3)(ii)(B) needs to be revised and clarified. It states 
``party to the contract'' may initiate arbitration, yet, no 
``contract'' is identified. The proposed rule at Sec.  680.20(h)(1) 
refer to the bilateral (IFQ and IPQ holders) contract with the 
Arbitrator. Yet, only an IFQ Holder may initiate arbitration. Does this 
allow IPQ Holders to do so, and with which IFQ shares? Also, the 
language ``with all Arbitrators in that fishery'' is confusing. We 
presume this phrase means that the IFQ and IPQ Arbitration 
Organizations must choose one Arbitrator from the set of all 
Arbitrators. If this is the intent, it is unclear. Alternatively, this 
language could imply fleetwide arbitration, which violates Council 
intent.
    Response: The regulation at Sec.  680.20(h)(3)(ii)(B) has been 
modified to more clearly state that only the Arbitration IFQ holder may 
initiate arbitration. An IPQ holder cannot initiate an arbitration 
proceeding. The regulations at Sec.  680.20(h)(3)(v) have been modified 
to more clearly state that an Arbitration IFQ holder can select ``a 
Contract Arbitrator.'' The intent is that only one Contract Arbitrator 
would participate in each arbitration proceeding.
    Comment 172: Revisions are needed to Sec.  680.20(h)(3)(iv)(B) of 
the proposed rule because the 50 percent share matching requirement was 
intended to limit frivolous and repeated arbitrations. Under the 
proposed rule, an omnibus FCMA cooperative can form, which may in turn 
form multiple Arbitration Organizations, each satisfying the 50 percent 
matching rule. Then, the omnibus FCMA would enter Binding Arbitration 
with EVERY processor. This structure would allow every harvester in the 
FCMA to see every processor's data, thus creating a serious antitrust 
risk. Furthermore, it creates an incentive to violate the Council 
intent that Binding Arbitration is the option of last resort to resolve 
failed price disputes.
    Response: The response to this comment was addressed in comment 
166.
    Comment 173: The proposed rule at Sec.  680.20(h)(3)(iv)(D) 
suggests there would be two Contract Arbitrators, one for the IFQ 
holders and one for the IPQ holders? If so, how is one picked to 
conduct mediation/binding arbitration, if the parties cannot agree? How 
are bilateral disputes between two contract arbitrators to be resolved? 
This language needs to stipulate a single Contract Arbitrator is 
mutually chosen to comply with Amendment 18.
    Response: The choice of the Contract Arbitrator(s) is addressed 
under Sec.  680.20(e)(4) and is conducted prior to the start of the 
season. The Contract Arbitrator(s) selected for a fishery must be 
chosen by mutual agreement of the PQS holders and QS holders in the 
fishery. NMFS has determined that 50 percent of the PQS holders and 50 
percent of the QS holders must agree to select the Contract 
Arbitrator(s). This process is intended to ensure that a pool of 
mutually acceptable Contract Arbitrator(s) is available for selection 
if a binding arbitration proceeding begins. The regulations at Sec.  
680.20(h)(3)(v) do not state how the Contract Arbitrator for a specific 
binding arbitration proceeding is selected. The regulations at Sec.  
680.20(h)(3)(v) have been modified to establish that the Arbitration 
IFQ holder would select the Contract Arbitrator subject to terms 
established in the contract among the Arbitration Organizations and the 
Contract Arbitrator. Because the Arbitration IFQ holder initiates the 
binding arbitration process by notifying the IPQ holder and the 
Contract Arbitrator, the choice of the Contract Arbitrator most 
appropriately lies with the Arbitration IFQ holder. Otherwise, the 
initiation of an arbitration proceeding could be delayed.
    Comment 174: The proposed rule at Sec.  680.20(h)(3)(v) states that 
Arbitration initiation must occur more than 15 days pre-season and that 
either an IFQ Holder or an IPQ Holder may initiate arbitration. Does 
this occur only after ``share-matching'' has occurred under Sec.  
680.20(h)(3)(iv)? If not, how are the IFQ and IPQ shares identified?
    Response: The regulations at Sec.  680.20(h)(3)(v) have been 
modified to state that the Arbitration IFQ holder initiates the binding 
arbitration proceeding. The timing of a binding arbitration proceeding 
is after the share matching process. Under the regulations at Sec.  
680.20(h)(3)(iv), share matching may begin at any point after 25 days 
prior to the start of the crab fishing season. The revised regulations 
at Sec.  680.20(e)(2)(v) establish an information release mechanism 
that requires uncommited IPQ holders to notify Arbitration IFQ holders 
of the availability of uncommited IPQ shares. This regulation has been 
modified to indicate that this notification must occur beginning not 
later than 25 days prior to the start of the crab fishing season so 
that the process is in place for share matching. The arbitration 
process described at Sec.  680.20(h)(3)(v) establishes that the binding 
arbitration must begin not earlier than 15 days prior to the start of 
the season. The share matching process would begin first, if the 
Arbitration IFQ holder and IPQ holder agree on terms then binding 
arbitration is not necessary, if not then the process established under 
binding arbitration would begin. The rule stipulates that there would 
be one arbitration proceeding per crab QS fishery during this initial 
phase of the arbitration.
    Comment 175: The proposed rule at Sec.  680.20(h)(3)(vi) should be 
revised and clarified to conform to Council intent. It states that any 
IFQ holder may join an arbitration. How are IFQ holders notified? When 
may they join--only at the beginning? Does a joining IFQ holder receive 
any information on the failed price negotiations? From whom? Can a 
cooperative IFQ holder commit more QS to that arbitration once it has 
begun? An IFQ holder in failed price negotiations must be limited in an 
arbitration to the shares it submitted in the share-matching period. 
The purpose of the share-matching period was to link IFQ holders with 
IPQ holders so that further negotiations (after the open period) or 
mediation could take place after the number of IFQ and IPQ were 
committed. Arbitration would then occur for those shares if mediation 
failed. The purpose of the requirement at Sec.  680.20(h)(3)(iv)(B) for 
an IFQ holder to submit at least 50 percent of its shares when doing 
share-matching was to prevent gaming the system. A cooperative IFQ 
holder must be limited in share-matching, mediation, and arbitration to 
the IFQ that it submits to share-matching.
    The Council concept is that specific IFQ holders would commit 
shares to a specific IPQ holder and that those shares were committed to 
the entire process of share matching, mediation, and arbitration. None 
of the shares could be removed from that process and no additional 
shares could join that process. The share-matching period begins only 
twenty-five days prior to the season opening, and the last day for an 
arbitration decision is five days before the season. In a twenty-day 
period, there is no time for adding or subtracting shares from the 
process. No additional

[[Page 10216]]

shares should be added after the share-matching period.
    Response: NMFS has modified the final rule at Sec.  680.20(h)(3)(v) 
based on several other comments to clarify that there is one 
arbitration process per crab QS fishery prior to the start of the 
season for each IPQ holder, that an Arbitration IFQ holder with 
uncommited IFQ may join a Binding Arbitration proceeding, and that an 
Arbitration IFQ must commit shares in order to participate in the share 
matching process. The process for an Arbitration Organization or third 
party to notify the Arbitration IFQ holder of uncommitted IPQ shares 
that are available for matching is provided at Sec.  680.20(e)(3)(v).
    Based on a previous response to comment, NMFS has revised the final 
rule at Sec.  680.20(h)(3)(x) to require that the arbitration decision 
is binding on all the committed shares that are applied in the biding 
arbitration proceeding. The regulations have been modified at Sec.  
680.20(h)(3)(vi) to note that once Arbitration IFQ or IPQ are committed 
to a binding arbitration proceeding they cannot be uncommited to that 
arbitration. The time frame established under the binding arbitration 
process limits the ability of Arbitration IFQ shares and IPQ shares to 
enter this initial arbitration proceeding. Once this binding 
arbitration proceeding has been completed, uncommited IFQ holders may 
choose to opt-in and commit their IFQ to the IPQ holder if uncommited 
IPQ is available under the provisions established at Sec.  
680.20(h)(9).
    Comment 176: Data confidentiality at Sec.  680.20(h)(3)(iv)(B) is 
problematic. There is an inconsistency between Sec.  680.20(h)(4)(ii), 
which says ``The Contract Arbitrator's decision may rely on any 
relevant information available. * * *'', and Sec.  680.20(h)(4)(iii), 
which says ``The Contract Arbitrator must receive and consider all data 
submitted by the parties.'' This broad provision allows submission and 
mandatory consideration of information about other arbitrations from 
participants in those other arbitrations. That must not be allowed. It 
is a clear violation of Council intent that arbitrations are bilateral. 
The fact that an Arbitration Organization can be engaged in more than 
one BA, or that one FCMA may be involved in as many binding 
arbitrations as there are processors in each fishery, implies that the 
Binding Arbitration might not be based solely on information germane to 
the bilateral dispute. Under this scenario, an IFQ holder could provide 
the results of a different arbitration or the information used in a 
different arbitration (an IFQ holder apparently may participate in more 
than one arbitration since it could commit 50 percent of its shares to 
two different processors). An IFQ holder could secure and provide to 
the Arbitrator any IPQ holder cost data discovered during a different 
arbitration. There is no justification a Contract Arbitrator is to 
receive and consider information about other arbitrations or 
participants in those other arbitrations.
    Assurance that data/information used in an arbitration remains 
confidential to the Binding Arbitration parties is essential but not 
guaranteed by the proposed rule. Sharing any of that information/data 
outside the arbitration or within a cooperative must not be allowed. 
Prevention of this possibility requires that no party invoking Binding 
Arbitration may be party to more than two binding arbitrations, 
directly or indirectly (50 percent rule). The proposed rule improperly 
suggests the Contract Arbitrator may share information and data with 
other parties Sec.  680.20(h)(4)(iii). This allowance needs to be 
removed.
    Response: Amendments 18 and 19 authorize the Contract Arbitrator to 
consider information received from the parties to an arbitration 
proceeding. Amendments 18 and 19 state that ``The [Contract] Arbitrator 
will also receive and consider all data submitted by the IFQ holders 
and the IPQ holder.'' The Contract Arbitrator may consider other 
relevant data as well as data received directly from the parties to the 
arbitration proceeding as is noted in Amendment 18, the Contract 
Arbitrator ``may gather additional data on the market and on completed 
arbitrations.'' The provision in the rule is consistent with Amendments 
18 and 19.
    Amendments 18 and 19 do not contain specific provisions that limit 
the ability of FCMA cooperatives to collectively negotiate. In fact, 
Amendments 18 and 19 state that ``[a]ny parties eligible for collective 
bargaining under the Fishermen's Cooperative Marketing Act of 1934 
(FCMA) will be eligible to participate collectively as a member of that 
FCMA cooperative in binding arbitration.'' This language indicates the 
Council intended to allow FCMA cooperative members to negotiate 
collectively. FCMA cooperatives may share information internally in 
order to collectively negotiate as an FCMA cooperative in a binding 
arbitration proceeding.
    As noted in previous responses, Sec.  680.20(e)(2)(iii) notes that 
each member of an Arbitration Organization is required to establish a 
contract with that Arbitration Organization that requires them to sign 
a confidentiality agreement with any party with whom they are 
arbitrating stating they will not disclose at any time to any person 
any information received from the Contract Arbitrator or another person 
during the course of a binding arbitration proceeding. This requirement 
limits the ability of a party to an arbitration to share information 
gathered during one arbitration proceeding and use it in subsequent 
arbitrations. This requirement does not restrict an FCMA cooperative or 
another individual that has uncommitted IFQ from entering into multiple 
binding arbitration proceedings with multiple IPQ holders. Amendments 
18 and 19 do not appear to limit the ability for an IFQ holder to enter 
into multiple binding arbitration proceedings.
    Comment 177: The agency has specifically invited comment on the 
feasibility of basing the structure of the Arbitration System upon 
intra-industry contracts. I have strong reservations about whether this 
system has enough governance structure that it will be capable of 
making the decisions on selecting Market Analysts, Formula Arbitrators 
and Contract Arbitrators in a timely fashion. There appear to be too 
many decision points that require collective decision making on a 
constrained timely, and no safety net in the event that the necessary 
governance does not develop spontaneously. Reading the proposed rule, I 
was left confused and skeptical about how it is all supposed to come 
together.
    Response: The Arbitration System was designed to meet the guidance 
in Amendments 18 and 19 that would leave many of the specific decisions 
about the Arbitration System to be established by contractual 
arrangements. There is the possibility under this Arbitration System 
that certain elements could not be implemented if parties do not agree. 
Specifically, the selection of the Market Analyst, Formula Arbitrator, 
and Contract Arbitrators require an agreement of at least 50 percent of 
the PQS and 50 percent of the QS holders. If this agreement does not 
occur, than the Arbitration System could not be used by IFQ or IPQ 
holders. Because this Arbitration System is considered to be an 
essential component of the Program as a whole, the final rule at Sec.  
680.20(e)(7) stipulates that CVO IFQ, CVC IFQ after June 30, 2008, and 
IPQ will not be issued for a fishery until the Market Analyst, Formula 
Arbitrator, and Contract Arbitrators have been selected. This provision 
would encourage resolution of potential conflicts. The Market Analyst, 
Formula Arbitrator, and Contract Arbitrators are intended to be

[[Page 10217]]

impartial third parties that can analyze fishery conditions and mediate 
disputes, and mutual agreement of qualified personnel should be 
possible by cooperative agreements.
    Comment 178: The provisions Sec.  680.20(e)(2)(v)(B)(1) and (2) 
create a paradox under which the persons (or organizations) required to 
deliver the notices are unlikely to be able to deliver the notices, 
because no person would be in a position to receive the information 
that needs to be disseminated or know the identities of the persons 
that need to receive the information. The provisions should be revised 
so that persons required to deliver notices (1) have access to the 
names of those required to receive the notice, (2) have access to the 
information required to be delivered, and (3) are required to maintain 
confidentiality.
    Response: This comments has been previously addressed in response 
to comment 145.
    Comment 179: The ability to initiate arbitration should rest 
exclusively with harvester IFQ holders at Sec. Sec.  
680.20(h)(2)(ii)(B), 680.20(h)(3)(iii)(C), 680.20(h)(3)(iv)(D), and 
680.20(h)(3)(v). Section 680.20(h)(3)(ii) limits negotiations to 
``prior to the date of the first crab fishing season''. Negotiation 
should be permitted at any time, including after the season opens, as 
long as participants are not committed to another share holder.
    Response: This comment has been previously addressed in response to 
comment 139.
    Comment 180: There are two problems with Sec.  680.20(h)(3)(iv)(B).
    (1) This provision requires an arbitration IFQ holder to commit at 
least 50 percent of the IFQ held to an IPQ holder to make a unilateral 
commitment. The provision should provide for the commitment of the 
lesser of 50 percent of the IFQ held and an amount of IFQ that results 
in the commitment of all of the processor's IPQ. In the absence of this 
provision, a harvester may be unable to commit any IFQ to a processor 
under the provision because the processor does not hold sufficient IPQ 
to take most of the harvester's IFQ.
    (2) The regulation should consider a lower level than 50 percent 
for a cooperative to make a unilateral commitment, since a cooperative 
represents several share holders. It is quite likely that a cooperative 
may hold more IFQ than a processor may hold un-committed IPQ. Further, 
in attempting to define ``substantial'' there is no grounds for 
creating a standard that results in a higher absolute quantity for 
cooperative participants than for individuals. A more appropriate 
threshold would be 50 percent of the average share holding in the 
cooperative or the average share holding in the fishery.
    Response: This comment has been previously addressed in response to 
comment 152.
    Comment 181: Section 680.20(h)(3)(i)(A) and (B) should refer to 
``FCMA crab harvesting cooperatives''. As written it could be 
interpreted to narrow the otherwise legal ability of more than one FCMA 
cooperative to act collectively under the shelter of the FCMA. This 
ability should not be restricted. It should also be recognized that 
harvesters are eligible to join an ``FCMA marketing cooperative'' 
whether they are in or out of a ``FCMA crab harvesting cooperative'' 
and may chose to join an umbrella ``FCMA marketing cooperative'' which 
holds no IFQ. Such a marketing cooperative simply engages in collective 
bargaining to the degree allowed by the FCMA, and its ability to do so 
should not be restricted by these regulations.
    Response: NMFS agrees in part. The regulations are not intended to 
limit the ability of individuals to join FCMA cooperatives to serve 
different functions. IFQ holders are limited to joining one crab 
harvesting cooperative for a given fishery, but this is not intended to 
limit participation in FCMA cooperatives. The limits on FCMA 
cooperatives participating collectively in a Binding Arbitration 
proceeding is intended to reduce potential antitrust risks for 
participants. These restrictions would not limit the ability of a 
person to participate in an FCMA cooperative for purposes of marketing 
and still participate in an FCMA cooperative for collective negotiation 
as long as those two FCMA cooperatives were not collectively 
negotiating in a Binding Arbitration proceeding. NMFS has modified the 
regulations at Sec.  680.20(h)(3)(i)(A) and (B) to clarify this point.
    Comment 182: The proposed regulation should be amended to provide 
for separate Arbitration Organizations to be formed by unaffiliated 
holders of QS; holders of PQS; and affiliated holders of QS. The 
administrative obligations and responsibilities should be detailed in 
one location and must be material terms in the binding arbitration 
agreements.
    The terms should require the following;
    (1) Select and contract with a market analyst, formula arbitrator, 
and contract arbitrators;
    (2) Establish a fund to pay expenses of these persons which are 
common to all;
    (3) Agreement that IPQ shares and IFQ shares committed during the 
share matching period or during the arbitration cannot be withdrawn; 
and
    (4) Agreement that all information gathered for the arbitration is 
strictly confidential to the arbitration and participants may not share 
any information received from the contract arbitrator with anyone.
    Response: The regulations do require the formation of separate 
Arbitration Organizations by unaffiliated holders of QS; holders of 
PQS; and affiliated holders of QS (see Sec.  680.20(d)(1)). The 
administrative obligations of the Arbitration Organizations are 
described under Sec.  680.20(d) and Sec.  680.20(e). These provisions 
stipulate that contractual agreements must be established among the 
members of the Arbitration Organization.
    Comment 183: Arbitration Organizations should be given the ability 
to hire a third party for the delivery of notices regarding uncommitted 
IPQ for Share-Matching, uncommitted IPQ available for arbitration, and 
notification to uncommitted IFQ holders of the results of arbitrations 
involving IPQ holders with remaining uncommitted shares.
    Response: This comment has been addressed in the response to 
comment 139.
    Comment 184: The proposed regulations provide that a contract 
arbitrator may receive information from any holder of QS, PQS, IFQ, or 
IPQ on current ex-vessel prices, market prices, for any products, 
innovations or other matters, but may not share that information with 
the participants. The contract arbitrator has access to the Market 
Report for the fishery, which is essential, and should have access to 
the non-binding price formula. The non-binding price formula is based 
on the historic data needed to understand the historic division of 
revenues between harvesters and processors. These two data sources are 
adequate supplements to the information provided by the arbitration 
participants. The contract arbitrator should not have access to 
information from any sources other than the Market Report, the Non-
Binding Price Formula, and the information submitted by the parties. 
Arbitration decisions based on information unknown or unavailable to 
the parties will completely undercut trust in the arbitration system 
and may allow arbitrary information into the proceeding.

[[Page 10218]]

    Response: The Contract Arbitrator does have access to the 
information described under this comment. The ability of the Contract 
Arbitrator to have access to other data is not limited by this rule, 
but the Contract Arbitrator is required to consider certain standards 
during the evaluation of the offers made by IFQ and IPQ holders. This 
approach is supported by Amendments 18 and 19 which state that the 
Contract Arbitrator ``will gather relevant independently and from the 
parties,'' and ``will receive and consider all data submitted by the 
IFQ holders and the IPQ holder.''
    Comment 185: Section 680(e)(2)(iii) requires that each party to an 
arbitration sign a confidentiality agreement with the other party in 
the arbitration stating they will not disclose to any other person any 
information exchanged in the arbitration. If one party is a 
cooperative, the regulation should also require that the information 
not be disclosed to other members of the cooperative.
    On May 18, 2004, Arnold & Porter provided an antitrust memorandum 
to NOAA recommending several significant changes in the arbitration 
program. On May 25, NOAA GC forwarded the memorandum and proposed 
changes to the Council motion for action in June 2004, which was taken. 
On pp. 26-30 of the Arnold & Porter memorandum, the authors cited 
strong concerns with information flow in arbitration. They recommended 
that the arbitrator be prohibited from sharing with the parties any 
information that he received from persons outside the arbitration. They 
also recommended a new requirement for a confidentiality agreement 
which they noted is standard in commercial arbitrations. The 
recommendations were based on a concern that sensitive pricing and cost 
information might be shared with or available to competitors.
    In the NOAA GC recommended changes to the Council motion, the 
confidentiality agreement requirement was added. Part of the rationale 
states that there is a `` * * * risk of antitrust liability if 
cooperative or members of a cooperative share sensitive competitive 
information * * *''. Both the Arnold & Porter memorandum and the NOAA 
GC recommendations point to the possibility of the sharing of sensitive 
information as a significant antitrust concern. Since it is possible 
that cooperatives will be formed with large numbers of participants, a 
single cooperative may be involved in several arbitrations, either in a 
single year or in succeeding years.
    The confidentiality agreement should require that a cooperative 
protect and partition confidential information within the cooperative 
so that only those members affected by a specific arbitration receive 
information from that arbitration. Although an FCMA cooperative is 
allowed under the antitrust laws to negotiate prices collectively, the 
FCMA does not condone all activity that might otherwise be in violation 
of the antitrust statutes. In the crab program's binding arbitration, 
an IPQ Holder is required by statute and regulation to participate in 
an arbitration at the sole discretion of an IFQ Holder. As a practical 
matter, the IPQ Holder must justify its price and delivery offer with 
cost data if it hopes to win an arbitration. Since the submission of 
such data is compelled by the program, in practice, every effort must 
be made to protect the confidentiality of that sensitive data and 
information.
    Response: As the commenter notes, an FCMA cooperative is allowed 
under existing antitrust laws to negotiate collectively. The ability 
for an FCMA cooperative to negotiate collectively would be limited if 
information among members of a cooperative were further limited. The 
regulations have been modified based on previous comments to clarify 
that information gained from one arbitration proceeding may not be used 
in other arbitrations. These regulations are not intended to limit 
existing antitrust laws. As with all aspects of this program, NMFS, 
DOJ, and FTC retain the ability to review the conduct of parties and 
investigate any possible antitrust violations.
    Comment 186: Some of the regulations in Sec.  680.20 may be seen as 
limiting the ability of a non-IFQ holding FCMA Coop to act in behalf of 
other IFQ holding cooperatives and individual harvesters. Clarification 
should be given so the legal rights of fishermen provided under the 
FCMA are not truncated by the regulations of this section. The 
following text should be inserted: ``Types of cooperatives governed 
under this section: The regulations in this section pertaining to non-
affiliated harvester cooperatives apply only to crab harvesting 
cooperatives that have formed for the purpose of applying for and of 
fishing under a crab cooperative IFQ fishing permit issued by NMFS''. 
Inclusion of this language is consistent with Sec.  680.21 and would 
help to clarify activities permitted under the FCMA for collective 
bargaining cooperatives.
    Response: The final rule at Sec.  680.20(f), (g), and (h) has been 
modified throughout those paragraphs to note that the ability of IFQ 
holders to participate collectively is intended to be limited to those 
persons who are members of FCMA cooperatives, distinct from the non-
FCMA cooperatives that can form for purposes of harvesting IFQ crab.
    Comment 187: Arbitration Organizations will incur some cost, 
perhaps substantial cost, preparing for and executing an arbitration 
proceeding. The proposed rule at Sec.  680.20(e)(2)(vi)(A)(4) provides 
payment for analysts and arbitrators but does not provide for the 
sharing of the expenses of the Arbitration Organization initiating the 
action. Non-member IFQ holders may opt-in to an arbitration result 
without sharing the full cost of the arbitration. The result is a 
negative incentive for IFQ holders to support a professional, informed 
and useful Arbitration Organization. The burden of maintaining such an 
organization will fall to responsible IFQ holders while freeloaders 
wait for the smoke to clear and opt-in to the result.
    One solution to this problem would be that the opt-in provision 
would only apply to IFQ holders who belong to the arbitration 
association directly involved in an arbitration proceeding. IPQ holders 
can notify other Arbitration Organizations of a proceeding and those 
organizations can do their own work and bring their own information and 
price ideas to the table at that time. Their members can then opt-in if 
they want to. Another alternative would be to allow an opt-in fee set 
by the arbitrator for IFQ holders who are not members of participant 
Arbitration Organizations. This alternative may also include opt-ins by 
affiliated vessels.
    Response: The costs for engaging in an arbitration could be 
significant and NMFS agrees that it would be appropriate to consider 
fees for any post arbitration opt-in. The regulations at Sec.  
680.20(h)(9)(A) note that IFQ holders that opt-in do so under the terms 
of the arbitrated contract. The arbitrated contract could include a 
provision that requires a proportional payment of fees for any IFQ 
holder that opts-in to a completed arbitration contract. Limiting the 
ability of certain IFQ holders to opt-in based solely on their 
participation in a specific Arbitration Organization would run counter 
to the overall intent of the opt-in provisions. The regulations at 
Sec.  680.20(h)(9) have been modified to state that the Contract 
Arbitrator may set the fees for the IFQ holder opting-in if those fees 
have not been determined in the Binding Arbitration contract.
    Comment 188: The provision at Sec.  680.20(2)(e)(vii) is important 
to avoid antitrust violations for Processors, but why is this provision 
extend to harvester Arbitration Organizations organized as FCMA 
collective bargaining associations? It is my

[[Page 10219]]

understanding that individual IFQ entities may form an Arbitration 
Organization with one member. Is that member then prohibited from 
forming a contract on his own behalf? This provision should apply to 
processor and affiliated Arbitration Organizations only.
    Response: The Arbitration Organizations are not permitted to 
negotiate on behalf of their members to avoid potential complications 
of allowing associations that are not FCMA cooperatives, and therefore 
not accorded the antitrust protections of that Act, to negotiate 
collectively. In the case of an individual who wishes to form his own 
Arbitration Organization, that individual could still participate in 
contracts, but the roles of the Arbitration Organization under each 
contract would be considered separate. If a group of IFQ holders joins 
an FCMA cooperative and an Arbitration Organization, they could 
collectively bargain under the name of the FCMA cooperative, but not as 
the Arbitration Organization. The rule has not been modified.
    Comment 189: Under Sec.  680.20(e)(4), can Affiliated QS 
Arbitration Organizations also select ``one Market Analyst, one Formula 
Arbitrator, and Contract Arbitrator(s) for each crab QS fishery'' or 
are they lumped with either harvesters or processors? Since affiliated 
vessels cannot participate in arbitrations, should they have a voice in 
the matter? Define role of affiliated vessels in selection of analysts 
and arbitrators at Sec.  680.20(e)(4).
    Response: Affiliated QS holders are not permitted to participate in 
the selection of the Market Analyst, Formula Arbitrator, or Contract 
Arbitrator(s) as established under Sec.  680.20(e)(4). Those 
regulations stipulate that only Arbitration QS holders and PQS holders 
can participate in the selection of these experts. A PQS holder who 
also holds QS could not participate in this selection process as a QS 
holder, but could participate as a PQS holder.
    Comment 190: Because an FCMA collective bargaining association may 
not be a ``harvesting'' entity or an IFQ holder, and QS/IFQ holders are 
allowed to belong to both a harvesting and non-harvesting cooperative, 
the arbitrator, at Sec.  680.20(g)(2)(iv), should be allowed to meet 
with representatives (employees and professional advisors) of the 
collective bargaining association cooperative or with members of that 
association.
    Response: The regulations require that the contract with the 
Formula Arbitrator must specify that the Formula Arbitrator may meet 
with members of any FCMA cooperative collectively and shall meet with 
distinct FCMA cooperatives separately. These requirements are intended 
to limit the ability of the Formula Arbitrator to meet with members of 
more than one FCMA cooperative simultaneously. Nothing in the contract 
requirements would limit the ability of a Formula Arbitrator to meet 
with members of the same FCMA cooperative and their representatives 
(employees and professional advisors) at the same time.
    Comment 191: Under Sec.  680.20(3)(i)(b), members of different crab 
harvesting cooperatives shall not participate collectively unless they 
are also members of the same non-IFQ holding FCMA collective bargaining 
association.
    Response: NMFS agrees. The regulations have not been modified.
    Comment 192: At Sec.  680.20(3)(iv) in the proposed rule, a 
distinction should by made between individual IFQ and cooperative IFQ 
share matching commitment. I think the idea here is to disincentive 
frivolous share matching and ``fishing expedition'' arbitrations, 
however this provision would restrict the inner machinations of 
cooperatives whose members wish to harvest ``their own'' IFQ and to 
match their shares with traditional markets. It is a disincentive to 
cooperative and the provision should by modified to exclude harvesting 
cooperatives.
    Response: The requirement to commit shares to the IPQ holder has 
been modified in response to previous comments. Twenty-five percent of 
the IFQ held by a cooperative would have to be matched. This 
requirement should permit cooperative members to negotiate internal 
arrangements adequate for them to establish markets with multiple 
partners if desired.
    Comment 193: Independent harvesters who fail to match shares and 
form a contract or initiate arbitration prior to the arbitration 
initiation deadline (15-days before the season) may want to 
``cherrypick'' arbitration results for the highest price. However, if a 
processor has uncommitted IPQ but did not engage in an arbitration 
proceeding, this ``last man'' harvester is at the mercy of the 
processor and without recourse. This situation can be avoided by a 
share matching deadline prior to an arbitration initiation deadline or 
by eliminating the ``15-day before the season'' deadline for initiating 
arbitration.
    Response: This comment has been addressed in response to comment 
153.
    Comment 194: How does one initiate a performance dispute 
arbitration 15 days prior to the season if there hasn't yet been any 
performance to dispute? Remove deadline for initiating arbitration. In 
addition, a ``statute of limitations'' restricting performance dispute 
arbitrations to a reasonable time frame should be included.
    Response: The time frame for performance disputes has been 
addressed in response to comment 155. NMFS agrees, that a time frame 
may be appropriate, but the specific timing of such a limitation is 
difficult to determine at this time. The contract terms with the 
Contract Arbitrator can establish a time-frame for an opt-in provision 
but that does not require a specific regulatory requirement in the 
regulations. The regulations at Sec.  680.20(h)(9) have been modified 
to note that the Contract Arbitrator may specify a time-frame by which 
opt-in may be exercised for a particular arbitration decision.
    Comment 195: A problem with the opt-in provision is that a single 
arbitration proceeding may result in multiple arbitration results. The 
opt-ins will want to join the arbitration with the best result. Again, 
there is disincentive to participate in the process, as it would be 
beneficial to sit back and select the highest result. In addition, the 
processor may not be able to accommodate the delivery terms extended to 
all the opt-ins (for example the plant capacity may not be adequate to 
handle the amount of crab required to be delivered between two specific 
dates). In addition, because affiliated vessels are left without 
recourse to arbitration, they should be allowed to opt in to an 
arbitration result provided an appropriate fee determined by the 
arbitrator goes to the harvester Arbitration Organization conducting 
the arbitration. Restrict opt-in provision to non-affiliated IFQ 
holders in the same Arbitration Organization. Allow some flexibility 
for delivery and perhaps other terms as determined by the arbitrator.
    Response: The ability of an uncommited Arbitration IFQ holder to 
opt-in to the best result is precisely what the opt-in provision is 
intended to allow. As noted in the response to comment 187, the 
Contract Arbitrator may establish fees for any opt-in contract. 
Affiliated IFQ holders are specifically excluded from the opt-in 
provisions based on concerns about increased risks of antitrust 
violations that may arise if affiliated members participate in price 
setting negotiations that could result in information being shared 
among harvesters and processors.
    Comment 196: The quality specialist should only determine the 
quality of the crab, not the price. The quality

[[Page 10220]]

specialist may be eminently qualified to make judgments on the quality 
of crab and at the same time know nothing of crab prices. Section 
680.20(h)(12)(ii) should be modified. appropriately.
    Response: NMFS agrees. The quality specialist should determine the 
quality of the crab, but would likely be limited on his ability to 
comment on prices. NMFS has modified the final rule at Sec.  
680.20(h)(11) modified to limit the tasks of the quality specialist to 
that of determining the quality of the crab. Due to renumbering of this 
section the proposed Sec.  680.20(h)(12)(ii) is renumbered Sec.  
680.20(h)(11)(ii).
    Comment 197: The binding arbitration process should be strictly 
construed to give full effect to applicable antitrust law, and as a 
result, processor-affiliated harvesters should be prohibited from 
participating in the arbitration process. Though the Council motion did 
not prohibit processors and processor affiliates from participating in 
the binding arbitration process as IFQ holders, it did acknowledge that 
there were substantial antitrust concerns with such participation and 
authorized its prohibition to the extent necessary to comport with 
antitrust laws. The DOJ has already opined that participation by 
affiliated IFQ holders would violate applicable antitrust law because 
the binding arbitration process acts as a collaborative price setting 
mechanism. The prohibition in the proposed rule is therefore 
appropriate, both as a matter of complying with the mandate of the 
Council motion and as a preservation of the binding arbitration 
objectives.
    Response: NMFS agrees. Affiliated IFQ holders will not participate 
in the arbitration process in the final rule.
    Comment 198: To the extent the proposed rule restricts the ability 
of cooperatives to collaborate in the binding arbitration process, it 
does so inappropriately. Throughout Sec.  680.20, cooperatives are 
restricted from collectively negotiating and sharing pricing 
information. Nothing in Amendment 18 prohibits cooperation between FCMA 
cooperatives. To the extent that the post-arbitration opt-in right is 
meaningful, it would presumably require knowledge of the arbitration 
decision, and in many cases, this knowledge will only be acquired on an 
inter-cooperative basis. Blocking the exchange of information under the 
guise of antitrust protection only serves to limit the negotiation 
power of unaffiliated harvesters that have formed FCMA cooperatives to 
counterbalance the pricing leverage granted to IPQ processors under the 
Program framework. Under applicable antitrust law, however, 
cooperatives formed under the FCMA are permitted to engage in marketing 
activity, both individually and collectively. It is likely that the 
arbitration process will be deemed marketing activity within the scope 
of the FCMA cooperative antitrust exemption. Therefore, any prohibition 
on inter-cooperative negotiation and information sharing contained in 
the proposed rule should be replaced with a standard that permits such 
activity to the extent permitted by applicable antitrust law.
    Response: The limitations on data exchanges is intended to reduce 
the potential increased risks of antitrust violations that could occur 
if information is freely traded among cooperatives that are not engaged 
in the same negotiations. While it may be the case that inter-
cooperative information exchange among IFQ holders that are parties to 
different arbitration proceedings may not be a violation of antitrust 
laws, the risk of inappropriate information exchange is increased if 
this activity is specifically condoned. NMFS has adopted a risk averse 
policy as it pertains to Binding Arbitration. Information on the 
availability of uncommitted IPQ shares and the results of any 
arbitration decisions are made available through provisions at Sec.  
680.20(e)(2)(iv). This information exchange mechanism should provide an 
adequate mechanism to ensure that Arbitration IFQ holders with 
uncommitted shares are apprised of decisions in a timely fashion.
    Comment 199: Membership in an Arbitration Organization should be 
permissive, not mandatory, and those who opt not to join should be 
required to remit their portion of the arbitration expense directly to 
NMFS. Membership on an Arbitration Organization should be permissive 
because many stakeholders in the Program cannot participate in binding 
arbitration or may opt not to do so. Eliminating the mandatory 
membership in Arbitration Organizations will decrease the overall cost 
of binding arbitration to the fishery, likely resulting in fewer price 
disputes.
    Response: NMFS Disagrees. Amendments 18 and 19 clearly provide that 
the costs of arbitration are meant to be split among QS and PQS 
holders. Regulations at Sec.  680.20(e)(2)(vi) establish Arbitration 
Organizations as a mechanism to ensure that the QS/IFQ and PQS/IPQ 
holders coordinate in the selection and the payment of the Market 
Analyst, Formula Arbitrator, and Contract Arbitrator. These costs are 
shared by all QS/IFQ and PQS/IPQ holders because the results of the 
Market Report, Non-Binding Price Formula, and the Contract Arbitrator 
are available to all fishery participants. The costs of entering a 
lengthy season approach, share matching, Binding Arbitration, quality 
and performance disputes are established through the Arbitration 
Organizations. The Arbitration Organizations may establish methods for 
assessing increased fees to IFQ or IPQ holders that use a lengthy 
season approach, share matching, Binding Arbitration, quality and 
performance dispute mechanisms relative to other IFQ or IPQ holders 
that do not use those mechanisms. The specific method for sharing fees 
among the IFQ and IPQ holders may be determined by negotiation among 
the various Arbitration Organizations.
    Comment 200: Consistent with the assertion that membership in 
Arbitration Organizations should be voluntary, the requirement at Sec.  
680.20(e)(vii) that transfer of QS, PQS, IFQ or IPQ be conditioned on 
the transferee's membership in an Arbitration Organization should be 
eliminated. This provision creates a condition to transfer eligibility 
that is dependent on resolution of private contract negotiations. To 
the extent negotiation of Arbitration Organization documents are 
contentious, this requirement diminishes the negotiating power of 
individuals in a position to receive QS or IFQ by transfer. Moreover, 
because this provision conditions the transfer of a Federal harvesting 
privilege on acts beyond the control of either the applicant or the 
agency, it is fundamentally unreasonably and unfair.
    Response: The intent behind this provision was to ensure that if 
QS/IFQ or PQS/IPQ is transferred after the Annual Arbitration 
Organization Report or the start of the season that the recipient of 
that QS/IFQ or PQS/IPQ has fulfilled the requirements necessary in 
order to participate in the Arbitration System, including the payment 
of fees. The commenter is correct in that this requirement could limit 
the ability of transfers to occur and does condition the transfer on 
the transferee meeting certain private contractual arrangements. If a 
person receives QS/IFQ or PQS/IPQ by transfer, there is no requirement 
that they are members of an Arbitration Organization. NMFS agrees that 
this transfer restriction as a contract term is not well-suited to 
meeting these goals. NMFS is revising the regulations to delete this 
provision and adding a provision at Sec.  680.20(c)(4) that requires 
that if a person receives QS/IFQ or PQS/IPQ by transfer they are 
required to join an Arbitration Organization upon transfer. Payment of 
fees or other cost sharing measures could be established

[[Page 10221]]

by the Arbitration Organization for any new members.
    Comment 201: For the purpose of share matching under Sec.  
680.20(h)(3)(iv)(B), a cooperative's offer to match up uncommitted 
Arbitration IFQ should be deemed substantial if it is 50 percent or 
more of the average individual IFQ holder's remaining uncommited 
Arbitration IFQ, not 50 percent or more if the cooperative's total 
uncommited Arbitration IFQ. The proposed rule required that a 
cooperative seeking to commit Arbitration IFQ make an offer of at least 
50 percent of that cooperative's uncommited Arbitration IFQ. Because 
this requirement is beyond that expressed in the Council's motion, and 
because it would decrease the marketability of a cooperatives IFQ and 
its ability to take advantage of the arbitration process, the proposed 
rule should be modified to better comport with the Council's intent. 
And, because the Council's motion focuses on the substantiality of an 
individual's offer to match up uncommited Arbitration IFQ, the proposed 
rule should permit cooperatives to meet this substantiality requirement 
by making an offer to commit Arbitration IFQ in an amount that is equal 
to 50 percent or more of an average individual IFQ holder's uncommited 
Arbitration IFQ.
    Response: This response has been addressed in the response to 
comment 152.
    Comment 202: In the case of binding arbitration at Sec.  680.20, 
there is good reason to apply greater restrictions on processor 
interest than apply elsewhere. The reason is that the exchange of 
information contemplated by the arbitration process is necessary to its 
effectiveness, but also an invitation to abuse, if made open to 
processors.
    Response: The regulations regarding information exchange in the 
Arbitration System are intended to minimize antitrust risks to 
participants in the system while facilitating the exchange of 
information.

Monitoring and Enforcement

    Comment 203: The additional requirements for CPs at Sec.  680.23 
will add undue costs to a system that already works. Finding additional 
space aboard a CP for larger floor scales in the observer area will be 
problematic, if not impossible. NMFS should adopt the following 
procedure:
    Each day the observer on board the vessel will periodically take a 
sample and this crab will be held separately. The observer will record 
the number and total weight of the crab, This crab will be processed 
separately each day and the observer and foreman will be available to 
verify the actual recovery rate of finished product. After 75 percent 
of the trip is complete, the observer and foreman will agree on an 
overall recovery percentage and both will sign a statement noting this 
rate and the process used to arrive at this rate. The final round 
weight to apply against the IFQ can be determined by taking the total 
net box weight and dividing it by the agreed upon recovery rate.
    Response: NMFS disagrees. The method described by the commenter 
would put additional burden on the observer and would require NMFS to 
specify observer duties in regulations. Because the State of Alaska is 
responsible for setting levels of observer coverage and training, NMFS 
is not able to base a catch accounting system on presumed levels of 
observer coverage, nor does NMFS believe it is appropriate to specify 
observer duties in regulation.
    Comment 204: The requirement for CPs to have internet connectivity 
at Sec.  680.5(b) as part of interagency electronic reporting system is 
unreasonably burdensome on CPs for two reasons. First, the technology 
for reliable at-sea internet connectivity is not yet perfected and may 
not work in certain sea conditions. These vessels are relatively small 
by comparison to large trawl vessels and are not well suited to 
reliable data transfer by satcom internet due to the ship's motion. 
Second, there is a well tested and reliable data transfer system in 
place by text over satellite communications systems, and weekly 
production reports are now transferred in this fashion. Considering the 
expense and potential for unreliability, CPs should be allowed to 
report catch data using existing sat-com systems as used in WRPs.
    Response: NMFS agrees. It was not NMFS' intent to require CPs to 
submit catch reports over the internet. This final rule amends the 
regulations at Sec.  679.5(d)(2)(ii) to clarify that CPs are not 
required to use the Interagency Electronic Reporting System and may use 
other, NMFS approved, means of reporting catch.
    Comment 205: The requirement at Sec.  680.5(c)(2) to report daily 
catch for CPs is unreasonably burdensome and without good purpose. 
Daily reporting of crab catch is not required of the catcher vessel 
component of the fleet, reporting is at delivery or landing. Managers 
will not be using daily catch reports from CPs to manage the fishery 
but will assume that individual CP catch will be limited to the amount 
of IFQ they hold. WPRs, offload reports, and transfer logs will be 
required at the point of delivery. These will be sufficient for 
managers and regulators to monitor the activity of the CP sector. 
Replace a daily catch reporting requirement for the CP fleet with a 
requirement for weekly report as required in other federal fisheries.
    Response: NMFS agrees and has amended the final rule at Sec.  
680.5(d)(4) to require weekly, rather than daily, catch reporting for 
CPs. NMFS notes, however, that this change does not relieve the burden 
upon CPs to accurately account for catch internally on an ongoing 
basis.
    Comment 206: The Council Motion recognized that onboard observer 
requirements for the BSAI crab fisheries should remain deferred to the 
Alaska Board of Fisheries, as prescribed in the FMP. Therefore, 
descriptive and regulatory language at Sec.  680.23(h) of the proposed 
rule, regarding requirements for the provision of observer work 
stations, should be removed. If these provisions of the regulations, as 
written, are adopted into regulation, then every time the Alaska Board 
of Fisheries makes a regulatory change through its cyclic public 
process, a duplicative or parallel complimentary Council action would 
be required.
    Response: NMFS disagrees that Amendment 18 prevents NMFS from 
implementing standards for observer work areas. While Amendment 18 does 
defer observer coverage to the State of Alaska, NMFS is responsible for 
ensuring that quotas are adequately monitored and reported. NMFS does 
not believe that Amendment 18 prevents NMFS from implementing 
regulations to adequately monitor and account for catch simply because 
they benefit or involve the observer.
    However, NMFS agrees that duplicative regulations could be 
confusing and create potential regulatory conflict and such duplicative 
regulations could be created in the event that the State of Alaska 
implements regulations governing working facilities for observers on 
CPs. Further, catch accounting for CPs is based on not only on the 
round weight of crab as verified by the observer at-sea, but also upon 
a full accounting of product when the crab is landed. Although NMFS 
believes that catch accounting accuracy could be improved by 
implementing standards for the observers' work areas, NMFS concurs that 
the State should have the opportunity to address this issue. NMFS will 
revisit the situation in the future to determine whether additional 
regulations governing observer's work areas are necessary.
    Comment 207: The requirement to land product processed on board at 
a

[[Page 10222]]

shoreside location in the U.S. accessible by road or regularly 
scheduled air service should be modified to specifically identify the 
port of Adak as a designated port. While Adak has regularly scheduled 
air service at this time, that may change. It is important to golden 
king crab CPs to have the ability to off-load product at the Adak port, 
rather than being forced to travel to Dutch Harbor to off-load.
    Response: NMFS disagrees. There is no reason to suppose that Adak 
is any more likely to lose regularly scheduled air service than other 
small communities, such as Akutan, Sand Point, King Cove, or Saint Paul 
where crab product may be offloaded. All of these communities have 
received essential air service determinations from the Department of 
Transportation and are eligible to receive subsidized air service. In 
the unlikely event that a community where crab product had been 
offloaded for accounting were to lose regularly scheduled air service, 
NMFS would work closely with the affected vessels to ensure accurate 
and affordable catch accounting.
    Comment 208: A product recovery rate should be an option instead of 
scales to weigh the catch. This is particularly true for smaller CPs 
that will have difficulty in installing the scales, due to space 
constraints and cost. The initial estimated cost of $100,000 or more 
will be a significant financial hardship for the small vessel to 
absorb. The ability to have a product recovery rate established is 
available and NMFS should move forward with an analysis of this 
important issue.
    Response: NMFS intends to further investigate recovery rate based 
accounting. However, at this time NMFS does not believe that a recovery 
rate accounting system is appropriate for several reasons. First, 
recovery rate data exist only for very short periods of the year and 
only for certain areas. Under a rationalized fishery, NMFS anticipates 
that fishing will take place during a much longer season and data are 
not available to predict the extent to which a change in fishing time 
or area will affect recovery rates. Second, recovery rates vary among 
vessels for numerous reasons. Most importantly, some vessels glaze crab 
prior to final packaging while others dry freeze the crab. NMFS would 
need to either develop seasonal rates, vessel specific glaze rates, or 
publish rates based on an absence of glaze. Such rates would unfairly 
debit quota from those boats that do glaze their finished product. 
Third, any recovery rate based accounting system would require observer 
coverage levels designed to ensure accurate accounting and an observer 
training program. Finally, a rate-based accounting system would require 
development and specification of product recovery rates. Such a process 
would needlessly delay implementation of this action.
    Comment 209: Where are the provisions to catch violators, fine them 
and jail them? Measures are necessary to prevent harvesters from 
catching more that they report to NMFS.
    Response: NMFS agrees that enforcement is an important component of 
ensuring compliance with fishery regulations, and, therefore, NMFS has 
implemented monitoring and enforcement measures for this Program. NMFS 
believes the fines and other sanctions available under the Magnuson-
Stevens Act are sufficient to deter unlawful activity.
    Comment 210: The definition of Processing at Sec.  680.2 should 
specifically state that deliveries for the purposes of live shipping 
are allowed. Crab delivered for the purpose of live shipment are not 
suitable for consumption or storage. In addition, live shipping is not 
considered ``processing'' as defined by the USCG. The intent is to 
continue to allow all typical pre-rationalization product forms.
    Response: None of the regulations in this rule preclude any crab 
product form, including live crab, from being produced or shipped. The 
regulations require that all crab harvested by catcher vessels be 
landed at, and accounted for by, an RCR. This accounting must take 
place at the time of offloading and before any processing has taken 
place. After accounting, the receiver of the crab may ship the crab on 
in their unprocessed form or produce any product they wish. NMFS' 
definition of processing is designed to prevent a harvesting vessel 
from producing a crab product that is suitable for long term storage or 
whose weight would be different than live, whole crab before that crab 
has been properly accounted for at the time of landing or, for CPs, 
reporting.
    Comment 211: The current proposed harvest overage cap of 3 percent 
is too low and places harvesters at a disadvantage. The overage cap 
should be increased to 5 percent.
    Response: The harvest overage provision of 3 percent is a provision 
of Amendment 18. Section 313(j) of the Magnuson-Stevens Act requires 
NMFS to implement the Program provisions in Amendment 18. NMFS does not 
possess the discretion to alter the harvest overage provision as it 
exists in statute. Any change to the harvest overage provision requires 
an amendment to the Program and should be addressed with the Council.
    Comment 212: Concerning fishing overages, any overage of three 
percent or less of the ``last trip'' should be forfeited, with the 
proceeds to be dedicated to the observer program. Additional sanctions 
for overages above three percent may be necessary. Further a post-
delivery harvester QS transfer process should be developed to 
accommodate in-season overages.
    Response: See Response to comment 18 (post-delivery transfers) and 
213 (IFQ overages). Amendment 18 does not direct how penalties will be 
administrated or resolved for any IFQ overages. Nonetheless, NOAA does 
not have the authority to provide proceeds from any seizures resulting 
from a violation to any agency other than NOAA. Therefore, NOAA cannot 
forward any proceeds from IFQ overage seizures to the State of Alaska 
observer program.
    Comment 213: The Council motion provides for the forfeiture of any 
overage from the last trip from a fishery and for penalties for any 
overage in excess of three percent of the unused IFQ on the last trip. 
These provisions appear to be missing from the regulation. The final 
rule should clarify that all overages are forfeited and that overages 
in excess of three percent are a violation.
    Response: See Response to Comment 18 on post-delivery transfers. 
NMFS agrees that Amendment 18 states, ``Overages up to 3 percent will 
be forfeited. Overages above 3 percent results in a violation and 
forfeiture of all overages.'' However, as a general policy, NMFS does 
not include penalties schedules in regulation. Therefore, NMFS has not 
included any regulatory language addressing overages and this 
discussion serves to inform the public of their rights and obligations 
regarding overages that occur during the last fishing trip.
    The Council did not provide a carryover provision in this Program 
similar to the halibut and sablefish IFQ program and harvesters are 
prohibited from exceeding their IFQ. Thus, NMFS interprets that any 
overage of any allocation under the program is a violation. This means 
that NMFS will address any overage through an enforcement action. The 
is necessary because the Magnuson-Stevens Act requires that a violation 
must exist in order for NMFS to seize any crab or the proceeds from any 
crab.
    NMFS also interprets the 3 percent statutory provision as a minimum 
standard by which penalties would be levied under the Program and 
additional

[[Page 10223]]

penalties may be imposed depending on the facts of each case. This 
means that a crab fisherman will always forfeit any overage as part of 
any enforcement action, and may or may not receive an additional 
monetary penalty depending on the facts and circumstances surrounding 
the violation. Absent any aggravating or other factors, the penalty 
will be based on the penalty schedule developed by NOAA. Under all 
circumstance, NOAA reserves the right to evaluate each overage case on 
its own merits.
    Comment 214: Overages and shortfalls present important issues. 
There should be a grace period in which there is an opportunity, 
without forfeiture or penalty, to find available, unutilized IFQ to 
cover harvesting overages. Forfeiture and a penalty would only apply 
where there remained an overage in excess of 3 percent after the grace 
period. If there is IFQ to cover an overage, there is no conservation 
impact, any overage less than three percent would likely have no such 
impact. There should also be a grace period in which there is an 
opportunity, without forfeiture or penalty, to find available, 
uncommitted IPQ to cover shortfalls for deliveries of harvested crab. 
The Council, at its December 2004 meeting, heard numerous witnesses 
testify in support of these positions.
    Response: See Response to Comment 18 (post-delivery transfers) and 
213 (IFQ overages). Amendment 18 clearly directs that IPQ holders may 
not receive any Class A IFQ in excess of the amount of IPQ they 
possess. Amendment 18 does not provide for any overage or underage of 
IPQ, nor does it include a 3 percent forfeiture provision for IPQ 
similar to that for IFQ overages. Therefore, any Class A IFQ purchased 
by an IPQ holder in excess of their IPQ constitutes a violation.
    Since any overage of IPQ constitutes a violation, NMFS would issue 
IPQ holders who exceed their IPQ a notice of enforcement action for any 
overage. Penalties for IPQ overages would be handled at the discretion 
of NOAA based on penalty schedules developed independent of this final 
rule.
    Similar to IFQ overages, Amendment 18 does not provide any 
provisions for IPQ overages or the ability to undertake post-delivery 
transfers of IPQ. Therefore, NMFS cannot accommodate a ``grace period'' 
to allow post-delivery transfers of IPQ at this time. Any change 
addressing IPQ overages or post-delivery transfers of IPQ requires an 
amendment to the Program and should be addressed with the Council.
    Comment 215: The Council motion provides that deadloss would be 
counted against QS. This provision appears to be missing from the 
regulation. Include provision providing for deadloss accounting.
    Response: NMFS has added provisions for deadloss accounting to the 
final rule at Sec.  680.5(b)(5) and (6). NMFS also recognized a related 
problem with accounting for personal use crab after publication of the 
proposed rule and has included the personal use accounting provision in 
this response.
    Amendment 18 clearly directs that all landings including deadloss 
will be counted against IFQs. Amendment 18 also directs that any Class 
A IFQ crab received by a processor must be deducted from that 
processor's IPQ. NMFS interprets these two statements to mean that 
deadloss and personal use crab must always be debited from the 
harvester's IFQ, but are to be counted against the receiving 
processor's IPQ only if they are Class A IFQ crab received by the IPQ 
holder. NMFS revised the final rule at Sec.  680.5(b)(5) and (6) to 
clarify that deadloss and personal use crab will be debited from IFQ, 
but will not be debited from the receiving processor's IPQ unless the 
crab is purchased. NMFS also added a definition of ``retain'', in Sec.  
680.2 of the final rule, to aid in enforcement of the recordkeeping and 
reporting requirements involving deadloss and personal use crab.

Economic Data Collection

    Comment 216: The time for providing the completed submission of 
historic data at Sec.  680.6(c)(2), (e)(2) and (g)(2) is limited to 60 
days after final rule becomes effective. Given the historic nature of 
these data and the complexity of consolidating information into 
reports, the 60 day interval provided for submitters of the EDR from 
the publishing of the final rule in the Federal Register is not a 
sufficient amount of time to submit accurate and complete historical 
EDR data. The commenter requests that the number of days available to 
respond to the EDR be extended.
    Response: NMFS agrees with the comment that the 60-day period to 
provide data for the historic EDR should be extended. In response to 
this public comment, the final rule at Sec. Sec.  680.6(a)(2), 
680.6(c)(2), 680.6(e)(2), and 680.6(g)(2) is modified to provide 90 
days after the effective date of the FR notice for submission of the 
historic EDR. The proposed rule provided notice to the affected 
industry that data collection for historical crab fisheries will be 
required. Many operations may be preparing records for submitting the 
historic EDR in the period following the proposed rule. For an IFQ 
permit application to be considered valid, an EDR must be submitted to 
the DCA in time for the DCA to review the form, verify certain data, 
and notify RAM that a submitter has responded to the requirement. The 
90-day interval will provide sufficient time for submitters of the 
historic EDR to gather records, fill out, and submit the historic EDR 
forms in time to be issued IFQ or IPQ for the 2005 crab fisheries.
    Comment 217: The commenter notes that once the Data Collection 
Agent receives a data form, the submitter has 15 days to respond to a 
contact by the Data Collection Agent. In the active and longer fishing 
seasons under the Program, this may not be a sufficient interval of 
time for persons who may be on the fishing grounds to respond. Also the 
commenter requests that the daily notice should not be based on the 
`issuance' of a request, but rather on certified receipt of the 
request.
    Response: NMFS agrees with the comment that the 15 day period to 
provide a response to an inquiry by the DCA should be extended. NMFS 
has provided submitters several ways to facilitate communication, 
including use of a representative to respond to questions. While it 
should be feasible for persons to respond to verification questions on 
the EDR in 15 days, we are providing a greater amount of time to 
respond by extending the number of days noted at Sec.  680.6(i)(2) to 
20 days. We cannot start counting the time period for responding to 
verification questions on the EDR on the date of a certified receipt of 
the request. NMFS is unable to legally verify that contact to request 
verification has been received if someone refuses to sign a return 
receipt. Also, each submitter will have previously provided an address 
and other contact information on the EDR, and they have the option of 
identifying a representative for responding to EDR questions if they 
will be difficult to reach.
    Comment 218: The commenter asks that data from not less than 2 
years prior to the implementation of the Program be used for estimating 
rationalization impacts. The proposed rule at Sec.  680.6(c)(3), (e)(3) 
and (g)(3), also provides for the submission of information concerning 
the 2004 crab fishery. The 2004 crab fishery would be used as a 
baseline for estimating the economic impacts of the Program on the 
fishery. The commenter requests that the final rule remove the 
provision requiring submission of data from the 2004 fisheries. The 
commenter asserts that the year 2004 should not be used as a 
representative year for historical

[[Page 10224]]

data because it would not be a representative baseline for the crab 
fisheries prior to rationalization.
    Response: Section 313(j) of the Magnuson Stevens Act authorizes a 
mandatory data collection system ``to study the impacts of the Crab 
Rationalization Program'' and to ensure that the program would achieve 
``equity between the harvesting and processing sectors'' and to monitor 
the ``economic stability for harvesters, processors and coastal 
communities''. It also requires that we evaluate the before and after 
effects of the program at an 18-month and 3-year interval. A number of 
transitions in the BSAI crab fisheries have occurred during 2004 and 
2005, including consolidation of BSAI crab vessel and processing plant 
ownership. To capture those changes and display the economic effects of 
the CR fishery program for the required 18-month review of the crab 
program, including year 2004 in the mandatory data collection is 
necessary to generate economic estimates of efficiency and 
distributional effects. As the 18-month review will consist of only one 
full year of data from the mandatory EDR, data collected during 2004 
will be an important indicator of directional change in the fishery.
    We agree that the year 2004 should not be used as a single baseline 
to compare an entire sector's economic status as it uses that year in 
combination with other years to define the pre-Program state. No data 
from a single historic year is intended to be used in isolation of 
other historic years as each EDR for a sector will be made up of data 
from at least three years between 1998 and 2004.
    Comment 219: The data collection agent, Pacific States Marine 
Fisheries Commission, should be required to negotiate a confidentiality 
agreement with any party the Council gives review authority, which may 
or may not include NMFS. That confidentiality agreement should include 
penalties for individuals who divulge data. The proprietary economic 
data being collected are highly sensitive because of competition.
    Response: In compliance with NOAA administrative orders an existing 
regulation regarding confidentiality of data, and when appropriate, 
confidentiality agreements will be required for recipients of data.
    Comment 220: The proposed rule provides an optimal approach to the 
disclosure of commercially sensitive data, having due regard to the 
antitrust laws, the relevant provisions of the enabling statute for the 
rationalization program, and the Council's intent. The proposed rule 
should not be altered to restrict disclosure of data beyond the extent 
necessary to comply with antitrust laws. Any changes to the proposed 
rule should be based on the objectives of maximum transparency of data 
to industry participants, consistent with antitrust law, the enabling 
statute for the program, and the Council's intent, and maximum 
availability of data to NMFS, the Council, the DOJ and FTC for the 
purposes of review, monitoring, and enforcement, as the case may be.
    Response: NMFS concurs with the comment.

Cost Recovery and Fee Collection

    Comment 221: Why would CP ex-vessel price proxies be lagged a year 
when real-time ex-vessel values are collected shoreside, especially 
with the IERS. A weighted average could be computed daily, weekly or 
monthly across shoreside crab buyers? One-year lagged proxies should 
not be allowed.
    Response: NMFS explored several different methods for calculating 
CP standard prices. NMFS based the CP standard prices for ex-vessel 
values based on the current method used to calculate standard prices 
under the halibut and sablefish IFQ regulations. The halibut and 
sablefish IFQ standard price regulations were developed recognizing 
that the ex-vessel value of a CP product often possesses a value added 
cost that would be subject to a fee liability that substantially 
exceeds the fee liability for shoreside deliveries of unprocessed fish. 
Therefore, NMFS developed an ex-vessel value methodology that 
calculated, as closely as possible by month and port or port-group, the 
variations in the actual ex-vessel values of IFQ halibut and IFQ 
sablefish landings based on information provided by shoreside buyers 
which included: (1) Landed pounds by IFQ species, port-group, and 
month; (2) total ex-vessel value by IFQ species, port-group, and month; 
and (3) price adjustments, including IFQ retro-payments. This method 
provides for a more equitable fee distribution between the CP and 
shoreside sectors. Because the rationalized crab fishery will function 
similarly to the halibut and sablefish IFQ fisheries, NMFS adopted a 
similar methodology to accommodate CP ex-vessel price calculation that 
bases standard prices on the preceding year's values.
    NMFS recognizes that information will be available through the 
Interagency Electronic Reporting System (IERS) on a real time basis, 
which could allow for daily, weekly, or quarterly standard price 
calculations. NMFS cannot implement more frequent standard price 
calculations than annually due to confidentiality issues and 
administrative constraints. However, NMFS agrees that CP standard 
prices should be based on information available at the time a CP 
harvests crab. Therefore, NMFS revised the language of the regulation 
at Sec.  680.44(b) to indicate that CPs will be responsible for 
calculating their fee liability at the end of a crab fishing year based 
on the current year's CP standard prices as provided to them by RAM. 
Each CP would be responsible for retaining their own estimated fees up 
to 3 percent of their estimated ex-vessel value until the end of the 
crab fishing year and submitting their actual fees based on the CP 
standard prices provided by NMFS. CP standard prices would be based on 
the current year's shoreside ex-vessel value thereby minimizing any 
disparity between the fee liability paid by shoreside processors and 
CPs.

Loan Program

    Comment 222: The proposed rule contains no provision for the crew 
loan program that is intended to support purchase of shares by captains 
and crew. This program is a critical component that should be 
implemented simultaneously with all other aspects of the program. In 
addition, the provision of seed money to fund the program from its 
inception would substantially increase the effectiveness of the loan 
program.
    Response: NMFS recognizes the importance of crab QS loans for crab 
vessel captains and crew. If Congress enacts the necessary loan 
ceiling, NMFS intends to make crab QS loans available in time to 
finance captains and crew purchasing crab QS when it first begins to 
trade.
    Under the Federal Credit Reform Act, Federal loans are available 
only in accordance with annually enacted loan ceilings. Congress has 
not yet enacted a loan ceiling for crab QS loans, but crab industry 
representatives advise us that they are working to ensure timely 
enactment of the necessary loan ceiling.

General Comments

    Comment 223: We are sure that for the years 2002-3 the NMFS' budget 
was in the billions of dollars. We are also sure that there are people 
who think that the NMFS programs are failing miserably. NMFS is not 
only responsible for the management and conservation of our marine 
resources but also fishing industry jobs. NMFS does not seem to be very 
good at its job description. What did NMFS do with our fish, what 
happened to our jobs?

[[Page 10225]]

    Response: NMFS regrets that the commentator has such a negative 
perception of the agency. It is unclear to which programs the 
commentator is specifically referring. Thus, NMFS is unable to respond 
to the sufficiency of the budget or the relative success of the program 
the commentator addresses. However, NMFS would like to note that the 
North Pacific fisheries continue to be recognized as the most 
productive and sustainable in U.S. waters, due in part to the extensive 
management measures undertaken by NMFS.
    NMFS is responsible for the management, conservation and protection 
of living marine resources within the United States Exclusive Economic 
Zone. NMFS also plays a supportive and advisory role in the management 
of living marine resources in coastal areas under state jurisdiction, 
provides scientific and policy leadership in the international arena 
and implements international conservation and management measures as 
appropriate.
    Under this mission, the goal is to optimize the benefits of living 
marine resources to the Nation through sound science and management. 
This requires a balancing of multiple public needs and interests in the 
sustainable benefits and use of living marine resources, without 
compromising the long-term biological integrity of coastal and marine 
ecosystems.
    Many factors, both natural and human-related, affect the status of 
fish stocks, protected species and ecosystems. Although these factors 
cannot all be controlled, available scientific and management tools 
enable the agency to have a strong influence on many of them. 
Maintaining and improving the health and productivity of these species 
is the heart of NMFS' stewardship mission. These activities will 
maintain and enhance current and future opportunities for the 
sustainable use of living marine resources as well as the health and 
biodiversity of their ecosystems.
    NMFS continues to believe that the Crab Rationalization Program is 
consistent with NMFS mission and goals. NMFS also believes that the 
Program will increase resource conservation, improve economic 
efficiency, and improve safety. NMFS continues to work diligently to 
ensure the needs and interests in the sustainable benefits and use of 
the crab resources remain properly balanced with the long-term 
biological integrity of the crab stocks.
    Comment 224: Giving away resources for free is an important public 
policy and needs independent public scrutiny.
    Response: NMFS agrees that the Program is important public policy 
and requires independent public scrutiny. NMFS believes that the public 
has had ample opportunity for independent scrutiny throughout the 
development of the Program. The Council developed this Program over a 
6-year period through its public process, starting with an ad hoc 
industry committee, which was formalized into the Council's BSAI Crab 
Rationalization Committee. The Council appointed members to the BSAI 
Crab Rationalization Committee, which included representatives from 
harvesters, processors, skippers and crew, communities, and 
environmental organizations. The BSAI Crab Rationalization Committee 
was tasked with developing elements and options for analysis and 
reporting to the Council. Also, the Council, the Advisory Panel (AP), 
and Scientific and Statistical Committee (SSC) have discussed 
rationalization at a number of meetings since October 1999. The 
Council, AP, and SSC accepted public testimony, written and oral, at 
each of these meetings.
    During the period from February 2002 to August 2004, the Council 
and NMFS developed the EIS. The Preliminary draft EIS for Council 
review was published November 2003 and distributed to the Council 
family and posted on the NMFS Alaska Region and Council web pages. The 
Council then recommended releasing the draft EIS for public review, 
along with some revisions to the analysis. The Draft EIS was filed with 
the Environmental Protection Agency and released for public review on 
March 19, 2004. The 45-day public comment period closed on May 3, 2004. 
The Comment Analysis Report, in Chapter 8 of the Final EIS, provides 
the public comments received during the comment period and presents the 
agency's response to the public comments. NMFS released the Final EIS 
in August 2005. These EIS documents were distributed to the Council and 
available to the public at the Council meetings and on the NMFS web 
page. The Council heard public testimony on the EIS at its meetings.
    In January 2004, the U.S. Congress amended section 313 of the 
Magnuson-Stevens Act to require the Secretary to approve the Program 
developed by the Council. NMFS is publishing notice and comment rule 
making to implement this Program, which allows for additional public 
review.
    Comment 225: NMFS reports contain worthless data that are never 
verified.
    Response: NMFS disagrees. First, in accordance with National 
Standard 2 of the Magnuson-Stevens Act, NMFS must use the best 
available scientific information in developing fishery conservation and 
management measures. NMFS ensures compliance with National Standard 2 
by using the highest quality scientific information collected from 
agency, industry, academic, and public resources. Second, in accordance 
with the Data Quality Act, NMFS must provide for and maximize the 
quality, objectivity, utility, and integrity of any information it 
disseminates. NMFS ensures compliance with the Data Quality Act by 
ensuring transparency of data, reproducibility of information, and an 
appropriate level of peer review. Therefore, through compliance with 
the Magnuson-Stevens Act and the Data Quality Act, NMFS ensures that 
the information used in developing the Crab Rationalization Program, as 
well as all other NMFS reports, is not only initially high-quality, but 
also is subjected to several significant independent verification 
steps.
    Comment 226: Marine sanctuaries should be established now.
    Response: Marine sanctuaries are not part of the Program and, 
therefore, are not addressed in this rule. However, as discussed in the 
Final EIS (see ADDRESSES), existing closed areas protect crab and their 
habitat from the effects of fishing. Trawl fishing is prohibited in the 
Pribilof Islands Habitat Conservation Zone established to protect crab 
habitat in the Pribilof Islands area. The Red King Crab Savings Area in 
the Bering Sea and the Nearshore Bristol Bay Closure protect female and 
juvenile red king crab and their habitat from trawl fishing. The State 
of Alaska established a no-fishing zone to protect blue king crab in 
state waters around the St. Matthew, Hall, and Pinnacles Islands.
    Comment 227: NMFS should reconsider the LLP's exemption for vessels 
under 32 foot in the Norton Sound king crab fishery because this 
exemption reduces the value of the LLP licenses, jeopardizes 
investments made in the fishery, and results in overcapitalization of a 
very limited resource.
    Response: This final rule does not address reducing capacity in the 
Norton Sound king crab fishery. As discussed in the Final EIS, the 
Council determined that inclusion of the Norton Sound king crab fishery 
in the Crab Rationalization Program was unwarranted at this time. We 
encourage you to petition the Council to make these changes in the LLP 
for this fishery.
    Comment 228: NMFS has issued too many LLP licenses for the Norton 
Sound king crab fishery because it is a very

[[Page 10226]]

small fishery with a limited resource and value. NMFS should consider 
revoking the LLP licenses that are not being used to restore the value 
of the remaining LLP licenses and protect the fishery from 
overcapitalization.
    Response: See response to comment 227.
    Comment 229: In the proposed rule, Sec.  679.4(k)(1)(ii)(B) and (D) 
refer to the U.S. Russian Convention line of 1867. This line is no 
longer recognized as the Maritime Boundary line between the U.S. and 
Russia.
    Response: NMFS agrees and has changed references to the U.S. 
Russian Convention line of 1867 in the final rule to the Maritime 
Boundary Agreement Line as that line is described in the text of and 
depicted in the annex to the Maritime Boundary Agreement between the 
United States and the Union of Soviet Socialist Republics signed in 
Washington, June 1, 1990, and as the Maritime Boundary Agreement Line 
as depicted on NOAA Chart No. 513 (6th edition, February 23, 1991) and 
NOAA Chart No. 514 (6th edition, February 16, 1991).
    Comment 230: The proposed rule does not contain specific measures 
to improve the safety of the BSAI crab fisheries. Specific measure are 
necessary to achieve the stated goals of the Program. Specific measures 
should include requiring vessels to be better built and equipped, 
mandatory USCG inspections, crew training, and pot limits to ensure 
vessel stability. QS holders not interested in complying with these 
safety measures could join a cooperative or lease or sell their QS/IFQ. 
NMFS should include language in the proposed rule ordering the Council 
to consult with the Coast Guard to develop an amendment that 
specifically addresses vessel and crew safety in the rationalized crab 
fishery. NMFS should publish the implementing regulations for the 
amendment to coincide with the sunset of the QS leasing option for QS 
holders.
    Although the Agency clearly states in the summary of the proposed 
action that ``The proposed action is necessary to increase resource 
conservation, improve economic efficiency and improve safety.'' 
(emphasis added by commenter), in the proposed rule there is virtually 
no discussion of precisely how--or whether--the crab rationalization 
program will actually improve the safety for fisherman in the Bering 
Sea (other than the discussion in rule that rationalization will end 
the race for fish and likely lead to more measured fisheries thus 
decreasing the dangers inherent in being forced to fish in dangerous 
weather and that a smaller, consolidated fleet with fewer participants 
will lead to fewer accidents). Nowhere in the rule is the protection of 
life and limb directly addressed, despite the rule's stated goal of 
improving safety.
    Response: Improved vessel safety is one of the goals of the Program 
for NMFS, the U.S. Congress, and the Council. As explained in the Final 
EIS, the safety benefits provided by the Program include improved 
opportunity for vessel owners to invest in safety, improved opportunity 
for captains to take weather and other considerations into account when 
making decisions, and more professional crews. NMFS agrees that the 
regulations do not contain specific measures to regulate how a 
participant improves vessel safety. NMFS believes that the Program, as 
mandated by the Magnuson-Stevens Act, is sufficient to improve safety 
and that no additional measures or changes to the regulations are 
required at this time. However, the Council, working with the Coast 
Guard, may develop recommendations to amend the Program with specific 
measures to improve safety.
    Comment 231: The Council motion provides that AFA crab harvesting 
and processing sideboards would be removed on implementation of the 
program. The regulation does not appear to contain a provision 
concerning the removal of AFA sideboards. Include provisions removing 
the AFA crab harvesting and processing sideboards.
    Response: The regulations do remove the AFA crab harvesting and 
processing sideboards, consistent with Amendment 18. The final rule 
removes the requirement for AFA crab sideboard endorsements at Sec.  
679.4(l)(3)(ii)(D) and Sec.  679.7(k)(4)(ii), and the crab processing 
sideboard limits at Sec.  679.7(k)(8) and Sec.  679.65.

Additional Changes From Proposed Rule

    NMFS made the following changes from the proposed rule to the final 
rule to clarify regulatory language or correct mistakes in the proposed 
rule.
    At Sec.  680.41(l)(2)(ii)(C) a typographical error was corrected to 
change 3 days to 30 days.
    Crab Harvesting Cooperatives. At Sec.  680.21 the crab harvesting 
cooperative IFQ permit deadline was changed from July 1 to August 1 to 
conform with the IFQ application deadline.
    NMFS has removed the provision in the proposed rule at Sec.  
680.21(g)(2) that allowed crab harvesting cooperatives to acquire 
individually held IFQ. Amendment 18 does not provide for crab 
harvesting cooperatives to acquire individually held IFQ. NMFS has 
determined that allowing crab harvesting cooperatives to acquire 
individually held IFQ could be a disincentive for QS holder to join 
crab harvesting cooperatives and a disincentive for crab harvesting 
cooperatives to acquire members, thus undermining the Program. Without 
this provision, the total amount of crab harvesting cooperative IFQ 
will be set at the start of the season, facilitating crab harvesting 
cooperative management. Removing this provision does not effect the 
ability of crab harvesting cooperatives to conduct intercooperative 
transfers.
    Permits. In Sec.  680.4, NMFS substituted the requirement in the 
proposed rule that each company obtain a separate RCR permit for each 
facility with a requirement in the final rule that each IPQ holder must 
hold an RCR permit. And, the application for an RCR permit is also 
changed accordingly to delete unnecessary information. At the time the 
proposed rule was prepared, development work on the IERS had not 
progressed to the point where the data collection organization and 
structure was defined. It is now clear that providing a single, 
unequivocal match between the holder of the IPQ permit(s) to be debited 
for a landing with the RCR receiving crab accomplishes several 
important results: it relieves the burden for an IPQ holder to obtain 
multiple RCR permits; it greatly simplifies landings reporting and 
eliminates need to enter data multiple times for a landing; it 
clarifies which entity is responsible for crab landings reporting; and 
it simplifies cost recovery statements and payments.
    Table 14. Tables 14a-14c have been updated to provide a 
corresponding NMFS port code for each ADF&G port code in the tables. 
Tables 14a-14c were provided for groundfish reporting, and there were 
several ports where groundfish were not customarily delivered. No NMFS 
port code was necessary from these locations for groundfish reporting. 
The ADF&G list of port codes in Tables 14a-14c was assembled to 
accommodate all fisheries including groundfish and shellfish. NMFS is 
populating the table with the necessary codes to provide reporting 
capabilities for any port from which shellfish as well as groundfish 
could be reported.
    IFQ overages. NMFS added language to address how accounting must 
occur for IFQ overages in relation to IPQ. Under Amendment 18, 
harvesters must forfeit any IFQ overages. NMFS believes that IFQ 
overages should not be debited from IPQ for two reasons. First,

[[Page 10227]]

processors should not be penalized for overages by the harvesters. 
Second, and more importantly, once crab is forfeited or seized it is no 
longer classified as ``IFQ.'' For instance, a harvester will be 
required to bring in their crab and have that crab weighed at a 
processor. If an overage of any amount occurs, NMFS would seize the 
overage (the harvester would forfeit) and debit the harvester's account 
only to the full amount of the offending harvester's IFQ. The processor 
would purchase the seized crab from NMFS without debiting their IPQ.
    Economic Data Collection. To reduce the burden to submitters and 
improve the quality of responses for the historic and annual EDRs for 
CVs, CPs, stationary floating crab processors-, and inshore processors, 
NMFS conducted pretests of the draft EDRs prepared for the proposed 
rule with industry experts. The industry expert reviews were used to 
evaluate the EDR for comprehension, clarity of instructions, form 
layout, as well as the probability of soliciting the most accurate 
response possible for each data field in the survey. From the industry 
expert review, changes to Sec.  680.6 are included in the final rule to 
improve the quality, comprehension, and reduce burden for submitters of 
the EDR. These changes consist of three types: Editorial changes, 
changes that eliminate or modify a data field, or substantive changes 
that would extend the reporting response time for submission of the 
EDR.
    NMFS has reorganized and renamed several data fields at Sec.  680.6 
of the final rule to organize the requested data in a manner that is 
consistent with the records kept by the submitters and to rename data 
fields to make it clearer to the submitters by using a term that is 
familiar to the fishing industry. NMFS also edit a portion of the 
instructions for a data field that is listed in a data form to provide 
an accurate explanation. Examples include the change of ``owner name'' 
to ``name of company,'' the change of ``pounds processed'' to 
``finished pounds processed'' clarifying the interval of time during a 
year for reporting costs as observed payments for which a record may be 
verified as opposed to estimates of costs from operator guesses. These 
changes occur in several paragraphs of Sec.  680.6 and do not 
constitute addition or removal of any data fields.
    NMFS removed data fields in the annual EDR related to the season 
interval at Sec. Sec.  680.6(b)(4)(i), 680.6(d)(4)(i), 680.6(f)(4)(i) 
and 680.6(h)(4)(i), because they conflicted with the approach used by 
submitters to retain and organize historical vessel data, processing 
data and other records by crab fishery. The use of a season interval 
was conceived of to allow for collection of data by time interval, 
where multiple fisheries may occur at the same point in time. Industry 
expert reviews of draft data forms revealed that most of these 
fisheries will still occur with minimal overlap in the early years and 
that the operators can adequately parse out fishing or processing costs 
and activities at the fishery level. This modification will have the 
added advantage of reducing reporting burden to the respondents.
    NMFS added a new data field to the historical and annual CP EDR at 
Sec.  680.6(c)(5)(x), and Sec.  680.6(d)(5)(x) ``BSAI crab-specific 
vessel costs'', called ``gear storage''. Pretesting identified this as 
a significant cost category that was not reported in the EDR prepared 
at the time of the proposed rule, and is typically available in 
historical and annual records. Including this data field avoids 
confusion regarding where to locate these costs in the EDR.
    NMFS added Table 3c, Crab Product Codes for Economic Data Reports, 
in the final rule because Tables 3a and 3b do not include information 
needed for the EDR for purposes of recording production information in 
the processor EDRs. Table 3c is added to differentiate descriptions of 
processed crab products from descriptions of delivery, condition, and 
disposition codes at the point of landing.
    Administrative Appeals. The following explanation of revisions to 
Sec.  679.43(a) was inadvertently left out of the preamble to the 
proposed rule although the proposed regulatory changes were published. 
The administrative appeals regulations at Sec.  679.43 currently apply 
to IADs issued under 50 CFR part 679 and part 300. The final rule adds 
part 680 to the applicability statement so that the same administrative 
appeals process that applies to IADs issued for the halibut/sablefish 
IFQ program and other programs established in part 679 will apply to 
any IADs issued for the Crab Rationalization Program. The final rule 
also specifically excludes IADs issued for approval or disapproval of 
CDQ allocations and Community Development Plans under Sec.  679.30(d) 
from the administrative appeals process at Sec.  679.43. CDQ 
allocations are made every three years through a lengthy administrative 
process that includes the CDQ groups, the State of Alaska, the Council, 
and NMFS. The crab CDQ allocations provided for under this Program are 
among the species that must be allocated among the CDQ groups using 
this CDQ allocation process. As a result of an evolving understanding 
of NMFS's legal responsibilities for the CDQ allocation decision, NMFS 
will provide an opportunity for the CDQ groups to administratively 
appeal NMFS'' IAD to approve or disapprove the State's CDQ allocation 
recommendations. However, the deadlines and process described at Sec.  
679.43 for IADs issued primarily for permits and QS fisheries are not 
appropriate for the CDQ allocation process. Therefore, NMFS will 
develop specific procedures for administrative appeals of the IAD 
issued about CDQ allocations in 2005 through a letter from the Regional 
Administrator to the CDQ groups. The administrative appeals procedure 
also would be made available to the State, the Council, and the public 
at the time it is provided to the CDQ groups. This procedure for 
administrative appeals of the CDQ allocations will be done this way one 
time. After completion of the 2006-2008 CDQ allocation decision 
process, NMFS will propose regulations to either revise the procedure 
for making CDQ allocations or codify an appropriate administrative 
appeals process at Sec.  679.43.

Classification

    This final rule has been determined to be significant for the 
purposes of Executive Order 12866.
    Congressional Review Act: The Office of Information and Regulatory 
Affairs has determined that this rule is major under 5 U.S.C. 801 et 
seq. Under 5 U.S.C. 808, the minimum 60-day delay in effectiveness 
required for major rules is not applicable because this rule 
establishes a regulatory program for a commercial activity related to 
fishing.
    A Draft Environmental Impact Statement (EIS) (dated March 2004) was 
prepared for this rule and made available to the public for comment (69 
FR 13036, March 19, 2004). The Final EIS was prepared and made 
available to the public on September 3, 2004 (69 FR 53915). Copies of 
the Final EIS for this action are available from NMFS (see ADDRESSES). 
On November 19, 2004, NMFS issued the Record of Decision for the Final 
EIS. The EIS contains as appendices the Regulatory Impact Review (RIR), 
Initial Regulatory Flexibility Analysis (IRFA), and Social Impact 
Assessment (SIA) prepared for this action.
    NMFS prepared a Final Regulatory Flexibility Analysis (FRFA). The 
FRFA incorporates the IRFA, response to public comments received on the 
IRFA, and a summary of the analyses completed to support the action. A 
copy of this analysis is available from NMFS (see ADDRESSES). The FRFA 
did not

[[Page 10228]]

reveal any Federal rules that duplicate, overlap, or conflict with the 
action. The following summarizes the FRFA.
    The FRFA evaluates the impacts of the Crab Rationalization Program 
for the king and Tanner fisheries in the BSAI on small entities. The 
FRFA addresses the statutory requirements of the Regulatory Flexibility 
Act (RFA) of 1980, as amended by the Small Business Regulatory 
Enforcement Fairness Act (SBREFA) of 1996 (5 U.S.C. 601-612). It 
specifically addresses the requirements at section 604(a).

Issues Raised by Public Comments on the IRFA

    The proposed rule for the Program was published in the Federal 
Register on October 29, 2004 (69 FR 63200). An IRFA was prepared for 
the proposed rule, and described in the classifications section of the 
preamble to the rule. The public comment period ended on December 13, 
2004. NOAA Fisheries Service received 49 letters of public comment on 
the proposed rule. NOAA Fisheries Service summarized these letters into 
234 separate comments. Of these, three comments were on the IRFA and 
are presented below. No changes were made to the final rule from the 
proposed rule in response to the comments on the IRFA. Several comments 
directly or indirectly dealt with economic impacts to small entities 
resulting from the management measures presented in the proposed rule. 
These comments and responses are under Response to Comments in this 
preamble.
    Comment 1: The IRFA incorrectly states the number of small 
entities. The ownership affiliation standard in the proposed rule 
surely reduces the number of small businesses to far less than 223. The 
EIS Appendix identifies approximately 39 processor-affiliated vessels, 
including CPs. So, this statement seems to presume all non-processor-
affiliated vessels are unique, small entities. Application of the 
affiliation standard in the proposed regulations makes this number 
highly suspect, especially in light of CDQ ownership affiliations.
    Response: As stated in the IRFA, the SBA establishes the principles 
of affiliation for defining small entities in an IRFA. The analysis in 
the IRFA used these principles of affiliation to define the number of 
small entities, and not the proposed rule's affiliation standard for 
the Program. Additionally, NOAA Fisheries Service has limited 
information on vessel ownership, therefore, the analysis is based on 
the best available information. The estimation of the number of small 
entities under the IRFA is likely over inclusive because of the lack of 
better ownership information. NOAA Fisheries Service has determined 
that the extensive economic data collection that is part of this 
Program will enable the agency to better determine the small business 
status of participants in the Program.
    Comment 2: This statement in the IRFA concerning entry of new 
processors is not complete. They may also buy or lease IPQ in order to 
purchase and process Class A IFQ. This means of entry should be added 
to the text.
    Response: NOAA Fisheries Service agrees and has added this means of 
entry to the FRFA. NOAA Fisheries Service points out that this means of 
entry discussed in the preamble to the proposed rule.
    Comment 3: NOAA Fisheries Service expressed interest in receiving 
comments regarding the definition of crab catcher processor in the 
IRFA. For the most part, crab catcher processors should be classified 
as small business size entities.
    Response: Comment noted. The commenter did not provide any 
information supporting the statement that catcher/processor vessels 
should be considered small business entities. The Small Business 
Administration has established size criteria for all major industry 
sectors in the U.S., including fish harvesting and fish processing 
businesses and these criteria are also included in NOAA Fisheries 
Service guidelines for RFA. NOAA Fisheries Service considers catcher/
processors to be small entities for the analysis in the IRFA and this 
FRFA. NOAA Fisheries Service has determined that the extensive economic 
data collection that is part of this Program will enable the agency to 
better determine the small business status of catcher/processors.

Need for and Objectives of This Action

    The BSAI crab fisheries are currently managed under the LLP. Under 
current management, the fisheries are prosecuted in an economically 
inefficient manner with significant amounts of the capital idle between 
seasons. The race to fish also creates incentives for participants to 
compromise safety to increase catch. The Council developed the Program 
which slows the race for fish, minimizes bycatch and associated 
mortalities, provides for conservation to increase the efficacy of crab 
rebuilding strategies, and addresses the social and economic concerns 
that have arisen under current management. The U.S. Congress mandated 
NOAA Fisheries Service approve and implement the Program by amending 
section 313(j) of the Magnuson-Stevens Act through the Consolidated 
Appropriations Act of 2004 (Pub. L. 108-199, section 801).

Number and Description of Small Entities Affected by the Rule

    Approximately 238 small entities own crab harvest vessels or crab 
catcher/processors. They are directly regulated by the final rule. 
Eight small entities appear to qualify for processor allocations. 
Thirteen communities, which are considered small government 
jurisdictions, could be directly impacted by the community protection 
provisions under consideration. The six non-profit CDQ groups are small 
entities directly regulated by the final rule.

Recordkeeping and Reporting Requirements

    Implementation of the final rule will change the overall reporting 
structure and recordkeeping requirements of the participants in the 
BSAI crab fisheries. Under the final rule, all participants will be 
required to provide additional reporting. Each harvester will be 
required to track harvests to avoid exceeding his or her allocation. As 
in other North Pacific rationalized fisheries, processors will provide 
catch recording data to managers to monitor harvest of allocations. 
Processors will be required to record deliveries and processing 
activities to aid in Program administration.
    To participate in the Program, persons will be required to complete 
application forms, transfer forms, EDR forms, reporting requirements, 
and other collections-of-information. These forms are either required 
by the Magnuson-Stevens Act or required for the administration of the 
Program. These forms impose costs on small entities in gathering the 
required information and completing the forms. Persons will be required 
to complete most of the forms at the start of the Program, like 
applications for initial issuance of QS and PQS and the historic EDR. 
Persons will be required to complete some forms every year, like 
applications for IFQ/IPQ and annual EDRs. Participation in the 
Arbitration System will be also be annual. Additionally, catch 
reporting will be completed more frequently.

Description of Significant Alternatives and Description of Steps Taken 
To Minimize the Significant Economic Impacts on Small Entities

    The Council considered an extensive and elaborate series of 
alternatives, options, and suboptions as it designed and evaluated the 
potential for

[[Page 10229]]

rationalization of the BSAI crab fisheries, including the ``no action'' 
alternative. The RIR presents the complete set of alternatives, in 
various combinations with the complex suite of options. The EIS 
presents four alternative programs for management of the BSAI crab 
fisheries, namely, Status Quo/No Action (Alternative 1); the Crab 
Rationalization Program (Alternative 2); an Individual Fisherman's 
Quota (IFQ) Program (Alternative 3); and a Cooperative Program 
(Alternative 4). These alternatives constitute the suite of 
``significant alternatives'', under the action, for RFA purposes. Each 
is addressed briefly below. Please refer to the EIS and its appendices 
for more detail. The following is a summary of the contents of those 
more extensive analyses, specifically focusing on the aspects which 
pertain to small entities, the reasons why each alternative to the 
action was rejected, and the reasons why the Crab Rationalization 
Program was selected.
    In January 2004, the U.S. Congress amended section 313 of the 
Magnuson-Stevens Act through the Consolidated Appropriations Act of 
2004 (Pub. L. 108-199, section 801), by adding paragraph (j). As 
amended, section 313(j)(1) requires the Secretary to approve and 
implement by regulation the Crab Rationalization Program, as it was 
approved by the North Pacific Fishery Management Council (Council) 
between June 2002 and April 2003, and all trailing amendments, 
including those reported to Congress on May 6, 2003.
    Under the status quo (no action), the BSAI crab fisheries have 
followed the well known pattern associated with managed open access. 
Enticed by the prospect of capturing 100 percent of the benefits, while 
externalizing all but a very small ``common'' share of the cost of an 
individual fishing decision (i.e., no enforceable ownership rights to 
ration access) these BSAI crab fisheries have been characterized by a 
``race-for-fish'', capital stuffing behavior, excessive risk taking, 
and a dissipation of potential rents. In the face of substantial stock 
declines, participants in these fisheries are confronted by significant 
surplus capacity (in both the harvesting and processing sectors), 
financial distress (for some, failure), and widespread economic 
instability, all contributing to resource conservation and management 
difficulties.
    In response to worsening biological, economic, social, and 
structural conditions in many of the BSAI crab fisheries, the Council 
and NMFS found that the status quo management structure was causing 
significant adverse impacts to the participants in these fisheries, as 
well as the communities that depend on these fisheries. As indicated in 
the IRFA, many small entities, as defined under RFA, are negatively 
impacted under current managed open access rules. The management tools 
in the existing FMP (e.g., time/area restriction, LLP, pot limits) do 
not provide managers with the ability to effectively solve these 
problems, thereby making Magnuson-Stevens Act goals difficult to 
achieve and forcing reevaluation of the existing FMP. For these 
reasons, the Council and NMFS rejected the status quo alternative as a 
means to rationalize the crab fisheries.
    In an effort to alleviate the problems caused by excess capacity 
and the race for fish, the Council and NMFS determined that the 
institution of some form of rationalization program is needed to 
improve crab fisheries management in accordance with the amended 
Magnuson-Stevens Act.
    The IFQ alternative would, as the name implies, allocate individual 
shares of the crab TAC to harvesters, imparting a ``quasi-private 
property interest'' (i.e. a transferrable access privilege) in a share 
of the TAC, thus removing the undesirable ``common property'' 
attributes of the status quo on qualifying harvesters. The 
rationalization of the BSAI crab fisheries would likely benefit the 
approximately 223 businesses that own harvest catcher vessels and are 
considered small entities. In recent years these entities have competed 
in the race to fish against larger businesses. The IFQ alternative 
would allow these operators to slow their rate of fishing and give more 
attention to efficiency. Some of these operations and the vessels they 
use could be negatively impacted if the allocations they qualify for 
are small and cannot be fished economically. The participants, however, 
would be permitted to lease or sell their allocations, and could obtain 
some return from their allocations. Differences in efficiency 
implications of rationalization by business size cannot be predicted. 
Some participants believe that smaller vessels could be more efficient 
than larger vessels in a rationalized fishery because a vessel only 
needs to be large enough to harvest the IFQ. Conversely, under open 
access, a vessel has to be large enough to outcompete the other 
fishermen and, hence, the overcapacity problems under the race for 
fish. If that is true, it is possible that some of the smaller 
participants in the fishery could increase their activity (by 
purchasing or leasing QS/IFQ) in a rationalized fishery.
    Council and NMFS rejected the IFQ alternative because the IFQ 
alternative would fail to protect the economic and social interests of 
other participants, also dependent on these crab fisheries, namely, 
processor and community entities. As the analysis in the RIR 
demonstrates, while harvesters clearly benefit, the IFQ alternative 
likely would increase the negative economic impacts relative to status 
quo on processor and community small entities. Specifically, as 
discussed in the RIR and SIA, harvesters may deliver crab to new 
processors in locations with more access to the outside world, forcing 
the closing of processing facilities in remote areas that are dependent 
on the crab fisheries, such as Saint Paul, Saint George, and Unalaska/
Dutch Harbor.
    The Cooperative alternative yields many of the positive economic, 
social, and structural results cited above for the IFQ alternative. In 
addition, however, the Cooperative alternative holds out the promise of 
providing efficiency gains to both small entity harvesters and the 
processors. Data on cost and operating structure within each sector are 
unavailable, so a quantitative evaluation of the size and distribution 
of these gains, accruing to each sector under this management regime, 
cannot be provided. Nonetheless, it appears that the Cooperative 
alternative offers all of the same ``improvements'' over the status quo 
as does the IFQ alternative (e.g., institution of ``rights-based-
management'' structure, reduction in uncertainty) while including 
another population of participants, the crab processors, that the 
Council expressed explicit concern about protecting in its problem 
statement and objectives for this action.
    While on the basis of available information, the Cooperative 
alternative appears to minimize negative economic impacts on small 
entities to a greater extent than does an IFQ alternative, and both 
appear to minimize negative economic impacts compared to the Status 
Quo, it is apparent, on the basis of the EIS and RIR analyses, that the 
Cooperative alternative does not extend the benefits of rationalization 
to the third population of small entities, fishery dependent 
communities. Therefore, the Council and NMFS rejected the Cooperative 
alternative.
    After an exhaustive public process, spanning several years, the 
Council and NMFS selected the Crab Rationalization Program alternative 
because it concluded that the Crab Rationalization Program best 
accomplishes the stated objectives articulated in the problem statement 
and applicable statutes, and minimizes to the extent practicable

[[Page 10230]]

adverse economic impacts on the universe of directly regulated small 
entities; harvesters, processors, and communities. This final rule will 
implement the Program.
    The Program contains many provisions to minimize significant 
negative impacts on small entities, consistent with stated objectives 
of applicable statutes. The Program makes three separate allocations; 
one to the harvest sector, one to the processing sector, and one to 
defined regions. All three allocations are based on historic 
participation, to protect investment in and reliance on the fisheries. 
Harvesters will receive harvest allocations, processors will receive 
processing allocations, and regions will receive allocations of 
landings and processing activity. These three separate allocations are 
also intended to mitigate the negative effects of the transition from a 
regulated open access race-for-fish to rationalized fisheries, burdens 
which tend to fall most heavily on small entities.
    The competing interests of harvesters and processors, many of which 
are small entities, are balanced by allocating different portions of 
the total harvest to the two sectors. Harvesters will be allocated 
harvest shares for 100 percent of the TAC, minus the community 
allocations. Processors will be allocated processing shares for 90 
percent of the TAC. To ensure corresponding allocations to the two 
sectors, 90 percent of the harvest allocation is allocated as Class A 
IFQ that require delivery to a processor that holds IPQ. The remaining 
10 percent will be Class B IFQ shares that can be delivered to any 
processor. Under the Program, harvesters (many of whom, as noted, are 
small entities) will be permitted to form cooperatives to achieve 
efficiencies and reduce transaction costs through the coordination of 
harvest activities and deliveries to processors.
    Small harvester entities that receive allocations large enough to 
support their participation could benefit from not needing to 
participate in the race for fish, as with the IFQ alternative. The 
portion of the fishery allocated as Class B IFQ, also known as open 
delivery IFQ, will also impact the effects of the Program on small 
harvesters, since Class B IFQ are likely to provide harvesters with 
additional power in their delivery negotiations with processors.
    Small processors appear to have been exiting the crab fishery in 
recent years as the harvest levels have declined and seasons have been 
compressed. The final rule will allocate PQS to processors that 
participated in the fishery in either 1998 or 1999. ``Small'' 
processors that plan to enter or reenter the crab fisheries (but did 
not participate during the qualifying years) will be allowed to process 
crab harvested with Class B IFQ and CDQ crab, or lease IPQ to process 
crab caught with Class A IFQ. Class B IFQ and CDQ crab will provide a 
mechanism for small processors to enter the fishery without large 
capital outlays to purchase PQS or IPQ. Class B IFQ, however, will 
reduce the allocation of PQS to the small and large processors that 
qualify for the Program. Class B IFQ therefore may negatively impact 
small processors, if they are unable to compete with large processors 
in the marketplace for the Class B IFQ.
    To resolve impasses in price negotiations, a potentially crippling 
occurrence for the smaller operators, the Program will include a 
mandatory binding arbitration program for the settlement of price 
disputes between harvesters and processors. Historically, prices have 
been settled by protracted, often contentious negotiations, from time 
to time resulting in harvesters delaying fishing (i.e., strikes), which 
can be detrimental to all concerned. An effective system of binding 
arbitration could protect the interests of both sectors in 
negotiations, while avoiding costly delays in fishing due to strikes.
    A number of small governmental jurisdictions will be directly 
regulated by, and therefore could be impacted by, this final rule. All 
communities benefitting from these special provisions of the final rule 
are ``small'', under SBA criteria. Community interests have been 
explicitly considered in the Program, and special provisions have been 
included to minimize (to the extent practicable) adverse impacts on 
these small entities. Under these provisions, the degree of protection 
will likely vary community-to-community.
    The allocation to regions is accomplished by regionally designating 
all Class A IFQ (delivery restricted) and all corresponding IPQ to be 
delivered and processed in a designated region. In most fisheries, 
regionalized IFQ and IPQ are either North or South, with North IFQ 
designated for delivery in areas on the Bering Sea north of 56[deg]20' 
north latitude and South IFQ designated for any other areas, including 
Kodiak and other areas on the Gulf of Alaska. IFQ and IPQ designations 
are based on the historic location of the landings and processing that 
gave rise to the shares. The final rule will also increase the 
allocation of crab to CDQ groups from 7.5 percent to 10 percent, 
providing additional aid to the 65 CDQ communities (all small 
entities).
    Community processing requirements in the first two years of the 
Program and ROFR will benefit communities with history supporting 
initial allocations and are intended to protect community interests. 
The ROFR provisions are likely to benefit communities that are more 
capable of exercising the right. Under the more general regional 
protection, processing activity could move between communities in a 
region. This is likely to benefit those communities able to attract 
additional processing activity from other communities in the region and 
harm communities that processing activity leaves. IPQ caps will benefit 
communities able to attract processing in years of high total harvest. 
Additionally, CDQ groups will be able to purchase QS and PQS to 
increase their participation in the BSAI crab fisheries above the CDQ 
allocation.
    The final rule also contains several additional measures to protect 
various interests. Eligible crew will receive 3 percent of the initial 
allocation of QS. Sideboards will limit the activity of crab vessels in 
other fisheries (such as the GOA groundfish fisheries) to protect 
participants in those fisheries from a possible influx of activity that 
could arise from vessels that exit the crab fisheries, or are able to 
time activities to increase participation in other fisheries. While 
these benefactors of this provision are not directly regulated, and 
therefore not counted among the entities addressed in this IRFA, they 
are predominantly small entities.
    Fish taxes will likely be redistributed with any redistribution of 
processing activity. In addition, the provision of support services and 
associated sales taxes will likely be redistributed to some extent by 
redistribution of landings in a rationalized fishery. Increased 
efficiency in the fisheries arising from the Program could reduce the 
demand for support services, impacting sales tax revenues, if the fleet 
is able to reduce their overall costs. These impacts may occur in large 
and small communities. Since the redistribution of activity and the 
increased efficiency cannot be predicted, these effects cannot be fully 
characterized.
    NMFS made a series of changes in issuing the final rule from 
measures included in the proposed rule in response to public comments, 
as explained in this preamble. NMFS determined these changes were 
necessary to meet the requirements of Amendment 18 and 19. Many of 
these changes were designed to further mitigate the cost of the Program 
on small entities. These changes mitigate

[[Page 10231]]

the impact of the Program on small entities in the following ways. The 
changes for the harvester, crew, and processor sectors mitigate the 
effects on small entities by improving clarity in the regulations to 
ensure compliance, providing additional harvest opportunities to small 
entities affiliated with processors, and refining the application of 
use caps to reduce the effects of excessive QS/PQS consolation on small 
entities. The changes for Crab Harvesting Cooperatives mitigate the 
effects on small entities by providing additional opportunities for 
economic efficiencies for small entities affiliated with processors 
while ensuring compliance with anti-trust laws, maintaining the owner 
on board requirements for crew QS/IFQ to ensure entry level access into 
the crab fisheries, and applying the use caps to crab harvesting 
cooperatives to reduce the effects of excessive QS consolation on small 
entities. The changes for ROFR mitigate the effects on small entities 
by reducing potential confusion for small entities in compliance with 
civil contract terms required under section 313(j) of the Magnuson-
Stevens Act. NMFS made changes to the Arbitration System that mitigate 
the effects on small entities by clarifying requirements for small 
entities to participate in the Arbitration System, and ensuring 
improved compliance with the Arbitration System to improve its ability 
to resolve price disputes while complying with anti-trust law.
    Additionally, NMFS made a number of changes as a result of public 
comments to the Program's compliance requirements to mitigate impacts 
on small entities. In response to public comment requesting additional 
time to prepare and submit the historic EDRs, NMFS increased the 
submission interval for the historic EDR from 60 days to 90 days to 
provide both the time to gather records and complete an accurate EDR. 
Also in response to public comment, NMFS extended the time interval 
allowed for verification of data by all submitters in the final rule to 
20 days from the 15-day interval identified in the proposed rule. NMFS 
made two major changes to requirements for catcher/processors as a 
result of public comment. Both changes reduce the burden on small 
entity participants in the crab fishery. NMFS reduced the required 
reporting interval for crab catch by catcher/processors from once every 
twenty-four hours to weekly. NMFS also clarified regulations governing 
the use of the IERS to ensure that vessels that are unable to use the 
Internet may report catch using an alternative, NMFS approved method 
such as an e-mail attachment to report catch. NMFS made one change to 
the cost recovery fee system in response to public comment by adjusting 
the methodology by which catcher/processors must calculate and submit 
fees to reduce any disparity between fees paid by catcher/processors 
and shoreside processors.

Collection-of-Information

    This rule contains collection-of-information requirements subject 
to the Paperwork Reduction Act (PRA) and which have been approved by 
OMB. Public reporting burden per response for these requirements are 
listed by OMB control number.

OMB No. 0648-0213

    Requirements for recordkeeping and reporting forms and their 
associated burden estimates per response are: 14 minutes for Vessel 
activity report, 20 minutes for Product transfer report, 28 minutes for 
Catcher vessel longline and pot gear daily fishing logbook, and 41 
minutes for Catcher/processor longline and pot gear daily cumulative 
production logbook.

OMB No. 0648-0272

    Requirements for crab IFQ forms and their associated burden 
estimates per response are: 6 minutes for Application for replacement 
of certificates, permits, or cards; 6 minutes for Transshipment 
authorization; 6 minutes for Departure report; 6 minutes for 
Administrative waiver, and 18 minutes for Application for Registered 
Buyer permit.

OMB No. 0648-0330

    Requirements for scales and catch weighing and their associated 
burden estimates per response are: 6 minutes for At-sea inspection 
request, 45 minutes for Record of daily scale tests, 45 minutes for 
printed output of at-sea scale weight, 45 minutes for printed output of 
State of Alaska scale weight, 80 hours for scale type evaluation, 6 
minutes for at-sea scale approval report/sticker, 2 hours for Observer 
sampling station inspection request, 2 minutes for prior notice to 
Observers of scale tests, and 40 hours for Crab catch monitoring plan.

OMB No. 0648-0445

    Requirements for a VMS and their associated burden estimates per 
response are: 12 minutes for VMS check-in form, 6 hours for VMS 
installation, 4 hours for VMS annual maintenance, and 6 seconds for 
each VMS transmission.

OMB No. 0648-0503

    Requirements for crab arbitration reports and their associated 
burden estimates per response are: 4 hours for Annual Arbitration 
Organization Report, 1 hour for Arbitration Organization miscellaneous 
reporting, 40 hours for Market Report, 40 hours for Non-binding Price 
Formula Report, and 45 minutes to establish price for arbitration 
negotiations.

OMB No. 0648-0504

    Requirements for applications for crab permits, transfers, and 
submittal of fees and their associated burden estimates per response 
are: 2 hours for Annual Application for Crab IFQ/IPQ Permit; 2 hours 
for Application for Crab QS or PQS; 2 hours for Application for annual 
crab harvesting cooperative IFQ permit; 30 minutes for Application for 
Crab IFQ Hired Master permit; 30 minutes for Application for RCR 
Permit; 20 minutes for Application for Federal crab vessel permit; 2 
hours for Application for eligibility to receive Crab QS/IFQ or PQS/IPQ 
by transfer; 2 hours for Application to Become an ECCO; 2 hours for 
Application for transfer of crab QS/IFQ or PQS/IPQ; 2 hours for 
Application for transfer of crab QS/IFQ to or from an ECCO; 2 hours for 
Application for Inter-cooperative Transfer; 30 minutes for RCR fee 
submission form; and 4 hours for a letter of appeal, if denied a 
permit.

OMB No. 0648-0505

    Requirements for crab reports and their associated burden estimates 
per response are: 35 minutes to electronically submit crab landing 
report and print receipts, 35 minutes to submit crab landing report 
paper backup (ADF&G fish ticket), 15 minutes for application for user 
ID, 20 minutes for CP offload report, 40 hours for ECCO annual report 
for an ECC.

OMB No. 0648-0506

    Requirements for crab EDRs and their associated burden estimates 
per response are: 25 hours for Catcher processor historical EDR, 25 
hours for Catcher processor annual EDR, 15 hours for Catcher vessel 
historical EDR, 15 hours for Catcher vessel annual EDR, 15 hours for 
Catcher vessel annual EDR, 15 hours for Stationary crab floating 
processor historical EDR, 15 hours for Stationary crab floating 
processor annual EDR, 15 hours for Shoreside crab processor historical 
EDR, 15 hours for Shoreside crab processor annual EDR, and 3 hours for 
verification of data by DCA.
    Response times include the time for reviewing instructions, 
searching

[[Page 10232]]

existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information. Send comments 
on these burden estimates, including suggestions for reducing the 
burden, or any other aspect of these data collections-of-information to 
NMFS, Alaska Region (see ADDRESSES) and e-mail to [email protected], 
or facsimile to (202) 395-7285.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

Small Entity Compliance Guide

    NMFS will post a small entity compliance guide on the Internet at 
http://www.fakr.noaa.gov/sustainablefisheries/crab/crfaq.htm to satisfy 
the Small Business Regulatory Enforcement Fairness Act of 1996, which 
requires a plain language guide to assist small entities in complying 
with this rule. Contact NMFS to request a hardtop of the guide (see 
ADDRESSES).

List of Subjects

15 CFR Part 902

    Reporting and recordkeeping requirements.

50 CFR Parts 679 and 680

    Alaska, Fisheries, Reporting and recordkeeping requirements.

Rebecca Lent,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.

0
For the reasons set out in the preamble, 15 CFR part 902 is amended as 
follows:

15 CFR Chapter IX

PART 902--NOAA INFORMATION COLLECTION REQUIREMENTS UNDER THE 
PAPERWORK REDUCTION ACT; OMB CONTROL NUMBERS

0
1. The authority citation for part 902 continues to read as follows:

    Authority: 44 U.S.C. 3501 et seq.

0
2. In Sec.  902.1, the table in paragraph (b) under 50 CFR is amended 
by adding in numerical order entries for Sec.  679.5(l)(3)(i), Sec.  
679.5(l)(4), Sec.  679.28(f) and (g), Sec.  680.4, Sec.  680.5, Sec.  
680.6, Sec.  680.20, Sec.  680.21, Sec.  680.23(d)(1), Sec.  
680.23(d)(2), Sec.  680.23(e), (f), (g) and (h), Sec.  680.40(f), (g), 
(h), (i), (j), (k), (l), and (m), Sec.  680.41, Sec.  680.42, Sec.  
680.43, and Sec.  680.44(a) through (f) to read as follows:


Sec.  902.1  OMB Control numbers assigned pursuant to the Paperwork 
Reduction Act.

* * * * *
    (b) * * *

------------------------------------------------------------------------
                                                             Current OMB
                                                               control
    CFR part or section where the information collection     number (all
                   requirement is located                      numbers
                                                              begin with
                                                                0648-)
------------------------------------------------------------------------
 
                                * * * * *
50 CFR.....................................................
 
                                * * * * *
679.5(l)(3)(i), (l)(4).....................................        -0272
 
                                * * * * *
679.28(f)..................................................        -0445
679.28(g)..................................................        -0330
 
                                * * * * *
680.4......................................................        -0504
680.5......................................................        -0505
680.6......................................................        -0506
680.20.....................................................        -0503
680.21.....................................................        -0504
680.23(d)(1) and (d)(2)....................................        -0445
680.23(e), (f), (g) and (h)................................        -0330
680.40(f), (g), (h), (i), (j), (k), (l), and (m)...........        -0504
680.41.....................................................        -0504
680.43.....................................................        -0504
680.44(a), (b), (c), (d), (e)..............................        -0505
680.44(f)..................................................        -0504
 
                                * * * * *
------------------------------------------------------------------------

50 CFR Chapter VI

0
For the reasons set out 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 part 679 continues to read as follows:

    Authority: 16 U.S.C. 773 et seq., 1801 et seq., and 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.  679.1, revise paragraphs (g) and (j) to read as follows:


Sec.  679.1  Purpose and scope.

* * * * *
    (g) Fishery Management Plan for Bering Sea/Aleutian Islands King 
and Tanner Crabs. Regulations in this part govern commercial fishing 
for king and Tanner crab in the Bering Sea and Aleutian Islands Area by 
vessels of the United States, and supersede State of Alaska regulations 
applicable to the commercial king and Tanner crab fisheries in the 
Bering Sea and Aleutians Islands Area EEZ that are determined to be 
inconsistent with the FMP (see subpart A, B, and E of this part). 
Additional regulations governing commercial fishing for, and processing 
of, king and Tanner crab managed pursuant to section 313(j) of the 
Magnuson-Stevens Act and the Crab Rationalization Program are codified 
at 50 CFR part 680.
* * * * *
    (j) License Limitation Program (LLP). (1) Regulations in this part 
implement the LLP for the commercial groundfish fisheries in the EEZ 
off Alaska and the LLP for the commercial crab fisheries in the Bering 
Sea and Aleutians Islands Area.
    (2) Regulations in this part govern the commercial fishing for 
groundfish under the LLP by vessels of the United States using 
authorized gear within the GOA and the Bering Sea and Aleutians Islands 
Area and the commercial fishing for crab species under the LLP by 
vessels of the United States using authorized gear within the Bering 
Sea and Aleutians Islands Area.
* * * * *

0
3. In Sec.  679.2, revise the definitions of ``Alaska local time,'' and 
``Shoreside processor,'' revise paragraphs (2) and (3) of the 
``Directed fishing'' definition, and add a definition of ``Registered 
crab receiver'' in alphabetical order to read as follows:


Sec.  679.2  Definitions.

* * * * *
    Alaska local time (A.l.t.) means the time in the Alaska time zone.
* * * * *
    Directed fishing means:
* * * * *
    (2) With respect to license limitation groundfish species, directed 
fishing as defined in paragraph (1) of this definition.
    (3) With respect to crab species under this part, the catching and 
retaining of any crab species.
* * * * *
    Registered crab receiver (RCR) means a person issued an RCR permit, 
described under 50 CFR part 680, by the Regional Administrator.
* * * * *
    Shoreside processor means any person or vessel that receives, 
purchases, or arranges to purchase, unprocessed groundfish, except 
catcher/processors, motherships, buying stations, restaurants, or 
persons receiving groundfish for personal consumption or bait.
* * * * *

0
4. In Sec.  679.3, revise paragraph (d) to read as follows:


Sec.  679.3  Relation to other laws.

* * * * *

[[Page 10233]]

    (d) King and Tanner crabs. Additional regulations governing 
conservation and management of king crabs and Tanner crabs in the 
Bering Sea and Aleutian Islands Area are contained in 50 CFR part 680 
and in Alaska Statutes at A.S. 16 and Alaska Administrative Code at 5 
AAC Chapters 34, 35, and 39.
* * * * *

0
5. In Sec.  679.4, revise paragraph (k)(1)(ii), remove and reserve 
paragraphs (l)(3)(ii)(D), (l)(4)(i), and (l)(5)(ii), and remove 
paragraphs, (l)(4)(ii)(D), (l)(4)(ii)(E), (l)(5)(iv)(E), and 
(l)(5)(iv)(F), to read as follows:


Sec.  679.4  Permits.

* * * * *
    (k) * * *
    (1) * * *
    (ii) Each vessel must have a crab species license, defined in Sec.  
679.2, issued by NMFS on board at all times it is engaged in fishing 
activities for the crab fisheries identified in this paragraph. A crab 
species license may be used only to participate in the fisheries 
endorsed on the license and on a vessel that complies with the vessel 
designation and MLOA specified on the license. NMFS requires a crab 
species license endorsed for participation in the following crab 
fisheries:
    (A) Aleutian Islands red king crab in waters of the EEZ with an 
eastern boundary the longitude of Scotch Cap Light (164[deg]44' W. 
long.) to 53[deg]30' N. lat., then west to 165[deg] W. long., a western 
boundary of 174[deg] W. long., and a northern boundary of a line from 
the latitude of Cape Sarichef (54[deg]36' N. lat.) westward to 171[deg] 
W. long., then north to 55[deg]30' N. lat., and then west to 174[deg] 
W. long.;
    (B) Aleutian Islands Area C. opilio and C. bairdi in waters of the 
EEZ with an eastern boundary the longitude of Scotch Cap Light 
(164[deg]44' W. long.) to 53[deg]30' N. lat., then west to 165[deg] W. 
long, a western boundary of the Maritime Boundary Agreement Line as 
that line is described in the text of and depicted in the annex to the 
Maritime Boundary Agreement between the United States and the Union of 
Soviet Socialist Republics signed in Washington, June 1, 1990, and as 
the Maritime Boundary Agreement Line as depicted on NOAA Chart No. 513 
(6th edition, February 23, 1991) and NOAA Chart No. 514 (6th edition, 
February 16, 1991), and a northern boundary of a line from the latitude 
of Cape Sarichef (54[deg]36' N. lat.), with a southern boundary of 
54[deg]30' N. lat. to 171[deg] W. long., and then south to 54 36' N. 
lat.;
    (C) Norton Sound red king and Norton Sound blue king in waters of 
the EEZ with a western boundary of 168[deg] W. long., a southern 
boundary of 62[deg] N. lat., and a northern boundary of 65[deg]36' N. 
lat.;
    (D) Minor Species endorsement includes:
    (1) Bering Sea golden king crab (Lithodes aequispinus) in waters of 
the EEZ east of the Maritime Boundary Agreement Line as that line is 
described in the text of and depicted in the annex to the Maritime 
Boundary Agreement between the United States and the Union of Soviet 
Socialist Republics signed in Washington, June 1, 1990, and as the 
Maritime Boundary Agreement Line as depicted on NOAA Chart No. 513 (6th 
edition, February 23, 1991) and NOAA Chart No. 514 (6th edition, 
February 16, 1991), with a southern boundary of 54[deg]36' N. lat. to 
171[deg] W. long., and then south to 54[deg]30' N. lat.
    (2) Scarlet or deep sea king crab (Lithodes couesi) in the waters 
of the Bering Sea and Aleutian Islands Area;
    (3) Grooved Tanner crab (Chionoecetes tanneri) in the waters of the 
Bering Sea and Aleutian Islands Area; and
    (4) Triangle Tanner crab (Chionoecetes angulatus) in the waters of 
the Bering Sea and Aleutian Islands Area.
* * * * *

0
6. In Sec.  679.5, revise paragraphs (a)(7)(i) table only, (a)(15) 
introductory text, (c)(1), (g), (k), and (l)(4); revise introductory 
paragraph (l), introductory paragraph (l)(2)(iii)(M), introductory 
paragraph (l)(2)(iv), paragraph (l)(2)(iv)(C), paragraph (l)(2)(iv)(D), 
paragraph (l)(3)(i); remove paragraphs (a)(15)(i) through (viii), 
including the table; and remove and reserve (l)(2)(iv)(A) to read as 
follows:


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

    (a) * * *
    (7) * * *
    (i) * * *

----------------------------------------------------------------------------------------------------------------
                                   And fishing activity is .   An active period is . .   An inactive period is .
     If participant is . . .                  . .                         .                        . .
----------------------------------------------------------------------------------------------------------------
(A) CV \1\.......................  Harvest or discard of      When gear remains on the  When no gear remains on
                                    groundfish.                grounds in a reporting    the grounds in a
                                                               area (except 300, 400,    reporting area.
                                                               550, or 690),
                                                               regardless of the
                                                               vessel location.
(B) SS, SFP......................  Receipt, purchase or       When checked in or        When not checked in or
                                    arrange to purchase, or    processing.               processing.
                                    processing of groundfish.
(C) MS...........................  Receipt, discard, or       When checked in or        When not checked in or
                                    processing of groundfish.  processing.               not processing.
(D) CP...........................  Harvest, discard, or       When checked in or        When not checked in or
                                    processing of groundfish.  processing.               not processing.
(E) BS...........................  Receipt, discard, or       When conducting fishing   When not conducting
                                    delivery of groundfish.    activity for an           fishing activity for an
                                                               associated processor.     associated processor.
----------------------------------------------------------------------------------------------------------------
\1\ CV = Catcher vessel; SS = Shoreside processor; SFP = stationary floating processor; MS = mothership; Catcher/
  processor = CP; BS = Buying station.

* * * * *
    (15) Transfer comparison. The operator, manager, Registered Buyer, 
or Registered Crab Receiver must refer to Table 13 to this part for 
paperwork submittal, issuance, and possession requirements for each 
type of transfer activity of non-IFQ groundfish, IFQ halibut, IFQ 
sablefish, CDQ halibut, and crab rationalization (CR) crab.
* * * * *
    (c) Catcher vessel DFL and catcher/processor DCPL--(1) Longline and 
pot gear catcher vessel DFL and catcher/processor DCPL. (i) In addition 
to information required at paragraphs (a) and (b) of this section:
    (A) Groundfish fisheries. (1) The operator of a catcher vessel 
using longline or pot gear to harvest groundfish and that retains any 
groundfish from the GOA, or BSAI, must maintain a longline and pot gear 
DFL.
    (2) The operator of a catcher/processor using longline or pot gear 
to

[[Page 10234]]

harvest groundfish and that retains any groundfish from the GOA, or 
BSAI, must maintain a longline and pot gear DCPL.
    (B) IFQ halibut, CDQ halibut, and IFQ sablefish fisheries. (1) The 
operator of a catcher vessel using longline or pot gear to harvest IFQ 
sablefish, IFQ halibut, or CDQ halibut from the GOA, or BSAI, must 
maintain a longline and pot gear DFL.
    (2) The operator of a catcher/processor using longline or pot gear 
to harvest IFQ sablefish, IFQ halibut, or CDQ halibut from the GOA, or 
BSAI, must maintain a longline and pot gear DCPL.
    (C) CR fisheries. (1) The operator of a catcher vessel using pot 
gear to harvest CR crab from the BSAI, must maintain a longline and pot 
gear DFL.
    (2) The operator of a catcher/processor using pot gear to harvest 
CR crab from the BSAI, must maintain a longline and pot gear DCPL.
    (ii) Required information. The operator of a catcher vessel or 
catcher/processor identified in paragraph (c)(1)(i) of this section 
must record in the DFL or DCPL, the following information:
    (A) Federal reporting area. Federal reporting area code (see 
Figures 1 and 3 to this part) where gear retrieval (see Sec.  679.2) 
was completed, regardless of where the majority of the set took place. 
Use a separate logsheet for each reporting area.
    (B) Crew size. If a catcher vessel, the number of crew, excluding 
observer(s), on the last day of a trip. If a catcher/processor, the 
number of crew, excluding observer(s), on the last day of the weekly 
reporting period.
    (C) Gear type. Use a separate logsheet for each gear type.
    (1) Circle gear type used to harvest the fish. If gear is other 
than those listed, circle ``Other'' and describe. If using hook-and-
line gear, enter the alphabetical letter that coincides with gear 
description.
    (2) If gear information is the same on subsequent pages, mark the 
box instead of re-entering the gear type information.
    (3) Pot gear. If you checked pot gear, enter the number of pots set 
and the number of pots lost (if applicable).
    (4) Hook-and-line gear. If you checked hook-and-line gear:
    (i) Indicate whether gear is fixed hook (conventional or tub), 
autoline, or snap (optional, but may be required by IPHC regulations).
    (ii) Skates. Indicate length of skate to the nearest foot 
(optional, but may be required by IPHC regulations), number of skates 
set, and number of skates lost (optional, but may be required by IPHC 
regulations).
    (iii) Hooks. Indicate size of hooks, hook spacing in feet, number 
of hooks per skate (optional, but may be required by IPHC regulations).
    (iv) Seabird avoidance gear code. Record seabird avoidance gear 
code(s) (see Sec.  679.24(e) and Table 19 to this part).
    (D) Permit numbers. Enter the permit number(s) for the applicable 
fishery in which you participated.
    (1) IFQ permit number of the operator and of each IFQ permit holder 
aboard the vessel.
    (2) CDQ group number (if applicable).
    (3) Halibut CDQ permit number (if applicable).
    (4) Federal crab vessel permit number (if applicable).
    (E) Observer information. Record the number of observers aboard, 
the name of the observer(s), and the observer cruise number(s).
    (F) Management program. Use a separate logsheet for each management 
program. Indicate whether harvest occurred under one of the following 
management programs. If harvest is not under one of these management 
programs, leave blank:
    (1) Exempted Fishery. Record exempted fishery permit number (see 
Sec.  679.6).
    (2) Research Fishery. Record research program permit number (see 
Sec.  600.745(a) of this chapter).
    (3) Aleutian Islands Pollock (AIP) (see paragraph (a)(7)(xv)(F) of 
this section).
    (G) Catch by set. (See Sec.  679.2 for definition of ``set''). The 
operator must record the following information for each set, if 
applicable:
    (1) If no catch occurred for a day, write ``no catch;'
    (2) Set number, sequentially by year;
    (3) Gear deployment date (month-day), time (in military format, 
A.l.t.), and begin position coordinates (in lat and long to the nearest 
minute);
    (4) Gear retrieval date (month-day), time (in military format, 
A.l.t.), and end position coordinates (in lat and long to the nearest 
minute);
    (5) Begin and end buoy or bag numbers (optional, but may be 
required by IPHC regulations);
    (6) Begin and end gear depths, recorded to the nearest fathom 
(optional, but may be required by IPHC regulations);
    (7) Target species code. Enter the species code of the species you 
intend to catch;
    (8) Estimated haul weight. Enter the total estimated haul weight of 
all retained species. Indicate whether to the nearest pound or to the 
nearest 0.001 mt (2.20 lb);
    (9) IR/IU Species (see Sec.  679.27). If a catcher/processor, enter 
species code of IR/IU species and estimated total round weight for each 
IR/IU species; indicate whether to the nearest pound or the nearest 
0.001 mt (2.20 lb);
    (10) Estimated total round weight of IFQ halibut and CDQ halibut to 
the nearest pound;
    (11) Number and estimated total round weight of IFQ sablefish to 
the nearest pound;
    (12) Circle to indicate whether IFQ sablefish product is Western 
cut (WC), Eastern cut (EC), or round weight (RD); and
    (13) Number and scale weight of raw CR crab to the nearest pound.
    (H) Data entry time limits. (1) The operator must record in the DFL 
or DCPL within 2 hours after completion of gear retrieval: Set number; 
time and date gear set; time and date gear hauled; begin and end 
position; CDQ group number, halibut CDQ permit number, halibut IFQ 
permit number, sablefish IFQ permit number, crab IFQ permit number, 
and/or Federal crab vessel permit number (if applicable), number of 
pots set, and estimated total haul for each set.
    (2) If a catcher vessel, the operator must record all other 
required information in the DFL within 2 hours after the vessel's catch 
is off-loaded, notwithstanding other time limits.
    (3) If a catcher/processor, the operator must record all other 
required information in the DCPL by noon of the day following 
completion of production.
    (4) If a catcher/processor, the operator must record product 
information in the DCPL by noon each day to record the previous day's 
production information.
* * * * *
    (g) Product transfer report (PTR)--(1) General requirements. Except 
as provided in paragraph (g)(1)(i) through (vi) of this section:
    (i) Groundfish. The operator of a mothership or catcher/processor 
or the manager of a shoreside processor or SFP must complete and submit 
a separate PTR for each shipment of groundfish and donated prohibited 
species caught in groundfish fisheries. A PTR is not required to 
accompany a shipment.
    (ii) IFQ halibut, IFQ sablefish, and CDQ halibut. A Registered 
Buyer must submit a separate PTR for each shipment of halibut or 
sablefish for which the Registered Buyer submitted an IFQ landing 
report or was required to submit an IFQ landing report. A PTR is not 
required to accompany a shipment.
    (iii) CR crab. A Registered Crab Receiver (RCR) must submit a 
separate

[[Page 10235]]

PTR for each shipment of crab for which the RCR submitted a CR crab 
landing report or was required to submit a CR crab landing report. A 
PTR is not required to accompany a shipment.
    (2) Exceptions--(i) Bait sales (non-IFQ groundfish only). During 
one calendar day, the operator or manager may aggregate and record on 
one PTR the individual sales or shipments of non-IFQ groundfish to 
vessels for bait purposes during the day recording the amount of such 
bait product shipped from a vessel or facility that day.
    (ii) Retail sales--(A) IFQ halibut, IFQ sablefish, CDQ halibut, and 
non-IFQ groundfish. During one calendar day, the operator, manager, or 
Registered Buyer may aggregate and record on one PTR the amount of 
transferred retail product of IFQ halibut, IFQ sablefish, CDQ halibut, 
and non-IFQ groundfish if each sale weighs less than 10 lb or 4.5 kg.
    (B) CR crab. During one calendar day, the RCR may aggregate and 
record on one PTR the amount of transferred retail product of CR crab 
if each sale weighs less than 100 lb or 45 kg.
    (iii) Wholesale sales (non-IFQ groundfish only). The operator or 
manager may aggregate and record on one PTR, wholesale sales of non-IFQ 
groundfish by species when recording the amount of such wholesale 
species leaving a vessel or facility in one calendar day, if invoices 
detailing destinations for all of the product are available for 
inspection by an authorized officer.
    (iv) Dockside sales. (A) A person holding a valid IFQ permit, IFQ 
card, and Registered Buyer permit may conduct a dockside sale of IFQ 
halibut or IFQ sablefish with a person who has not been issued a 
Registered Buyer permit after all IFQ halibut and IFQ sablefish have 
been landed and reported in accordance with paragraph (l) of this 
section.
    (B) A person holding a valid halibut CDQ permit, halibut CDQ card, 
and Registered Buyer permit may conduct a dockside sale of CDQ halibut 
with a person who has not been issued a Registered Buyer permit after 
all CDQ halibut have been landed and reported in accordance with 
paragraph (l) of this section.
    (C) A Registered Buyer conducting dockside sales must issue a 
receipt to each individual receiving IFQ halibut, CDQ halibut, or IFQ 
sablefish in lieu of a PTR. This receipt must include:
    (1) Date of sale;
    (2) Registered Buyer permit number;
    (3) Weight by product of the IFQ halibut, CDQ halibut or IFQ 
sablefish transferred.
    (D) A Registered Buyer must maintain a copy of each dockside sales 
receipt as described in paragraph (l) of this section.
    (v) Transfer directly from the landing site to a processing 
facility (CDQ halibut, IFQ halibut, IFQ sablefish, or CR crab only). A 
PTR is not required for transportation of unprocessed IFQ halibut, IFQ 
sablefish, CDQ halibut, or CR crab directly from the landing site to a 
facility for processing, provided the following conditions are met:
    (A) A copy of the IFQ landing report receipt (Internet receipt) 
documenting the IFQ landing accompanies the offloaded IFQ halibut, IFQ 
sablefish, or CDQ halibut while in transit.
    (B) A copy of the CR crab landing report receipt (Internet receipt) 
documenting the IFQ landing accompanies the offloaded CR crab while in 
transit.
    (C) A copy of the IFQ landing report or CR crab landing report 
receipt is available for inspection by an authorized officer.
    (D) The Registered Buyer submitting the IFQ landing report or RCR 
submitting the CR crab landing report completes a PTR for each shipment 
from the processing facility pursuant to paragraph (g)(1) of this 
section.
    (3) Time limits and submittal. The operator of a mothership or 
catcher/processor, the manager of a shoreside processor or SFP, the 
Registered Buyer, or RCR must:
    (i) Record all product transfer information on a PTR within 2 hours 
of the completion of the shipment.
    (ii) Submit a PTR by facsimile or electronic file to OLE, Juneau, 
AK (907-586-7313), by 1200 hours, A.l.t., on the Tuesday following the 
end of the applicable weekly reporting period in which the shipment 
occurred.
    (iii) If any information on the original PTR changes prior to the 
first destination of the shipment, submit a revised PTR by facsimile or 
electronic file to OLE, Juneau, AK (907-586-7313), by 1200 hours, 
A.l.t., on the Tuesday following the end of the applicable weekly 
reporting period in which the change occurred and indicate the 
confirmation number of the original PTR.
    (4) Required information. The operator of a mothership or catcher/
processor, the manager of a shoreside processor or SFP, the Registered 
Buyer, or RCR must include the following information on a PTR:
    (i) Original or revised PTR. Whether a submittal is an original or 
revised PTR. If revised, record the confirmation number of the original 
PTR.
    (ii) Shipper information. Name, telephone number, and facsimile 
number of the representative. According to the following table:

------------------------------------------------------------------------
      If you are shipping . . .          Enter under ``Shipper'' . . .
------------------------------------------------------------------------
(A) Non-IFQ groundfish...............  Your processor's name, Federal
                                        fisheries or Federal processor
                                        permit number.
(B) IFQ halibut, CDQ halibut or IFQ    Your Registered Buyer name and
 sablefish.                             permit number.
(C) CR crab..........................  Your RCR name and permit number.
(D) Non-IFQ groundfish, IFQ halibut,   (1) Your processor's name and
 CDQ halibut or IFQ sablefish, and CR   Federal fisheries permit number
 crab on the same PTR.                  or Federal processor permit
                                        number, (2) Your Registered
                                        Buyer's name and permit number,
                                        and (3) Your RCR name and permit
                                        number.
------------------------------------------------------------------------

    (iii) Transfer information. Using descriptions from the following 
table, enter receiver information, date and time of product transfer, 
location of product transfer (e.g., port, position coordinates, or 
city), mode of transportation, and intended route:

[[Page 10236]]



----------------------------------------------------------------------------------------------------------------
                                                                 Then enter . . .
                                 -------------------------------------------------------------------------------
 If you are the  shipper and . .                                                                    Mode of
                .                      Receiver         Date & time of        Location of     transportation and
                                                       product transfer    product transfer     intended route
----------------------------------------------------------------------------------------------------------------
(A) Receiver is on land and       Receiver name and   Date and time when  Port or city of     Name of the
 transfer involves one van,        Federal             shipment leaves     product transfer.   shipping company;
 truck, or vehicle.                fisheries,          the plant.                              destination city
                                   Federal                                                     and state or
                                   processor, or                                               foreign country.
                                   Federal crab
                                   vessel permit
                                   number (if any).
(B) Receiver is on land and       Receiver name and   Date and time when  Port or city of     Name of the
 transfer involves multiple        Federal             loading of vans     product transfer.   shipping company;
 vans, trucks or vehicles.         fisheries,          or trucks, is                           destination city
                                   Federal             completed each                          and state or
                                   processor, or       day.                                    foreign country.
                                   Federal crab
                                   vessel permit
                                   number (if any).
(C) Receiver is on land and       Receiver name and   Date and time when  Port or city of     Name of the
 transfer involves one airline     Federal             shipment leaves     product transfer.   airline company;
 flight.                           fisheries,          the plant.                              destination
                                   Federal                                                     airport city and
                                   processor, or                                               state.
                                   Federal crab
                                   vessel permit
                                   number (if any).
(D) Receiver is on land and       Receiver name and   Date and time of    Port or city of     Name of the
 transfer involves multiple        Federal             shipment when the   product transfer.   airline
 airline flights.                  fisheries,          last airline                            company(s);
                                   Federal             flight of the day                       destination
                                   processor, or       leaves.                                 airport(s) city
                                   Federal crab                                                and state.
                                   vessel permit
                                   number (if any).
(E) Receiver is a vessel and      Vessel name and     Start and finish    Transfer position   The first
 transfer occurs at sea.           call sign.          dates and times     coordinates in      destination of
                                                       of transfer.        latitude and        the vessel.
                                                                           longitude, in
                                                                           degrees and
                                                                           minutes.
(F) Receiver is a vessel and      Vessel name and     Start and finish    Port or position    The first
 transfer takes place in port.     call sign.          dates and times     of product          destination of
                                                       of transfer.        transfer.           the vessel.
(G) Receiver is an agent (buyer,  Agent name and      Transfer start and  Port, city, or      Name (if
 distributor, shipping agent)      location (city,     finish dates and    position of         available) of the
 and transfer is in a              state).             times.              product transfer.   vessel
 containerized van(s).                                                                         transporting the
                                                                                               van; destination
                                                                                               port.
(H) You are aggregating           ``RETAIL SALES''..  Date of transfer..  Port or city of     N/A.
 individual retail sales for                                               product transfer.
 human consumption. (see
 paragraph (g)(2) of this
 section).
(I) You are aggregating           ``BAIT SALES''....  Date of transfer..  Port or city of     N/A.
 individual bait sales during a                                            product transfer.
 day onto one PTR (non-IFQ
 groundfish only).
(J) Non-IFQ Groundfish only. You  ``WHOLESALE         Time of the first   Port or city of     N/A.
 are aggregating wholesale non-    SALES''.            sale of the day;    product transfer.
 IFQ groundfish product sales by                       time of the last
 species during a single day                           sale of the day.
 onto one PTR and maintaining
 invoices detailing destinations
 for all of the product for
 inspection by an authorized
 officer.
----------------------------------------------------------------------------------------------------------------

    (iv) Products shipped. The operator, manager, Registered Buyer, or 
RCR must record the following information for each product shipped:
    (A) Species code and product code. (1) For non-IFQ groundfish, IFQ 
halibut, IFQ sablefish, and CDQ halibut, the species code and product 
code (Tables 1 and 2 to this part).
    (2) For CR crab, the species code and product code (Tables 1 and 2 
to 50 CFR part 680).
    (B) Species weight. Use only if recording 2 or more species with 2 
or more product types contained within the same production unit. Enter 
the actual scale weight of each product of each species to the nearest 
kilogram or pound (indicate which). If not applicable, enter ``n/a'' in 
the species weight column. If using more than one line to record 
species in one carton, use a brace ``{time} '' to tie the carton 
information together.
    (C) Number of units. Total number of production units (blocks, 
trays, pans, individual fish, boxes, or cartons; if iced, enter number 
of totes or containers).
    (D) Unit weight. Unit weight (average weight of single production 
unit as listed in ``No. of Units'' less packing materials) for each 
species and product code in kilograms or pounds (indicate which).
    (E) Total weight. Total weight for each species and product code of 
shipment less packing materials in kilograms or pounds (indicate 
which).
    (F) Total or partial offload. (1) If a mothership or catcher/
processor, the

[[Page 10237]]

operator must indicate whether fish or fish products are left onboard 
the vessel (partial offload) after the shipment is complete.
    (2) If a partial offload, for the products remaining on board after 
the transfer, the operator must enter: Species code, product code, and 
total product weight to the nearest kilogram or pound (indicate which) 
for each product.
* * * * *
    (k) U.S. Vessel Activity Report (VAR)--(1) Fish or fish product 
other than crab onboard. Except as noted in paragraph (k)(4) of this 
section, the operator of a catcher vessel greater than 60 ft (18.3 m) 
LOA, a catcher/processor, or a mothership required to hold a Federal 
fisheries permit issued under this part and carrying fish or fish 
product onboard must complete and submit a VAR by facsimile or 
electronic file to OLE, Juneau, AK (907-586-7313) before the vessel 
crosses the seaward boundary of the EEZ off Alaska or crosses the U.S.-
Canadian international boundary between Alaska and British Columbia.
    (2) Combination of non-IFQ groundfish with IFQ halibut, CDQ 
halibut, IFQ sablefish or CR crab. If a vessel is carrying non-IFQ 
groundfish and IFQ halibut, CDQ halibut, IFQ sablefish or CR crab, the 
operator must submit a VAR in addition to an IFQ Departure Report 
required by paragraph (l)(4) of this section.
    (3) Revised VAR. If fish or fish products are landed at a port 
other than the one specified on the VAR, the operator must submit a 
revised VAR showing the actual port of landing before any fish are 
offloaded.
    (4) Exemption: IFQ Departure Report. A VAR is not required if a 
vessel is carrying only IFQ halibut, CDQ halibut, IFQ sablefish, or CR 
crab onboard and the operator has submitted an IFQ Departure Report 
required by paragraph (l)(4) of this section.
    (5) Information required. (i) Whether original or revised VAR.
    (ii) Name and Federal fisheries permit number of vessel or RCR 
permit number.
    (iii) Type of vessel (whether catcher vessel, catcher/processor, or 
mothership).
    (iv) Name, daytime telephone number (including area code), and 
facsimile number and COMSAT number (if available) of representative.
    (v) Return report. ``Return,'' for purposes of this paragraph, 
means returning to Alaska. If the vessel is crossing the seaward 
boundary of the EEZ off Alaska or crossing the U.S.-Canadian 
international boundary between Alaska and British Columbia into U.S. 
waters, indicate a ``return'' report and enter:
    (A) Intended Alaska port of landing (see Table 14a to this part);
    (B) Estimated date and time (hour and minute, Greenwich mean time) 
the vessel will cross the boundary; and
    (C) The estimated position coordinates in latitude and longitude 
where the vessel will cross.
    (vi) Depart report. ``Depart'' means leaving Alaska. If the vessel 
is crossing the seaward boundary of the EEZ off Alaska and moving out 
of the EEZ or crossing the U.S.-Canadian international boundary between 
Alaska and British Columbia and moving into Canadian waters, indicate a 
``depart'' report and enter:
    (A) The intended U.S. port of landing or country other than the 
United States (see Table 14b to this part);
    (B) Estimated date and time (hour and minute, Greenwich mean time) 
the vessel will cross the boundary; and
    (C) The estimated position coordinates in latitude and longitude 
where the vessel will cross.
    (vii) The Russian Zone. Indicate whether the vessel is returning 
from fishing in the Russian Zone or is departing to fish in the Russian 
Zone.
    (viii) Fish or fish products. For all fish or fish products 
(including non-groundfish) on board the vessel, enter:
    (A) Harvest zone code;
    (B) Species codes;
    (C) Product codes; and
    (D) Total fish product weight in lbs or to the nearest 0.001 mt 
(2.20 lb).
    (1) IFQ halibut, CDQ halibut, IFQ sablefish, or CR crab R&R. In 
addition to the R&R requirements in this section, in 50 CFR part 680 
with respect to CR crab, and as prescribed in the annual management 
measures published in the Federal Register pursuant to Sec.  300.62 of 
this title, the following reports and authorizations are required, when 
applicable: IFQ Prior Notice of Landing, Product Transfer Report (see 
Sec.  679.5(g)), IFQ landing report, IFQ Transshipment Authorization, 
and IFQ Departure Report.
* * * * *
    (2) * * *
    (iii) * * *
    (M) After the Registered Buyer enters the landing data in the 
Internet submission form(s) and receipts are printed, the Registered 
Buyer, or his/her representative, and the IFQ cardholder or CDQ 
cardholder must sign the receipts to acknowledge the accuracy of the 
IFQ landing report.
    (iv) Submittals. Except as indicated in paragraph (1)(2)(iv)(C) of 
this section, IFQ landing reports must be submitted electronically to 
OLE, Juneau, AK by using the Internet as follows:
* * * * *
    (C) Manual landing report. Waivers from the Internet reporting 
requirement can only be granted in writing on a case-by-case basis by a 
local clearing officer. If a waiver is granted, manual landing 
instructions must be obtained from OLE, Juneau, AK, (800-304-4846, 
Select Option 1). Registered Buyers must complete and submit manual 
landing reports by facsimile to OLE, Juneau, AK, (907-586-7313). When a 
waiver is issued, the following additional information is required: 
Whether the manual landing report is an original or revised; and name, 
telephone number, and facsimile number of individual submitting the 
manual landing report.
    (D) Properly debited landing. A properly concluded printed Internet 
submission receipt or a manual landing report receipt which is sent by 
facsimile from OLE to the Registered Buyer, and which is then signed by 
both the Registered Buyer and cardholder constitutes confirmation that 
OLE received the landing report and that the cardholder's account is 
properly debited. A copy of each receipt must be maintained by the 
Registered Buyer as described in Sec.  679.5(l).
    (3) * * *
    (i) No person may transship processed IFQ halibut, CDQ halibut, IFQ 
sablefish, or CR crab between vessels without authorization by a local 
clearing officer. Authorization from a local clearing officer must be 
obtained for each instance of transshipment at least 24 hours before 
the transshipment is intended to commence.
* * * * *
    (4) IFQ departure report--(i) General requirements--(A) Time limit 
and submittal. A vessel operator who intends to make a landing of IFQ 
halibut, CDQ halibut, IFQ sablefish, or CR crab at any location other 
than in an IFQ regulatory area for halibut and sablefish or in a crab 
fishery for CR crab (see Table 1 to part 680) in the State of Alaska 
must submit an IFQ Departure Report, by telephone, to OLE, Juneau, AK, 
(800-304-4846 or 907-586-7163) between the hours of 0600 hours, A.l.t., 
and 2400 hours, A.l.t.
    (B) Completion of fishing. A vessel operator must submit an IFQ 
Departure Report after completion of all fishing and prior to departing 
the waters of the EEZ adjacent to the jurisdictional waters of the 
State of Alaska, the territorial sea of the State of Alaska, or the 
internal waters of the State of Alaska when IFQ

[[Page 10238]]

halibut, CDQ halibut, IFQ sablefish, or CR crab are on board.
    (C) Permit--(1) Registered Crab Receiver permit. A vessel operator 
submitting an IFQ Departure Report for CR crab must have a Registered 
Crab Receiver permit.
    (2) Registered Buyer permit. A vessel operator submitting an IFQ 
Departure Report for IFQ halibut, CDQ halibut, or IFQ sablefish must 
have a Registered Buyer permit.
    (D) First landing of any species. A vessel operator submitting an 
IFQ Departure Report must submit IFQ landing reports for all IFQ 
halibut, CDQ halibut, and IFQ sablefish on board at the same time and 
place as the first landing of any IFQ halibut, CDQ halibut, or IFQ 
sablefish.
    (E) Permits on board. (1) A vessel operator submitting an IFQ 
Departure Report to document IFQ halibut or IFQ sablefish must have one 
or more IFQ cardholders on board with a combined IFQ balance equal to 
or greater than all IFQ halibut and IFQ sablefish on board the vessel.
    (2) A vessel operator submitting an IFQ Departure Report to 
document CDQ halibut must ensure that one or more CDQ cardholders are 
on board with enough remaining CDQ halibut balance to harvest amounts 
of CDQ halibut equal to or greater than all CDQ halibut on board.
    (3) A vessel operator submitting an IFQ Departure Report to 
document CR crab must have one or more permit holders on board with a 
combined CR balance equal to or greater than all CR crab on board the 
vessel.
    (ii) Required information. When submitting an IFQ Departure Report, 
the vessel operator must provide the following information:
    (A) Intended date, time (A.l.t.), and location of landing;
    (B) Vessel name and ADF&G vessel registration number;
    (C) Vessel operator's name and Registered Buyer permit or 
Registered Crab Receiver permit number;
    (D) Halibut IFQ, halibut CDQ, sablefish IFQ, and CR crab permit 
numbers of IFQ and CDQ cardholders on board;
    (E) Area of harvest. (1) If IFQ or CDQ halibut, then halibut 
regulatory areas (see Figure 15 to this part).
    (2) If IFQ sablefish, then sablefish regulatory areas (see Figure 
14 to this part).
    (3) If CR crab, then the crab rationalization fishery code (see 
Table 1 to part 680).
    (F) Estimated total weight as appropriate of IFQ halibut, CDQ 
halibut, IFQ sablefish, or CR crab on board (lb/kg/mt).
    (iii) Revision to Departure Report. A vessel operator who intends 
to make an IFQ landing at a location different from the location named 
on the IFQ Departure report must submit a revised report naming the new 
location at least 12 hours in advance of the offload. Revisions must be 
submitted by telephone, to OLE, Juneau, AK, (800-304-4846 or 907-586-
7163) between the hours of 0600 hours, A.l.t., and 2400 hours, A.l.t.
* * * * *

0
7. In Sec.  679.7, revise paragraph (a)(15) and (k)(1)(iii), remove and 
reserve paragraphs (k)(2)(ii), (k)(3)(iii), (k)(4)(ii), and remove 
paragraph (k)(8) to read as follows:


Sec.  679.7  Prohibitions.

* * * * *
    (a) * * *
    (15) Federal processor permit. Receive, purchase or arrange for 
purchase, discard, or process groundfish harvested in the GOA or BSAI 
by a shoreside processor or SFP that does not have on site a valid 
Federal processor permit issued pursuant to Sec.  679.4(f).
* * * * *
    (k) * * *
    (1) * * *
    (iii) Processing BSAI crab. Use a listed AFA catcher/processor to 
process any crab species harvested in the BSAI.
* * * * *

0
8. In Sec.  679.28, add a new paragraph (b)(1)(v) and revise paragraph 
(f)(4)(i) to read as follows:


Sec.  679.28  Equipment and operational requirements.

* * * * *
    (b) * * *
    (1) * * *
    (v) Exceptions. A scale manufacturer or their representative may 
request that NMFS approve a custom built automatic hopper scale under 
the following conditions:
    (A) The scale electronics are the same as those used in other 
scales on the Regional Administrator's list of scales eligible for 
approval;
    (B) Load cells have received Certificates of Conformance from NTEP 
or OIML;
    (C) The scale compensates for motion in the same manner as other 
scales made by that manufacturer which have been listed on the Regional 
Administrator's list of scales eligible for approval;
    (D) The scale, when installed, meets all of the requirements set 
forth in paragraph 3 of appendix A to this part, except those 
requirements set forth in paragraph 3.2.1.1.
* * * * *
    (f) * * *
    (4) * * *
    (i) Contact the OLE by Facsimile (907-586-7703) and provide: the 
VMS transmitter ID, the vessel name, the Federal Fisheries Permit 
number or Federal crab vessel permit number.
* * * * *

0
9. In Sec.  679.31, revise paragraph (d) to read as follows:


Sec.  679.31  CDQ reserves.

* * * * *
    (d) Crab CDQ reserves. Crab CDQ reserves for crab species governed 
by the Crab Rationalization Program are specified at Sec.  680.40 
(a)(1). For Norton Sound red king crab, 7.5 percent of the guideline 
harvest level specified by the State of Alaska is allocated to the crab 
CDQ reserve.

0
10. In Sec.  679.43, revise paragraph (a) to read as follows:


Sec.  679.43  Determinations and appeals.

    (a) General. This section describes the procedure for appealing 
initial administrative determinations made under parts 300, 679, 680, 
and subpart E, of this title. This section does not apply to initial 
administrative determinations made under Sec.  679.30(d).
* * * * *


Sec.  679.65  [Removed and Reserved]

0
11. Remove and reserve Sec.  679.65.

0
12. In part 679, Tables 14a, 14b, and 15 are revised; and Tables 13 and 
14c are added to read as follows:

                                                                          Table 13 to Part 679.--Transfer Form Summary
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         Submit                                     Issue            Possess
                                                                                          ------------------------------------------------------------------------------------------------------
     If participant type is . . .         And has . . . Fish      And is involved in this                                       Trans-ship       Departure      Dockside sales   Landing receipt
                                            product onboard              activity             VAR (Sec.        PTR (Sec.          (Sec.         report (Sec.    receipt (Sec.         (Sec.
                                                                                              679.5(k))        679.5(g))       679.5(l)(3))     679.5(l)(4))   679.5(g)(1)(v))  679.5(g)(1)(vi))
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Catcher vessel greater than 60 ft      Only non-IFQ groundfish.  Vessel leaving or                      X   ...............  ...............  ...............  ...............  ................
 LOA, mothership or catcher/processor.                            entering Alaska.

[[Page 10239]]

 
Catcher vessel greater than 60 ft      Only IFQ sablefish, IFQ   Vessel leaving Alaska...  ...............  ...............  ...............               X
 LOA, mothership or catcher/processor.  halibut, CDQ halibut,
                                        or CR crab.
Catcher vessel greater than 60 ft      Combination of IFQ        Vessel leaving Alaska...               X   ...............  ...............               X   ...............  ................
 LOA, mothership or catcher/processor.  sablefish, IFQ halibut,
                                        CDQ halibut, or CR crab
                                        and non-IFQ groundfish.
Mothership, catcher/processor,         Non-IFQ groundfish......  Transfer of product.....  ...............               X   ...............  ...............  ...............  ................
 shoreside processor, or SFP.
Registered Buyer.....................  IFQ sablefish, IFQ        Transfer of product.....  ...............               X   ...............  ...............  ...............  ................
                                        halibut or CDQ halibut.
Registered Crab Receiver.............  CR crab.................  Transfer of product.....  ...............               X   ...............  ...............  ...............  ................
A person holding a valid IFQ permit,   IFQ sablefish, IFQ        Transfer of product.....  ...............  ...............  ...............  ...............             XXX   ................
 IFQ card, and Registered Buyer         halibut or CDQ halibut.
 permit.
Registered Buyer.....................  IFQ sablefish, IFQ        Transfer from landing     ...............  ...............  ...............  ...............  ...............               XX
                                        halibut or CDQ halibut.   site to Registered
                                                                  Buyer's processing
                                                                  facility.
Registered Crab Receiver.............  CR crab.................  Transfer from landing     ...............  ...............  ...............  ...............  ...............               XX
                                                                  site to RCR's
                                                                  processing facility.
Vessel operator......................  Processed IFQ sablefish,  Transshipment between     ...............  ...............            XXXX   ...............  ...............  ................
                                        IFQ halibut, CDQ          vessels.
                                        halibut, or CR crab.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
``X'' indicates under what circumstances each report is submitted.
``XX'' indicates that the document must accompany the transfer of IFQ species from landing site to processor.
``XXX'' indicates receipt must be issued to each receiver in a dockside sale.
``XXXX'' indicates authorization must be obtained 24 hours in advance.


        Table 14a to Part 679.--Port of Landing Codes \1\: Alaska
------------------------------------------------------------------------
              Port name                NMFS code        ADF&G code
------------------------------------------------------------------------
Adak.................................        186  ADA
Akutan, Akutan Bay...................        101  AKU
Alitak...............................        103  ALI
Anchorage............................        105  ANC
Angoon...............................        106  ANG
Aniak................................        300  ANI
Anvik................................        301  ANV
Atka.................................        107  ATK
Auke Bay.............................        136  JNU
Beaver Inlet.........................        119  DUT
Bethel...............................        302  BET
Captains Bay.........................        119  DUT
Chefornak............................        189  CHF
Chignik..............................        113  CHG
Cordova..............................        115  COR
Craig................................        116  CRG
Dillingham...........................        117  DIL
Douglas..............................        136  JNU
Dutch Harbor/Unalaska................        119  DUT
Egegik...............................        122  EGE
Ekuk.................................        303  EKU
Elfin Cove...........................        123  ELF
Emmonak..............................        304  EMM
Excursion Inlet......................        124  XIP
False Pass...........................        125  FSP
Fairbanks............................        305  FBK
Galena...............................        306  GAL
Glacier Bay..........................        307  GLB
Glennallen...........................        308  GLN
Gustavus.............................        127  GUS
Haines...............................        128  HNS
Halibut Cove.........................        130  HBC
Homer................................        132  HOM
Hoonah...............................        133  HNH
Hydaburg.............................        309  HYD
Hyder................................        134  HDR
Juneau...............................        136  JNU
Kake.................................        137  KAK
Kaltag...............................        310  KAL
Kasilof..............................        138  KAS
Kenai................................        139  KEN
Kenai River..........................        139  KEN
Ketchikan............................        141  KTN
King Cove............................        142  KCO
King Salmon..........................        143  KNG
Kipnuk...............................        144  KIP
Klawock..............................        145  KLA
Kodiak...............................        146  KOD
Kotzebue.............................        311  KOT
Mekoryuk.............................        147  MEK
Metlakatla...........................        148  MET
Moser Bay............................        312  MOS
Naknek...............................        149  NAK
Nenana...............................        313  NEN
Nikiski (or Nikishka)................        150  NIK
Ninilchik............................        151  NIN
Nome.................................        152  NOM
Nunivak Island.......................        314  NUN
Old Harbor...........................        153  OLD
Other Alaska \1\.....................        499  UNK
Pelican..............................        155  PEL
Petersburg...........................        156  PBG
Port Alexander.......................        158  PAL
Port Armstrong.......................        315  PTA
Port Bailey..........................        159  PTB
Port Graham..........................        160  GRM
Port Lions...........................        316  LIO
Port Moller..........................        317  MOL
Port Protection......................        161  PRO
Quinhagak............................        187  QUK
Sand Point...........................        164  SPT
Savoonga.............................        165  SAV
Selawik..............................        326  SWK
Seldovia.............................        166  SEL
Seward...............................        167  SEW
Sitka................................        168  SIT
Skagway..............................        169  SKG
Soldotna.............................        318  SOL
St. George...........................        170  STG
St. Mary.............................        319  STM
St. Paul.............................        172  STP
Tee Harbor...........................        136  JNU
Tenakee Springs......................        174  TEN
Togiak...............................        176  TOG
Toksook Bay..........................        177  TOB
Tununak..............................        178  TUN
Ugashik..............................        320  UGA
Unalakleet...........................        321  UNA
Valdez...............................        181  VAL
Wasilla..............................        322  WAS
Whittier.............................        183  WHT
Wrangell.............................        184  WRN
Yakutat..............................        185  YAK
------------------------------------------------------------------------
\1\ To report a landing at a location not currently assigned a location
  code number, use the code for ``Other Alaska'' code ``499'' ``OAK''.


        Table 14b to Part 679.--Port of Landing Codes: Non-Alaska
                [California, Oregon, Canada, Washington]
------------------------------------------------------------------------
              Port name                NMFS code        ADF&G code
------------------------------------------------------------------------
              CALIFORNIA
  Eureka.............................        500  EUR
  Other California \1\...............       1599  OCA
                CANADA
  Other Canada \1\...................        899  OCN
  Port Edward........................        802  PRU
  Prince Rupert......................        802  PRU
                OREGON
  Astoria............................        600  AST
  Newport............................        603  NPT
  Other Oregon \1\...................        699  OOR

[[Page 10240]]

 
  Portland...........................        323  POR
  Warrenton..........................        604  WAR
              WASHINGTON
  Anacortes..........................        700  ANA
  Bellingham.........................        702  BEL
  Blaine.............................        717  BLA
  Everett............................        704  EVT
  La Conner..........................        708  LAC
  Olympia............................        324  OLY
  Other Washington \1\...............        799  OWA
  Seattle............................        715  SEA
  Tacoma.............................        325  TAC
------------------------------------------------------------------------
\1\ To report a landing at a location not currently assigned a location
  code number, use the code for ``Other'' for the state or country at
  which the landing occurs.


 Table 14c to Part 679.--At-sea Operation Type Codes To Be Used as Port
            Codes for Vessels Matching This Type of Operation
------------------------------------------------------------------------
                           Description of code
-------------------------------------------------------------------------
              Code                NMFS Alaska region         ADF&G
------------------------------------------------------------------------
FCP.............................  Catcher/processor.  Floating catcher
                                                       processor.
FLD.............................  Mothership........  Floating domestic
                                                       mothership.
IFP.............................  Stationary          Inshore floating
                                   Floating            processor--proces
                                   Processor.          sing in State of
                                                       Alaska waters
                                                       only.
------------------------------------------------------------------------


                                                Table 15 to Part 679.--Gear Codes, Descriptions, and Use
                                                          [X indicates where this code is used]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    Use alphabetic code to complete the  following:              Use numeric code to complete the following:
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             NMFS       Electronic                  Shoreside
                                                          logbooks &   WPR & check-    Numeric     electronic   IFQ Internet
           Name of gear               Alpha gear code     paper forms  in/check-out   gear code      logbook       & forms       CR crab     ADF&G COAR
                                                              \1\        code \1\                   (SSPELR)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Diving............................  OTH                            X             X            11            X   ............  ............            X
Dredge............................  OTH                            X             X            22            X   ............  ............            X
Dredge, hydro/mechanical..........  OTH                            X             X            23            X   ............  ............            X
Fish wheel........................  OTH                            X             X            08            X   ............  ............            X
Gillnet, drift....................  OTH                            X             X            03            X   ............  ............            X
Gillnet, herring..................  OTH                            X             X            34            X   ............  ............            X
Gillnet, set......................  OTH                            X             X            04            X   ............  ............            X
Gillnet, sunken...................  OTH                            X             X            41            X   ............  ............            X
Hand line/jig/troll (IFQ name:      n/a                  ............  ............           05            X             X   ............            X
 hand troll).
Handpicked........................  OTH                            X             X            12            X   ............  ............            X
Hatchery..........................  n/a                  ............  ............           77            X   ............  ............            X
Hook-and-line.....................  HAL                            X             X            61            X             X   ............            X
Jig, mechanical (IFQ name: jigs)..  JIG                            X             X            26            X             X   ............            X
Net, dip..........................  OTH                            X             X            13            X   ............  ............            X
Net, ring.........................  OTH                            X             X            10            X   ............  ............            X
Other/specify.....................  OTH                            X             X            99            X   ............  ............            X
Pair trawl........................  (\1\)                ............  ............           37  ............  ............  ............            X
Pot...............................  POT                            X             X            91            X             X             X             X
Pound.............................  OTH                            X             X            21            X   ............  ............            X
Seine, purse......................  OTH                            X             X            01            X   ............  ............            X
Seine, beach......................  OTH                            X             X            02            X   ............  ............            X
Shovel............................  OTH                            X             X            18            X   ............  ............            X
Trap..............................  OTH                            X             X            90            X   ............  ............            X
Trawl, beam.......................  (\1\)                ............  ............           17            X   ............  ............            X
Trawl, double otter...............  (\1\)                ............  ............           27            X   ............            X
Trawl, nonpelagic/bottom..........  NPT                            X             X            07            X   ............  ............            X
Trawl, pelagic/midwater...........  PTR                            X             X            47            X   ............  ............            X
Troll, dinglebar..................  TROLL                          X             X            25            X             X   ............            X
Troll, power gurdy................  TROLL                          X             X            15            X             X   ............            X
Weir..............................  OTH                            X             X            14            X   ............  ............            X
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For groundfish logbooks, forms, electronic WPR, electronic check-in/out reports: all trawl gear must be reported as either nonpelagic trawl (NPT) or
  pelagic trawl (PTR).


[[Page 10241]]

    For the reasons set out in the preamble, a new 50 CFR part 680 is 
added as follows:

PART 680--SHELLFISH FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF 
ALASKA

Subpart A--General
Sec.
680.1 Purpose and scope.
680.2 Definitions.
680.3 Relation to other laws.
680.4 Permits.
680.5 Recordkeeping and reporting (R&R).
680.6 Crab economic data report (EDR).
680.7 Prohibitions.
680.8 Facilitation of enforcement.
680.9 Penalties.
Subpart B--Management Measures
680.20 Arbitration System.
680.21 Crab harvesting cooperatives.
680.22 Sideboard protections for GOA groundfish fisheries.
680.23 Equipment and operational requirements.
680.30 [Reserved]
Subpart C--Quota Management Measures
680.40 Quota Share (QS), Processor QS (PQS), Individual Fishing 
Quota (IFQ), and Individual Processor Quota (IPQ) Issuance.
680.41 Transfer of QS, PQS, IFQ and IPQ.
680.42 Limitations on use of QS, PQS, IFQ, and IPQ.
680.43 Determinations and appeals.
680.44 Cost recovery.
Table 1 to Part 680--Crab Rationalization (CR) Fisheries
Table 2 to Part 680--Crab Species Codes
Table 3a to Part 680--Crab Delivery Condition Codes
Table 3b to Part 680--Crab Disposition or Product Codes
Table 3c to Part 680--Crab Product Codes for Economic Data Reports
Table 4 to Part 680--Crab Process Codes
Table 5 to Part 680--Crab Size Codes
Table 6 to Part 680--Crab Grade Codes
Table 7 to Part 680--Initial Issuance of Crab QS by Crab QS Fishery
Table 8 to Part 680--Initial QS and PQS Pool for Each Crab QS 
Fishery
Table 9 to Part 680--Initial Issuance of Crab PQS by Crab QS Fishery

    Authority: 16 U.S.C. 1862.

Subpart A--General


Sec.  680.1  Purpose and scope.

    Regulations in this part implement policies developed by the North 
Pacific Fishery Management Council and approved by the Secretary of 
Commerce in accordance with the Magnuson-Stevens Fishery Conservation 
and Management Act. In addition to part 600 of this chapter, these 
regulations implement the following:
    (a) Fishery Management Plan (FMP) for Bering Sea and Aleutian 
Islands King and Tanner Crabs. Regulations in this part govern 
commercial fishing for, and processing of, king and Tanner crabs in the 
Bering Sea and Aleutian Islands Area pursuant to section 313(j) of the 
Magnuson-Stevens Act, including regulations implementing the Crab 
Rationalization Program for crab fisheries in the Bering Sea and 
Aleutian Islands Area, and supersede State of Alaska regulations 
applicable to the commercial king and Tanner crab fisheries in the 
Exclusive Economic Zone (EEZ) of the Bering Sea and Aleutian Islands 
Area that are determined to be inconsistent with the FMP.
    (b) License Limitation Program. Commercial fishing for crab species 
not included in the Crab Rationalization Program for crab fisheries of 
the Bering Sea and Aleutian Islands Area remains subject to the License 
Limitation Program for the commercial crab fisheries in the Bering Sea 
and Aleutian Islands Area under part 679 of this chapter.


Sec.  680.2  Definitions.

    In addition to the definitions in the Magnuson-Stevens Act, in 50 
CFR part 600, and Sec.  679.2 of this chapter, the terms used in this 
part have the following meanings:
    Adak community entity means the non-profit entity incorporated 
under the laws of the state of Alaska that represents the community of 
Adak and has a board of directors elected by the residents of Adak.
    Affiliation means a relationship between two or more entities in 
which one directly or indirectly owns or controls a 10 percent or 
greater interest in, or otherwise controls, another, or a third entity 
directly or indirectly owns or controls a 10 percent or greater 
interest in, or otherwise controls, both. For the purpose of this 
definition, the following terms are further defined:
    (1) Entity. An entity may be an individual, corporation, 
association, partnership, joint-stock company, trust, or any other type 
of legal entity, any receiver, trustee in bankruptcy or similar 
official or liquidating agent, or any organized group of persons 
whether incorporated or not, that holds direct or indirect interest in:
    (i) Quota share (QS), processor quota share (PQS), individual 
fishing quota (IFQ), or individual processing quota (IPQ); or,
    (ii) For purposes of the economic data report (EDR), a vessel or 
processing plant operating in CR fisheries.
    (2) Indirect interest. An indirect interest is one that passes 
through one or more intermediate entities. An entity's percentage of 
indirect interest in a second entity is equal to the entity's 
percentage of direct interest in an intermediate entity multiplied by 
the intermediate entity's direct or indirect interest in the second 
entity.
    (3) Controls a 10 percent or greater interest. An entity controls a 
10 percent or greater interest in a second entity if the first entity:
    (i) Controls a 10 percent ownership share of the second entity, or
    (ii) Controls 10 percent or more of the voting stock of the second 
entity.
    (4) Otherwise controls. (i) A PQS or IPQ holder otherwise controls 
QS or IFQ, or a QS or IPQ holder, if it has:
    (A) The right to direct, or does direct, the business of the entity 
which holds the QS or IFQ;
    (B) The right in the ordinary course of business to limit the 
actions of or replace, or does limit or replace, the chief executive 
officer, a majority of the board of directors, any general partner or 
any person serving in a management capacity of the entity which holds 
the QS or IFQ;
    (C) The right to direct, or does direct, the transfer of QS or IFQ;
    (D) The right to restrict, or does restrict, the day-to-day 
business activities and management policies of the entity holding the 
QS or IFQ through loan covenants;
    (E) The right to derive, or does derive, either directly, or 
through a minority shareholder or partner, and in favor of a PQS or IPQ 
holder, a significantly disproportionate amount of the economic benefit 
from the holding of QS or IFQ;
    (F) The right to control, or does control, the management of, or to 
be a controlling factor in, the entity holding QS or IFQ;
    (G) The right to cause, or does cause, the sale of QS or IFQ;
    (H) Absorbs all of the costs and normal business risks associated 
with ownership and operation of the entity holding QS or IFQ; and
    (I) Has the ability through any other means whatsoever to control 
the entity that holds QS or IFQ.
    (ii) Other factors that may be indica of control include, but are 
not limited to the following:
    (A) If a PQS or IPQ holder or employee takes the leading role in 
establishing an entity that will hold QS or IFQ;
    (B) If a PQS or IPQ holder has the right to preclude the holder of 
QS or IFQ from engaging in other business activities;
    (C) If a PQS or IPQ holder and QS or IFQ holder use the same law 
firm, accounting firm, etc.;

[[Page 10242]]

    (D) If a PQS or IPQ holder and QS or IFQ holder share the same 
office space, phones, administrative support, etc.;
    (E) If a PQS or IPQ holder absorbs considerable costs and normal 
business risks associated with ownership and operation of the QS or IFQ 
holdings;
    (F) If a PQS or IPQ holder provides the start up capital for the QS 
or IFQ holder on less than an arm's-length basis;
    (G) If a PQS or IPQ holder has the general right to inspect the 
books and records of the QS or IFQ holder; and
    (H) If the PQS or IPQ holder and QS or IFQ holder use the same 
insurance agent, law firm, accounting firm, or broker of any PQS or IPQ 
holder with whom the QS or IFQ holder has entered into a mortgage, 
long-term or exclusive sales or marketing agreement, unsecured loan 
agreement, or management agreement.
    Arbitration IFQ means:
    (1) Class A catcher vessel owner (CVO) IFQ held by a person who is 
not a holder of PQS or IPQ and who is not affiliated with any holder of 
PQS or IPQ, (2) Prior to July 1, 2008, catcher vessel crew (CVC) IFQ 
that the holder has elected to submit to the Arbitration System, and 
that is held by a person who is not a holder of PQS or IPQ, and who is 
not affiliated with any holder of PQS or IPQ, and
    (3) Beginning July 1, 2008, Class A CVC IFQ held by a person who is 
not a holder of PQS or IPQ and is not affiliated with any holder of PQS 
or IPQ.
    (4) IFQ held by an FCMA cooperative.
    Arbitration QS means:
    (1) CVO QS held by a person who is not a holder of PQS or IPQ and 
is not affiliated with any holder of PQS or IPQ, (2) Prior to July 1, 
2008, CVC QS that the holder has elected to submit to the Arbitration 
System, and that is held by a person who is not a holder of PQS or IPQ 
and who is not affiliated with any holder of PQS or IPQ and,
    (3) Beginning July 1, 2008, CVC QS held by a person who is not a 
holder of PQS or IPQ and is not affiliated with any holder of PQS or 
IPQ.
    Arbitration System means the system established by the contracts 
required by Sec.  680.20, including the process by which the Market 
Report and Non-Binding Price Formula are produced, the negotiation 
approaches, the Binding Arbitration process, and fee collection.
    Assessed value means the most recent value for a vessel and gear 
provided in a marine survey.
    Auditor means an examiner employed by, or under contract to, the 
data collection agent to verify data submitted in an economic data 
report.
    Blind data means any data collected from the economic data report 
by the data collection agent that are subsequently amended by removing 
personal identifiers, including, but not limited to social security 
numbers, crew permit numbers, names and addresses, Federal fisheries 
permit numbers, Federal processor permit numbers, Federal tax 
identification numbers, State of Alaska vessel registration and permit 
numbers, and by adding in their place a nonspecific identifier.
    Box size means the capacity of a crab-packing container in 
kilograms or pounds.
    BSAI crab means those crab species governed under the Fishery 
Management Plan (FMP) for Bering Sea/Aleutian Islands King and Tanner 
Crabs.
    BSAI Crab Capacity Reduction Program means the program authorized 
by Public Law 106-554, as Amended by Public Law 107-20 and Public Law 
107-117.
    BSAI crab fisheries means those crab fisheries governed under the 
Fishery Management Plan (FMP) for Bering Sea/Aleutian Islands King and 
Tanner Crabs.
    Captain means, for the purposes of the EDR, a vessel operator.
    Catcher/processor (CP) means a vessel that is used for catching 
crab and processing that crab.
    Catcher vessel means a vessel that is used for catching crab and 
that does not process crab on board.
    CDQ community means a community eligible to participate in the 
Western Alaska Community Development Program under subpart C of 50 CFR 
part 679.
    CDQ group means a CDQ group as that term is defined at 50 CFR 
679.2.
    Committed IFQ means:
    (1) Any Arbitration IFQ for which the holder of such IFQ has agreed 
or committed to delivery of crab harvested with the IFQ to the holder 
of previously uncommitted IPQ and for which the holder of the IPQ has 
agreed to accept delivery of that crab, regardless of whether such 
agreement specifies the price or other terms for delivery, or
    (2) Any Arbitration IFQ for which, on or after the date which is 25 
days prior to the opening of the first crab fishing season in the crab 
QS fishery for such IFQ, the holder of the IFQ has unilaterally 
committed to delivery of crab harvested with the IFQ to the holder of 
previously uncommitted IPQ, regardless of whether the IFQ and IPQ 
holders have reached an agreement that specifies the price or other 
terms for delivery.
    Committed IPQ means any IPQ for which the holder of such IPQ has 
received a commitment of delivery from a holder of Arbitration IFQ such 
that the Arbitration IFQ is committed IFQ, regardless of whether the 
Arbitration IFQ and IPQ holders have reached an agreement that 
specifies the price or other terms for delivery.
    CP standard price means price, expressed in U.S. dollars per raw 
crab pound, for all CR crab landed by a CP as determined for each crab 
fishing year by the Regional Administrator and documented in a CP 
standard price list published by NMFS.
    Crab cost recovery fee liability means that amount of money, in 
U.S. dollars, owed to NMFS by a CR allocation holder or RCR as 
determined by multiplying the appropriate ex-vessel value of the amount 
of CR crab debited from a CR allocation by the appropriate crab fee 
percentage.
    Crab fee percentage means that positive number no greater than 3 
percent determined for each crab fishing year by the Regional 
Administrator and used to calculate the crab cost recovery fee 
liability for a CR allocation holder or RCR under the Crab 
Rationalization Program.
    Crab fishing year means the period from July 1 of one calendar year 
through June 30 of the following calendar year.
    Crab grade means a grading system to describe the quality of crab.
    (1) Grade 1 means standard or premium quality crab, and
    (2) Grade 2 means below standard quality crab.
    Crab harvesting cooperative, for the purposes of this part 680, 
means a group of crab QS holders who have chosen to form a crab 
harvesting cooperative, under the requirements of Sec.  680.21, in 
order to combine and collectively harvest their crab IFQ through a crab 
harvesting cooperative IFQ permit issued by NMFS.
    Crab harvesting cooperative IFQ means the annual catch limit of IFQ 
crab that may be harvested by a crab harvesting cooperative that is 
lawfully allocated a harvest privilege for a specific portion of the 
TAC of a crab QS fishery.
    Crab individual fishing quota (crab IFQ) means the annual catch 
limit of a crab QS fishery that may be harvested by a person who is 
lawfully allocated a harvest privilege for a specific portion of the 
TAC of a crab QS fishery with the following designations or with the 
designation as a crab IFQ hired master:
    (1) Catcher vessel crew (CVC) IFQ means a permit to annually 
harvest, but not process, a CR crab on board a vessel.
    (2) Catcher vessel owner (CVO) IFQ means a permit to annually 
harvest, but not process, a CR crab on board a vessel.

[[Page 10243]]

    (i) Class A IFQ means IFQ that is required to be delivered to a 
processor holding unused IPQ.
    (ii) Class B IFQ means IFQ that is not required to be delivered to 
a processor holding unused IPQ.
    (3) Catcher/processor owner (CPO) IFQ means a permit to annually 
harvest and process a CR crab on a catcher/processor.
    (4) Catcher/processor crew (CPC) IFQ means a permit to annually 
harvest and process a CR crab on a catcher/processor.
    Crab IFQ hired master means a person who holds a crab IFQ hired 
master permit issued under Sec.  680.4.
    Crab IFQ permit holder means the person identified on an IFQ 
permit.
    Crab LLP license history means, for any particular crab LLP 
license, the legal landings made on the vessel(s) that was used to 
qualify for that LLP license and any legal landings made under the 
authority of that LLP license.
    Crab quota share (crab QS) means a permit the face amount of which 
is used as the basis for the annual calculation and allocation of a 
person's crab IFQ with the following designations:
    (1) Catcher vessel crew (CVC) QS means a permit that yields CVC 
IFQ.
    (2) Catcher vessel owner (CVO) QS means a permit that yields CVO 
IFQ.
    (3) Catcher/processor owner (CPO) QS means a permit that yields CPO 
IFQ.
    (4) Catcher/processor crew (CPC) QS means a permit that yields CPC 
IFQ.
    Crab QS fishery means those CR fisheries under Table 1 to this part 
that require the use of QS and PQS, and their resulting IFQ and IPQ, to 
harvest and receive IFQ crab.
    Crab QS program means the program that allocates QS and PQS, and 
their resulting IFQ and IPQ, for CR crab of the BSAI off Alaska and 
governed by regulations under this part.
    Crab QS regional designation means the designation of QS or PQS and 
their resulting IFQ and IPQ subject to regional delivery requirements 
in this part.
    Crab Rationalization (CR) allocation means any allocation of CR 
crab authorized under the CR Program.
    Crab Rationalization (CR) crab means those crab species in the crab 
fisheries subject to management under the Crab Rationalization Program 
described in Table 1 to this part.
    Crab Rationalization (CR) fisheries means those fisheries defined 
in Table 1 to part 680.
    Crab Rationalization (CR) Program means the crab QS program plus 
the CDQ and the Adak community allocation programs, including all 
management, monitoring, and enforcement components, for BSAI king and 
Tanner crabs governed by the regulations of this part.
    Crew means:
    (1) Any individual, other than the fisheries observers, working on 
a vessel that is engaged in fishing.
    (2) For the purposes of the EDR, each employee on a vessel, 
excluding the captain and fisheries observers, that participated in any 
CR fishery.
    Custom processing means processing of crab by a person undertaken 
on behalf of another person.
    Data collection agent (DCA) means the entity selected by the 
Regional Administrator to distribute an EDR to a person required to 
complete it, to receive the completed EDR, to review and verify the 
accuracy of the data in the EDR, and to provide those data to 
authorized recipients.
    Days at sea means, for the purposes of the EDR, the number of days 
spent at sea while fishing for crab, including travel time to and from 
fishing grounds.
    Economic data report (EDR) means the report of cost, labor, 
earnings, and revenue data for catcher vessels, catcher/processors, 
shoreside crab processors, and stationary floating crab processors 
participating in CR fisheries.
    Eligible community resident means, for purposes of the Crab QS 
program, any individual who:
    (1) Is a citizen of the United States;
    (2) Has maintained a domicile in the ECC, from which the individual 
requests to lease crab IFQ, for at least 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; and
    (3) Is otherwise eligible to receive crab QS or IFQ by transfer.
    Eligible crab community (ECC) means a community in which at least 3 
percent of the initial allocation of processor quota share of any crab 
fishery is allocated. The specific communities are:
    (1) CDQ Communities.
    (i) Akutan;
    (ii) False Pass;
    (iii) St. George; and
    (iv) St. Paul.
    (2) Non-CDQ Communities.
    (i) Unalaska/Dutch Harbor;
    (ii) Kodiak;
    (iii) King Cove;
    (iv) Port Moller; and
    (v) Adak.
    Eligible crab community (ECC) entity means a non-profit 
organization specified under Sec.  680.41(j)(2) that is designated by 
the governing body of an ECC, other than Adak, to represent it for the 
purposes of engaging in the right of first refusal of transfer of crab 
PQS or IPQ outside the ECC under contract provisions set forth under 
section 313(j) of the Magnuson-Stevens Act. For those ECCs that also 
are CDQ communities, the ECC entity is the CDQ group to which the ECC 
is a member.
    Eligible crab community organization (ECCO) means a non-profit 
organization that represents at least one ECC, as defined in this part, 
and that has been approved by the Regional Administrator to obtain by 
transfer and hold crab QS and to lease the resulting IFQ on behalf of 
an ECC.
    Ex-vessel value means:
    (1) For the shoreside processing sector. The total U.S. dollar 
amount of all compensation, monetary and non-monetary, including any 
retroactive payments, received by a CR allocation holder for the 
purchase of any CR crab debited from the CR allocation described in 
terms of raw crab pounds.
    (2) For the catcher/processor sector. The total U.S. dollar amount 
of CR crab landings as calculated by multiplying the number of raw crab 
pounds debited from the CR allocation by the appropriate CP standard 
price determined by the Regional Administrator.
    FCMA cooperative, for the purposes of this part 680, means a 
cooperative formed in accordance with the Fishermen's Collective 
Marketing Act of 1934 (15 U.S.C. 521).
    Finished pounds means the total weight, in pounds, of processed 
product, not including the container.
    IFQ account means the amount of crab IFQ in raw crab pounds that is 
held by a person at any particular time for a crab QS fishery, sector, 
region, and class.
    IFQ crab means crab species listed in Table 1 to this part subject 
to management under the crab QS program.
    Individual processor quota (IPQ) means the annual amount of crab, 
in pounds, representing a specific portion of the TAC for a crab QS 
fishery, that may be received for processing by a person who is 
lawfully allocated PQS or IPQ.
    Initial processor quota share (PQS) pool means the total number of 
PQS units for each crab QS fishery which is the basis of initial PQS 
allocations.
    Initial quota share (QS) pool means the total number of non-
processor QS units for each crab QS fishery which is the basis of 
initial QS allocations.
    IPQ account means the amount of crab IPQ in raw crab pounds that is 
held by a person at any particular time for a crab QS fishery and 
region.

[[Page 10244]]

    Landing means the transfer of raw crab harvested by a vessel prior 
to that crab being reported on a CR crab landing report.
    (1) For catcher/processors, the amount of crab retained during a 
reporting period constitutes a landing.
    (2) For catcher vessels, the amount of crab removed from the boat 
at a single location/time constitutes a landing.
    Lease of QS/IFQ or PQS/IPQ means a temporary, annual transfer of 
crab IFQ or IPQ without the underlying QS or PQS.
    Leaseholder means, for purposes of the EDR, a person who:
    (1) Is identified as the leaseholder in a written lease of a 
catcher vessel, catcher/processor, shoreside crab processor, or 
stationary floating crab processor, or
    (2) Pays the expenses of a catcher vessel, catcher/processor, 
shoreside crab processor, or stationary floating crab processor, or
    (3) Claims expenses for the catcher vessel, catcher/processor, 
shoreside crab processor, or stationary floating crab processor as a 
business expense on schedule C of his/her Federal income tax return or 
on a state income tax return.
    Magnuson-Stevens Act means the Magnuson-Stevens Fishery 
Conservation and Management Act, as amended (16 U.S.C. 1801 et seq.).
    Mutual Agreement means, for purposes of the Arbitration System, the 
consent and agreement of Arbitration Organizations that represent an 
amount of Arbitration QS equal to more than 50 percent of all the 
Arbitration QS in a fishery, and an amount of PQS equal to more than 50 
percent of all the PQS in a fishery based upon the Annual Arbitration 
Organization Reports.
    Newly constructed vessel means, for the purposes of initial QS 
issuance, a vessel on which the keel was laid by June 10, 2002.
    Official crab rationalization record means the information prepared 
by the Regional Administrator about the legal landings and legal 
processing by vessels and persons in the BSAI crab fisheries during the 
qualifying periods specified at Sec.  680.40.
    Processing, or to process means the preparation of, or to prepare, 
crab to render it suitable for human consumption or storage. This 
includes, but is not limited to: Cooking, canning, butchering, 
sectioning, freezing or icing.
    Processor quota share (PQS) means a permit the face amount of which 
is used as the basis for the annual calculation and allocation of IPQ.
    Raw crab pounds means the weight of raw crab in pounds when landed.
    Registered crab receiver (RCR) means a person holding an RCR Permit 
issued by the Regional Administrator.
    Retain means to fail to return crab to the sea after a reasonable 
opportunity to sort the catch.
    Right of First Refusal (ROFR) means the civil contract provisions 
set forth under section 313(j) of the Magnuson-Stevens Act between the 
holders of PQS and IPQ and ECC entities, other than Adak, for the 
opportunity of ECCs to exercise the right to purchase or lease PQS or 
IPQ proposed to be transferred by a holder of PQS or IPQ in an ECC.
    Seafood Marketing Association Assessment (SMAA) means the seafood 
processing assessment collected by processing firms and buyers from 
fishery harvesters for the State of Alaska.
    Share payment means an amount of monetary compensation (not salary 
or wages) based on gross or net earnings of a BSAI crab fishing vessel.
    Shoreside crab processor means any person or vessel that receives, 
purchases, or arranges to purchase unprocessed crab, except a catcher/
processor or a stationary floating crab processor.
    Stationary floating crab processor (SFCP) means a vessel of the 
United States that remains anchored or otherwise remains stationary 
while receiving or processing crab in the waters of the State of 
Alaska.
    Uncommitted IFQ means any Arbitration IFQ that is not Committed 
IFQ.
    Uncommitted IPQ means any IPQ that is not Committed IPQ.
    U.S. Citizen means:
    (1) Any individual who is a citizen of the United States; or
    (2) Any corporation, partnership, association, or other entity that 
is organized under Federal, state, or local laws of the United States 
or that may legally operate in the United States.


Sec.  680.3  Relation to other laws.

    (a) King and Tanner crab. (1) Additional laws and regulations 
governing the conservation and management of king crab and Tanner crab 
in the BSAI area are contained in 50 CFR part 679, Alaska Statutes at 
A.S. 16, and Alaska Administrative Code at 5 AAC Chapters 34, 35, and 
39.
    (2) The Alaska Administrative Code (at 5 AAC 39.130) governs 
reporting and permitting requirements using the ADF&G ``Intent to 
Operate'' registration form and ``Fish Tickets.''
    (b) Sport, personal use, and subsistence. (1) For State of Alaska 
statutes and regulations governing sport and personal use crab fishing 
other than subsistence fishing, see Alaska Statutes, Title 16--Fish and 
Game; 5 AAC Chapters 47 through 77.
    (2) For State of Alaska statutes and regulations governing 
subsistence fishing for crab, see Alaska Statutes, Title 16--Fish and 
Game; 5 AAC 02.001 through 02.625.


Sec.  680.4  Permits.

    (a) General information. Persons participating in the CR fisheries 
are required to possess the permits described in this section.
    (1) Approval. Approval of applications under this part may be 
conditioned on the payment of fees under Sec.  680.44 or the submission 
of an EDR as described under Sec.  680.6.
    (2) Issuance. The Regional Administrator may issue or amend any 
permits under this section or under Sec.  680.21 annually or at other 
times as needed under this part.
    (3) Transfer. Crab QS and PQS permits issued under Sec.  680.40 and 
Crab IFQ and IPQ permits issued under this section are transferable, as 
provided under Sec.  680.41. Crab IFQ hired master permits, Federal 
crab vessel permits, and RCR permits issued under this section are not 
transferable.
    (4) Inspection. The holder of a Federal crab vessel permit, crab 
IFQ permit, crab IPQ permit, or crab IFQ hired master permit, must 
present a legible copy of the permit on request of any authorized 
officer or RCR receiving a crab IFQ landing. A legible copy of the RCR 
permit must be present at the location of a crab IFQ landing and an 
individual representing the RCR must make the RCR permit available for 
inspection on request of any authorized officer.
    (b) Crab QS permit. Crab QS is issued by the Regional Administrator 
to persons who successfully apply for an initial allocation under Sec.  
680.40 or to receive QS by transfer under Sec.  680.41. Once issued, a 
crab QS permit is valid until modified by transfer under Sec.  680.41; 
or until the permit is revoked, suspended, or modified pursuant to 
Sec.  679.43 or under 15 CFR part 904. To qualify for a crab QS permit, 
the applicant must be a U.S. Citizen.
    (c) Crab PQS permit. Crab PQS is issued by the Regional 
Administrator to persons who successfully apply for an initial 
allocation under Sec.  680.40 or receive PQS by transfer under Sec.  
680.41. Once issued, a PQS permit is valid until modified by transfer 
under Sec.  680.41 or until the permit is revoked, suspended, or 
modified pursuant to Sec.  679.43 or under 15 CFR part 904.
    (d) Crab IFQ permit. (1) A crab IFQ permit authorizes the person 
identified on the permit to harvest crab in the

[[Page 10245]]

fishery identified on the permit at any time the fishery is open during 
the crab fishing year for which the permit is issued, subject to 
conditions of the permit. A crab IFQ permit is valid under the 
following circumstances:
    (i) Until the end of the crab fishing year for which the permit is 
issued;
    (ii) Until the amount harvested is equal to the amount specified on 
the permit;
    (iii) Until the permit is modified by transfers under Sec.  680.41; 
or
    (iv) Until the permit is revoked, suspended, or modified pursuant 
to Sec.  679.43 or under 15 CFR part 904.
    (2) A legible copy of the crab IFQ permit must be carried on board 
the vessel used by the permitted person at all times that IFQ crab are 
retained on board.
    (3) A crab IFQ permit is issued on an annual basis by the Regional 
Administrator to persons who hold crab QS, of the type specified on the 
crab QS permit, and who have submitted a complete annual application 
for crab IFQ/IPQ permit, described at paragraph (f) of this section, 
that is subsequently approved by the Regional Administrator.
    (4) To qualify for a crab IFQ permit, the applicant must be a U.S. 
Citizen.
    (e) Crab IPQ permit. (1) A crab IPQ permit authorizes the person 
identified on the permit to receive/process the IFQ crab identified on 
the permit during the crab fishing year for which the permit is issued, 
subject to conditions of the permit. A crab IPQ permit is valid under 
the following circumstances:
    (i) Until the end of the crab fishing year for which the permit is 
issued;
    (ii) Until the amount received/processed is equal to the amount 
specified on the permit;
    (iii) Until the permit is modified by transfers under Sec.  680.41; 
or
    (iv) Until the permit is revoked, suspended, or modified pursuant 
to Sec.  679.43 or under 15 CFR part 904.
    (2) A legible copy of the crab IPQ permit authorizing receiving/
processing of IFQ crab must be retained on the premises or vessel used 
by the permitted person to process the IFQ crab at all times that IFQ 
crab are retained on the premises or vessel.
    (3) A crab IPQ permit is issued on an annual basis by the Regional 
Administrator to persons who hold crab PQS, and who have submitted a 
complete annual application for crab IFQ/IPQ permit, described at 
paragraph (f) of this section, that is subsequently approved by the 
Regional Administrator.
    (f) Contents of annual application for crab IFQ/IPQ permit. (1) A 
complete application must be received by NMFS no later than August 1 of 
the crab fishing year for which a person is applying to receive IFQ or 
IPQ. If a complete application is not received by NMFS by this date, 
that person will not receive IFQ or IPQ for that crab fishing year.
    (2) For the application to be considered complete, all fees 
required by NMFS must be paid, and any EDR required under Sec.  680.6 
must be submitted to the DCA. In addition, the applicant must include 
the following information:
    (i) Applicant information. Enter applicant's name and NMFS Person 
ID; applicant's date of birth or, if a non-individual, date of 
incorporation; applicant's social security number (optional) or tax 
identification number; applicant's permanent business mailing address 
and any temporary mailing address the applicant wishes to use; and 
applicant's business telephone number, facsimile number, and e-mail 
address.
    (ii) Crab IFQ or IPQ permit identification. Indicate the type of 
crab IFQ or IPQ permit for which applicant is applying by QS 
fishery(ies) and indicate (YES or NO) whether applicant has joined a 
crab harvesting cooperative. If YES, indicate cooperative's name and 
ensure that this application is submitted by the applicant's 
cooperative with its completed application for an annual crab 
harvesting cooperative IFQ permit.
    (iii) Identification of ownership interests. If the applicant is 
not an individual, provide the names of all persons, to the individual 
level, holding an ownership interest in the entity and the percentage 
ownership each person and individual holds in the applicant.
    (iv) Documentation of affiliation. Complete a documentation of 
affiliation declaring any and all affiliations, as the term 
``affiliation'' is defined at Sec.  680.2. A documentation of 
affiliation includes affirmations by the applicant pertaining to 
relationships that may involve direct or indirect ownership or control 
of the delivery of IFQ crab and any supplemental documentation deemed 
necessary by NMFS to determine whether an affiliation exists. Indicate 
whether any entity that holds PQS or IPQ is affiliated with the 
applicant, as affiliation is defined in Sec.  680.2. If the applicant 
is considered affiliated, the applicant must provide a list of all PQS 
or IPQ holders with which he/she is affiliated, including full name, 
business mailing address, and business telephone number.
    (v) Certification of applicant. The applicant must sign and date 
the application certifying that all information is true, correct, and 
complete to the best of his/her knowledge and belief. Print the name of 
the applicant. If the application is completed by an authorized 
representative, proof of authorization must accompany the application.
    (g) Crab IFQ hired master permit. (1) A crab IFQ hired master 
permit is issued on an annual basis and authorizes the individual 
identified on the permit to harvest and land IFQ crab for debit against 
the specified crab IFQ permit until the crab IFQ hired master permit 
expires or is revoked, suspended, or modified pursuant to Sec.  679.43 
or under 15 CFR part 904, or on request of the crab IFQ permit holder.
    (2) A legible copy of the crab IFQ hired master permit must be on 
board the vessel used by the hired master to harvest IFQ crab at all 
times IFQ crab are retained on board. Except as specified in Sec.  
680.42, an individual who is issued a crab IFQ hired master permit must 
remain aboard the vessel used to harvest IFQ crab, specified under that 
permit, during the crab fishing trip and at the landing site until all 
crab harvested under that permit are offloaded and the landing report 
for IFQ crab is completed.
    (h) Contents of application for crab IFQ hired master permit. In 
order for the application to be considered complete, a copy of the USCG 
Abstract Of Title or Certificate Of Documentation must be included with 
this application to demonstrate percent of vessel ownership by the IFQ 
permit holder. A complete application for a crab IFQ hired master 
permit must include the following information:
    (1) Purpose of application. Indicate whether the application is to 
add or to delete a hired master and identification of crab IFQ 
permit(s) for which this application is submitted.
    (2) IFQ permit holder information. Enter permit holder's name, NMFS 
Person ID, and social security number (optional) or tax identification 
number; permit holder's permanent or temporary business mailing 
address; and permit holder's business telephone number, facsimile 
number, and e-mail address (if available).
    (3) Identification of vessel upon which crab IFQ will be harvested. 
Enter the vessel's name, ADF&G vessel registration number, and USCG 
documentation number. Indicate whether (YES or NO) the permit holder 
has at least a 10 percent ownership interest in the vessel the crab IFQ 
hired master will use to fish permit holder's IFQ crab. If YES, provide 
documentation of IFQ permit holder's 10 percent ownership interest.

[[Page 10246]]

    (4) IFQ hired master permit holder information. Complete a separate 
section for each crab IFQ hired master. Enter the hired master's name, 
NMFS Person ID, social security number (optional) or tax identification 
number, and date of birth; hired master's permanent or temporary 
business mailing address; and hired master's business telephone number, 
facsimile number, and e-mail address (if available).
    (5) Applicant certification. The applicant must sign and date the 
application certifying that all information is true, correct, and 
complete to the best of his/her knowledge and belief. If the 
application is completed by an authorized representative, then 
authorization must accompany the application.
    (i) RCR permit. (1) An RCR permit is issued on an annual basis. An 
RCR permit is valid during the crab fishing year for which it is issued 
until the RCR permit expires or is revoked, suspended, or modified 
pursuant to Sec.  679.43 or under 15 CFR part 904.
    (2) An RCR permit is required for any person who receives 
unprocessed CR crab from the person(s) who harvested the crab, the 
owner or operator of a vessel that processes CR crab at sea, any person 
holding IPQ, and any person required to submit a Departure Report under 
50 CFR 679.5(l)(4).
    (j) Contents of application for RCR permit. For the application to 
be considered complete, all fees required by NMFS must be paid, and any 
EDR required under Sec.  680.6 must be submitted to the DCA. In 
addition, the applicant must include the following information:
    (1) Purpose of application. Indicate whether the application is a 
request for a new RCR permit, a renewal of an existing RCR permit, or 
an amendment to an existing RCR permit. If a renewal of or amendment to 
an existing RCR permit, include the applicant's RCR permit number.
    (2) Applicant identification. Enter applicant's name and NMFS 
Person ID; applicant's social security number or tax ID number 
(required); name of contact person for the applicant, if applicant is 
not an individual; applicant's permanent business mailing address; and 
business telephone number, facsimile number, and e-mail address (if 
available).
    (3) Type of activity. Select type of receiving or processing 
activity and whether catcher/processor or shoreside processor.
    (4) Individual responsible for submission of EDR. Enter the name of 
the designated representative submitting the EDR on behalf of the RCR, 
if an EDR is required at Sec.  680.6. If different from the RCR's 
contact information, also enter the designated representative's 
business mailing address, telephone number, facsimile number, and e-
mail address (if available).
    (5) Application certification. The applicant must sign and date the 
application certifying that all information is true, correct, and 
complete to the best of his/her knowledge and belief. If the 
application is completed by an authorized representative, then proof of 
authorization must accompany the application.
    (k) Federal crab vessel permit. The owner of a vessel must have a 
Federal crab vessel permit on board that vessel when used to fish for 
CR crab.
    (1) A Federal crab vessel permit is issued on an annual basis to 
the owner of the vessel and is in effect from the date of issuance 
through the end of the crab fishing year for which the permit was 
issued, unless it is revoked, suspended, or modified under Sec.  
600.735 or Sec.  600.740.
    (2) A Federal crab vessel permit may not be surrendered at any time 
during the crab fishing year for which it was issued.
    (3) A Federal crab vessel permit issued under this paragraph is not 
transferable or assignable and is valid only for the vessel for which 
it is issued.
    (4) To qualify for a Federal crab vessel permit, the applicant must 
be a U.S. Citizen.
    (5) The holder of a Federal crab vessel permit must submit an 
amended application for a Federal crab vessel permit within 10 days of 
the date of change in: the ownership of the vessel (a copy of the 
current USCG documentation for the vessel showing the change in 
ownership must accompany the amended application), or the individual 
responsible for submission of the EDR on behalf of the vessel's 
owner(s).
    (l) Contents of application for federal crab vessel permit. For the 
application to be considered complete, all fees required by NMFS must 
be paid, and any EDR required under Sec.  680.6 must be submitted to 
the DCA. Also, if ownership of the vessel has changed or if the permit 
application for a vessel to which a Federal crab vessel permit has 
never been issued, a copy of the USCG Abstract Of Title or Certificate 
Of Documentation. In addition the applicant must include the following 
information:
    (1) Purpose of application. Indicate whether the application is a 
request for a new permit, a renewal of an existing permit, or an 
amendment to an existing permit. If a renewal of or amendment to an 
existing permit, include the current Federal crab vessel permit number.
    (2) Contact owner information. The name(s), permanent business 
mailing address, social security number (voluntary) or tax ID number, 
business telephone number, business facsimile number, business e-mail 
address (if available) of all vessel owners, and the name of any person 
or company (other than the owner) that manages the operation of the 
vessel.
    (3) Vessel information. Enter the vessel's name and home port (city 
and state); ADF&G processor code, if vessel is a catcher/processor or 
stationary floating crab processor; whether a vessel of the United 
States; USCG documentation number; ADF&G vessel registration number; 
and vessel's LOA (in feet), registered length (in feet), gross tonnage, 
net tonnage, and shaft horsepower. Indicate all types of operations the 
vessel may conduct during a crab fishing year.
    (4) Designated representative for EDR. Enter the name of the 
designated representative who is responsible for completion and 
submission of the EDR, and the representative's business mailing 
address, telephone number, facsimile number, and e-mail address (if 
available).
    (5) Applicant certification. The applicant must sign and date the 
application certifying that all information is true, correct, and 
complete to the best of his/her knowledge and belief. Print the 
applicant name. If the application is completed by an authorized 
representative, then authorization must accompany the application.
    (m) Annual crab harvesting cooperative IFQ permit. See Sec.  
680.21.


Sec.  680.5  Recordkeeping and reporting (R&R).

    (a) General requirements--(1) Recording and reporting crab. Any CR 
crab harvested that is retained must be recorded and reported.
    (2) Responsibility. (i) The participants in the CR fisheries are 
responsible for complying with the following R&R requirements:

[[Page 10247]]



------------------------------------------------------------------------
  Recordkeeping and reporting        Person
            report                 responsible           Reference
------------------------------------------------------------------------
(A) Longline and pot gear       Owner and         Sec.   679.5(c)(1).
 catcher vessel daily fishing    operator of
 logbook.                        vessel.
(B) Longline and pot gear       Owner and         Sec.   679.5(c)(1).
 catcher/processor daily         operator of
 cumulative production logbook.  vessel.
(C) Product Transfer Report     Owner and         Sec.   679.5(g).
 (PTR).                          operator of
                                 catcher/
                                 processor;
                                 Owner and
                                 manager of
                                 shoreside
                                 processor or
                                 SFCP; RCR.
(D) U.S. Vessel Activity        Owner and         Sec.   679.5(k).
 Report (VAR).                   operator of
                                 vessel.
(E) Transhipment Authorization  Owner and         Sec.   679.5(l)(3).
                                 operator of a
                                 catcher/
                                 processor; RCR.
(F) IFQ Departure Report......  Owner and         Sec.   679.5(l)(4).
                                 operator of
                                 vessel.
(G) CR crab Landing Report....  RCR.............  Sec.   680.5(c).
(H) Catcher/processor offload   Owner and         Sec.   680.5(d).
 report.                         operator of a
                                 catcher/
                                 processor.
(I) Eligible Crab Community     ECCO............  Sec.   680.5(e).
 Organization (ECCO) Annual
 Report for an Eligible Crab
 Community (ECC).
(J) RCR Fee Submission Form...  RCR.............  Sec.   680.5(f).
(K) Crab Economic Data Report   Owners or         Sec.   680.6.
 (EDR).                          leaseholders of
                                 a catcher
                                 vessel, catcher/
                                 processor,
                                 shoreside
                                 processor, or
                                 SFCP.
------------------------------------------------------------------------

    (3) Representative. Designation of a representative to complete R&R 
requirements does not relieve the person(s) responsible for compliance 
from ensuring compliance with this section.
    (4) Submittal of information. A person must submit to NMFS all 
information, records, and reports required in this section in English 
and in a legible, timely, and accurate manner, based on A.l.t.; if 
handwritten or typed, in indelible ink.
    (5) Alteration of records. A person may not alter or change any 
entry or record submitted to NMFS, except that an inaccurate, 
incomplete, or incorrect entry or record may be corrected after 
notifying the Regional Administrator at the address and facsimile 
number listed on each form, or as provided the opportunity on the 
Internet.
    (6) Inspection of records. A person responsible for R&R under 
paragraph (a)(2) of this section must make available for inspection all 
reports, forms, scale receipts, and CR crab landing report receipts 
upon the request of an authorized officer for the time periods 
indicated in paragraph (a)(7) of this section.
    (7) Retention of records. A person responsible for R&R under 
paragraph (a)(2) of this section must retain all reports and receipts 
as follows:
    (i) On site. Until the end of the crab fishing year during which 
the records were made and for as long thereafter as crab or crab 
products recorded in the records are retained onboard the vessel or on 
site at the facility; and
    (ii) For 3 years. For 3 years after the end of the crab fishing 
year during which the records were made.
    (8) Landing verification and inspection. Each CR crab landing and 
all crab retained on board the vessel making a CR crab landing are 
subject to verification and inspection by authorized officers.
    (9) Sampling. Each CR crab landing and all crab retained onboard a 
vessel making a CR crab landing are subject to sampling by authorized 
officers and observers.
    (b) CR landing report procedure--(1) Properly debited landing. All 
retained crab catch must be weighed, reported, and debited from the 
appropriate IFQ or IPQ account under which the catch was harvested, as 
appropriate.
    (2) An RCR must enter his or her authorized user ID and password to 
access the IERS. An RCR obtains a user ID by submitting to NMFS an IERS 
application for user ID (see paragraph (c)(1) of this section).
    (3) The crab IFQ permit holder, crab IFQ hired master, or person 
who harvested Adak or CDQ crab must provide his or her name, NMFS 
person ID, crab IFQ number, and his or her own password or personal 
identification number (PIN), if required, to enter a CR crab landing 
report;
    (4) The RCR must enter the landing and/or processing data specified 
under paragraphs (c)(7), (c)(8) or (c)(9) of this section in the 
Internet submission form(s) or other NMFS-approved method.
    (5) Deadloss and personal use crab must be debited from the 
appropriate CR allocation under which the catch was harvested.
    (6) Deadloss and personal use crab that an IPQ holder did not 
purchase are not required to be debited from the IPQ holder's account.
    (7) A properly debited, printed receipt from the IERS or other 
NMFS-approved reporting method constitutes confirmation that NMFS 
received the CR crab landing report and that the permit holder's 
account is properly debited.
    (8) The RCR and the crab IFQ permit holder, crab IFQ hired master, 
IPQ permit holder, or person who harvested Adak or CDQ crab must each 
sign the printed receipt(s) to indicate that the landing reports are 
accurate and must enter date signed.
    (9) The receipt must be retained as specified under paragraph 
(a)(7) of this section.
    (10) A person who for any reason is unable to properly submit an 
electronic CR crab landing report or debit a landing as required under 
paragraph (d) of this section must telephone NMFS (800-304-4846).
    (11) The address of the NMFS Alaska Region Internet site will be 
provided to all RCRs receiving crab.
    (c) Interagency electronic reporting system (IERS). Unless an 
alternative reporting method has been approved by NMFS, an RCR must 
obtain at his or her own expense: hardware, software, and Internet 
connectivity to support Internet submissions of the CR crab landing 
report on the IERS. The IERS will provide a web page where the 
applicant will enter information.
    (1) IERS application for user ID. (i) Each RCR and the crab IFQ 
permit holder, crab IFQ hired master, IPQ permit holder, or person who 
harvested Adak or CDQ crab must submit an IERS application to the 
Regional Administrator to provide information needed to process account 
access into the IERS. The IERS will validate that all required 
information is submitted, that the information entered is in correct 
format, and that the requested user ID is not already in use. The IERS 
will generate a PDF document from the information entered by the 
applicant.
    (ii) The user will print, sign, and submit the application by mail 
to the Regional Administrator. Signature of applicant on form means 
that the applicant agrees to use access privileges to the IERS for 
purposes of submitting legitimate fishery landing reports and to 
safeguard the user ID and password to prevent their use by unauthorized 
persons. In addition, signature of the

[[Page 10248]]

RCR ensures that the applicant is authorized to submit landing reports 
for the processor permit number(s) listed.
    (iii) Agency staff will review the form, confirm that the user 
should be authorized for the system, and will activate the user on the 
IERS. The IERS will then send the user an e-mail informing the user 
that his or her new user ID is ready for use.
    (2) Contents of the IERS application for user ID. The IERS 
application for user ID must contain the following information: Date of 
application, name of applicant (user), processor name and location 
(city and state) or vessel name, if applicable, business telephone 
number, business facsimile number, business e-mail address (if 
available), requested user ID, initial password, security question, 
security answer, ADF&G processor code(s), Federal processor permit 
number, if applicable, and RCR permit number(s).
    (d) CR crab landings--(1) Joint and several liability. The RCR and 
the crab IFQ permit holder, crab IFQ hired master, IPQ permit holder, 
or person who harvested Adak or CDQ crab are required to provide 
accurate information to the RCR to complete the CR crab landing report.
    (2) Reporting. All CR crab must be reported by the receiving RCR 
unless the crab has been previously reported.
    (i) Reporting by all except catcher/processors. Crab must be 
reported using the IERS system described in paragraph (c) of this 
section.
    (ii) Reporting by catcher/processors. Catcher/processors may submit 
CR crab landings by e-mail attachment in a format approved by NMFS.
    (3) Submittal requirement. An RCR is required to submit a CR crab 
landing report to the Regional Administrator for each catcher vessel 
landing or catcher/processor landing.
    (4) Time limits. (i) For CR crab harvested on a catcher/processor, 
the owner or operator is required to submit a CR crab landing report to 
NMFS within 6 hours of the end of each weekly reporting period in which 
CR crab was harvested.
    (ii) For CR crab landed to an RCR that is not a catcher/processor, 
the owner or manager is required to submit a CR crab landing report to 
NMFS within 6 hours after all crab is offloaded from a specific vessel.
    (5) Remain at landing site. Except for landings of CR crab 
processed at sea, once the landing has commenced, neither the 
harvesting vessel nor the crab IFQ permit holder, crab IFQ hired 
master, or person who harvested Adak or CDQ crab may leave the landing 
facility until the CR crab account is properly debited (as described in 
paragraph (b)(5) of this section).
    (6) No movement of CR crab. The landed crab may not be moved from 
the facility where it was landed until the CR crab landing report is 
received by the Regional Administrator, and the IFQ permit holder's or 
IPQ permit holder's account is properly debited (as described in 
paragraph (b)(5) of this section).
    (7) Contents of CR crab landing report. The RCR must accurately 
enter the following information in a CR crab landing report:
    (i) RCR permit number;
    (ii) ADF&G processor code of first purchaser;
    (iii) State of Alaska Interim Use Permit (IUP) number;
    (iv) Commercial Fisheries Entry Commission year sequence number;
    (v) Indicate (YES or NO) whether a portion of the harvested CR crab 
was or will be delivered to another RCR (partial delivery);
    (vi) Indicate (YES or NO) whether this is the last delivery for the 
trip;
    (vii) Management program: IFQ, CDQ, or Adak. (If CDQ or Adak, see 
paragraph (c)(11) of this section);
    (viii) ADF&G vessel registration number of the delivering vessel;
    (ix) Date fishing began;
    (x) Date of the CR crab landing;
    (xi) Number of pot lifts in each ADF&G statistical area;
    (xii) Number of crew, including operator and excluding observer(s);
    (xiii) Number of observers;
    (xiv) ADF&G fish ticket number (if not automatically supplied);
    (xv) If a shoreside processor, type of processing operation; enter 
port code from Tables 14a or 14b to part 679. If a catcher/processor, 
enter operation type from Table 14c to part 679;
    (xvi) ADF&G statistical area of harvest reported by the IFQ permit 
holder;
    (xvii) Species code of catch from Table 2 to this part;
    (xviii) Delivery-condition codes of catch from Table 3a to this 
part;
    (xix) Number of crab retained (optional);
    (xx) Price per pound;
    (xxi) Scale weight of live crab in pounds;
    (xxii) Scale weight of deadloss in pounds;
    (xxiii) Scale weight of crab retained for personal use in pounds; 
and
    (xxiv) Gear code to describe gear used to harvest CR crab (see 
Table 15 to 50 CFR part 679).
    (8) Custom processing. In addition to the information required in 
paragraph (c)(7) of this section, if custom processing CR crab, enter 
the ADF&G processor code of the person for which the CR crab was custom 
processed;
    (9) CDQ and Adak landings. Instead of the information described in 
paragraph (c)(7) of this section, an RCR who receives a landing of CR 
crab harvested under the CDQ or Adak community allocation programs must 
submit for each landing the following information for each CR fishery 
and species:
    (i) RCR permit number;
    (ii) Crab species code from Table 2 to this part;
    (iii) Type of crab, either CDQ or Adak community allocation;
    (iv) If CDQ, enter CDQ group number;
    (v) Crab species amount. Enter the scale weight(s) in raw crab 
pounds landed or processed at sea; and
    (vi) Price per pound.
    (e) Catcher/processor offload report. The owner or operator of a 
catcher/processor that harvested and processed CR crab must complete a 
catcher/processor offload report at the time of offload of CR crab and 
attach a scale printout showing gross product offload weight.
    (1) Contents of catcher/processor offload report. The catcher/
processor offload report must include the following: Name, ADF&G 
processor code, and Federal crab vessel permit number of the catcher/
processor; fishing start date and time; fishing stop date and time; 
product code from Table 3b to this part; total gross weight of product 
offload, including glaze and packaging (specify lb or kg); estimated 
glaze percentage; case count and average box weight (specify lb or kg); 
net weight of crab product (specify lb or kg); completion date and time 
of catcher/processor offload; location (port) of catcher/processor 
offload (see Tables 14a and 14b to part 679); and ADF&G fish ticket 
numbers.
    (2) Submittal. The RCR must submit electronically or by facsimile 
(907-586-7465) the catcher/processor offload report and a copy of the 
scale printout within 2 hours of completion of offload to the Regional 
Administrator.
    (f) ECCO Annual Report. (1) Annually by June 30, each ECCO must 
submit a complete annual report on its crab QS activity for the prior 
crab fishing year for each ECC represented by the ECCO. The ECCO must 
submit a copy of the annual report to the governing body of each 
community represented by the ECCO and to the Regional Administrator, 
NMFS, Alaska Region; P.O. Box 21668; Juneau, AK 99802.
    (2) Contents of ECCO Annual Report. A complete annual report must 
include the following information for the crab

[[Page 10249]]

IFQ derived from the QS held by the ECCO:
    (i) Name, ADF&G vessel registration number, USCG documentation 
number, and Federal crab vessel permit of each vessel from which the 
crab IFQ was harvested;
    (ii) Name and business addresses of individuals employed as crew 
members when fishing the crab IFQ;
    (iii) Criteria used by the ECCO to distribute crab IFQ leases among 
eligible community residents;
    (iv) Description of efforts made to ensure that crab IFQ lessees 
employ crew members who are eligible community residents of the ECC 
aboard vessels on which crab IFQ derived from QS held by a ECCO is 
being fished;
    (v) Description of the process used to solicit lease applications 
from eligible community residents of the ECC on whose behalf the ECCO 
is holding QS;
    (vi) Names and business addresses and amount of crab IFQ requested 
by each individual applying to receive crab IFQ from the ECCO;
    (vii) Any changes in the bylaws of the ECCO, board of directors, or 
other key management personnel;
    (viii) Copies of minutes, bylaw changes, motions, and other 
relevant decision making documents from ECCO board meetings.
    (g) RCR fee submission form (See Sec.  680.44). (1) Applicability. 
An RCR who receives any CR crab pursuant to Sec.  680.44 or the RCR's 
authorized representative, must submit a complete RCR fee submission 
form electronically, by mail, or by facsimile to the Regional 
Administrator. Mail to: Regional Administrator, NMFS, Alaska Region; 
Attn: OMI; P.O. Box 21668; Juneau, AK 99802-1668; Facsimile (907-586-
7354). Fee submission forms are available from RAM or on the Alaska 
Region Home Page at http://www.fakr.noaa.gov/.
    (2) Due date and submittal. The reporting period of the RCR fee 
submission form shall be the crab fishing year. An RCR must submit any 
crab cost recovery fee liability payment(s) and the RCR fee submission 
form to NMFS electronically or to the address provided at paragraph 
(g)(1) of this section not later than July 31 following the crab 
fishing year in which the CR crab landings were made.
    (3) Required information. An RCR must accurately record on the RCR 
fee submission form the following information:
    (i) Identification of the RCR. Enter the printed full name, NMFS 
person ID, RCR permit number, social security number or Federal tax 
identification number of the RCR. Enter the permanent or temporary 
business mailing address (indicate whether permanent or temporary), and 
the business telephone number, facsimile number, and e-mail address (if 
available).
    (ii) Signature of applicant. Enter printed name and signature of 
applicant and date signed. If authorized representative, attach 
authorization to application.
    (iii) Method of Payment (see Sec.  680.44 (a)(4)). The RCR must 
select the method of payment for fees; whether by personal check, bank 
certified check (cashier's check), money order, or credit card. If by 
credit card, the RCR must select the type of credit card and enter the 
card number, expiration date, amount of payment, name as printed on the 
card, signature of the card holder, and date of signature.
    (h) Product transfer report. (See Sec.  679.5(g).)
    (i) U.S. Vessel activity report (VAR). (See Sec.  679.5(k).)
    (j) Transshipment authorization. (See Sec.  679.5(l)(3).)
    (k) IFQ departure report. (See Sec.  679.5(l)(4).)
    (l) Catcher vessel longline and pot daily fishing logbook (DFL) and 
catcher/processor daily cumulative production logbook (DCPL). (See 
Sec.  679.5 (c)).


Sec.  680.6  Crab economic data report (EDR).

    Persons participating in the CR crab fisheries are required to 
submit the EDRs described in this section for various permit 
applications to be considered complete. Use these tables to complete 
the EDRs described in this section: Table 1, Crab Rationalization (CR) 
Fisheries; Table 2, Crab Species Codes; Table 3c, Crab Product Codes 
for the EDRs; Table 4, Crab Process Codes; Table 5, Crab Size Codes; 
and Table 6, Crab Grade Codes.
    (a) Catcher vessel historical EDR. (1) NMFS will select catcher 
vessels from a list of known catcher vessels, as determined by NMFS, 
that made at least one landing from fisheries listed in Table 1 to this 
part between January 1, 1998, through December 31, 2004, and will 
publish a Federal Register notice identifying vessels whose existing or 
former owners and leaseholders are required to submit an EDR, as 
follows:
    (i) Owners or leaseholders of catcher vessels that participated in 
the BSAI crab fisheries between January 1, 1998, through December 31, 
2004, and have received an allocation of QS, PQS, IFQ, or IPQ.
    (ii) Owners or leaseholders of catcher vessels that participated in 
the BSAI crab fisheries between January 1, 1998, through December 31, 
2004, that did not qualify for and receive QS, PQS, IFQ, or IPQ, but 
were participants at any time since January 23, 2004, in the BSAI crab 
fisheries.
    (2) Time limit. The owner or leaseholder of the identified vessels 
must submit the historical EDR to the DCA 90 days after the Federal 
Register notice notifying owners or leaseholders, to the address 
provided on the form.
    (3) Instructions. Instructions for submitting a catcher vessel 
historical EDR and certification page are specified in the following 
table:

------------------------------------------------------------------------
                                                      You must complete
      If you were . . .             And . . .         and submit . . .
------------------------------------------------------------------------
(i) The catcher vessel owner  (A) You harvested     Entire EDR for each
 as described in paragraph     BSAI crab in the      year that BSAI crab
 (a)(1) of this section.       vessel described at   was harvested.
                               paragraph
                               (a)(4)(ii)(B) of
                               this section and
                               were notified by
                               NMFS to submit an
                               EDR for selected
                               years.
                              (B) No one harvested  EDR certification
                               BSAI crab in the      pages.
                               vessel described at
                               paragraph
                               (a)(4)(ii)(B) of
                               this section and
                               you were notified
                               by NMFS to submit
                               an EDR for selected
                               years.
                              (C) You leased the    (1) EDR
                               vessel to another     certification
                               party, and            pages.
                               harvested no BSAI
                               crab in the vessel
                               described at
                               paragraph
                               (a)(4)(ii)(B) of
                               this section and
                               were notified by
                               NMFS to submit an
                               EDR for selected
                               years.
                                                    (2) Provide the
                                                     name, business
                                                     address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the
                                                     vessel during the
                                                     NMFS-selected
                                                     years.

[[Page 10250]]

 
                              (D) You leased the    (1) Entire EDR for
                               vessel for a          each year that BSAI
                               portion of the year   crab was harvested.
                               to another party,
                               but harvested some
                               BSAI crab in the
                               vessel described at
                               paragraph
                               (a)(4)(ii)(B) of
                               this section and
                               were notified by
                               NMFS to submit an
                               EDR for selected
                               years.
                                                    (2) Provide the
                                                     name, business
                                                     address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the
                                                     vessel during the
                                                     NMFS-selected
                                                     years.
(ii) The leaseholder as       You harvested BSAI    Entire EDR for each
 described in paragraph        crab in the vessel    year that BSAI crab
 (a)(1) of this section.       described at          was harvested.
                               paragraph
                               (a)(4)(ii)(B) of
                               this section vessel
                               and were notified
                               by NMFS to submit
                               an EDR for selected
                               years.
------------------------------------------------------------------------

    (4) EDR certification pages. (i) The owner or leaseholder must 
submit the EDR certification pages either:
    (A) As part of the entire EDR. The owner or leaseholder must submit 
the completed EDR certification pages as part of the entire EDR and 
must attest to the accuracy and completion of the EDR by signing and 
dating the certification pages; or
    (B) As a separate document. The owner or leaseholder must submit 
the completed EDR certification pages only, and must attest that they 
meet the conditions exempting them from submitting the EDR, by signing 
and dating the certification pages (see paragraph (a)(3) of this 
section).
    (ii) The owner, leaseholder, or designated representative must 
submit the following information on the certification pages:
    (A) Calendar year of EDR. Calendar year for which the vessel must 
submit the EDR;
    (B) Catcher vessel information. Vessel name, USCG documentation 
number, ADF&G vessel registration number, crab LLP license number(s), 
current estimated market value of vessel and equipment, and replacement 
value of vessel and equipment.
    (C) Owner information. Name of company, partnership, or sole 
proprietorship and business telephone number, facsimile number, and e-
mail address (if available).
    (D) Designated representative. Any owner or leaseholder may appoint 
a designated representative who is an individual for responding to 
questions on the EDR and must ensure that the designated representative 
complies with the regulations in this part. The designated 
representative is the primary contact person for the DCA on issues 
relating to data required in the EDR.
    (E) Person completing this report. (1) Indicate whether the person 
completing this report is the owner, leaseholder, or designated 
representative;
    (2) If the owner is the person completing this report, check the 
correct box. If the name and address of the owner provided in paragraph 
(a)(4)(ii)(C) of this section is the same as the name and address of 
the person completing the EDR, the information does not need to be 
repeated here; and
    (3) Name of person, title, and business telephone number, facsimile 
number, and e-mail address (if available).
    (5) EDR. The owner or leaseholder must record the following 
information on an EDR:
    (i) BSAI Crab activity chart. Complete a crab activity chart by 
entering the following information: CR fishery code, ADF&G Fish ticket 
number(s), number of days at sea, average crew size (including 
captain), and number of pots lost (if applicable).
    (ii) Crab sales gross revenue. CR fishery code, pounds sold, and 
gross revenue.
    (iii) CDQ crab lease costs. CR fishery code, pounds leased, and 
total cost of lease. If you did not participate in CDQ fisheries, 
indicate N/A.
    (iv) Crab harvesting labor costs. CR fishery code, number of crew 
earning shares (excluding captain), total crew share payment, and 
captain's share payment.
    (v) BSAI crab crew residence. For employees that participated in 
BSAI crab harvesting, record the locations where they reside and the 
number of employees that are from each residential location, as 
follows:
    (A) If Alaska, enter primary city of residence.
    (B) If state other than Alaska, enter primary state of residence.
    (C) If country other than United States, enter primary country of 
residence.
    (vi) BSAI crab-specific vessel costs. For the fishing year being 
reported, record insurance premiums (for hull, property and indemnity, 
and pollution), insurance deductible fees, quantity and cost of pots 
purchased, line, and other crab fishing gear purchases, pounds and cost 
of bait by species, gallons and cost of fuel, cost of lubrication and 
hydraulic fluids, cost of food and provisions for crew, other crew 
costs, freight costs of supplies shipped to you for the vessel, freight 
costs for landed crab, storage, observer costs, fish taxes, and other 
crab-specific costs.
    (vii) Vessel-specific costs. Record the total annual costs for each 
category. If the reported total cost is not exclusively for BSAI crab 
operations, place an ``X'' in the COST RELATED TO MORE THAN JUST CRAB 
FISHING column. The agency or contracted analyst will prorate this 
amount over all fishing activities. Indicate capitalized expenditures 
for vessel, gear and equipment; repair and maintenance (R&M) expenses 
for vessel, gear and equipment; and other vessel-specific costs 
(specify).
    (viii) Labor payment details. (A) Indicate with an ``X'' in the 
appropriate column whether the following expenses were deducted, 
directly charged, or not deducted or directly charged from the total 
revenue before calculating the crew payments in BSAI fisheries: fuel 
and lubrication, food and provisions, bait, fish tax, observer costs, 
CDQ fish, freight, gear loss, and other (specify).
    (B) Indicate percentage of the net share that was applied to boat 
share and crew share (including captain).
    (ix) Annual totals for all fisheries. For the calendar year, record 
the total days at sea, gross revenue, round pounds caught (excluding 
discards), and labor costs for your fishing activities in all fisheries 
in which you participated (crab, groundfish, etc.).
    (b) Catcher vessel annual EDR--(1) Requirement. On or before May 1 
of each year, any owner or leaseholder of a catcher vessel that landed 
crab from a CR fishery must submit to the DCA, at the address provided 
on the form, an EDR for annual data for the previous calendar year. For 
the year 2005, the annual EDR is due on or before May 1, 2006.
    (2) Instructions. Instructions for submitting a catcher vessel 
annual EDR and certification page are specified in the following table:

[[Page 10251]]



------------------------------------------------------------------------
                                                      You must complete
      If you are . . .              And . . .         and submit . . .
------------------------------------------------------------------------
(i) The catcher vessel owner  (A) You harvested     Entire EDR.
                               BSAI crab in the
                               vessel described at
                               paragraph
                               (b)(3)(ii)(B) of
                               this section during
                               this calendar year.
                              (B) No one harvested  EDR certification
                               BSAI crab in the      pages.
                               vessel described at
                               paragraph
                               (b)(3)(ii)(B) of
                               this section during
                               this year.
                              (C) You leased the    (1) EDR
                               vessel to another     certification
                               party, and            pages.
                               harvested no BSAI
                               crab in the vessel
                               described at
                               paragraph
                               (b)(3)(ii)(B) of
                               this section during
                               this calendar year.
                                                    (2) Provide the
                                                     name, address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the
                                                     vessel during this
                                                     calendar year.
                              (D) You leased the    (1) Entire EDR.
                               vessel for a
                               portion of the year
                               to another party,
                               but harvested some
                               BSAI crab in the
                               vessel described at
                               paragraph
                               (b)(3)(ii)(B) of
                               this section during
                               this calendar year.
                                                    (2) Provide the
                                                     name, address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the
                                                     vessel during this
                                                     calendar year.
(ii) The leaseholder........  You harvested BSAI    Entire EDR.
                               crab in the vessel
                               described at
                               paragraph
                               (b)(3)(ii)(B) of
                               this section vessel
                               during this
                               calendar year.
------------------------------------------------------------------------

    (3) EDR certification pages. (i) The owner or leaseholder must 
submit the EDR certification pages either:
    (A) As part of the entire EDR. The owner or leaseholder must submit 
the completed EDR certification pages as part of the entire EDR and 
must attest to the accuracy and completion of the EDR by signing and 
dating the certification pages; or
    (B) As a separate document. The owner or leaseholder must submit 
the completed EDR certification pages only, and must attest that they 
meet the conditions exempting them from submitting the EDR, by signing 
and dating the certification pages.
    (ii) The owner or leaseholder must submit the following information 
on the certification pages:
    (A) Calendar year of EDR. Calendar year of reporting year;
    (B) Catcher vessel information. Catcher vessel name, USCG 
documentation number, ADF&G vessel registration number, Federal crab 
vessel permit number, crab LLP license number(s), current estimated 
market value of vessel and equipment, and replacement value of vessel 
and equipment;
    (C) Owner information. Name of company, partnership, or sole 
proprietorship and business telephone number, facsimile number, and e-
mail address (if available);
    (D) Designated representative. Any owner or leaseholder may appoint 
a designated representative who is an individual for responding to 
questions on the EDR and must ensure that the designated representative 
complies with the regulations in this part. The designated 
representative is the primary contact person for the DCA on issues 
relating to data required in the EDR.
    (E) Person completing this report. (1) Indicate whether the person 
completing this report is the owner, leaseholder, or designated 
representative;
    (2) If the owner is the person completing this report, check the 
correct box. If the name and address of the owner provided in paragraph 
(b)(3)(ii)(C) of this section are the same as the name and address of 
the person completing the EDR, the information does not need to be 
repeated here; and
    (3) Name of person, title, and business telephone number, facsimile 
number, and e-mail address (if available).
    (4) EDR. The owner or leaseholder must record the following 
information on an EDR.
    (i) BSAI Crab activity chart. Complete a crab activity chart by 
entering the following information: CR fishery code, ADF&G Fish ticket 
number(s), number of days at sea, average crew size (including 
captain), and number of pots lost (if applicable).
    (ii) Crab sales, gross revenue. CR fishery code, species code, 
pounds sold, and gross revenue;
    (iii) CDQ and IFQ crab leases. CR fishery code, species code, 
pounds leased, and total cost of leasing the quota. If you did not 
participate in CDQ or IFQ fisheries, indicate N/A.
    (iv) Crab harvesting labor costs--(A) Standard crew payment 
(shares) for non-IFQ crew and/or captains. CR fishery code, number of 
crew earning shares, total crew share payment, and captain's share 
payment;
    (B) Payments to IFQ-holding crew and/or captains. CR fishery code, 
number of crew contributing IFQ shares, pounds of IFQ contributed by 
crew, total payment to crew for IFQ and shares (for all crab caught, 
and residual profit on their IFQ), pounds of IFQ contributed by 
captain, and payment to captain for IFQ and shares (for all fish 
caught, and residual profit on their IFQ);
    (v) BSAI crab crew residence--(A) Employees with crew license. 
Record the Alaska Commercial Crew license number or the State of Alaska 
Commercial Fisheries Entry Commission (CFEC) gear operator permit 
number, and location of crew residence (city and state);
    (B) Employees without crew license. Record the locations where they 
reside and the number of employees that are from each residential 
location as follows:
    (1) If Alaska, enter primary city of residence;
    (2) If state other than Alaska, enter primary state of residence; 
or
    (3) If country other than United States, enter primary country of 
residence.
    (vi) BSAI crab-specific vessel costs. Insurance premiums (hull, 
property and indemnity, and pollution), insurance deductible fees, pots 
purchased, line and other gear purchases, pounds and cost of bait by 
species, gallons and cost of fuel, lubrication and hydraulic fluids, 
food and provisions for crew, other crew costs, freight costs of 
supplies shipped to you for the vessel, freight costs for landed crab, 
storage, observer costs, fish taxes, other crab-specific costs 
(specify), and fishing cooperative costs.
    (vii) Vessel-specific costs. Record the total annual costs for each 
category. If the reported total cost is not exclusively for BSAI crab 
operations, place an ``X''

[[Page 10252]]

in the COST RELATED TO MORE THAN JUST CRAB FISHING column. The agency 
or contracted analyst will prorate this amount over all fishing 
activities. Indicate capitalized expenditures for vessel, gear and 
equipment (city and state where purchased); R&M expenses for vessel, 
gear and equipment (city and state where repairs were made); and other 
vessel-specific costs (specify).
    (viii) Labor payment details. (A) Indicate with an ``X'' in the 
appropriate column whether the following expenses were deducted, 
directly charged, or not deducted or directly charged from the total 
revenue before calculating the crew payments in BSAI crab fisheries: 
fuel and lubrication, food and provisions, bait, fish tax, observer 
costs, CDQ fish, IFQ leases, freight, gear loss, and other (specify);
    (B) Indicate percentage of the net share that is applied to boat 
share and crew share (including captain).
    (ix) Annual totals for all fisheries. For the calendar year, record 
the total days at sea, gross revenue, round pounds caught (excluding 
discards), and labor costs for your fishing activities in all fisheries 
in which you participated (crab, groundfish, etc.).
    (c) Catcher/processor historical EDR--(1) Requirement. Any owner or 
leaseholder of a catcher/processor that harvested or processed BSAI 
crab in the calendar years 1998, 2001, or 2004 must submit to the DCA, 
at the address provided on the form, an EDR for historical data for 
each of the specified calendar years, if they:
    (i) Received an allocation of QS, PQS, IFQ, or IPQ under this 
program;
    (ii) Did not qualify for and receive QS, PQS, IFQ, or IPQ, but are 
participants at any time since January 23, 2004, in the BSAI crab 
fisheries.
    (2) Time limit. Any owner or leaseholder of the catcher/processor 
described in paragraph (c)(4)(ii)(B) of this section must submit the 
historical EDR to the DCA by June 30, 2005, at the address provided on 
the form.
    (3) Instructions. Instructions for submitting a catcher/processor 
historical EDR and certification page are specified in the following 
table:

------------------------------------------------------------------------
                                                      You must complete
      If you were . . .             And . . .         and submit . . .
------------------------------------------------------------------------
(i) The catcher/processor     (A) You processed     Entire EDR for each
 owner described in            BSAI crab in the      year that BSAI crab
 paragraph of this section.    vessel described at   was processed.
                               paragraph
                               (c)(4)(ii)(B) of
                               this section during
                               1998, 2001, or 2004.
                              (B) No one processed  EDR certification
                               BSAI crab in the      pages for each year
                               vessel described at   that no one
                               paragraph             processed BSAI
                               (c)(4)(ii)(B) of      crab.
                               this section during
                               1998, 2001, or 2004.
                              (C) You leased your   (1) EDR
                               catcher/processor     certification
                               to another party,     pages.
                               and processed no
                               BSAI crab in the
                               vessel described at
                               paragraph
                               (c)(4)(ii)(B) of
                               this section during
                               1998, 2001, or 2004.
                                                    (2) Provide the
                                                     name, business
                                                     address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the
                                                     catcher/processor
                                                     during 1998, 2001,
                                                     or 2004.
                              (D) You leased your   (1) Entire EDR for
                               catcher/processor     each year that BSAI
                               for a portion of      crab was processed.
                               the year to another
                               party, but
                               processed some BSAI
                               crab in the vessel
                               described at
                               paragraph
                               (c)(4)(ii)(B) of
                               this section during
                               1998, 2001, or 2004.
                                                    (2) Provide the
                                                     name, business
                                                     address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the
                                                     catcher/processor
                                                     during 1998, 2001,
                                                     or 2004.
(ii) The leaseholder          You processed BSAI    Entire EDR for each
 described in paragraph        crab in the vessel    year that BSAI crab
 (c)(1) of this section.       described at          was processed.
                               paragraph
                               (c)(4)(ii)(B) of
                               this section during
                               1998, 2001, or 2004.
------------------------------------------------------------------------

    (4) EDR certification pages. (i) The owner or leaseholder must 
submit the EDR certification page either:
    (A) As part of the entire EDR. The owner or leaseholder must submit 
the completed EDR certification pages as part of the entire EDR and 
must attest to the accuracy and completion of the EDR by signing and 
dating the certification pages; or
    (B) As a separate document. If the owner or leaseholder did not 
process BSAI crab in 1998, 2001, or 2004, he or she must submit the 
completed EDR certification pages only, and must attest that he or she 
meets the conditions exempting him or her from submitting the EDR, by 
signing and dating the certification pages, for each year of 1998, 
2001, or 2004 that this applies.
    (ii) The owner or leaseholder must submit the following information 
on the certification pages;
    (A) Calendar year of EDR. Calendar year corresponding to 1998, 
2001, or 2004;
    (B) Catcher/processor information. Catcher/processor name, USCG 
documentation number, ADF&G processor code, crab LLP license number(s), 
current estimated market value of vessel and equipment, and replacement 
value of vessel and equipment.
    (C) Owner information. Name of company, partnership, or sole 
proprietorship and business telephone number, facsimile number, and e-
mail address (if available).
    (D) Designated representative. Any owner or leaseholder may appoint 
a designated representative who is an individual for responding to 
questions on the EDR and must ensure that the designated representative 
complies with the regulations in this part. The designated 
representative is the primary contact person for the DCA on issues 
relating to data required in the EDR.
    (E) Person completing this report. (1) Indicate whether the person 
completing this report is the owner, leaseholder, or designated 
representative;
    (2) If the owner is the person completing this report, check the 
correct box. If the name and address of the owner provided in paragraph 
(c)(4)(ii)(C) of this section are the same as the name and address of 
the person completing the EDR, the information does not need to be 
repeated here; and
    (3) Name of person, title, and business telephone number, facsimile 
number, and e-mail address (if available).
    (5) EDR. The owner or leaseholder must record the following 
information on an EDR.
    (i) BSAI crab activity chart. Complete a crab activity chart by 
entering the

[[Page 10253]]

following information: CR fishery code; dates covered (beginning and 
ending day, month and year); number of days at sea; number of crab 
processing days, and number of pots lost (if applicable).
    (ii) BSAI crab production. CR fishery code, raw crab pounds, 
product code, process code, crab size, crab grade, box size, finished 
pounds, and whether custom processed (yes or no).
    (iii) Crab harvesting labor costs. CR fishery code, number of crew 
earning shares, total crew share payment, and captain's share payment.
    (iv) Crab processing labor costs. CR fishery code, number of crew 
with pay determined by processing work, average number of crab 
processing positions, and total processing labor payment.
    (v) BSAI crab crew residence. For employees that participated in 
BSAI crab harvesting and processing, record the locations where they 
reside and the number of employees that are from each residential 
location, as follows:
    (A) If Alaska, enter primary city of residence;
    (B) If state other than Alaska, enter primary state of residence;
    (C) If country other than United States, enter primary country of 
residence;
    (vi) BSAI crab custom processing done for you. CR fishery code, raw 
crab pounds supplied to custom processors, raw crab pounds purchased 
from custom processors, product code, process code, crab size, crab 
grade, box size, finished pounds, and processing fee.
    (vii) Raw crab purchases from delivering vessels. CR fishery code, 
crab size, crab grade, raw crab pounds purchased, and gross payment.
    (viii) CDQ Crab Costs (leases). CR fishery code, pounds leased, and 
total cost. If you did not participate in CDQ or IFQ fisheries, 
indicate N/A.
    (ix) Annual BSAI crab sales. Record the following information on 
crab sales to affiliated entities and to unaffiliated entities: species 
code, product code, process code, crab size, crab grade, box size, 
finished pounds, and FOB Alaska Revenues.
    (x) BSAI crab-specific vessel costs. Insurance premiums (hull, 
property and indemnity, and pollution); insurance deductible fees; 
total of fisheries taxes which includes the Alaska fisheries business 
tax, Alaska fisheries resource landing tax, SMAA taxes, and other local 
sales tax on raw fish; pots purchased (quantity and cost); line and 
other crab fishing gear purchases; bait (by each CR fishery code, 
species, pounds and cost); fuel (by CR fishery code, gallons and cost); 
lubrication and hydraulic fluids; food and provisions for crew; other 
crew costs; processing and packaging materials, equipment and supplies; 
re-packing costs, broker fees and promotions for BSAI crab sales (by CR 
fishery code); observer costs (by CR fishery code); freight costs for 
supplies to the vessel; freight and handling costs for processed crab 
products from the vessel; product storage; gear storage; and other 
crab-specific costs (specify).
    (xi) Vessel-specific costs. Record the total annual costs for each 
category. If the reported total cost is not exclusively for BSAI crab 
operations, place an ``X'' in the COST RELATED TO MORE THAN JUST CRAB 
FISHING column. The agency or contracted analyst will prorate this 
amount over all fishing activities. Indicate capitalized expenditures 
for vessel, gear and equipment; R&M expenses for vessel, gear and 
equipment (city and state where repairs were made); number of employees 
and salaries for foremen, managers, and other employees not included in 
direct labor costs; and other vessel-specific costs (specify).
    (xii) BSAI crab custom processing performed for others. CR Fishery 
code, product code, process code, whether OUR CRAB or THEIR CRAB, and 
processing revenue.
    (xiii) Annual totals for all fisheries. For the calendar year, 
record the total processing days, total days at sea, gross revenue, 
finished pounds processed, round pounds caught (excluding discards), 
and labor costs for your fishing and processing activities in all 
fisheries in which you participated (crab, groundfish, etc.).
    (xiv) Labor payment details. (A) Indicate with an ``X'' in the 
appropriate column whether the following expenses were deducted, 
directly charged, or not deducted or directly charged from the total 
revenue before calculating the crew payments in BSAI fisheries: fuel 
and lubrication, food and provisions, bait, fish tax, observer costs, 
CDQ fish, freight, gear loss, and other (specify).
    (B) Indicate percentage of the net share that was applied to boat 
share and harvesting crew share (including captain).
    (C) If processing workers were paid on a share system, indicate 
percentage of the net share (if applicable) that was applied to 
processing workers based on product value or net share.
    (d) Catcher/processor annual EDR--(1) Requirement. On or before May 
1 of each year, any owner or leaseholder of a catcher/processor that 
landed or processed crab from a CR fishery must submit to the DCA, at 
the address provided on the form, an EDR for annual data for the 
previous calendar year. For the year 2005, the annual EDR is due on or 
before May 1, 2006.
    (2) Instructions. Instructions for submitting a catcher/processor 
annual EDR and certification page are specified in the following table:

------------------------------------------------------------------------
                                                      You must complete
      If you are . . .              And . . .         and submit . . .
------------------------------------------------------------------------
(i) The catcher/processor     (A) You processed     Entire EDR.
 owner.                        BSAI crab in the
                               vessel described at
                               paragraph
                               (d)(3)(ii)(B) of
                               this section during
                               this calendar year.
                              (B) No one processed  EDR certification
                               BSAI crab in the      pages.
                               vessel described at
                               paragraph
                               (d)(3)(ii)(B) of
                               this section during
                               this calendar year.
                              (C) You leased all    (1) EDR
                               of your IPQ to        certification
                               another party, and    pages.
                               processed no BSAI
                               crab in the vessel
                               described at
                               paragraph
                               (d)(3)(ii)(B) of
                               this section during
                               this calendar year.
                                                    (2) Provide the
                                                     name, address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the IPQ
                                                     during this
                                                     calendar year.
                              (D) You leased        (1) Entire EDR.
                               portions of your
                               IPQ to another
                               party, but
                               processed some BSAI
                               crab in the vessel
                               described at
                               paragraph
                               (d)(3)(ii)(B) of
                               this section during
                               this calendar year.

[[Page 10254]]

 
                                                    (2) Provide the
                                                     name, address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the IPQ
                                                     during this
                                                     calendar year.
(ii) The leaseholder          You processed BSAI    Entire EDR.
 described in paragraph        crab in the
 (d)(1) of this section.       described in vessel
                               described at
                               paragraph paragraph
                               (d)(3)(ii)(B) of
                               this section this
                               section during this
                               calendar year.
------------------------------------------------------------------------

    (3) EDR certification pages. (i) The owner or leaseholder must 
submit the EDR certification pages either:
    (A) As part of the entire EDR. The owner or leaseholder must submit 
the completed EDR certification pages as part of the entire EDR and 
must attest to the accuracy and completion of the EDR by signing and 
dating the certification pages; or
    (B) As a separate document. The owner or leaseholder must submit 
the completed EDR certification pages only, and must attest that they 
meet the conditions exempting them from submitting the EDR, by signing 
and dating the certification pages.
    (ii) The owner or leaseholder must submit the following information 
on the certification pages:
    (A) Calendar year of EDR. Calendar year for the reporting year;
    (B) Catcher/processor information. Catcher/processor name, USCG 
documentation number, ADF&G processor code, RCR permit number, crab LLP 
license number(s), current estimated market value of vessel and 
equipment, and replacement value of vessel and equipment.
    (C) Owner information. Name of company, partnership, or sole 
proprietorship and business telephone number, facsimile number, and e-
mail address (if available).
    (D) Designated representative. Any owner or leaseholder may appoint 
a designated representative who is an individual for responding to 
questions on the EDR and must ensure that the designated representative 
complies with the regulations in this part. The designated 
representative is the primary contact person for the DCA on issues 
relating to data required in the EDR.
    (E) Person completing this report. (1) Indicate whether the person 
completing this report is the owner, leaseholder, or designated 
representative;
    (2) If the owner is the person completing this report, check the 
correct box. If the name and address of the owner provided in paragraph 
(d)(3)(ii)(C) of this section are the same as the name and address of 
the person completing the EDR, the information does not need to be 
repeated here; and
    (3) Name of person, title, and business telephone number, facsimile 
number, and e-mail address (if available).
    (4) EDR. The owner or leaseholder must record the following 
information on an EDR.
    (i) BSAI Crab activity chart. Complete a crab activity chart by 
entering the following information: CR fishery code, dates covered 
(beginning and ending day, month and year), number of days at sea, 
number of crab processing days, and number of pots lost (if 
applicable).
    (ii) BSAI crab production. CR fishery code, species code, raw crab 
pounds, product code, process code, crab size, crab grade, box size, 
finished pounds, and whether custom processed (Yes or No).
    (iii) Harvesting labor costs. Record the following information for 
crew if they harvest crab only, or harvest and process crab.
    (A) Standard crew payment (shares) for non-IFQ contributing crew 
and/or captains. CR fishery code, number of crew earning shares, total 
crew share payment, and captain's share payment.
    (B) Payments to IFQ-holding crew and/or captains. CR fishery code, 
number of crew contributing IFQ shares, pounds of IFQ contributed by 
crew, total payment to crew for IFQ and shares, pounds of IFQ 
contributed by captain, and payment to captain for IFQ and shares.
    (iv) Crab processing labor costs. CR fishery code, number of crew 
with pay determined by processing work, average number of crab 
processing positions, and total processing labor payment.
    (v) BSAI crab crew residence--(A) Employees with crew license. 
Record the Alaska Commercial Crew license number or the State of Alaska 
Commercial Fisheries Entry Commission (CFEC) gear operator permit 
number, and location of crew residence (city and state);
    (B) Employees without crew license. Record the locations where they 
reside and the number of employees that are from each residential 
location as follows:
    (1) If Alaska, enter primary city of residence;
    (2) If state other than Alaska, enter primary state of residence; 
or
    (3) If country other than United States, enter primary country of 
residence.
    (vi) BSAI crab custom processing done for you. CR fishery code, 
species code, raw crab pounds supplied to custom processors, raw crab 
pounds purchased from custom processors, product code, process code, 
crab size, crab grade, box size, finished pounds, and processing fee.
    (vii) Raw crab purchases from delivering vessels. CR fishery code, 
species code, crab size, crab grade, raw crab pounds purchased, and 
gross payment.
    (viii) CDQ and IFQ crab costs (leases). For CDQ and IFQ leases 
enter CR fishery code, species code, pounds leased, and total cost. If 
you did not participate in CDQ or IFQ fisheries, indicate N/A.
    (ix) Annual BSAI crab sales. For affiliated entities and 
unaffiliated entities enter species code, product code, process code, 
crab size, crab grade, box size, finished pounds, and FOB Alaska 
Revenues.
    (x) BSAI crab-specific vessel costs. Insurance premiums (hull, 
property and indemnity, and pollution); insurance deductible fees; 
total of fisheries taxes which include the Alaska fisheries business 
tax, Alaska fisheries resource landing tax, SMAA taxes, and other local 
sales tax on raw fish; pots purchased by city and state (quantity and 
cost); line and other crab fishing gear purchases by city, state, and 
cost; bait (by each CR fishery code by city and state, species, pounds, 
and cost); fuel in gallons and cost by CR fishery code, city and state; 
lubrication and hydraulic fluids by city and state; food and provisions 
for crew; other crew costs; processing and packaging materials, 
equipment and supplies by city and state; re-packing costs; broker fees 
and promotions for BSAI crab sales (by CR fishery code); observer costs 
(by CR fishery code); freight costs for products to the vessel; freight 
and handling costs for processed crab products from the vessel; product 
storage; gear storage; other crab-specific costs (specify), and fishing 
cooperative costs.
    (xi) Vessel-specific costs. Record the total annual costs for each 
category. If the reported total cost is not exclusively

[[Page 10255]]

for BSAI crab operations, place an ``X'' in the COST RELATED TO MORE 
THAN JUST CRAB FISHING column. The agency or contracted analyst will 
prorate this amount over all fishing activities. Indicate capitalized 
expenditures for vessel, gear and equipment (city and state where 
purchased); R&M expenses for vessel, gear and equipment (city and state 
where repairs were made); number of employees and salaries for foremen, 
managers and other employees not included in direct labor costs; and 
other vessel-specific costs (specify).
    (xii) BSAI crab custom processing performed for others. CR fishery 
code, species code, product code, process code, whether OUR CRAB or 
THEIR CRAB, and processing revenue.
    (xiii) Annual totals for all fisheries. For the calendar year, 
record the total processing days, total days at sea, gross revenue, 
finished pounds processed, round pounds caught (excluding discards), 
and labor costs for your fishing and processing activities in all 
fisheries in which you participated (crab, groundfish, etc.).
    (xiv) Labor payment details. (A) Indicate with an ``X'' in the 
appropriate column whether the following expenses were deducted, 
directly charged, or not deducted or directly charged from the total 
revenue before calculating the crew payments in BSAI fisheries: fuel 
and lubrication, food and provisions, bait, fish tax, observer costs, 
CDQ fish, IFQ leases, freight, gear loss, and other (specify).
    (B) Indicate percentage of the net share that is applied to boat 
share and harvesting crew share (including captain).
    (C) If processing workers are paid on a share system, indicate 
percentage of the net share (if applicable) that is applied to 
processing workers based on product value or net share.
    (e) Stationary floating crab processor (SFCP) historical EDR--(1) 
Requirement. Any owner or leaseholder of an SFCP that processed CR crab 
in the calendar years 1998, 2001, or 2004 must submit to the DCA, at 
the address provided on the form, an EDR for historical data for each 
of the specified calendar years, if they:
    (i) Received an allocation of QS, PQS, IFQ, or IPQ under this 
program;
    (ii) Did not qualify for and receive QS, PQS, IFQ, or IPQ, but are 
participants at any time since January 23, 2004, in the BSAI crab 
fisheries.
    (2) Time limit. Any owner or leaseholder of the SFCP described in 
paragraph (e)(4)(ii)(B) of this section must submit the historical EDR 
to the DCA by June 30, 2005, at the address provided on the form.
    (3) Instructions. Instructions for submitting an SFCP historical 
EDR and certification page are specified in the following table:

------------------------------------------------------------------------
                                                      You must complete
      If you were . . .             And . . .         and submit . . .
------------------------------------------------------------------------
(i) The SFCP owner described  (A) You processed     Entire EDR for each
 in paragraph (e)(1) of this   BSAI crab in the      year that BSAI crab
 section.                      SFCP described at     was processed.
                               paragraph
                               (e)(4)(ii)(B) of
                               this section during
                               1998, 2001, or 2004.
                              (B) No one processed  EDR certification
                               BSAI crab in the      pages for each year
                               SFCP described at     that no one
                               paragraph             processed BSAI
                               (e)(4)(ii)(B) of      crab.
                               this section during
                               1998, 2001, 2004.
                              (C) You leased your   (1) EDR
                               SFCP to another       certification
                               party, and            pages.
                               processed no BSAI
                               crab in the SFCP
                               described at
                               paragraph
                               (e)(4)(ii)(B) of
                               this section during
                               1998, 2001, or 2004.
                                                    (2) Provide the
                                                     name, address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the SFCP
                                                     during 1998, 2001,
                                                     or 2004.
                              (D) You leased your   (1) Entire EDR for
                               SFCP a portion of     each year that BSAI
                               the time to another   crab was processed.
                               party, but
                               processed some BSAI
                               crab in the SFCP
                               described at
                               paragraph
                               (e)(4)(ii)(B) of
                               this section during
                               1998, 2001, or 2004.
                                                    (2) Provide the
                                                     name, address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the SFCP
                                                     during 1998, 2001,
                                                     or 2004.
(ii) The leaseholder          You operated the      Entire EDR for each
 described in paragraph        SFCP described at     year that BSAI crab
 (e)(1) of this section.       paragraph             was processed.
                               (e)(4)(ii)(B) of
                               this section and
                               processed some BSAI
                               crab during 1998,
                               2001, or 2004.
------------------------------------------------------------------------

    (4) EDR certification pages. (i) The owner or leaseholder must 
submit the EDR certification pages either:
    (A) As part of the entire EDR. The owner or leaseholder must submit 
the completed EDR certification pages as part of the entire EDR and 
must attest to the accuracy and completion of the EDR by signing and 
dating the certification pages; or
    (B) As a separate document. If the owner or leaseholder did not 
process BSAI crab in 1998, 2001, or 2004, he or she must submit the 
completed EDR certification pages only, and must attest that he or she 
meets the conditions exempting him or her from submitting the EDR, by 
signing and dating the certification pages, for each year of 1998, 
2001, or 2004 that this applies.
    (ii) The owner or leaseholder must submit the following information 
on the certification pages:
    (A) Calendar year of EDR. Calendar years corresponding to 1998, 
2001, or 2004;
    (B) SFCP information. SFCP name, USCG documentation number, ADF&G 
processor code, current estimated market value of vessel and equipment, 
and replacement value of vessel and equipment.
    (C) Owner information. Name of company, partnership, or sole 
proprietorship and business telephone number, facsimile number, and e-
mail address (if available).
    (D) Designated representative. Any owner or leaseholder may appoint 
a designated representative, who is an individual for responding to 
questions on the EDR, and must ensure that the designated 
representative complies with the regulations in this part. The 
designated representative is the primary contact person for the DCA on 
issues relating to data required in the EDR.
    (E) Person completing this report. (1) Indicate whether the person 
completing this report is the owner, leaseholder, or designated 
representative;

[[Page 10256]]

    (2) If the owner is the person completing this report, check the 
correct box. If the name and address of the owner provided in paragraph 
(e)(4)(ii)(C) of this section are the same as the name and address of 
the person completing the EDR, the information does not need to be 
repeated here; and
    (3) Name of person, title, business telephone number, facsimile 
number, and e-mail address (if available).
    (5) EDR. The owner or leaseholder must record the following 
information on an EDR.
    (i) BSAI Crab activity chart. Complete a crab activity chart by 
entering the following information: CR fishery code, number of crab 
processing days, dates covered (beginning and ending day, month and 
year), raw crab pounds purchased, product code, process code, crab 
size, crab grade, box size, finished pounds, and whether custom 
processed (Yes or No).
    (ii) Crab processing labor costs. CR fishery code, average number 
of crab positions, total man-hours, and total labor payment.
    (iii) BSAI Crab crew residence. For employees that participated in 
BSAI crab processing, record the locations where they reside and the 
number of employees that are from each residential location, as 
follows:
    (A) If Alaska, enter primary city of residence.
    (B) If state other than Alaska, enter primary state of residence.
    (C) If country other than United States, enter primary country of 
residence.
    (iv) BSAI crab custom processing done for you. CR fishery code, raw 
crab pounds supplied to custom processors, raw crab pounds purchased 
from custom processors, product code, process code, crab size, crab 
grade, box size, finished pounds, and processing fee.
    (v) Raw crab purchases from delivering vessels. CR fishery code, 
crab size, crab grade, raw crab pounds purchased, and gross payment.
    (vi) Annual BSAI crab sales. Record the following information on 
crab sales to affiliated entities and to unaffiliated entities: species 
code, product code, process code, crab size, crab grade, box size, 
finished pounds, and FOB Alaska Revenues.
    (vii) BSAI crab-specific vessel data. Total of fisheries taxes 
which include the Alaska fisheries business tax, SMAA taxes, and other 
local sales tax on raw fish; processing and packaging materials, 
equipment, and supplies; food and provisions; other costs for direct 
crab labor; insurance deductible fees; re-packing costs; broker fees 
and promotions for BSAI crab sales (by CR fishery code); observer costs 
(by CR fishery code); freight costs for supplies to the vessel; freight 
and handling costs for processed crab products from the vessel; product 
storage; and other crab-specific costs (specify).
    (viii) Vessel-specific costs. Record the total annual costs for 
each category. If the reported total cost is not exclusively for BSAI 
crab operations, place an ``X'' in the COST RELATED TO MORE THAN JUST 
CRAB FISHING column. The agency or contracted analyst will prorate this 
amount over all fishing activities. Indicate capitalized expenditures 
for vessel, gear and equipment; R&M expenses for vessel, gear and 
equipment (city and state where repairs were made); number of employees 
and salaries for foremen, managers and other employees not included in 
direct labor costs; and other vessel-specific costs (specify).
    (ix) BSAI crab custom processing performed for others. CR fishery 
code, product code, process code, whether OUR CRAB or THEIR CRAB, and 
processing revenue.
    (x) Annual totals for all fisheries. For the calendar year, record 
the total processing days, gross revenue, finished pounds processed, 
and processing labor costs for your fishing activities in all fisheries 
in which you participated (crab, groundfish, etc.).
    (f) Stationary floating crab processor (SFCP) annual EDR--(1) 
Requirement. On or before May 1 of each year, any owner or leaseholder 
of an SFCP that processed crab from a CR fishery must submit to the 
DCA, at the address provided on the form, an EDR for annual data for 
the previous calendar year. For the year 2005, the annual EDR is due on 
or before May 1, 2006.
    (2) Instructions. Instructions for submitting an SFCP annual EDR 
and certification page are specified in the following table:

------------------------------------------------------------------------
                                                      You must complete
      If you are . . .              And . . .         and submit . . .
------------------------------------------------------------------------
(i) The SFCP owner..........  (A) You processed     Entire EDR.
                               BSAI crab in the
                               SFCP described at
                               paragraph
                               (f)(3)(ii)(B) of
                               this section during
                               this calendar year.
                              (B) No one processed  EDR certification
                               BSAI crab in the      pages.
                               SFCP described at
                               paragraph
                               (f)(3)(ii)(B) of
                               this section during
                               this calendar year.
                              (C) You leased all    (1) EDR
                               of your IPQ to        certification
                               another party and     pages.
                               processed no BSAI
                               crab in the SFCP
                               described at
                               paragraph
                               (f)(3)(ii)(B) of
                               this section during
                               this calendar year.
                                                    (2) Provide the
                                                     name, address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the IPQ
                                                     during this
                                                     calendar year.
                              (D) You leased a      (1) Entire EDR.
                               portion of your IPQ
                               to another party,
                               but processed some
                               BSAI crab in the
                               SFCP described at
                               paragraph
                               (f)(3)(ii)(B) of
                               this section during
                               this calendar year.
                                                    (2) Provide the
                                                     name, address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the IPQ
                                                     during this
                                                     calendar year.
(ii) The leaseholder          You operated the      Entire EDR.
 described in paragraph        SFCP described at
 (f)(1) of this section.       paragraph
                               (f)(3)(ii)(B) of
                               this section and
                               processed some BSAI
                               crab during this
                               paragraph calendar
                               year.
------------------------------------------------------------------------


[[Page 10257]]

    (3) EDR certification pages. (i) The owner or leaseholder must 
submit the EDR certification pages either:
    (A) As part of the entire EDR. The owner or leaseholder must submit 
the completed EDR certification pages as part of the entire EDR and 
must attest to the accuracy and completion of the EDR by signing and 
dating the certification pages; or
    (B) As a separate document. The owner or leaseholder must submit 
the completed EDR certification pages only, and must attest that they 
meet the conditions exempting them from submitting the EDR, by signing 
and dating the certification pages (see paragraph (e)(2) of this 
section).
    (ii) The owner or leaseholder must submit the following information 
on the certification pages:
    (A) Calendar year of EDR. Calendar year of the reporting year;
    (B) SFCP information. SFCP name, USCG documentation number, ADF&G 
processor code, RCR permit number, current estimated market value of 
vessel and equipment, and replacement value of vessel and equipment.
    (C) Owner information. Name of company, partnership, or sole 
proprietorship and business telephone number, facsimile number, and e-
mail address (if available).
    (D) Designated representative. Any owner or leaseholder may appoint 
a designated representative who is an individual for responding to 
questions on the EDR and must ensure that the designated representative 
complies with the regulations in this part. The designated 
representative is the primary contact person for the DCA on issues 
relating to data required in the EDR.
    (E) Person completing the report. (1) Indicate whether the person 
completing this report is the owner, leaseholder, or designated 
representative;
    (2) If the owner is the person completing this report, check the 
correct box. If the name and address of the owner provided in paragraph 
(f)(3)(ii)(C) of this section are the same as the name and address of 
the person completing the EDR, the information does not need to be 
repeated here; and
    (3) Name of person, title, and business telephone number, facsimile 
number, and e-mail address (if available).
    (4) EDR. The owner or leaseholder must record the following 
information on an EDR.
    (i) BSAI Crab activity chart. Complete a crab activity chart by 
entering the following information: CR fishery code, number of crab 
processing days, dates covered (beginning and ending day, month and 
year), raw crab pounds purchased, product code, process code, crab 
size, crab grade, box size, finished pounds, and whether custom 
processed (Yes or No).
    (ii) Crab processing labor costs. CR fishery code, average number 
of crab processing positions, total man-hours, and total processing 
labor payment.
    (iii) BSAI Crab employee residence. For employees that participated 
in BSAI crab processing, record the locations where they reside and the 
number of employees that are from each residential location, as 
follows:
    (A) If Alaska, enter primary city of residence.
    (B) If state other than Alaska, enter primary state of residence.
    (C) If country other than United States, enter primary country of 
residence.
    (iv) BSAI crab custom processing done for you. CR fishery code, 
species code, raw crab pounds supplied to custom processors, raw crab 
pounds purchased from custom processors, product code, process code, 
crab size, crab grade, box size, finished pounds, and processing fee.
    (v) Raw crab purchases from delivering vessels. CR fishery code, 
species code, crab size, crab grade, raw crab pounds purchased, and 
gross payment.
    (vi) Annual BSAI crab sales. For affiliated entities and 
unaffiliated entities enter species code, product code, process code, 
crab size, crab grade, box size, finished pounds, and FOB Alaska 
Revenues.
    (vii) BSAI crab-specific vessel costs. Total of fisheries taxes 
which includes the Alaska fisheries business tax, SMAA taxes, and other 
local sales tax on raw fish; processing and packaging materials, 
equipment and supplies by city and state; food and provisions; other 
costs for direct crab labor; insurance deductible fees; re-packing 
costs; broker fees and promotions for BSAI crab sales (by CR fishery 
code); observer costs (by CR fishery code); freight costs for supplies 
to the vessel; freight and handling costs for processed crab products 
from the vessel; product storage; and other crab-specific costs 
(specify).
    (viii) Vessel-specific costs. Record the total annual costs for 
each category. If the reported total cost is not exclusively for BSAI 
crab operations, place an ``X'' in the COST RELATED TO MORE THAN JUST 
CRAB FISHING column. The agency or contracted analyst will prorate this 
amount over all fishing activities. Indicate fuel, electricity, 
lubrication and hydraulic fluids; capitalized expenditures for vessel, 
gear and equipment (city and state where purchased); R&M for vessel, 
gear and equipment (city and state where repairs were made); number of 
employees and salaries for foremen, managers and other employees not 
included in direct labor costs; and other vessel-specific costs 
(specify).
    (ix) BSAI crab custom processing performed for others. CR fishery 
code, species code, product code, process code, whether OUR CRAB or 
THEIR CRAB, and processing revenue.
    (x) Annual totals for all fisheries. For the calendar year, record 
the total processing days, gross revenue, finished pounds processed, 
and labor costs for your fishing activities in all fisheries in which 
you participated (crab, groundfish, etc.).
    (g) Shoreside processor historical EDR--(1) Requirement. Any owner 
or leaseholder of a shoreside processor who processed CR crab in the 
calendar years 1998, 2001, or 2004 must submit to the DCA, at the 
address provided on the form, an EDR for historical data for each of 
the specified calendar years, if they:
    (i) Received an allocation of QS, PQS, IFQ, or IPQ under this 
Program;
    (ii) Did not qualify for and receive QS, PQS, IFQ, or IPQ, but are 
participants at any time since January 23, 2004, in the BSAI crab 
fisheries.
    (2) Time limit. Any owner or leaseholder of the shoreside processor 
described in paragraph (g)(4)(ii)(B) of this section must submit the 
historical EDR to the DCA by June 30, 2005, at the address provided on 
the form.
    (3) Instructions. Instructions for submitting a shoreside processor 
historical EDR and certification page are specified in the following 
table:

------------------------------------------------------------------------
                                                      You must complete
      If you are . . .              And . . .         and submit . . .
------------------------------------------------------------------------
(i) The shoreside processor   (A) You processed     Entire EDR for each
 owner described in            BSAI crab in the      year that BSAI crab
 paragraph (g)(1) of this      plant described at    was processed.
 section.                      paragraph
                               (g)(4)(ii)(B) of
                               this section during
                               1998, 2001, or 2004.

[[Page 10258]]

 
                              (B) No one processed  EDR certification
                               BSAI crab in the      pages for each year
                               plant described at    that no one
                               paragraph             processed BSAI
                               (g)(4)(ii)(B) of      crab.
                               this section during
                               1998, 2001, or 2004.
                              (C) You leased your   (1) EDR
                               shoreside processor   certification
                               to another party,     pages.
                               and processed no
                               BSAI crab in the
                               plant described at
                               paragraph
                               (g)(4)(ii)(B) of
                               this section during
                               1998, 2001, or 2004.
                                                    (2) Provide the
                                                     name, address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the
                                                     shoreside processor
                                                     during 1998, 2001,
                                                     or 2004.
                              (D) You leased your   (1) Entire EDR for
                               shoreside processor   each year that BSAI
                               for a portion of      crab was processed.
                               the time to another
                               party, but
                               processed some BSAI
                               crab in the plant
                               described at
                               paragraph
                               (g)(4)(ii)(B) of
                               this section during
                               1998, 2001, or 2004.
                                                    (2) Provide the
                                                     name, address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the
                                                     shoreside processor
                                                     during 1998, 2001,
                                                     or 2004.
(ii) The leaseholder          You operated the      Entire EDR for each
 described in paragraph        plant described at    year that BSAI crab
 (g)(1) of this section.       (g)(4)(ii)(B) of      was processed.
                               this section and
                               processed some BSAI
                               crab during 1998,
                               2001, or 2004.
------------------------------------------------------------------------

    (4) EDR certification pages. (i) The owner or leaseholder must 
submit the EDR certification pages either:
    (A) As part of the entire EDR. The owner or leaseholder must submit 
the completed EDR certification pages as part of the entire EDR and 
must attest to the accuracy and completion of the EDR by signing and 
dating the certification pages; or
    (B) As a separate document. If the owner or leaseholder did not 
process BSAI crab in 1998, 2001, or 2004, he or she must submit the 
completed EDR certification pages only, and must attest that he or she 
meets the conditions exempting him or her from submitting the EDR, by 
signing and dating the certification pages for each year of 1998, 2001, 
or 2004 that this applies;
    (ii) Required information. The owner or leaseholder must submit the 
following information on the certification pages:
    (A) Calendar year of EDR. Calendar years corresponding to 1998, 
2001, or 2004;
    (B) Shoreside processor information. Shoreside processor name, 
ADF&G processor code, physical location of land-based plant (street 
address, city, state, zip code), borough assessed value of plant and 
equipment, year assessed, and current estimated market value of plant 
and equipment;
    (C) Owner information. Name of company, partnership, or sole 
proprietorship and business telephone number, facsimile number, and e-
mail address (if available);
    (D) Designated representative. Any owner or leaseholder may appoint 
a designated representative who is an individual for responding to 
questions on the EDR and must ensure that the designated representative 
complies with the regulations in this part. The designated 
representative is the primary contact person for the DCA on issues 
relating to data required in the EDR.
    (E) Person completing the report. (1) Indicate whether the person 
completing this report is the owner, leaseholder, or designated 
representative;
    (2) If the owner is the person completing the report, check the 
correct box. If the name and address of the owner provided in paragraph 
(g)(4)(ii)(C) of this section are the same as the name and address of 
the person completing the EDR, the information does not need to be 
repeated here; and
    (3) Name of person, title, and business telephone number, facsimile 
number, and e-mail address (if available).
    (5) EDR. The owner or leaseholder must record the following 
information on an EDR.
    (i) BSAI crab activity chart. Complete a crab activity chart by 
entering the following information: CR fishery code, number of crab 
processing days, dates covered (beginning and ending day, month and 
year), raw crab pounds purchased, product code, process code, crab 
size, crab grade, box size, finished pounds, and whether custom 
processed (Yes or No).
    (ii) Crab processing labor costs. CR fishery code, average number 
of crab processing positions, total man-hours, and total processing 
labor payment.
    (iii) BSAI Crab crew residence. For employees that participated in 
BSAI crab processing, record the locations where they reside and the 
number of employees that are from each residential location, as 
follows:
    (A) If Alaska, enter primary city of residence.
    (B) If state other than Alaska, enter primary state of residence.
    (C) If country other than United States, enter primary country of 
residence.
    (iv) BSAI crab custom processing done for you. CR fishery code, raw 
crab pounds supplied to custom processors, raw crab pounds purchased 
from custom processors, product code, process code, crab size, crab 
grade, box size, finished pounds, and processing fee.
    (v) Raw crab purchases from delivering vessels. CR fishery code, 
crab size, crab grade, raw crab pounds purchased, and gross payment.
    (vi) Annual BSAI crab sales. For affiliated entities and 
unaffiliated entities enter species code, product code, process code, 
crab size, crab grade, box size, finished pounds, and FOB Alaska 
Revenues.
    (vii) BSAI crab-specific plant costs. Total fisheries taxes which 
include the Alaska fisheries business tax, SMAA taxes, and other local 
sales tax on raw fish; processing and packaging materials, equipment 
and supplies; food and provisions; other costs for direct crab labor; 
insurance deductible fees; re-packing costs, broker fees and promotions 
for BSAI crab sales by CR fishery code; observer costs by CR fishery 
code; freight costs for supplies to the plant; freight and handling 
costs for

[[Page 10259]]

processed crab products from the plant; product storage; water, sewer, 
and waste disposal; and other crab specific costs (specify).
    (viii) Plant-specific costs. Record the total annual costs for each 
category. If the reported total cost is not exclusively for BSAI crab 
operations, place an ``X'' in the COST RELATED TO MORE THAN JUST CRAB 
FISHING column. The agency or contracted analyst will prorate this 
amount over all vessel activities: fuel, electricity, lubrication, and 
hydraulic fluids; capitalized expenditures for plant, and equipment; 
R&M for existing plant and equipment; number of employees and salaries 
for foremen, managers and other employees not included in direct labor 
costs; and other plant-specific costs (specify).
    (ix) BSAI crab custom processing done for others. CR fishery code, 
product code, process code, whether OUR CRAB or THEIR CRAB, and 
processing revenue.
    (x) Annual totals for all fisheries. For the calendar year, record 
the total processing days, gross revenue, finished pounds processed, 
and labor costs for your fishing activities in all fisheries in which 
you participated (crab, groundfish, etc.).
    (h) Shoreside processor annual EDR--(1) Requirement. On or before 
May 1 of each year, any owner or leaseholder of a shoreside processor 
that processed crab from a CR fishery must submit to the DCA, at the 
address provided on the form, an EDR for annual data for the previous 
year. For the year 2005, the annual EDR is due on or before May 1, 
2006.
    (2) Instructions. Instructions for submitting a shoreside processor 
annual EDR and certification page are specified in the following table:

------------------------------------------------------------------------
                                                      You must complete
      If you are . . .              And . . .         and submit . . .
------------------------------------------------------------------------
(i) The shoreside processor   (A) You processed     Entire EDR.
 owner.                        BSAI crab in the
                               plant described at
                               paragraph
                               (h)(3)(ii)(B) of
                               this section during
                               this calendar year.
                              (B) No one processed  EDR certification
                               BSAI crab in the      pages.
                               plant described at
                               paragraph
                               (h)(3)(ii)(B) of
                               this section during
                               this calendar year.
                              (C) You leased all    (1) EDR
                               of your IPQ to        certification
                               another party, and    pages.
                               processed no BSAI
                               crab in the plant
                               described at
                               paragraph
                               (h)(3)(ii)(B) of
                               this section during
                               this calendar year.
                                                    (2) Provide the
                                                     name, address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the IPQ
                                                     during this
                                                     calendar year.
                              (D) You leased        (1) Entire EDR.
                               portions of your
                               IPQ to another
                               party, but
                               processed some BSAI
                               crab in the plant
                               described at
                               paragraph
                               (h)(3)(ii)(B) of
                               this section during
                               this calendar year.
                                                    (2) Provide the
                                                     name, address, and
                                                     telephone number of
                                                     the person to whom
                                                     you leased the IPQ
                                                     during this
                                                     calendar year.
(ii) The leaseholder          You operated the      Entire EDR.
 described in paragraph        plant described at
 (h)(1) of this section.       paragraph
                               (h)(3)(ii)(B) of
                               this section and
                               processed some BSAI
                               crab during this
                               calendar year.
------------------------------------------------------------------------

    (3) EDR certification pages. (i) The owner or leaseholder must 
submit the EDR certification pages either:
    (A) As part of the entire EDR. The owner or leaseholder must submit 
the completed EDR certification pages as part of the entire EDR and 
must attest to the accuracy and completion of the EDR by signing and 
dating the certification pages; or
    (B) As a separate document. The owner or leaseholder must submit 
the completed EDR certification pages only, and must attest that they 
meet the conditions exempting them from submitting the EDR, by signing 
and dating the certification pages.
    (ii) The owner or leaseholder must submit the following information 
on the certification pages:
    (A) Calendar year of EDR. Calendar year for the reporting year;
    (B) Shoreside processor information. Shoreside processor name, RCR 
permit number, ADF&G processor code, physical location of land-based 
plant (street address, city, state, zip code), borough assessed value 
of plant and equipment, current estimated market value of plant and 
equipment, and year assessed.
    (C) Owner information. Name of company, partnership, or sole 
proprietorship and business telephone number, facsimile number, and e-
mail address (if available);
    (D) Designated representative. Any owner or leaseholder may appoint 
a designated representative who is an individual for responding to 
questions on the EDR and must ensure that the designated representative 
complies with the regulations in this part. The designated 
representative is the primary contact person for the DCA on issues 
relating to data required in the EDR.
    (E) Person completing the report. (1) Indicate whether the person 
completing this report is the owner, leaseholder, or designated 
representative;
    (2) If the owner is the person completing this report, check the 
correct box. If the name and address of the owner provided in paragraph 
(h)(3)(ii)(C) of this section are the same as the name and address of 
the person completing the EDR, the information does not need to be 
repeated here; and
    (3) Name of person, title, and business telephone number, facsimile 
number, and e-mail address (if available).
    (4) EDR.The owner or leaseholder must record the following 
information on an EDR.
    (i) BSAI Crab activity chart. Complete a crab activity chart by 
entering the following information: CR fishery code, number of crab 
processing days, dates covered (beginning and ending day, month and 
year), raw crab pounds purchased, product code, process code, crab 
size, crab grade, box size, finished pounds, and whether custom 
processed (Yes or No).
    (ii) Crab processing labor costs. CR fishery code, average number 
of crab processing positions, total man-hours, and total processing 
labor payment.
    (iii) BSAI Crab employee residence. For employees that participated 
in BSAI crab processing, record the locations

[[Page 10260]]

where they reside and the number of employees that are from each 
residential location, as follows:
    (A) If Alaska, enter primary city of residence.
    (B) If state other than Alaska, enter primary state of residence.
    (C) If country other than United States, enter primary country of 
residence.
    (iv) BSAI crab custom processing done for you. CR fishery code, 
species code, raw crab pounds supplied to custom processors, raw crab 
pounds purchased from custom processors, product code, process code, 
crab size, crab grade, box size, finished pounds, and processing fee.
    (v) Raw crab purchases from delivering vessels. CR fishery code, 
species code, crab size, crab grade, raw crab pounds purchased, and 
gross payment.
    (vi) Annual BSAI crab sales. For affiliated entities and 
unaffiliated entities enter species code, product code, process code, 
crab size, crab grade, box size, finished pounds, and FOB Alaska 
Revenues.
    (vii) BSAI crab-specific plant costs. Total of fisheries taxes 
which include the Alaska fisheries business tax, SMAA taxes, and other 
local sales tax on raw fish; processing and packaging materials, 
equipment and supplies by city and state; food and provisions; other 
costs for direct crab labor; insurance deductible fees; re-packing 
costs; broker fees and promotions for BSAI crab sales by CR fishery 
code; observer costs by CR fishery code; freight costs for supplies to 
the plant; freight and handling costs for processed crab products from 
the plant; product storage; water, sewer, and waste disposal; and other 
crab specific costs (specify).
    (viii) Plant-specific costs. Record the total annual costs for each 
category. If the reported total cost is not exclusively for BSAI crab 
operations, place an ``X'' in the COST RELATED TO MORE THAN JUST CRAB 
FISHING column. The agency or contracted analyst will prorate this 
amount over all vessel activities: fuel, electricity, lubrication, and 
hydraulic fluids; capitalized expenditures for plant and equipment by 
city and state; R&M for existing plant and equipment by city and state; 
number of employees and salaries for foremen, managers and other 
employees not included in direct labor costs; and other plant-specific 
costs (specify).
    (ix) BSAI crab custom processing performed for others. CR fishery 
code, species code, product code, process code, whether OUR CRAB or 
THEIR CRAB, and processing revenue.
    (x) Annual totals for all fisheries. For the calendar year, record 
the total processing days, gross revenue, finished pounds processed, 
and labor costs for your fishing activities in all fisheries in which 
you participated (crab, groundfish, etc.).
    (i) Verification of data. (1) The DCA shall conduct verification of 
information with the owner or leaseholder.
    (2) The owner or leaseholder must respond to inquiries by the DCA 
within 20 days of the date of issuance of the inquiry.
    (3) The owner or leaseholder must provide copies of additional data 
to facilitate verification by the DCA. The DCA auditor may review and 
request copies of additional data provided by the owner or leaseholder, 
including but not limited to: previously audited or reviewed financial 
statements, worksheets, tax returns, invoices, receipts, and other 
original documents substantiating the data.
    (j) DCA authorization. The DCA is authorized to request voluntary 
submission of economic data specified in this section from persons who 
are not required to submit an EDR under this section.


Sec.  680.7  Prohibitions.

    In addition to the general prohibitions specified in Sec.  600.725 
of this chapter, it is unlawful for any person to do any of the 
following:
    (a) Receiving and processing CR crab. (1) Process any CR crab that 
has not been weighed by an RCR on:
    (i) A scale approved by the State in which the RCR is located and 
that meets the requirements described in Sec.  680.23(f); or
    (ii) Onboard a catcher/processor RCR on a scale approved by NMFS as 
described in Sec.  680.23(e).
    (2) Receive CR crab harvested under an IFQ permit in any region 
other than the region for which the IFQ permit is designated.
    (3) Use IPQ on board a vessel outside of the territorial sea or 
internal waters of the State of Alaska.
    (4) Use IPQ in any region other than the region for which the IPQ 
is designated.
    (5) Receive any crab harvested under a Class A IFQ permit in excess 
of the total amount of unused IPQ held by the RCR.
    (6) Receive crab harvested under a Class B IFQ permit on a vessel 
if that vessel was used to harvest and process any crab in that crab QS 
fishery during the same crab fishing season.
    (7) For an IPQ holder to use more IPQ crab than the maximum amount 
of IPQ that may be held by that person. Use of IPQ includes all IPQ 
held by that person and all IPQ crab that are received by any RCR at 
any shoreside crab processor or stationary floating crab processor in 
which that IPQ holder has a 10 percent or greater direct or indirect 
ownership interest.
    (8) For a shoreside crab processor or stationary floating crab 
processor that does not have at least one owner with a 10 percent or 
greater direct or indirect ownership who also holds IPQ in that crab QS 
fishery, to be used to receive in excess of 30 percent of the IPQ 
issued for that crab fishery.
    (b) Landing CR crab. (1) Remove retained and unprocessed CR crab 
from a vessel at any location other than to an RCR operating under an 
approved catch monitoring plan as described in Sec.  680.23(g) unless 
that crab is accompanied by a signed landing receipt showing the crab 
was properly landed.
    (2) Remove any CR crab processed at sea from any vessel before 
completing a landing report, as defined at Sec.  680.5(c), for all such 
CR crab onboard.
    (3) Resume fishing for CR crab or take CR crab on board a vessel 
once a landing has commenced and until all CR crab are landed.
    (4) Fail to remove all processed crab harvested under a CPO or a 
CPC IFQ permit to an onshore location within the United States, 
accessible by road or regularly scheduled air service, and to weigh 
that crab product on a scale approved by the State in which the crab is 
weighed.
    (5) Make an IFQ crab landing except by an individual who holds 
either a crab IFQ permit or a crab IFQ hired master permit issued under 
Sec.  680.4 in his or her name.
    (6) Make an IFQ crab landing without the following on board: a copy 
of the crab IFQ permit to be debited for the landing; and, if 
applicable, a copy of the crab IFQ hired master permit issued under 
Sec.  680.4 in the name of the person making the landing.
    (7) For a Crab IFQ hired master to make an IFQ crab landing on any 
vessel other than the vessel named on the Crab IFQ hired master permit.
    (c) Harvest crab. (1) Harvest any BSAI crab with any vessel not 
named on a valid Federal crab vessel permit.
    (2) Harvest IFQ crab with any vessel that does not use functioning 
VMS equipment as required by Sec.  680.23.
    (3) Harvest on any vessel more IFQ crab than are authorized under 
Sec.  680.42.
    (4) Harvest crab under a CVC or a CPC IFQ permit unless the person 
named on the IFQ permit is on board that vessel.
    (5) Harvest crab under a CPO or CPC permit unless all scales used 
to weigh

[[Page 10261]]

crab, or used by an observer for sampling crab, have passed an inseason 
scale test according to Sec.  680.23(e)(1).
    (d) Recordkeeping and reporting. (1) Fail to submit information on 
any report, application, or statement required under this part.
    (2) Submit false information on any report, application, or 
statement required under this part.
    (e) Permits. (1) Retain IFQ crab without a valid crab IFQ permit 
for that fishery on board the vessel.
    (2) Retain IFQ crab on a vessel in excess of the total amount of 
unharvested crab IFQ, for a crab QS fishery, that is currently held by 
all crab IFQ permit holders or Crab IFQ Hired Masters aboard that 
vessel.
    (3) Receive Class B IFQ by transfer if a person holds PQS or IPQ.
    (4) Receive Class B IFQ by transfer if you are affiliated with a 
person who holds PQS or IPQ.
    (f) IPQ. Use IPQ as collateral or otherwise leverage IPQ to acquire 
an ownership interest in Class B IFQ.
    (g) General. (1) Possess, buy, sell, or transport any crab 
harvested or landed in violation of any provision of this part.
    (2) Violate any other provision under this part.
    (h) Inseason action. Conduct any fishing contrary to notification 
of inseason action closure, or adjustment issued under Sec.  680.22.


Sec.  680.8  Facilitation of enforcement.

    See Sec.  600.730 of this chapter.


Sec.  680.9  Penalties.

    (a) Any person committing, or a fishing vessel used in the 
commission of, a violation of the Magnuson-Stevens Act, or any 
regulation issued under the Magnuson-Stevens Act, is subject to the 
civil and criminal penalty provisions, permit sanctions, and civil 
forfeiture provisions of the Magnuson-Stevens Act, to part 600 of this 
chapter, to 15 CFR part 904 (Civil Procedures), and to other applicable 
law. Penalties include but are not limited to permanent or temporary 
sanctions to PQS, QS, IPQ, IFQ, Crab IFQ hired master, Federal crab 
vessel permit, or RCR permits.
    (b) In the event a holder of any IPQ is found by a court of 
competent jurisdiction, either in an original action in that court or 
in a proceeding to enforce or review the findings or orders of any 
Government agency having jurisdiction under the antitrust laws, to have 
violated any of the provisions of antitrust laws in the conduct of the 
licensed activity, the Secretary of Commerce may revoke all or a 
portion of such IPQ. The antitrust laws of the United States include, 
but are not limited to, the following Acts:
    (1) The Sherman Act, 15 U.S.C. 1-7;
    (2) The Wilson Tariff Act, 15 U.S.C. 8-11;
    (3) The Clayton Act, 15 U.S.C. 12-27; and
    (4) The Federal Trade Commission Act, 15 U.S.C. 12 and 45(a).

Subpart B--Management Measures


Sec.  680.20  Arbitration System.

    (a) Applicability--(1) Arbitration System. All CVO QS, Arbitration 
IFQ, Class A IFQ holders, CVC QS holders after June 30, 2005, PQS and 
IPQ holders must enter the contracts as prescribed in this section that 
establish the Arbitration System. Certain parts of the Arbitration 
System are voluntary for some parties, as specified in this section. 
All contract provisions will be enforced by parties to those contracts.
    (2) Open negotiation. Any holder of uncommitted IFQ may negotiate 
with any holder of uncommitted IPQ, the price and delivery terms for 
that season or for future seasons for any uncommitted IFQ and 
uncommitted IPQ. Uncommitted IFQ holders and uncommitted IPQ holders 
may freely contact each other and initiate open negotiations.
    (b) Eligibility for Arbitration System--(1) Arbitration 
Organization. The following persons are the only persons eligible to 
join an Arbitration Organization:
    (i) Holders of CVO and CVC QS,
    (ii) Holders of PQS,
    (iii) Holders of Arbitration IFQ,
    (iv) Holders of Class A IFQ affiliated with a PQS or IPQ holder, 
and
    (v) Holders of IPQ.
    (2) Persons eligible to use negotiation and Binding Arbitration 
procedures. The following persons are the only persons eligible to 
enter contracts with a Contract Arbitrator to use the negotiation and 
Binding Arbitration procedures described in paragraph (h) of this 
section to resolve price and delivery disputes or negotiate remaining 
contract terms not previously agreed to by IFQ and IPQ holders under 
other negotiation approaches:
    (i) Holders of Arbitration IFQ, and
    (ii) Holders of IPQ.
    (3) Persons ineligible to use negotiation and Binding Arbitration 
procedures. Holders of IFQ that are affiliated with holders of PQS or 
IPQ are ineligible to enter contracts with a Contract Arbitrator to use 
the negotiation and Binding Arbitration procedures described in 
paragraph (h) of this section to resolve price and delivery disputes or 
negotiate remaining contract terms not previously agreed to by IFQ and 
IPQ holders under other negotiation approaches.
    (c) Preseason requirements for joining an Arbitration Organization. 
All holders of CVO QS, CVC QS after June 30, 2008, PQS, Arbitration 
IFQ, Class A IFQ affiliated with a PQS or IPQ holder, and IPQ must join 
and maintain a membership in an Arbitration Organization as specified 
in paragraph (d) of this section. All holders of QS, PQS, IFQ, or IPQ 
must join an Arbitration Organization at the following times:
    (1) For QS holders and PQS holders except as provided for in 
paragraph (c)(3) of this section, not later than May 1 of each year for 
the crab fishing year that begins on July 1 of that year.
    (2) For IFQ holders and IPQ holders, not later than 15 days after 
the issuance of IFQ and IPQ for that crab QS fishery if that IFQ or IPQ 
holder does not also hold QS or PQS.
    (3) During 2005, QS and PQS holders must join an Arbitration 
Organization as described in paragraph (d) of this section not later 
than August 15, 2005.
    (4) Persons receiving QS, PQS, IFQ, or IPQ by transfer after these 
dates must join an Arbitration Organization at the time of receiving 
the QS, PQS, IFQ, or IPQ by transfer.
    (d) Formation process for an Arbitration Organization. (1) 
Arbitration Organizations must be formed to select and contract a 
Market Analyst, Formula Arbitrator, Contract Arbitrator(s), and 
establish the Arbitration System, including the payment of costs of 
arbitration, described in this section for each crab QS fishery. All 
persons defined in paragraph (a)(1) of this section must join an 
Arbitration Organization.
    (i) Arbitration QS/IFQ Arbitration Organization. Holders of 
Arbitration QS and Arbitration IFQ must join an Arbitration QS/IFQ 
Arbitration Organization. This Arbitration Organization may not have 
members who are not holders of Arbitration QS or Arbitration IFQ. 
Arbitration QS holders and Arbitration IFQ holders may join separate 
Arbitration QS/IFQ Arbitration Organizations. The mechanism for forming 
an Arbitration Organization is determined by the members of the 
organization.
    (ii) PQS/IPQ Arbitration Organization. Holders of PQS or IPQ must 
join a PQS/IPQ Arbitration Organization. This Arbitration Organization 
may not have members who are not holders of PQS or IPQ. PQS holders and 
IPQ holders may join separate PQS/IPQ Arbitration Organizations. The 
mechanism for forming an Arbitration Organization is determined by the 
members of the organization.

[[Page 10262]]

    (iii) Affiliated QS/IFQ Arbitration Organization. Holders of CVO QS 
or Class A IFQ affiliated with a PQS or IPQ holder must join an 
Affiliated QS/IFQ Arbitration Organization. This Arbitration 
Organization may not have members who are not holders of QS or IFQ 
affiliated with a PQS or IPQ holder. CVO QS holders and Class A IFQ 
holders may join separate Affiliated QS/IFQ Arbitration Organizations. 
The mechanism for forming an Arbitration Organization is determined by 
the members of the organization.
    (iv) Limitation on joining an Arbitration Organization. For a crab 
QS fishery during a crab fishing year, a person who holds:
    (A) PQS/IPQ may join only one PQS/IPQ Arbitration Organization;
    (B) Affiliated QS/IFQ may join only one Affiliated QS/IFQ 
Arbitration Organization; and
    (C) Arbitration QS/IFQ may join only one Arbitration QS/IFQ 
Organization.
    (2) Each Arbitration Organization must submit a complete Annual 
Arbitration Organization report to NMFS. A complete report must 
include:
    (i) A copy of the business license of the Arbitration Organization;
    (ii) A statement identifying the members of the organization and 
the amount of Arbitration QS and Arbitration IFQ, Non-Arbitration QS 
and Non-Arbitration IFQ, or PQS and IPQ held by each member and 
represented by that Arbitration Organization;
    (iii) QS, PQS, IFQ, and IPQ ownership information on the members of 
the organization;
    (iv) Management organization information, including:
    (A) The bylaws of the Arbitration Organization;
    (B) A list of key personnel of the management organization 
including, but not limited to, the board of directors, officers, 
representatives, and any managers;
    (v) The name of the Arbitration Organization, permanent business 
mailing addresses, name of contact persons and additional contact 
information of the managing personnel for the Arbitration Organization, 
resumes of management personnel; and
    (vi) A copy of all minutes of any meeting held by the Arbitration 
Organization or any members of the Arbitration Organization.
    (3) An Arbitration Organization, with members who are QS or PQS 
holders, must submit a complete Annual Arbitration Organization Report 
to NMFS by electronic mail to the Regional Administrator, NMFS, or by 
mail addressed to the Regional Administrator, NMFS, Post Office Box 
21668, Juneau, Alaska 99802 by:
    (i) August 20, 2005 for the crab fishing year beginning on July 1, 
2005.
    (ii) May 1 of each subsequent year for the crab fishing year 
beginning on July 1 of that year.
    (4) An Arbitration Organization, with members who are IFQ or IPQ 
holders, must submit a complete Annual Arbitration Organization Report 
to NMFS by electronic mail to the Regional Administrator, NMFS, or by 
mail addressed to the Regional Administrator, NMFS, Post Office Box 
21668, Juneau, Alaska 99802 by not later than 15 days after the 
issuance of IFQ and IPQ for that crab QS fishery.
    (e) Role of Arbitration Organization(s) and annual requirements. 
(1) General. The members of each Arbitration Organization must enter 
into a contract that specifies the terms and conditions of 
participation in the organization.
    (i) The contract among members of an Arbitration QS/IFQ Arbitration 
Organization, or a PQS/IPQ Arbitration Organization shall include the 
terms, conditions, and provisions specified in paragraph (e)(2) of this 
section.
    (ii) The contract among members of an Affiliated QS/IFQ Arbitration 
Organization shall include the terms, conditions, and provisions in 
paragraph (e)(3) of this section.
    (2) Provisions for Arbitration QS/IFQ Arbitration Organizations, 
and PQS/IPQ Arbitration Organizations--(i) Selection of Market Analyst, 
Formula Arbitrator, and Contract Arbitrator(s). A provision authorizing 
the Arbitration Organization to act on behalf of its members in the 
selection of and contracting with the Market Analyst, Formula 
Arbitrator, and Contract Arbitrator(s) under paragraph (e)(4) of this 
section.
    (ii) Confidentiality of information. A provision that a member that 
is a party to a Binding Arbitration proceeding shall sign a 
confidentiality agreement with the party with whom it is arbitrating 
stating they will not disclose at any time to any person any 
information received from the Contract Arbitrator or any other party in 
the course of the arbitration. That confidentiality agreement shall 
specify the potential sanctions for violating the agreement.
    (iii) Provision of information to members. A provision requiring 
the Arbitration Organization to provide to its members:
    (A) A copy of the contracts for the Market Analyst, Formula 
Arbitrator, and Contract Arbitrator for each fishery in which the 
member participates; and
    (B) A copy of the Market Report and the Non-Binding Price Formula 
for each fishery in which the member participates within 5 days of its 
release.
    (iv) Information release. (A) A provision requiring that the 
Arbitration Organization deliver to NMFS any data, information, and 
documents generated pursuant to this section.
    (B) In the case of a PQS/IPQ Arbitration Organization(s):
    (1) A provision that requires the PQS/IPQ Arbitration Organization 
to provide for the delivery of the names of and contact information for 
its members who hold uncommitted IPQ, and to identify the regional 
designations and amounts of such uncommitted IPQ, to Arbitration QS/IFQ 
Arbitration Organizations either directly or through a third-party data 
provider so the information may be provided to any persons that hold 
uncommitted Arbitration IFQ for purposes of Share Matching, Binding 
Arbitration, and Post Arbitration Opt-in;
    (2) A provision that prohibits the disclosure of any information 
received under this provision to any person except those Arbitration 
QS/IFQ Arbitration Organizations, or their third-party data provider so 
that information may be provided to holders of uncommitted Arbitration 
IFQ. The provision will require that information concerning uncommitted 
IPQ be updated within 24 hours of a change of any such information, 
including any commitment of IPQ, and that information be provided to 
those persons that hold uncommitted Arbitration IFQ. This provision may 
include a mechanism to provide information to uncommitted Arbitration 
IFQ holders through a secure Web site, or through other electronic 
means;
    (3) A provision that requires the PQS/IPQ Arbitration Organization 
to arrange for the delivery to all holders of uncommitted Arbitration 
IFQ through the Arbitration QS/IFQ Arbitration Organizations holders or 
their third-party data provider the terms of a decision of a Contract 
Arbitrator in a Binding Arbitration proceeding involving a member that 
holds uncommitted IPQ within 24 hours of notice of that decision. This 
provision may include a mechanism to provide information to uncommitted 
Arbitration IFQ holders through a secure Web site, or through other 
electronic means; and
    (4) A provision that requires the holders of uncommitted IPQ to 
provide information concerning such uncommitted IPQ as necessary for 
the PQS/IPQ Arbitration Organization to comply with this paragraph and 
prohibits the disclosure of any such information by such holder to any

[[Page 10263]]

person, except as directed in this paragraph.
    (C) In the case of a Arbitration QS/IFQ Organization(s):
    (1) A provision that requires Arbitration QS/IFQ Arbitration 
Organizations holders, or their third-party data provider to provide 
information concerning uncommitted IPQ from PQS/IPQ Arbitration 
Organization(s) as necessary for the Arbitration IFQ holder to use that 
information in a timely manner.
    (2) A provision that prohibits the disclosure of any such 
information concerning uncommitted IPQ from PQS/IPQ Arbitration 
Organization to any person, except as directed therein.
    (D) Third-party Data Provider provision. Notwithstanding any 
provision in this section, an Arbitration Organization required to 
supply or receive information under this section must hire 
administrative personnel or may contract with a person who will arrange 
for the receipt and delivery of information as required. Any such third 
party that receives such information cannot be affiliated with or 
employed by or related to any QS, PQS, IFQ, or IPQ holder in any crab 
QS fishery and must enter a contract that:
    (1) Prohibits such third person from releasing any information 
received to any person except as specifically provided by this section; 
and
    (2) Prohibits such third person from entering taking any employment 
from or establishing any relationship, except under a contract meeting 
the requirements of this section for a period of 3 years after the 
termination of the contract.
    (v) Costs. A provision that authorizes the Arbitration Organization 
to enter into a contract with all other Arbitration Organizations for 
the payment of the costs of arbitration as specified under this 
section.
    (A) The Arbitration Organizations must establish a contract that 
requires the payment of all costs of the Market Analyst, Formula 
Arbitrator, and Contract Arbitrator(s), dissemination of information 
concerning uncommitted IPQ to holders of uncommitted Arbitration IFQ, 
and the costs of such persons associated with lengthy season approach, 
share matching approach, Binding Arbitration, quality and performance 
disputes, to be shared equally so that IPQ holders pay 50 percent of 
the costs and Arbitration IFQ holders and Class A IFQ holders pay 50 
percent of the costs.
    (B) Each person shall pay an amount of the cost based on the amount 
of IPQ or IFQ held by that person at the time of application to an 
Arbitration Organization.
    (C) PQS holders shall advance all costs and shall collect the 
contribution of IFQ holders at landing subject to terms mutually agreed 
to by the Arbitration Organizations.
    (vi) Negotiation methods. A provision that prohibits the 
Arbitration Organization from engaging in any contract negotiations on 
behalf of its members, except for those necessary to hire the Market 
Analyst, Formula Arbitrator, and Contract Arbitrator(s).
    (vii) Enforcement of the contract. Violations of the contract shall 
be enforced under civil law.
    (3) Provisions applying to Affiliated QS/IFQ Arbitration 
Organizations. The provisions that allow for the provision of 
information to members, payment of costs, limits on the transfer of QS, 
PQS, IFQ, and IPQ, and enforcement of the contract as described under 
paragraphs (e)(2)(iv), (v), (vii), and (viii) will apply to the 
contract among members of an Affiliated QS/IFQ Arbitration 
Organization(s).
    (4) Process for selection of Market Analyst, Formula Arbitrator, 
and Contract Arbitrator(s). (i) For each crab fishing year, QS holders 
who are members of Arbitration QS/IFQ Arbitration Organization(s) and 
PQS holders who are members of PQS/IPQ Arbitration Organization(s), by 
mutual agreement, will select one Market Analyst, one Formula 
Arbitrator, and Contract Arbitrator(s) for each crab QS fishery. The 
number of Contract Arbitrators selected for each fishery will be 
subject to the mutual agreement of those Arbitration Organizations. The 
selection of the Market Analyst and the Formula Arbitrator must occur 
in time to ensure the Market Report and non-binding price formula are 
produced within the time line established in paragraph (e)(4)(ii) of 
this section.
    (ii) The Arbitration Organizations representing Arbitration QS 
holders and PQS holders in a crab fishery shall establish by mutual 
agreement the contractual obligations of the Market Analyst, Formula 
Arbitrator, and Contract Arbitrator(s) for each fishery, which shall 
provide that the Market Report and Non-Binding Price Formula are 
produced not later than 50 days prior to the first crab fishing season 
for that crab QS fishery in that crab fishing year except as provided 
in paragraph (e)(6) of this section. The contractual obligations of the 
Market Analyst, the Formula Arbitrator and Contract Arbitrators will be 
enforced by the parties to the contract.
    (iii) The same person may be chosen for the positions of Market 
Analyst and Formula Arbitrator for a fishery.
    (iv) A person selected to be a Contract Arbitrator may not be the 
Market Analyst or Formula Arbitrator, and shall not be affiliated with, 
employed by, or otherwise associated with, the Market Analyst or 
Formula Arbitrator, for that fishery.
    (5) Notification to NMFS. Not later than June 1 for that crab 
fishing year, except as provided in paragraph (e)(6) of this section, 
the Arbitration Organizations representing the holders of Arbitration 
QS and PQS in each fishery shall notify NMFS of the persons selected as 
the Market Analyst, Formula Arbitrator, and Contract Arbitrator(s) for 
the fishery by electronic mail addressed to the Regional Administrator, 
NMFS, or by mail addressed to the Regional Administrator, NMFS, Post 
Office Box 21668, Juneau, Alaska 99802. The Arbitration Organizations 
shall include a list of Arbitration Organizations that mutually agreed 
to the selection of the Market Analyst, Formula Arbitrator, and 
Contract Arbitrator(s) and signatures of representatives of those 
Arbitration Organizations and a copy of the contract with Market 
Analyst, the Formula Arbitrator, and each Contract Arbitrator. The 
notification must include a curriculum vitae and other relevant 
biographical material for each of these individuals.
    (6) First-year implementation. During 2005, the selection of and 
establishment of the contractual obligations of the Market Analyst, 
Formula Arbitrator, and Contract Arbitrator(s) as required under this 
section shall occur not later than September 1, 2005.
    (7) IFQ and IPQ Issuance and Selection of the Market Analyst, 
Formula Arbitrator, and Contract Arbitrator(s). NMFS will not issue CVO 
IFQ, CVC IFQ after July 1, 2008, and IPQ for a crab QS fishery until 
Arbitration Organizations establish by mutual agreement contracts with 
a Market Analyst, Formula Arbitrator, and Contract Arbitrators for that 
fishery and notify NMFS.
    (f) Roles and standards for the Market Analyst and process for 
producing the Market Report. (1) For each crab QS fishery, the 
Arbitration QS/IFQ Arbitration Organizations and the PQS/IPQ 
Arbitration Organizations shall establish a contract with the Market 
Analyst to produce a Market Report for the fishery. The terms of this 
contract must specify that the Market Analyst must produce a Market 
Report that shall provide an analysis of the market for products of 
that fishery.

[[Page 10264]]

    (2) The contract with the Market Analyst must specify that:
    (i) The Market Analyst shall base the Market Report on:
    (A) A survey of the market for crab products produced by the 
fishery; and
    (B) Information provided by the IPQ and IFQ holders regarding 
market conditions and expectations.
    (ii) To the extent IPQ and IFQ holders provide information 
requested by the Market Analyst, they must provide such information 
directly to the Market Analyst and not to any other IPQ holder or IFQ 
holder, except that IFQ holders that are members of any single FCMA 
cooperative may share such information with other members of the same 
FCMA cooperative who are authorized to participate in the arbitration 
system.
    (iii) The Market Analyst:
    (A) May meet with IFQ holders who are members of any single FCMA 
cooperative collectively;
    (B) Shall meet with IPQ holders individually;
    (C) Shall meet with distinct crab FCMA cooperatives individually; 
and
    (D) Shall meet with IFQ holders who are not members of the same 
FCMA cooperatives individually.
    (iv) The information provided to the Market Analyst by IPQ and IFQ 
holders must be historical information based on activities occurring 
more than three months prior to the generation of the Market Report.
    (v) The Market Analyst shall keep confidential the identity of the 
source of any particular information contained in the report. The 
Market Analyst may note generally the sources from which it gathered 
information. The report shall:
    (A) Include only data that is based on information regarding 
activities occurring more than three months prior to the generation of 
the Market Report;
    (B) Include only statistics for which there are at least five 
providers reporting data upon which each statistic is based and for 
which no single provider's data represents more than 25 percent of a 
weighted basis of that statistic; and
    (C) Sufficiently aggregate any information disseminated in the 
report such that it would not identify specific price information by an 
individual provider of information.
    (vi) The Market Report shall consider the following factors:
    (A) Current ex-vessel prices, including ex-vessel prices received 
for crab harvested under Class A IFQ, Class B IFQ, and CVC IFQ permits;
    (B) Consumer and wholesale product prices for the processing sector 
and the participants in the arbitration (recognizing the impact of 
sales to affiliates on wholesale pricing);
    (C) Innovations and developments of the harvesting and processing 
sectors and the participants in the arbitration (including new product 
forms);
    (D) Efficiency and productivity of the harvesting and processing 
sectors (recognizing the limitations on efficiency and productivity 
arising out of the management program structure);
    (E) Quality (including quality standards of markets served by the 
fishery and recognizing the influence of harvest strategies on the 
quality of landings);
    (F) The interest of maintaining financially healthy and stable 
harvesting and processing sectors;
    (G) Safety and expenditures for ensuring adequate safety;
    (H) Timing and location of deliveries; and
    (I) The cost of harvesting and processing less than the full IFQ or 
IPQ allocation (underages) to avoid penalties for overharvesting IFQ 
and a mechanism for reasonably accounting for deadloss.
    (vii) There shall only be one annual Market Report for each 
fishery.
    (viii) The Market Analyst shall not issue interim or supplemental 
reports for each fishery.
    (3) The Market Analyst shall not disclose any information to any 
person not required under this section.
    (4) In 2005, the Market Report shall be produced not later than 
September 30, 2005 or 25 days prior to the first crab fishing season 
for that crab QS fishery whichever is later in that crab fishing year 
as required under this section.
    (i) In all subsequent years, the Market Report shall be produced 
not later than 50 days prior to the first crab fishing season for that 
crab QS fishery.
    (ii) The contract with the Market Analyst must specify that the 
Market Analyst will provide in that crab fishing year to:
    (A) Each Arbitration Organization in that fishery;
    (B) NMFS by electronic mail to the Regional Administrator, NMFS, or 
addressed to the Regional Administrator, NMFS, Post Office Box 21668, 
Juneau, Alaska 99802; and
    (C) The Formula Arbitrator and any Contract Arbitrator(s) for the 
fishery.
    (g) Roles and standards for the Formula Arbitrator. (1) For each 
crab QS fishery, the Arbitration QS/IFQ Arbitration Organizations and 
the PQS/IPQ Arbitration Organizations shall establish a contract with 
the Formula Arbitrator to develop a Non-Binding Price Formula.
    (2) The contract with the Formula Arbitrator must specify that:
    (i) The Formula Arbitrator will conduct a single annual fleet-wide 
analysis of the markets for crab to establish a Non-Binding Price 
Formula under which a fraction of the weighted average first wholesale 
prices for crab products from the fishery may be used to set an ex-
vessel price; and
    (ii) The Non-Binding Price Formula shall:
    (A) Be based on the historical distribution of first wholesale 
revenues between fishermen and processors in the aggregate based on 
arm's length first wholesale prices and ex-vessel prices, taking into 
consideration the size of the harvest in each year; and
    (B) Establish a price that preserves the historical division of 
revenues in the fishery while considering the following:
    (1) Current ex-vessel prices, including ex-vessel prices received 
for crab harvested under Class A, Class B, and CVC IFQ permits;
    (2) Consumer and wholesale product prices for the processing sector 
and the participants in arbitrations (recognizing the impact of sales 
to affiliates on wholesale pricing);
    (3) Innovations and developments of the harvesting and processing 
sectors and the participants in arbitrations (including new product 
forms);
    (4) Efficiency and productivity of the harvesting and processing 
sectors (recognizing the limitations on efficiency and productivity 
arising out of the management program structure);
    (5) Quality (including quality standards of markets served by the 
fishery and recognizing the influence of harvest strategies on the 
quality of landings);
    (6) The interest of maintaining financially healthy and stable 
harvesting and processing sectors;
    (7) Safety and expenditures for ensuring adequate safety;
    (8) Timing and location of deliveries; and
    (9) The cost of harvesting and processing less than the full IFQ or 
IPQ allocation (underages) to avoid penalties for overharvesting IFQ 
and a mechanism for reasonably accounting for deadloss.
    (C) Include identification of various relevant factors such as 
product form, delivery time, and delivery location.
    (D) Consider the ``highest arbitrated price'' for the fishery from 
the previous crab fishing season, where the ``highest arbitrated 
price'' means the highest arbitrated price for arbitrations of IPQ and 
Arbitration IFQ which represent a minimum of at least 7 percent of the 
IPQ resulting from the PQS in that fishery. For purposes of this 
process, the Formula Arbitrator may aggregate up to three arbitration 
findings to collectively equal a minimum of 7 percent of the IPQ. When 
arbitration findings are

[[Page 10265]]

aggregated with 2 or more entities, the lesser of the arbitrated prices 
of the arbitrated entities included to attain the 7 percent minimum be 
considered for the highest arbitrated price.
    (iii) The Non-Binding Price Formula may rely on any relevant 
information available to the Formula Arbitrator, including, but not 
limited to,
    (A) Information provided by the QS, PQS, IPQ and IFQ holders in the 
fishery, and
    (B) The Market Report for the fishery.
    (iv) The Formula Arbitrator:
    (A) May meet with IFQ holders who are members of any single FCMA 
cooperative collectively;
    (B) Shall meet with IPQ holders individually;
    (C) Shall meet with distinct FCMA cooperatives individually; and
    (D) Shall meet with IFQ holders who are not members of the same 
FCMA cooperative individually.
    (v) The Formula Arbitrator may request any relevant information 
from QS, PQS, IPQ, and IFQ holders in the fishery, but the Formula 
Arbitrator shall not have subpoena power.
    (vi) The Formula Arbitrator may obtain information from persons 
other than QS, PQS, IPQ, and IFQ holders in the fishery, if those 
persons agree to provide such data. Any information that is provided 
must be based on activities occurring more than three months prior to 
the date of submission to the Formula Arbitrator.
    (vii) The Formula Arbitrator shall keep confidential the 
information that is not publicly available and not disclose the 
identity of the persons providing specific information.
    (viii) (A) In 2005, the non-binding price formula shall be produced 
not later than September 30, 2005 or 25 days prior to the first crab 
fishing season for that crab QS fishery whichever is later in that crab 
fishing year as required under this section.
    (B) In all subsequent years, the non-binding price formula shall be 
produced not later than 50 days prior to the first crab fishing season 
for that crab QS fishery.
    (C) The contract with the Formula Arbitrator must specify that the 
Formula Arbitrator will provide the non-binding price formula in that 
crab fishing year to:
    (1) Each Arbitration Organization in that fishery;
    (2) NMFS by electronic mail to the Regional Administrator, NMFS, or 
addressed to the Regional Administrator, NMFS, Post Office Box 21668, 
Juneau, Alaska 99802; and
    (3) The Market Analyst and all Contract Arbitrators in the fishery.
    (ix) The Formula Arbitrator shall not disclose any information to 
any person not required under this section, except as permitted by 
paragraph (j) of this section.
    (h) Roles and standards for the Contract Arbitrator(s)--(1) 
General. For each crab QS fishery, the Arbitration QS/IFQ Arbitration 
Organizations and PQS/IPQ Arbitration Organizations shall establish a 
contract with all Contract Arbitrators in that fishery that specifies 
that each Contract Arbitrator may be selected to resolve a dispute 
concerning the terms of delivery, price, or other factors in the 
fishery.
    (2) Selection of Contract Arbitrators. The contract with the 
Contract Arbitrator shall specify the means by which the Contract 
Arbitrator will be selected to resolve specific disputes. This contract 
must specify that for any dispute for which the Contract Arbitrator is 
selected, the Contract Arbitrator will comply with the last best offer 
arbitration method as set forth in this section.
    (3) Negotiation and Binding Arbitration Procedure. The contract 
with the Contract Arbitrator(s) shall specify the following approaches 
for negotiation and Binding Arbitration among members of the 
Arbitration Organizations:
    (i) Restrictions on collective negotiation. An IFQ and an IPQ 
holder may negotiate individually. Groups of IFQ holders may negotiate 
collectively with an IPQ holder only under the following provisions:
    (A) Members of an FCMA cooperatives may participate collectively 
with other members of the same FCMA cooperative in Binding Arbitration 
except as otherwise provided under this section.
    (B) Members of different FCMA cooperatives shall not participate 
collectively in Binding Arbitration.
    (C) IPQ holders shall not participate collectively. Only one IPQ 
holder shall enter into Binding Arbitration with any IFQ holder or IFQ 
holder(s).
    (D) An Arbitration Organization must not negotiate on behalf of a 
member. This shall not prohibit the members of an Arbitration IFQ 
Arbitration Organization from negotiation if the Arbitration 
Organization qualifies as an FCMA cooperative.
    (ii) Open negotiations. At any time prior to the date of the first 
crab fishing season of a crab fishing year for that crab QS fishery, 
any holder of uncommitted Arbitration IFQ may negotiate with any holder 
of uncommitted IPQ, the price and delivery terms for that season for 
any uncommitted IFQ and uncommitted IPQ.
    (A) Uncommitted Arbitration IFQ holders and Uncommitted IPQ holders 
may freely contact each other and initiate open negotiations.
    (B) If Arbitration IFQ holders and IPQ holders do not reach an 
agreement on price, delivery terms, or other terms after committing 
shares, an Arbitration IFQ holder may initiate Binding Arbitration in 
accordance with the procedures specified in this section in order to 
resolve disputes in those price, delivery terms, or other terms.
    (C) Once IFQ or IPQ has been committed, the IFQ holder and IPQ 
holder cannot engage in open negotiation using those shares.
    (iii) Lengthy season approach. (A) Prior to the date of the first 
crab fishing season for that crab QS fishery in that crab fishing year 
a committed IPQ holder and one or more committed Arbitration IFQ 
holders may choose to adopt a Lengthy Season approach. The Lengthy 
Season approach is an alternative method to the Binding Arbitration 
proceedings.
    (B) A Lengthy Season approach allows a committed IPQ holder and a 
committed Arbitration IFQ holder to agree to postpone negotiation of 
specific contract terms until a time during the crab fishing year as 
agreed upon by the Arbitration IFQ holder and IPQ holder participating 
in the negotiation. The Lengthy Season approach allows the Arbitration 
IFQ holders and IPQ holder involved in the negotiation to postpone 
Binding Arbitration, if necessary, until a time during the crab fishing 
year. If the parties ready a final agreement on the contract terms, 
Binding Arbitration is not necessary.
    (C) If a committed IPQ holder and one or more committed Arbitration 
IFQ holder(s) are unable to reach an agreement on whether to adopt a 
Lengthy Season approach, they may request mediation to assist the 
parties in determining whether to adopt a Lengthy Season approach. The 
parties may request a Contract Arbitrator to act as a mediator. If the 
mediation proves unsuccessful or is not selected, the Arbitration IFQ 
holder may initiate enter Binding Arbitration to determine whether to 
adopt a lengthy season approach.
    (1) Binding Arbitration may begin immediately with the same 
Contract Arbitrator.
    (2) If the Contract Arbitrator serves as a mediator in an 
unsuccessful mediation, either party may request another Contract 
Arbitrator for the Binding Arbitration.

[[Page 10266]]

    (iv) Share matching. (A) At any time after the issuance of IFQ and 
IPQ for a crab QS fishery but not earlier than 25 days prior to the 
first crab fishing season for a crab QS fishery in the crab fishing 
year, holders of uncommitted Arbitration IFQ may choose to commit the 
delivery of harvests of crab to be made with that uncommitted 
Arbitration IFQ to an uncommitted IPQ holder.
    (B) To commit Arbitration IFQ, the holder of uncommitted IFQ must 
offer an amount of Arbitration IFQ:
    (1) Not less than 50 percent of the Arbitration IFQ holder's total 
uncommitted Arbitration IFQ, or an amount of uncommitted Arbitration 
IFQ equal to the total amount of uncommitted IPQ available, whichever 
is less, if the Arbitration IFQ holder is not an FCMA cooperative; and
    (2) Not less than 25 percent of the Arbitration IFQ holder's total 
uncommitted Arbitration IFQ, or an amount of uncommitted Arbitration 
IFQ equal to the total amount of uncommitted IPQ available, whichever 
is less, if the Arbitration IFQ holder is an FCMA cooperative.
    (C) Any holder of uncommitted IPQ must accept all proposed 
Arbitration IFQ commitments, up to the amount of its uncommitted IPQ. 
The commitment of IPQ will take place on receipt of notice from the 
holder of uncommitted Arbitration IFQ of the intention to commit that 
IFQ.
    (D) After matching, an Arbitration IFQ holder and an IPQ holder may 
decide to enter mediation to reach agreement on contract terms. The 
Arbitration IFQ holder and IPQ holder may request a Contract Arbitrator 
to act as a mediator to facilitate an agreement.
    (1) If the mediation proves unsuccessful, or if mediation is not 
selected, the Arbitration IFQ holder may initiate Binding Arbitration 
which may begin immediately with the same Contract Arbitrator.
    (2) If the Contract Arbitrator serves as a mediator in an 
unsuccessful mediation, the Arbitration IFQ holder may request another 
Contract Arbitrator for the Binding Arbitration.
    (v) Initiation of Binding Arbitration. If an Arbitration IFQ holder 
intends to initiate Binding Arbitration, the Arbitration IFQ holder 
must initiate the Binding Arbitration procedure between 25 days and 15 
days prior to the date of the first crab fishing season for a crab QS 
fishery. Binding Arbitration is initiated after the committed 
Arbitration IFQ holder notifies a committed IPQ holder and selects a 
Contract Arbitrator. Binding Arbitration may be initiated to resolve 
price, terms of delivery, and other disputes. There will be only one 
Binding Arbitration Proceeding for an IPQ holder but multiple 
Arbitration IFQ holders may participate in this proceeding. This 
limitation on the timing of Binding Arbitration proceedings does not 
include proceedings that arise due to:
    (A) The lengthy season approach;
    (B) Performance disputes; and
    (C) Quality disputes.
    (vi) Joining a Binding Arbitration proceeding. Any uncommitted 
Arbitration IFQ holder may join a Binding Arbitration proceeding as a 
party by committing the shares to the arbitration and providing notice 
to the IPQ holder and the Contract Arbitrator(s). An Arbitration IFQ 
holder may join a Binding Arbitration proceeding only if uncommitted 
IPQ is available. Once shares are committed to a Binding Arbitration 
Proceeding they cannot be uncommitted. The contract with the Contract 
Arbitrator may specify the terms and timing of joining the proceedings.
    (vii) Arbitration schedule meeting. The Contract Arbitrator shall 
meet with all parties to a Binding Arbitration proceeding as soon as 
possible once a Binding Arbitration proceeding has been initiated for 
the sole purpose of establishing a schedule for the Binding 
Arbitration. This schedule shall include the date by which the IPQ 
holder and Arbitration IFQ holder(s) must submit their last best offer 
and any supporting materials, and any additional meetings or mediation 
if agreed to by all parties. This meeting will discuss the schedule of 
the Binding Arbitration proceedings and not address terms of last best 
offers.
    (viii) Terms of last best offers. The Contract Arbitrator will meet 
with the parties to the Binding Arbitration proceeding to determine the 
matters that must be included in the last best offer, which may include 
a fixed price or a price over a time period specified by the parties, a 
method for adjusting prices over a crab fishing year, or an advance 
price paid at the time of delivery.
    (ix) Submission of last best offers. The parties to a Binding 
Arbitration proceeding shall each submit to the Contract Arbitrator(s) 
a last best offer defining all the terms specified for inclusion in a 
last best offer by the Contract Arbitrator. An Arbitration IFQ holder 
that is an FCMA cooperative may submit a last best offer that defines 
terms for the delivery of crab harvested by members of that FCMA 
cooperative with IFQ held by the cooperative. An Arbitration IFQ holder 
that is not an FCMA cooperative may submit a last best offer that 
defines the term of delivery of crab harvested with IFQ held by that 
person. The IPQ holder that is a party to the proceeding shall submit a 
single offer that defines terms for delivery of crab harvested with all 
IFQ that are subject to the proceedings.
    (x) Arbitration decisions. The Contract Arbitrator(s) shall decide 
among each offer received from an Arbitration IFQ holder and the offer 
received from the IPQ holder. Each arbitration decision shall result in 
a binding contract between the IPQ holder and the Arbitration IFQ 
holder defined by the terms of the offer selected by Contract 
Arbitrator(s). An arbitration decision applies to all committed IFQ and 
committed IPQ in that arbitration.
    (xi) Announcement of decisions. (A) If last best offers are 
submitted at least 15 days before the first crab fishing season for 
that crab fishing year for that crab QS fishery, arbitration decisions 
shall be issued no later than 10 days before the first crab fishing 
season for that crab fishing year for that crab QS fishery. Otherwise, 
the Contract Arbitrator will notify the parties of the arbitration 
decision within 5 days of the parties submitting their last best 
offers.
    (B) The Contract Arbitrator will notify the parties by providing 
each Arbitration IFQ holder and IPQ holder that is a party to the 
Binding Arbitration proceeding, a copy of any decision. The decision is 
binding on the parties to the Binding Arbitration proceeding.
    (4) Basis for the Arbitration decision. The contract with the 
Contract Arbitrator shall specify that the Contract Arbitrator will be 
subject to the following provisions when deciding which last best offer 
to select.
    (i) The Contract Arbitrator's decision shall:
    (A) Be based on the historical distribution of first wholesale 
revenues between fishermen and processors in the aggregate based on 
arm's length first wholesale prices and ex-vessel prices, taking into 
consideration the size of the harvest in each year; and
    (B) Establish a price that preserves the historical division of 
revenues in the fishery while considering the following:
    (1) Current ex-vessel prices, including ex-vessel prices received 
for crab harvested under Class A IFQ, Class B IFQ, and CVC IFQ permits;
    (2) Consumer and wholesale product prices for the processing sector 
and the participants in the arbitration (recognizing the impact of 
sales to affiliates on wholesale pricing);
    (3) Innovations and developments of the harvesting and processing 
sectors and the participants in the arbitration (including new product 
forms);
    (4) Efficiency and productivity of the harvesting and processing 
sectors

[[Page 10267]]

(recognizing the limitations on efficiency and productivity arising out 
of the management program structure);
    (5) Quality (including quality standards of markets served by the 
fishery and recognizing the influence of harvest strategies on the 
quality of landings);
    (6) The interest of maintaining financially healthy and stable 
harvesting and processing sectors;
    (7) Safety and expenditures for ensuring adequate safety;
    (8) Timing and location of deliveries; and
    (9) The cost of harvesting and processing less than the full IFQ or 
IPQ allocation (underages) to avoid penalties for overharvesting IFQ 
and a mechanism for reasonably accounting for deadloss.
    (C) Consider the Non-Binding Price Formula established in the 
fishery by the Formula Arbitrator.
    (ii) The Contract Arbitrator's decision may rely on any relevant 
information available to the Contract Arbitrator, including, but not 
limited to:
    (A) Information provided by the QS, PQS, IPQ and IFQ holders in the 
fishery regarding the factors identified in paragraph (h)(4)(i) of this 
section; and
    (B) The Market Report for the fishery.
    (iii) Each of the Arbitration IFQ holders and the IPQ holders that 
is party to the proceeding may provide the Contract Arbitrator with 
additional information to support its last best offer. The Contract 
Arbitrator must receive and consider all data submitted by the parties.
    (iv) The Contract Arbitrator may request specific information from 
the Arbitration IFQ holder(s) and IPQ holder that would be useful in 
reaching a final decision. The Contract Arbitrator will not have 
subpoena power and it is in the sole discretion of the person from whom 
information is requested as to whether to provide the requested 
information.
    (5) Limits on the release of data. The parties to a Binding 
Arbitration proceeding shall be precluded from full access to the 
information provided to the Contract Arbitrator.
    (i) Arbitration IFQ holders that are party to an arbitration 
proceeding shall have access only to information provided directly by 
the IPQ holder to the Contract Arbitrator for that Binding Arbitration 
proceeding.
    (ii) IPQ holders that are party to an arbitration proceeding shall 
have access only to information provided directly by an Arbitration IFQ 
holder to the Contract Arbitrator for that Binding Arbitration 
proceeding.
    (iii) The Contract Arbitrator shall keep confidential the 
information provided by any QS, PQS, IFQ, or IPQ holders in the fishery 
and not disclose the identity of the persons providing specific 
information except as provided in paragraph (h)(6) of this section.
    (iv) The Arbitration IFQ holders and IPQ holders shall not release 
information received in a Binding Arbitration proceeding to persons who 
were not party to that Binding Arbitration proceeding other than the 
final result of that arbitration proceeding as provided for in 
paragraph (h)(6) of this section.
    (6) Information provided to NMFS. The Contract Arbitrator must 
provide any information, documents, or data required under this 
paragraph to NMFS via mail to the Administrator, Alaska Region, NMFS, 
P.O. Box 21668, Juneau, AK 99802-1668, or electronically not later than 
30 days prior to the end of the crab fishing year for which the open 
negotiation or arbitration applied. The contract with the Contract 
Arbitrator must specify that the Contract Arbitrator provide NMFS with:
    (i) A copy of any minutes from any meeting attended by that 
Contract Arbitrator between or among any PQS or IPQ holders concerning 
any negotiations under this section;
    (ii) Any last-best offers made during the Binding Arbitration 
process, including all contract details, the names of other 
participants in the arbitration, and whether the bid was accepted by 
the Contract Arbitrator; and
    (iii) A copy of any information, data, or documents given by the 
Contract Arbitrator to any person who is not a party to the particular 
arbitration for which that information was provided. The Contract 
Arbitrator must identify the arbitration to which the information, 
data, or documents apply, and the person to whom those information, 
data, or documents were provided.
    (7) Enforcement of Binding Arbitration decisions. The decision of 
the Contract Arbitrator for Binding Arbitration shall be enforced among 
the parties to that arbitration.
    (8) Failure of Contract Arbitrator(s). Except as provided for in 
paragraph (h)(6) of this section, the failure of a Contract Arbitrator 
to perform shall be enforced by the Arbitration Organizations.
    (9) Post Binding Arbitration opt-in. (i) An Arbitration IFQ holder 
with uncommitted IFQ, may opt-in to any contract that results from a 
completed a Binding Arbitration procedure with any IPQ holder that has 
uncommitted IPQ.
    (A) All the terms from the arbitrated contract will apply. The 
Contract Arbitrator may determine fees and a time frame by which a Post 
Binding Arbitration opt-in may occur if those terms are not specified 
in the arbitrated contract.
    (B) Once exercised, the opt-in results in a contract that is 
binding on both the Arbitration IFQ and IPQ holder.
    (ii) To initiate the opt-in process, the holder of uncommitted 
Arbitration IFQ will notify the holder of uncommitted IPQ in writing of 
its intent to opt-in.
    (iii) Holders of uncommitted Arbitration IFQ may opt-in to a 
contract resulting from a completed Binding Arbitration procedure with 
a person that holds uncommitted IPQ for that fishery.
    (iv) If the IPQ holder and the Arbitration IFQ holder are unable to 
resolve a dispute regarding whether the opt-in offer is consistent with 
the original contract from the completed Binding Arbitration procedure, 
the dispute may be decided by the Contract Arbitrator to the original 
arbitration that resulted in the contract to which the Arbitration IFQ 
holder is seeking to opt-in. The Contract Arbitrator will decide only 
whether the proposed opt-in terms are consistent with the original 
contract.
    (10) Performance disputes. If an IPQ holder and an Arbitration IFQ 
holder are unable to resolve disputes regarding the obligations to 
perform specific contract provisions after substantial negotiations or 
when time is of the essence, the issues of that dispute shall be 
submitted for Binding Arbitration before a Contract Arbitrator for that 
fishery.
    (i) Binding Arbitration resulting from a performance dispute can 
occur at any point during or after the crab fishing year. The dispute 
must be raised by the IPQ holder or the Arbitration IFQ holder. 
Arbitration of that performance dispute must be initiated prior to the 
date of the first crab fishing season for the following crab fishing 
year in that crab QS fishery.
    (ii) Performance dispute arbitration shall follow the applicable 
procedures described for a Binding Arbitration in paragraph (h)(3) of 
this section, except that the time frame for the procedure applicable 
to a performance dispute will be determined by the Contract Arbitrator 
once the dispute has been raised.
    (iii) If a party fails to abide by the arbitration decision, a 
party may pursue available contract remedies.
    (iv) The costs of arbitrating performance disputes shall be 
provided from the general fees collected by the Arbitration 
Organizations pursuant to paragraph (e) of this section.
    (v) The Contract Arbitrator may assign fees to any party bringing 
frivolous complaints. Any such fees shall be paid by the party and not 
from the fees

[[Page 10268]]

collected under paragraph (e)(2)(vi) of this section.
    (11) Quality disputes. When disputes regarding the quality of the 
harvested crab arise within the context of an existing contract, the 
parties may settle the disputes within the context of the arbitration 
system according to the following:
    (i) In cases where the IPQ holder and Arbitration IFQ holder(s) 
have agreed to a formula-based price for crab but where they cannot 
reach an agreement on the quality and price of the crab, the IPQ holder 
and Arbitration IFQ holder(s) will receive their share of the value of 
the amount of crab delivered based on the provisions of the contract.
    (ii) In quality disputes where the Arbitration IFQ holders prefer 
to use actual ex-vessel price and not a formula-based price and a 
dispute arises regarding crab quality and price, the dispute should be 
referred to a mutually agreeable independent quality specialist firm. 
This independent quality specialist firm will determine the quality of 
the crab. This information will be used as the basis for subsequent 
price determinations. The IPQ holder and Arbitration IFQ holder(s) with 
this quality dispute shall share the cost of hiring the specialist firm 
and agree to abide by its findings according to the terms of their 
agreement.


Sec.  680.21  Crab harvesting cooperatives.

    This section governs the formation and operation of crab harvesting 
cooperatives. The regulations in this section apply only to crab 
harvesting cooperatives that have formed for the purpose of applying 
for and fishing under a crab harvesting cooperative IFQ permit issued 
by NMFS. Members of crab harvesting cooperatives that are not FCMA 
cooperatives should consult counsel before commencing any activity if 
the members are uncertain about the legality under the antitrust laws 
of the crab harvesting cooperative's proposed conduct.
    (a) Formation of crab harvesting cooperatives. The following 
requirements apply to the formation of crab harvesting cooperatives.
    (1) Membership requirements. A crab harvesting cooperative is 
limited to QS holders that hold any amount of CPO, CVO, CPC, or CVC QS, 
and that NMFS has determined are eligible to receive crab IFQ.
    (i) Minimum number of members. Each crab harvesting cooperative 
must include at least four unique QS holding entities. A unique QS 
holding entity is a QS holder or group of affiliated QS holders that 
are not affiliated with any other QS holders or QS holding entities in 
the crab harvesting cooperative. For the purpose of this paragraph, the 
term ``affiliation'' is defined at Sec.  680.2.
    (ii) Voluntary nature of membership. Membership in a crab 
harvesting cooperative is voluntary. No person may be required to join 
a crab harvesting cooperative, and no crab harvesting cooperative may 
be required to accept a member who the crab harvesting cooperative 
chooses not to accept.
    (iii) Membership in more than one crab harvesting cooperative. (A) 
A QS holder may join one crab harvesting cooperative per CR fishery.
    (B) Upon joining a crab harvesting cooperative for a CR fishery, 
NMFS will convert all of a QS holder's QS holdings for that CR fishery 
to crab harvesting cooperative IFQ, except that after June 30, 2008, a 
CVC QS holder that joins a crab harvesting cooperative may retain his 
or her Class B IFQ from use by the crab harvesting cooperative.
    (2) Legal and organizational requirements. A crab harvesting 
cooperative must meet the following legal and organizational 
requirements before it is eligible to apply for a crab harvesting 
cooperative IFQ permit:
    (i) Registered business entity. Each crab harvesting cooperative 
must be formed as a partnership, corporation, or other legal business 
entity that is registered under the laws of one of the 50 states or the 
District of Columbia.
    (ii) Appointment of a designated representative. Each crab 
harvesting cooperative must appoint an individual as designated 
representative to act on the crab harvesting cooperative's behalf and 
serve as contact point for NMFS for questions regarding the operation 
of the crab harvesting cooperative. The designated representative may 
be a member of the crab harvesting cooperative or some other individual 
authorized by the crab harvesting cooperative to act on its behalf.
    (b) Application for annual crab harvesting cooperative IFQ permits. 
A crab harvesting cooperative IFQ permit is an annual permit issued to 
a crab harvesting cooperative that establishes an annual catch limit of 
crab that is based on the collective QS holdings of the members of the 
crab harvesting cooperative that have been contributed by the members. 
A crab harvesting cooperative IFQ permit will list the IFQ amount, by 
fishery, held by the crab harvesting cooperative and identify the 
members of the crab harvesting cooperative. Each crab harvesting 
cooperative will be issued a separate IFQ permit for each type of QS 
held by a member (or members) of the crab harvesting cooperative.
    (1) August 1 application deadline. A completed application for an 
annual crab harvesting cooperative IFQ permit must be submitted 
annually by each crab harvesting cooperative and received by NMFS no 
later than August 1, together with the signed annual application for 
crab IFQ/IPQ permit forms of all the members of the crab harvesting 
cooperative.
    (2) Contents of application for annual crab harvesting cooperative 
IFQ permit. A completed application also must contain the following 
information:
    (i) Cooperative identification. Enter the crab harvesting 
cooperative's legal name; type of business entity under which the crab 
harvesting cooperative is organized; state in which the crab harvesting 
cooperative is legally registered as a business entity; printed name of 
the crab harvesting cooperative's designated representative; the 
permanent business address, telephone number, facsimile number, and e-
mail address (if available) of the crab harvesting cooperative or its 
designated representative; and the signature of the crab harvesting 
cooperative's designated representative and date signed.
    (ii) Members of the cooperative. Full name and NMFS Person ID of 
each member of the crab harvesting cooperative.
    (iii) Additional documentation. For the application to be 
considered complete, the following documents must be attached to the 
application: the completed and signed annual application for crab IFQ/
IPQ permit for all members of the crab harvesting cooperative, a copy 
of the business license issued by the state in which the crab 
harvesting cooperative is registered as a business entity, a copy of 
the articles of incorporation or partnership agreement of the crab 
harvesting cooperative, and a copy of the crab harvesting cooperative 
agreement signed by the members of the crab harvesting cooperative (if 
different from the articles of incorporation or partnership agreement 
of the crab harvesting cooperative).
    (3) Issuance of crab harvesting cooperative IFQ permits. Upon 
receipt of a completed application for an annual crab harvesting 
cooperative IFQ permit that is subsequently approved, NMFS will issue 
one-year crab harvesting cooperative IFQ permits to the crab harvesting 
cooperative. The crab harvesting cooperative IFQ permits will list the 
crab IFQ amounts that are generated by the aggregate QS holdings of all 
members of the crab harvesting cooperative for each fishery, region, 
sector, and Class A/B IFQ categories.

[[Page 10269]]

Issuance by NMFS of a crab harvesting cooperative IFQ permit is not a 
determination that the crab harvesting cooperative is formed or is 
operating in compliance with antitrust law.
    (4) Appeals. A crab harvesting cooperative or person that is 
adversely affected by an initial administrative determination (IAD) 
that is associated with the issuance of a crab harvesting cooperative 
IFQ permit may appeal the IAD using the appeals procedures described in 
Sec.  680.43.
    (c) Restrictions on fishing under a crab harvesting cooperative IFQ 
permit. The following restrictions govern fishing for IFQ crab under a 
crab harvesting cooperative IFQ permit:
    (1) Maintenance of permit on board. A copy of a crab harvesting 
cooperative IFQ permit must be maintained on board any vessel that is 
being used to harvest crab under the permit.
    (2) Persons eligible to harvest crab under a crab harvesting 
cooperative IFQ permit. The only person eligible to harvest crab under 
a crab harvesting cooperative IFQ permit is the crab IFQ hired master 
under Sec.  680.4(g) who is operating a vessel in which at least a 10 
percent ownership share is held by a member of the crab harvesting 
cooperative to whom the IFQ permit is issued.
    (3) Liability. Each member of a crab harvesting cooperative is 
responsible for ensuring that members of the crab harvesting 
cooperative and crab IFQ hired masters of the crab harvesting 
cooperative comply with all regulations applicable to fishing for CR 
crab.
    (d) Transfers by members of a crab harvesting cooperative. The 
following requirements address transfers of QS and IFQ by members of a 
crab harvesting cooperative.
    (1) Transfer of QS. A member of a crab harvesting cooperative may 
acquire or divest QS at any time using the transfer procedures 
described in Sec.  680.41. However, transfers of QS that occur after 
the August 1 deadline for crab harvesting cooperative IFQ permit 
applications will not be reflected in the type or amount of IFQ permit 
issued to the crab harvesting cooperative for the subsequent fishing 
season.
    (2) Transfer of individually held IFQ. A member of a crab 
harvesting cooperative may acquire or divest individually held IFQ 
using the transfer procedures described in Sec.  680.41. However, any 
vessel used to harvest IFQ not held by a crab harvesting cooperative 
loses the vessel use cap exemption.
    (3) Transfer of crab harvesting cooperative IFQ prohibited. A 
member of a crab harvesting cooperative may not acquire or divest crab 
harvesting cooperative IFQ. Crab harvesting cooperative IFQ may only be 
transferred between two crab harvesting cooperatives.
    (e) Transfers by crab harvesting cooperatives. The following 
requirements address transfers of QS, IFQ, PQS, and IPQ by crab 
harvesting cooperatives that have been issued crab harvesting 
cooperative IFQ permits.
    (1) Acquisition of QS, PQS, and IPQ prohibited. A crab harvesting 
cooperative that has been issued a crab harvesting cooperative IFQ 
permit is prohibited from acquiring any amount of QS, PQS, or IPQ for 
the valid duration of the crab harvesting cooperative IFQ permit. A 
crab harvesting cooperative that acquires any amount of QS, PQS, or IPQ 
becomes ineligible to receive a crab harvesting cooperative IFQ permit.
    (2) Transfer of crab harvesting cooperative IFQ. A crab harvesting 
cooperative may transfer its IFQ only to another crab harvesting 
cooperative. Crab harvesting cooperatives wishing to engage in an 
inter-cooperative transfer must complete an application for inter-
cooperative transfer to transfer crab IFQ between crab harvesting 
cooperatives. A crab harvesting cooperative is prohibited from 
transferring any amount of crab harvesting cooperative IFQ to any 
entity that is not a crab harvesting cooperative operating under a crab 
harvesting cooperative IFQ permit.
    (3) Use caps. Inter-cooperative transfers of IFQ will apply to the 
individual use caps of crab harvesting cooperative members through the 
designation of the crab harvesting cooperative members conducting the 
transfer.
    (f) Application for inter-cooperative transfer. An application for 
inter-cooperative transfer is to be used only to apply for a transfer 
of crab harvesting cooperative IFQ from one crab harvesting cooperative 
to another crab harvesting cooperative. A complete application must 
also contain the following information:
    (1) Identification of transferor. Enter the name; NMFS Person ID; 
date of incorporation; Tax ID number; name of crab harvesting 
cooperative's designated representative; permanent business mailing 
address; and business telephone number, facsimile number, and e-mail 
address (if available) of the crab harvesting cooperative transferor. A 
temporary mailing address for each transaction may also be provided in 
addition to the permanent business mailing address.
    (2) Identification of crab harvesting cooperative member. Enter the 
name and NMFS Person ID of the member to whose use cap the crab 
harvesting cooperative IFQ will be applied.
    (3) Identification of transferee. Enter the name; NMFS Person ID; 
date of incorporation; Tax ID number; name of crab harvesting 
cooperative's designated representative; permanent business mailing 
address; and business telephone number, facsimile number, and e-mail 
address (if available) of the crab harvesting cooperative transferee. A 
temporary mailing address for each transaction may also be provided in 
addition to the permanent business mailing address.
    (4) Identification of crab harvesting cooperative member. Enter the 
name and NMFS person ID of the member from whose use cap the crab 
harvesting cooperative IFQ will be removed.
    (5) Crab harvesting cooperative IFQ to be transferred. Identify the 
crab harvesting cooperative IFQ being transferred, including the type 
of crab harvesting cooperative IFQ being transferred, crab harvesting 
cooperative permit number and year that permit was issued. Indicate 
(YES or NO) whether all remaining pounds for the current fishing year 
are to be transferred; if NO, specify number of pounds to be 
transferred.
    (6) Transferor information. Indicate (YES or NO) whether a broker 
is being used for this transaction. If YES, indicate the dollar amount 
to be paid in brokerage fees or percentage of total price. Enter the 
total amount being paid for the IFQ in this transaction, including all 
fees, and the price per pound of IFQ.
    (7) Certification of transferor. The crab harvesting cooperative 
transferor's designated representative must sign and date the 
application certifying that all information is true, correct, and 
complete to the best of his or her knowledge and belief. Only an 
application with an original, notarized signature will be accepted. 
Also enter the printed name of the crab harvesting cooperative 
transferor's representative or authorized representative. If the 
application is completed by an authorized representative, proof of 
authorization to act on behalf of the transferor must accompany the 
application. A Notary Public must sign the application, enter the date 
commission expires, and affix notary stamp or seal.
    (8) Certification of transferee. The crab harvesting cooperative 
transferee's representative must sign and date the application 
certifying that all information is true, correct, and complete to the 
best of his or her knowledge and belief. Only an application with an 
original, notarized

[[Page 10270]]

signature will be accepted. Also enter the printed name of the crab 
harvesting cooperative transferee's representative or authorized 
representative. If the application is completed by an authorized 
representative, proof of authorization to act on behalf of the 
transferee must accompany the application. A Notary Public must sign 
the application, enter the date commission expires, and affix notary 
stamp or seal.
    (g) Inseason changes to crab harvesting cooperative membership. The 
following requirements address inseason changes to crab harvesting 
cooperative membership.
    (1) Eligible membership changes. A crab harvesting cooperative may 
add a new member if that person becomes eligible to join the crab 
harvesting cooperative through the acquisition of any amount of the QS 
upon which the crab harvesting cooperative's annual IFQ permit was 
based, provided that the person acquiring the QS in question has been 
determined by NMFS to be eligible to hold IFQ. Likewise, a crab 
harvesting cooperative may remove a member if that person no longer 
holds any of the QS upon which the crab harvesting cooperative's annual 
IFQ permit was based.
    (2) Inseason membership changes are voluntary. A crab harvesting 
cooperative is not required to add or remove members during the fishing 
season to reflect inseason transfers of QS. Each crab harvesting 
cooperative is free to establish its own process for deciding whether 
or not to admit new members or to remove existing members during the 
fishing season to reflect changes in the QS holdings. No crab 
harvesting cooperative is required to admit a new QS holder that the 
crab harvesting cooperative chooses not to admit, regardless of whether 
the person in question has acquired any amount of QS upon which the 
crab harvesting cooperative's annual IFQ is based. If a crab harvesting 
cooperative chooses to make inseason membership changes, then it must 
comply with paragraph (g)(3) of this section.
    (3) Application for an inseason change in cooperative membership. 
To change crab harvesting cooperative membership, a crab harvesting 
cooperative must submit to NMFS a revised application for an annual 
crab harvesting cooperative IFQ permit together with any revised 
supporting documents that are required to be submitted with the 
application. The revised application for an annual crab harvesting 
cooperative IFQ permit must be accompanied by a cover letter that 
indicates the revisions that have been made. Upon approval of the 
membership change, NMFS will issue a revised crab harvesting 
cooperative IFQ permit that reflects the change. A new member may not 
fish on behalf of a cooperative except as a crab IFQ hired master until 
NMFS issues a revised crab harvesting cooperative IFQ permit that 
reflects the change in membership.
    (4) Successors-in-interest. If a member of a crab harvesting 
cooperative dies (in the case of an individual) or dissolves (in the 
case of a business entity), the QS held by that person will be 
transferred to the legal successor-in-interest. However, the crab 
harvesting cooperative IFQs generated by that person's QS holdings 
remain under the control of the crab harvesting cooperative for the 
valid duration of the crab harvesting cooperative IFQ permit. Each crab 
harvesting cooperative is free to establish its own internal procedures 
for admitting a successor-in-interest during the fishing season to 
reflect the transfer of QS due to the death or dissolution of a QS 
holder. The regulations in this section do not require any crab 
harvesting cooperative to admit a successor-in-interest that the 
cooperative chooses not to admit. If a crab harvesting cooperative 
chooses to admit the successor-in-interest for membership, then the 
crab harvesting cooperative must comply with paragraph (g)(3) of this 
section.


Sec.  680.22  Sideboard protections for GOA groundfish fisheries.

    The regulations in this section restrict the owners of vessels with 
a history of participation in the Bering Sea snow crab fishery from 
using the increased flexibility provided by the CR Program to expand 
their level of participation in GOA groundfish fisheries. These 
restrictions are commonly known as ``sideboards.''
    (a) Vessels and LLP licenses subject to sideboard restrictions. The 
sideboard fishing restrictions described in this section are based on a 
vessel's fishing history and apply both to the fishing vessel itself 
and to any LLP license generated by that vessel's fishing history. The 
criteria used to determine which vessels and LLP licenses are subject 
to GOA groundfish sideboard fishing restrictions are as follows:
    (1) Vessels subject to GOA groundfish sideboard directed fishing 
closures. Any vessel that NMFS has determined meets one or both of the 
following criteria is subject to GOA groundfish sideboard directed 
fishing closures issued under paragraph (e) of this section.
    (i) Any non-AFA vessel that made a legal landing of Bering Sea snow 
crab between January 1, 1996, and December 31, 2000, that had landings 
of Bering Sea snow crab during the QS qualifying period in Table 7 of 
this part, or
    (ii) Any vessel named on an LLP license that was generated in whole 
or in part by the fishing history of a vessel meeting the criteria in 
paragraph (a)(1)(i) of this section.
    (2) Vessels prohibited from directed fishing for Pacific cod in the 
GOA. Any vessel that NMFS has determined meets either of the following 
two criteria is prohibited from directed fishing for Pacific cod in the 
GOA:
    (i) Any vessel subject to GOA groundfish sideboard closures under 
paragraph (a)(1)(i) of this section that landed less than 50 mt 
(110,231 lb), in round weight equivalents, of groundfish harvested from 
the GOA between January 1, 1996, and December 31, 2000, or
    (ii) Any vessel named on an LLP license that was generated in whole 
or in part by the fishing history of a vessel meeting the criteria in 
paragraph (a)(2)(i) of this section.
    (3) Vessels exempt from Pacific cod sideboard closures in the GOA. 
Any vessel that NMFS has determined meets one or both of the following 
criteria is exempt from sideboard directed fishing closures for Pacific 
cod in the GOA:
    (i) Any vessel subject to GOA groundfish closures under paragraph 
(a)(1)(i) of this section that landed less than 100,000 lb (45,359 kg), 
in raw weight equivalents, of Bering Sea snow crab and more than 500 mt 
(1,102,311 lb), in round weight equivalents, of Pacific cod from the 
GOA between January 1, 1996, and December 31, 2000; and
    (ii) Any vessel named on an LLP license that was generated in whole 
or in part by the fishing history of a vessel meeting the criteria in 
paragraph (a)(3)(i) of this section.
    (b) Notification of affected vessel owners and LLP license holders. 
After NMFS determines which vessels and LLP licenses meet the criteria 
described in paragraph (a) of this section, NMFS will inform each 
vessel owner and LLP license holder in writing of the type of sideboard 
restriction and issue a revised Federal Fisheries Permit and/or LLP 
license that displays the restriction on the face of the permit or 
license.
    (c) Appeals. A vessel owner or LLP license holder who believes that 
NMFS has incorrectly identified his or her vessel or LLP license as 
meeting the criteria for a GOA groundfish sideboard restriction may 
request reconsideration. All requests for reconsideration must be 
submitted in writing to the RAM Division, Alaska Region, NMFS, together 
with any documentation or

[[Page 10271]]

evidence supporting the request. If the request for reconsideration is 
denied, affected persons may appeal using the procedures described at 
Sec.  680.43.
    (d) Determination of GOA groundfish sideboard ratios. Sideboard 
ratios for each GOA groundfish species other than fixed-gear sablefish, 
species group, season, and area for which annual specifications are 
made, are established according to the following formulas:
    (1) Pacific cod. The sideboard ratios for Pacific cod are 
calculated by dividing the aggregate retained catch of Pacific cod by 
vessels that are subject to sideboard directed fishing closures under 
paragraph (a)(1) of this section and that do not meet the criteria in 
paragraphs (a)(2) or (a)(3) of this section by the total retained catch 
of Pacific cod by all groundfish vessels between 1996 and 2000.
    (2) Groundfish other than Pacific cod. The sideboard ratios for 
groundfish species and species groups other than Pacific cod and fixed-
gear sablefish are calculated by dividing the aggregate landed catch by 
vessels subject to sideboard directed fishing closures under paragraph 
(a)(1) of this section by the total landed catch of that species by all 
groundfish vessels between 1996 and 2000.
    (e) Conversion of sideboard ratios into annual harvest limits. NMFS 
will convert sideboard ratios into annual harvest limits according to 
the following procedures.
    (1) Annual harvest limits. Annual harvest limits for each 
groundfish species, except fixed-gear sablefish, will be established by 
multiplying the sideboard ratios calculated under paragraph (d) of this 
section by the interim and final TACs in each area for which a TAC is 
specified. If a TAC is further apportioned by season, the sideboard 
harvest limit also will be apportioned by season in the same ratio as 
the overall TAC. The resulting harvest limits expressed in metric tons 
will be published in the annual GOA groundfish harvest specification 
notices.
    (2) Sideboard directed fishing allowance. (i) If the Regional 
Administrator determines that a harvest limit for a species or species 
group has been or will be reached, the Regional Administrator may 
establish a sideboard directed fishing allowance for the species or 
species group applicable only to the group of crab vessels to which the 
sideboard limit applies.
    (ii) If the Regional Administrator determines that a harvest limit 
is insufficient to support a directed fishery for that species or 
species group, then the Regional Administrator may set the sideboard 
directed fishing allowance at zero for that species or species group.
    (3) Directed fishing closures. Upon attainment of a sideboard 
directed fishing allowance, the Regional Administrator will publish 
notification in the Federal Register prohibiting directed fishing for 
the species or species group in the specified subarea, regulatory area, 
or district. A directed fishing closure is effective for the duration 
of the fishing year or season.


Sec.  680.23  Equipment and operational requirements.

    (a) Catcher vessel requirements. A catcher vessel used to harvest 
CR crab must:
    (1) Carry and use a VMS as described in paragraph (d) of this 
section;
    (2) Land all retained crab to an RCR operating under an approved 
catch monitoring plan as described in paragraph (g) of this section;
    (b) Catcher/processor requirements. A catcher/processor used to 
harvest CR crab must:
    (1) Carry and use a VMS as described in paragraph (d) of this 
section;
    (2) Weigh all retained crab to be processed on board, in its raw 
form, on a scale approved by NMFS as described in paragraph (e) of this 
section;
    (3) Land all retained crab not processed on board at an RCR;
    (4) Land all product processed on board at a shoreside location in 
the United States accessible by road or regularly scheduled air service 
and weigh that product on a scale approved by the State in which the 
product is landed; and
    (5) Provide an approved observer platform scale and test weights 
that meet the requirements in paragraph (e) of this section.
    (c) RCR requirements. An RCR must:
    (1) Ensure that all CR crab landings are weighed on a scale 
approved by the State in which the landing takes place.
    (2) Ensure that all crab landing and weighing be conducted as 
specified in an approved crab monitoring plan as described in paragraph 
(g) of this section, and that a copy of the crab monitoring plan is 
made available to NMFS personnel or authorized officer upon demand.
    (d) Vessel Monitoring System (VMS) requirements--(1) General 
requirements. General VMS requirements concerning the approval and 
installation of VMS components and the responsibilities of vessel 
owners and operators are detailed at Sec.  679.28(f)(1) through (5).
    (2) VMS transmission requirements. A vessel's transmitter must be 
transmitting if:
    (i) The vessel is operating in any reporting area (see definitions 
at Sec.  679.2) off Alaska;
    (ii) The vessel has crab pots or crab pot hauling equipment, or a 
crab pot launcher onboard; and
    (iii) The vessel has or is required to have a Federal crab vessel 
permit for that crab fishing year.
    (e) Scales approved by NMFS. To be approved by NMFS, a scale used 
to weigh crab at sea must meet the type evaluation and initial 
inspection requirements set forth in Sec.  679.28(b)(1) and (2). Once a 
scale is installed on a vessel and approved by NMFS for use, it must be 
reinspected annually as described in Sec.  679.28(b) by requesting a 
scale inspection from NMFS. Each scale must be tested daily and meet 
the maximum permissible error (MPE) requirements described in paragraph 
(e)(1) of this section.
    (1) At-sea scale tests. To verify that the scale meets the MPEs 
specified in this paragraph, the vessel operator must test each scale 
or scale system used to weigh CR crab one time during each 24-hour 
period when use of the scale is required. The vessel owner must ensure 
that these tests are performed in an accurate and timely manner.
    (i) Belt scales. The MPE for the daily at-sea scale tests is plus 
or minus 3 percent of the known weight of the test material. The scale 
must be tested by weighing at least 400 kg (882 lb) of crab or an 
alternative material supplied by the scale manufacturer on the scale 
under test. The known weight of the test material must be determined by 
weighing it on a platform scale approved for use under Sec.  679.28 
(b)(7).
    (ii) Automatic hopper scales. An automatic hopper scale must be 
tested at its minimum and maximum capacity with approved test weights. 
Test weights must be placed in the bottom of the hopper unless an 
alternative testing method is approved by NMFS. The MPE for the daily 
at-sea scale tests is plus or minus 2 percent of the weight of the 
approved test weights.
    (iii) Platform scales used for observer sampling. A platform scale 
used for observer sampling must be tested at 10, 25, and 50 kg (or 20, 
50, and 100 lb if the scale is denominated in pounds) using approved 
test weights. The MPE for the daily at-sea scale test is plus or minus 
0.5 percent if the scale is used to determine the known weight of test 
material for the purpose of testing a belt scale. If the scale is not 
used for that purpose, the MPE for the daily at-sea scale test is plus 
or minus 1 percent.
    (iv) Approved test weights. Each test weight must have its weight 
stamped on or otherwise permanently affixed to it.

[[Page 10272]]

The weight of each test weight must be annually certified by a National 
Institute of Standards and Technology approved metrology laboratory or 
approved for continued use by the NMFS authorized inspector at the time 
of the annual scale inspection.
    (v) Requirements for all scale tests. (A) Notify the observer at 
least 15 minutes before the time that the test will be conducted, and 
conduct the test while the observer is present.
    (B) Conduct the scale test and record the following information on 
the at-sea scale test report form:
    (1) Vessel name;
    (2) Month, day, and year of test;
    (3) Time test started to the nearest minute;
    (4) Known weight of test weights;
    (5) Weight of test weights recorded by scale;
    (6) Percent error as determined by subtracting the known weight of 
the test weights from the weight recorded on the scale, dividing that 
amount by the known weight of the test weights, and multiplying by 100; 
and
    (7) Sea conditions at the time of the scale test.
    (C) Maintain the test report form on board the vessel until the end 
of the crab fishing year during which the tests were conducted, and 
make the report forms available to observers, NMFS personnel, or an 
authorized officer. In addition, the vessel owner must retain the scale 
test report forms for 3 years after the end of the crab fishing year 
during which the tests were performed. All scale test report forms must 
be signed by the vessel operator.
    (2) Scale maintenance. The vessel owner must ensure that the vessel 
operator maintains the scale in proper operating condition throughout 
its use, that adjustments made to the scale are made so as to bring the 
performance errors as close as practicable to a zero value, and that no 
adjustment is made that will cause the scale to weigh inaccurately.
    (3) Printed reports from the scale. The vessel owner must ensure 
that the printed reports are provided as required by this paragraph. 
Printed reports from the scale must be maintained on board the vessel 
until the end of the year during which the reports were made and be 
made available to NMFS or NMFS authorized personnel. In addition, the 
vessel owner must retain printed reports for 3 years after the end of 
the year during which the printouts were made.
    (i) Reports of catch weight and cumulative weight. Reports must be 
printed at least once every 24 hours prior to submitting a CR crab 
landing report as described in Sec.  680.5. Reports must also be 
printed before any information stored in the scale computer memory is 
replaced. Scale weights must not be adjusted by the scale operator to 
account for the perceived weight of water, mud, debris, or other 
materials. Scale printouts must show:
    (A) The vessel name and Federal crab vessel permit number;
    (B) The weight of each load in the weighing cycle (hopper scales 
only);
    (C) The date and time the information was printed;
    (D) The total amount weighed since the last printout was made; and
    (E) The total cumulative weight of all crab or other material 
weighed on the scale.
    (ii) Printed report from the audit trail. The printed report must 
include the information specified in sections 2.3.1.8, 3.3.1.7, and 
4.3.1.8 of appendix A to 50 CFR part 679. The printed report must be 
provided to the authorized scale inspector at each scale inspection and 
must also be printed at any time upon request of NMFS staff or other 
NMFS-authorized personnel.
    (iii) Platform scales used for observer sampling. A platform scale 
used for observer sampling is not required to produce a printed record 
unless that scale is also used to obtain raw weight for a CR crab 
landing report.
    (4) Scale installation requirements. Unless otherwise approved by 
NMFS, a scale used to obtain raw weight for a CR crab landing report 
must be installed such that:
    (i) From the location where the observer samples unsorted crab, the 
observer can ensure that all crab are being weighed;
    (ii) The scale may not be installed in a manner that facilitates 
bypassing. It must not be possible for the scale inspector and an 
assistant to bypass the scale with 100 kg (220 lb) of test material in 
less than 20 seconds.
    (f) Scales approved by the state. Scale requirements in this 
paragraph are in addition to those requirements set forth by the State 
in which the scale is approved, and nothing in this paragraph may be 
construed to reduce or supersede the authority of the State to 
regulate, test, or approve scales within the State. Scales used to 
weigh CR crab that are also required to be approved by the State must 
meet the following requirements:
    (1) Verification of approval. The scale must display a valid State 
sticker indicating that the scale was inspected and approved within the 
previous 12 months.
    (2) Visibility. An RCR must ensure that the scale and scale display 
are visible simultaneously. NMFS personnel or NMFS authorized 
personnel, including observers, must be allowed to observe the weighing 
of crab on the scale and be allowed to read the scale display at all 
times.
    (3) Printed scale weights. (i) An RCR must ensure that printouts of 
the scale weight of each delivery or offload are made available to NMFS 
personnel or to NMFS authorized personnel, including observers, at the 
time printouts are generated. An RCR must maintain printouts on site 
until the end of the fishing year during which the printouts were made 
and make them available upon request by an authorized officer for 3 
years after the end of the fishing year during which the printout was 
made.
    (ii) A scale used to weigh any portion of a landing of CR crab or 
an offload of CR crab product must produce a printed record for each 
landing, or portion of each landing, weighed on that scale. The printed 
record must include:
    (A) The RCR's name;
    (B) The weight of each load in the weighing cycle;
    (C) The total weight of crab in each landing, or portion of the 
landing that was weighed on that scale;
    (D) The date and time the information is printed; and
    (E) The name and ADF&G vessel registration number of the vessel 
making the delivery. The scale operator may write this information on 
the scale printout in ink at the time of landing.
    (4) Inseason scale testing. Scales used to weigh CR crab must be 
tested by RCR personnel when testing is requested by NMFS-staff or by 
NMFS-authorized personnel.
    (i) Inseason testing criteria. To pass an inseason test, NMFS staff 
or NMFS-authorized personnel will verify that the scale display and 
printed information are clear and easily read under all conditions of 
normal operation, that weight values are visible on the display until 
the value is printed, and that the scale does not exceed the maximum 
permissible errors specified in the following table:

------------------------------------------------------------------------
                                                           Maximum error
              Test load in scale divisions                   in scale
                                                             divisions
------------------------------------------------------------------------
(A) 0-500...............................................               1
(B) 501-2,000...........................................               2
(C) 2,001-4,000.........................................               3
(D) > 4,000.............................................               4
------------------------------------------------------------------------

    (ii) Test weight requirements. Scales must be tested with the 
amount and type of weight specified for each scale

[[Page 10273]]

type in the following tables under paragraphs (f)(4)(ii)(A) through 
(f)(4)(ii)(D) of this section:
    (A) Automatic hopper 0 to 150 kg (0 to 300 lb) capacity.

------------------------------------------------------------------------
         Certified test weights                Other test  material
------------------------------------------------------------------------
(1) Minimum weighment or 10 kg (20 lb),  Minimum.
 whichever is greater.
(2) Maximum............................  Maximum.
------------------------------------------------------------------------

    (B) Automatic hopper > 150 kg (300 lb) capacity.

------------------------------------------------------------------------
         Certified test weights                Other test  material
------------------------------------------------------------------------
(1) Minimum weighment or 10 kg (20 lb),  Minimum.
 whichever is greater.
(2) 25 percent of maximum of 150 kg      Maximum.
 (300 lb), whichever is greater.
------------------------------------------------------------------------

    (C) Platform, flatbed or hanging scales less than 150 kg (300 lb) 
capacity.

------------------------------------------------------------------------
         Certified test weights                Other test  material
------------------------------------------------------------------------
(1) 10 kg (20 lb)......................  Not Acceptable.
(2) Midpoint...........................  Not Acceptable.
(3) Maximum............................  Not Acceptable.
------------------------------------------------------------------------

    (D) Platform, flatbed or hanging scales > 150 kg (300 lb) capacity.

------------------------------------------------------------------------
         Certified test weights                Other test  material
------------------------------------------------------------------------
(1) 10 kg (20 lb)......................  Not Acceptable.
(2) 12.5 percent of maximum or 75 kg     50 percent of maximum or 75 kg
 (150 lb), whichever is greater.          (150 lb), whichever is
                                          greater.
(3) 25 percent of maximum or 150 kg      75 percent of maximum or 150 kg
 (300 lb), whichever is greater.          (300 lb), whichever is
                                          greater.
------------------------------------------------------------------------

    (iii) Certified test weights. An RCR must ensure that there are 
sufficient test weights on-site to test each scale used to weigh CR 
crab. Each test weight used for inseason scale testing must have its 
weight stamped on or otherwise permanently affixed to it. The weight of 
each test weight must be certified by a National Institute of Standards 
and Technology approved metrology laboratory every 2 years.
    (iv) Other test material. When permitted in paragraph (f)(4)(ii) of 
this section, a scale may be tested with test material other than 
certified test weights.
    (g) Crab Monitoring Plans (CMP). A CMP is a plan submitted by an 
RCR for each location or processing vessel where the RCR wishes to take 
deliveries of CR crab. The CMP must detail how the RCR will meet the 
catch monitoring standards detailed in paragraph (g)(5) of this 
section. An RCR that processes only CR crab harvested under a CPO or 
CPC IFQ permit is not required to prepare a CMP.
    (1) CMP Approval. NMFS will approve a CMP if it meets all the 
performance standards specified in paragraph (g)(5) of this section. 
The location or vessel identified in the CMP may be inspected by NMFS 
prior to approval of the CMP to ensure that the location conforms to 
the elements addressed in the CMP. If NMFS disapproves a CMP, the plant 
owner or manager may resubmit a revised CMP or file an administrative 
appeal as set forth under the administrative appeals procedures 
described in Sec.  679.43.
    (2) Inspection scheduling. The time and place of a CMP inspection 
may be arranged by submitting a written request for an inspection to 
NMFS, Alaska Region. An inspection must be requested no less than 10 
working days before the requested inspection date. NMFS staff will 
conduct CMP inspections in any port located in the United States that 
can be reached by regularly scheduled commercial air service. The 
inspection request must include:
    (i) Name and signature of the person submitting the application and 
the date of the application;
    (ii) Address, telephone number, facsimile number, and e-mail 
address (if available) of the person submitting the application; and
    (iii) A proposed CMP detailing how the RCR will meet each of the 
standards in paragraph (g)(5) of this section.
    (3) Approval period. NMFS will approve a CMP for 1 year if it meets 
the performance standards specified in paragraph (e)(2) of this 
section. An owner or manager must notify NMFS in writing if changes are 
made in plant operations or layout that do not conform to the CMP.
    (4) Changing an approved CMP. An RCR may change an approved CMP by 
submitting a CMP addendum to NMFS. Depending on the nature and 
magnitude of the change requested, NMFS may require a CMP inspection as 
described in paragraph (g)(2) of this section. A CMP addendum must 
contain:
    (i) Name and signature of the person submitting the addendum;
    (ii) Address, telephone number, facsimile number and e-mail address 
(if available) of the person submitting the addendum; and
    (iii) A complete description of the proposed CMP change.
    (5) CMP standards--(i) Crab sorting and weighing requirements. All 
crab, including crab parts and crab that are dead or otherwise 
unmarketable, delivered to the RCR must be sorted and weighed by 
species. The CMP must detail how and where crab are sorted and weighed.
    (ii) Scales used for weighing crab. The CMP must identify by serial 
number each scale used to weigh crab and describe the rationale for its 
use.
    (iii) Scale testing procedures. Scales identified in the CMP must 
be accurate within the limits specified in paragraph (f)(4)(i) of this 
section. For each scale identified in the CMP a testing plan must be 
developed that:
    (A) Describes the procedure the plant will use to test the scale;
    (B) Lists the test weights and equipment required to test the 
scale;
    (C) Lists where the test weights and equipment will be stored; and
    (D) Lists the names of the personnel responsible for conducting the 
scale testing.
    (iv) Printed record. An RCR must ensure that the scale produces a 
complete and accurate printed record of the weight of each species in a 
landing. All of the crab in a delivery must be weighed on a scale 
capable of producing a complete printed record as described in 
paragraph (e)(3) of this section. A printed record of each landing must 
be printed before the RCR submits a CR crab landing report.
    (v) Observation area. Each CMP must designate an observation area. 
The observation area is a location designated on the CMP where an 
individual may monitor the offloading and weighing of crab. The 
observation area must meet the following standards:
    (A) Access to the observation area. The observation area must be 
freely accessible to observer, NMFS staff or enforcement aides at any 
time during the effective period of the CMP.
    (B) Monitoring the offloading and weighing of crab. From the 
observation area, an individual must have an unobstructed view or 
otherwise be able to monitor the entire offload of crab between the 
first location where crab are removed from the boat and a location 
where all sorting has taken place and each species has been weighed.
    (C) Other requirements. The observation area must be sheltered from 
the weather and not exposed to unreasonable safety hazards.
    (vi) Plant liaison. The CMP must designate a plant liaison. The 
plant liaison is responsible for:

[[Page 10274]]

    (A) Orienting new observers, NMFS staff and enforcement aides to 
the plant;
    (B) Assisting in the resolution of observer concerns; and
    (C) Informing NMFS if changes must be made to the CMP.
    (vii) Drawing to scale of delivery location. The CMP must be 
accompanied by a drawing to scale of the delivery location or vessel 
showing:
    (A) Where and how crab are removed from the delivering vessel;
    (B) The observation area;
    (C) The location of each scale used to weigh crab; and
    (D) Each location where crab is sorted.
    (viii) Single geographic location. All offload and weighing 
locations detailed in a CMP must be located on the same vessel or in 
the same geographic location. If a CMP describes facilities for the 
offloading of vessels at more than one location, it must be possible to 
see all locations simultaneously.


Sec.  680.30  [Reserved]

Subpart C--Quota Management Measures


Sec.  680.40  Quota Share (QS), Processor QS (PQS), Individual Fishing 
Quota (IFQ), and Individual Processor Quota (IPQ) issuance.

    (a) Crab QS and Crab QS fisheries. The Regional Administrator will 
issue crab QS for the crab QS fisheries defined in paragraph (a)(1) of 
this section. The Regional Administrator will annually issue IFQ based 
on the amount of QS a person holds. Crab harvested and retained in each 
crab QS fishery may be harvested and retained only by persons holding 
the appropriate crab IFQ for that crab QS fishery.
    (1) Allocations. With the exception of the WAI golden king crab 
fishery, the Regional Administrator shall annually apportion 10 percent 
of the TAC specified by the State of Alaska for each of the fisheries 
described in Table 1 to this part to the Western Alaska CDQ program. 
Ten percent of the TAC in the Western Aleutian Islands golden king crab 
fishery will be allocated to the Adak community entity. The remaining 
TACs for the crab QS fisheries will be apportioned for use by QS 
holders in each fishery.
    (2) Official crab rationalization record. The official crab 
rationalization record will be used to determine the amount of QS that 
is to be allocated for each crab QS fishery. The official crab 
rationalization record is presumed to be correct. An applicant for QS 
has the burden to prove otherwise. For the purposes of creating the 
official crab rationalization record the Regional Administrator will 
presume the following:
    (i) An LLP license is presumed to have been used onboard the same 
vessel from which that LLP is derived, unless documentation is provided 
establishing otherwise.
    (ii) If more than one person is claiming the same legal landings or 
legal processing activities, then each person eligible to receive QS or 
PQS based on those activities will receive an equal share of any 
resulting QS or PQS unless the applicants can provide written 
documentation establishing an alternative means for distributing the QS 
or PQS.
    (iii) For the purposes of determining eligibility for CPO QS, a 
person is presumed to have processed BSAI crab in 1998 or 1999 if the 
vessel on which the applicant's LLP license is based processed such 
crab in those years.
    (b) QS sectors and regional designations--(1) General. The Regional 
Administrator shall initially assign to qualified persons, crab QS that 
are specific to the crab QS fisheries defined in paragraph (a)(1) of 
this section. The crab QS amount issued will be based on legal landings 
made on vessels authorized to participate in those fisheries in four QS 
sectors:
    (i) Catcher Vessel Owner (CVO) QS shall be initially issued to 
qualified persons defined in paragraph (b)(3) of this section based on 
legal landings of unprocessed crab.
    (ii) Catcher Vessel Crew (CVC) QS shall be initially issued to 
qualified persons defined in paragraph (b)(3) of this section based on 
legal landings of unprocessed crab. After July 1, 2008, CVC QS shall 
yield an annual IFQ of CVC Class A or CVC Class B as defined under 
paragraph (h)(2) of this section.
    (iii) Catcher/Processor Owner (CPO) QS shall be initially issued to 
qualified persons defined in paragraph (b)(3) of this section based on 
legal landings of crab that were harvested and processed on the same 
vessel.
    (iv) Catcher/Processor Crew (CPC) QS shall be initially issued to 
qualified persons defined in paragraph (b)(3) of this section based on 
legal landings of crab that were harvested and processed on the same 
vessel.
    (2) Regional designations. (i) Regional designations apply to:
    (A) North QS if the legal landings that gave rise to the QS for a 
crab QS fishery were landed in the Bering Sea subarea north of 
56[deg]20[min] N. lat.; or
    (B) South QS if the legal landings that gave rise to the QS for a 
crab QS fishery were not landed in the North Region;
    (1) CVO QS allocated to the WAI crab QS fishery; and
    (2) CVC QS for the WAI crab QS fishery on and after July 1, 2008.
    (C) West QS for a portion of the QS allocated to the WAG crab QS 
fishery subject to the provisions under Sec.  680.40(c)(4).
    (ii) Regional designations do not apply (Undesignated QS) to:
    (A) Crab QS for the BST crab QS fishery;
    (B) Crab QS for that portion of the WAG QS fishery not regionally 
designated for the West region;
    (C) CVC QS prior to July 1, 2008;
    (D) CPO QS unless that QS is transferred to the CVO QS sector, in 
which case the regional designation is made by the recipient of the 
resulting CVO QS at the time of transfer; and
    (E) CPC QS.
    (iii) The regional designations that apply to each of the crab QS 
fisheries are specified in the following table:

----------------------------------------------------------------------------------------------------------------
                                                                                                   Undesignated
               Crab QS fishery                 North  region    South  region     West  region        region
----------------------------------------------------------------------------------------------------------------
(A) EAG.....................................               X                X   ...............  ...............
(B) WAG.....................................  ...............  ...............               X                X
(C) BST.....................................  ...............  ...............  ...............               X
(D) BSS.....................................               X                X   ...............  ...............
(E) BBR.....................................               X                X   ...............  ...............
(F) PIK.....................................               X                X   ...............  ...............
(G) SMB.....................................               X                X   ...............  ...............
(H) WAI.....................................  ...............               X
----------------------------------------------------------------------------------------------------------------

    (iv) The regional designation ratios applied to QS and PQS for each 
crab QS fishery will be established based on the regional designations 
determined on August 1, 2005. QS or PQS issued after

[[Page 10275]]

this date will be issued in the same ratio.
    (3) Qualified person means, for the purposes of QS issuance, a 
person, as defined in Sec.  679.2, who at the time of application for 
QS meets the following criteria for each of the QS sectors:
    (i) CVO QS. Holds one or more permanent, fully transferable crab 
LLP licenses and is a citizen of the United States;
    (ii) CPO QS. (A) Holds one or more permanent, fully transferable 
crab LLP licenses with a Catcher/Processor designation and is a citizen 
of the United States; and
    (B) Harvested and processed at sea any crab species in any BSAI 
crab fishery during the years 1998 or 1999.
    (iii) CVC QS and CPC QS. (A) Is an individual who is a citizen of 
the United States, or his or her successor-in-interest if that 
individual is deceased;
    (B) Has historical participation in the fishery demonstrated by 
being the individual named on a State of Alaska Interim Use Permit for 
a QS crab fishery and made at least one legal landing per year for any 
3 eligibility years under that permit based on data from fish tickets 
maintained by the State of Alaska. The qualifying years are described 
in Column C of Table 7 to this part.
    (C) Has recent participation in the fishery demonstrated by being 
the individual named on a State of Alaska Interim Use Permit for a QS 
crab fishery and made at least one legal landing under that permit in 
any 2 of 3 seasons based on data from fish tickets maintained by the 
State of Alaska. Those seasons are defined in Column D of Table 7 to 
this part; except that the requirement for recent participation does 
not apply if:
    (1) The legal landings that qualify the individual for QS in the 
PIK crab QS fishery were made from a vessel that was less than 60 feet 
length overall; or
    (2) If the individual who is otherwise eligible to receive an 
initial issuance of QS died while working as part of a harvesting crew 
in any U.S. commercial fishery.
    (4) Qualification for initial allocation of QS--(i) Qualifying 
year. The qualifying years for each crab QS fishery are described in 
Column B of Table 7 to this part.
    (ii) Legal landing of crab means, for the purpose of initial 
allocation of QS, crab harvested during the qualifying years specified 
in Column B of Table 7 to this part and landed in compliance with state 
and Federal permitting, landing, and reporting regulations in effect at 
the time of the landing.
    (A) Legal landings exclude any deadloss, test fishing, fishing 
conducted under an experimental, exploratory, or scientific activity 
permit, or the fishery conducted under the Western Alaska CDQ Program.
    (B) Landings made onboard a vessel that gave rise to a crab LLP 
license or made under the authority of an LLP license are non-severable 
from the crab LLP license until QS has been issued for those legal 
landings, except as provided for in paragraph (c)(2)(vii) of this 
section.
    (C) Landings may only be used once for each QS sector for the 
purposes of allocating QS.
    (D) Landings made from vessels which are used for purposes of 
receiving compensation through the BSAI Crab Capacity Reduction Program 
may not be used for the allocation of CVO QS or CPO QS.
    (E) Legal landings for purposes of allocating QS for a crab QS 
fishery only include those landings that resulted in the issuance of an 
LLP license endorsed for that crab QS fishery, or landings that were 
made in that crab QS fishery under the authority of an LLP license 
endorsed for that crab QS fishery, except as provided for in paragraph 
(c)(2)(vii) of this section.
    (iii) Documentation. Evidence of legal landings shall be limited to 
State of Alaska fish tickets.
    (c) Calculation of QS allocation--(1) General. (i) For each 
permanent, fully transferable crab LLP license under which an applicant 
applies, CVO and CPO QS will be based on legal landings that resulted 
in the issuance of that license or from legal landings that were made 
under the authority of that license.
    (ii) For each State of Alaska Interim Use Permit under which an 
applicant applies for CVC QS or CPC QS, the initial allocation of QS 
will be based on the legal landings that were made under the authority 
of that permit.
    (2) Computation for initial issuance of QS. (i) Based on the 
official crab rationalization record the Regional Administrator shall 
derive the annual harvest denominator (AHD) that represents the amount 
of legally landed crab in each crab QS fishery in each qualifying year 
as established in Column B of Table 7 to this part.
    (ii) The initial QS pool is described in Table 8 to this part.
    (iii) A person's initial allocation of QS shall be based on a 
percentage of the legal landings for the applicable sector in each crab 
QS fishery:
    (A) Associated with crab LLP licenses held by the applicant for CVO 
or CPO QS; or
    (B) Authorized under a State of Alaska Interim Use Permit held by 
the applicant for CVC or CPC QS.
    (iv) The Regional Administrator shall calculate the allocation of 
CVO and CPO QS for each crab QS fishery ``f'' based on each fully 
transferable LLP license ``l'' held by a qualified person by the 
following formulas:
    (A) Sum legal landings for each qualifying year, as described in 
Column B of Table 7 to this part, and divide that amount by the AHD for 
that year as follows:

([sigma] legal landingslf/AHDf) x 100 = 
Percentage of the AHDlf

    (B) In those fisheries where only a subset of the qualifying years 
are applied, the Regional Administrator will use the years that yield 
the highest percentages of each AHD as calculated in paragraph 
(c)(2)(iv)(A) of this section.
    (C) Sum the highest percentages of the AHD's for that license as 
calculated under paragraph (c)(2)(iv)(B) of this section and divide by 
the number in Column E of Table 7 to this part (Subset of Qualifying 
Years). This yields the Average Percentage as presented in the 
following equation:

[sigma] Percentages of the AHDlf/Subset of Qualifying 
Yearsf = Average Percentagelf

    (D) Divide the Average percentage in paragraph (c)(2)(iv)(C) of 
this section for a license and fishery by the Sum of all Average 
Percentages for all licenses for that fishery as presented in the 
following equation:

Average Percentagelf/[sigma] Average Percentagesf 
= Percentage of the Total Percentageslf

    (E) Multiply the Percentage of the Total Percentages in paragraph 
(c)(2)(iv)(D) of this section by the Initial QS Pool as described in 
Table 8 to this part. This yields the unadjusted number of QS units 
derived from a license for a fishery.
    (F) Multiply the unadjusted number of QS units in paragraph 
(c)(2)(iv)(E) of this section by 97 percent. This yields the number of 
QS units to be allocated.
    (G) Determine the percentage of legal landings in the subset of 
qualifying years associated with a LLP license with a catcher/processor 
designation that were processed on that vessel and multiply the amount 
calculated in paragraph (c)(2)(iv)(F) of this section by this 
percentage. This yields the amount of CPO QS to be allocated.
    (H) Determine the percentage of legal landings in the subset of 
qualifying years associated with a LLP license that were not processed 
on that vessel and multiply the amount calculated in

[[Page 10276]]

paragraph (c)(2)(iv)(F) of this section by this percentage. This yields 
the amount of CVO QS to be allocated.
    (I) Determine the percentage of legal landings associated with an 
LLP license in the subset of qualifying years that were delivered in 
each region as defined in paragraph (b)(2) of this section. The amount 
calculated in paragraph (c)(2)(iv)(H) of this section is multiplied by 
the percentage for each region.
    (J) The percentage calculated in paragraph (c)(2)(iv)(I) of this 
section may be adjusted according to the provisions at paragraphs 
(c)(3) and (c)(4) of this section.
    (v) As shown in the formulas under this paragraph (c)(2)(v), the 
allocation of CVC and CPC QS for each crab QS fishery ``f'' based on 
each State of Alaska Interim Use Permit ``i'' held by each qualified 
person shall be calculated by the Regional Administrator as follows:
    (A) Sum legal landings for each qualifying year as described in 
Column B of Table 7 to this part and divide that amount by the AHD for 
that year using the following equation:

([sigma] legal landingsif/AHDf) x 100 = 
Percentage of the AHDif

    (B) In those fisheries where only a subset of the qualifying years 
are applied, the Regional Administrator will use the years that yield 
the highest percentages of the AHD as calculated in paragraph 
(c)(2)(v)(A) of this section.
    (C) Sum the highest percentages of the AHDs for that license 
calculated under paragraph (c)(2)(v)(B) of this section and divide by 
the number in Column E of Table 7 to this part (Subset of Qualifying 
Years). This yields the Average Percentage as presented in the 
following equation:

[sigma] Percentages of the AHDlf/Subset of Qualifying 
Yearsf = Average Percentageif

    (D) Divide the Average Percentage in paragraph (c)(2)(v)(C) of this 
section for a permit and fishery by the Sum of all Average Percentages 
for all permits for that fishery as presented in the following 
equation:

Average Percentageif/[sigma] Average Percentagesf 
= Percentage of the Total Percentagesif

    (E) Multiply the Percentage of the Total Percentages in paragraph 
(c)(2)(v)(E) of this section by the Initial QS Pool as described in 
Table 8 to this part. This yields the unadjusted number of QS units 
derived from a permit for a fishery.
    (F) Multiply the unadjusted number of QS units in paragraph 
(c)(2)(v)(E) of this section by 3 percent. This yields the number of QS 
units to be allocated.
    (G) Determine the percentage of legal landings in the subset of 
qualifying years associated with a permit that were processed on that 
vessel and multiply the amount calculated in paragraph (c)(2)(v)(F) of 
this section by this percentage. This yields the amount of CPC QS to be 
allocated.
    (H) Determine the percentage of legal landings in the subset of 
qualifying years associated with a permit that were not processed on 
that vessel and multiply the amount calculated in paragraph 
(c)(2)(v)(F) of this section by this percentage. This yields the amount 
of CVC QS to be allocated.
    (I) Determine the percentage of legal landings associated with a 
permit in the subset of qualifying years that were delivered in each 
region as defined in paragraph (b)(2) of this section. The amount 
calculated in paragraph (c)(2)(v)(H) of this section is multiplied by 
the percentage for each region.
    (J) The percentage calculated in paragraph (c)(2)(v)(I) of this 
section may be adjusted according to the provisions at paragraphs 
(c)(3) and (c)(4) of this section. The amount calculated in paragraph 
(c)(2)(v)(H) of this section is multiplied by the percentage for each 
region. These regional QS designations do not apply in the CVC QS 
sector until July 1, 2008.
    (vi) Sunken vessel provisions. (A) If a person applies for CVO QS 
or CPO QS based, in whole or in part, on the activities of a vessel 
that sank, the Regional Administrator shall presume landings for that 
vessel for the crab fishing years between the time of vessel loss and 
the replacement of the vessel under Sec.  679.40(k)(5)(v). These 
presumed landings shall be equivalent to 50 percent of the average 
legal landings for the qualifying years established in Column B of 
Table 7 to this part unaffected by the sinking. If the vessel sank 
during a qualifying year, the legal landings for that year will not be 
used as the basis for presumed landings;
    (B) If a person applies for CVO QS or CPO QS based, in whole or in 
part, on the activities of a vessel that sank and:
    (1) The person who owned the vessel that sank would have been 
denied eligibility to replace a sunken vessel under the provisions of 
Public Law 106-554; and
    (2) The vessel that sank was replaced with a newly constructed 
vessel, with that vessel under construction no later than June 10, 
2002. For purposes of this section a vessel is considered under 
construction once the keel for that vessel has been laid; and
    (3) The newly constructed vessel participated in any Bering Sea 
crab fishery no later than October 31, 2002;
    (4) Then the Regional Administrator shall presume landings for that 
vessel for the crab fishing years between the time of vessel loss and 
the replacement of the vessel. These presumed landings shall be 
equivalent to 50 percent of the average legal landings for the 
qualifying years established in Column B of Table 7 to this part 
unaffected by the sinking. If the vessel sank during a qualifying year, 
the legal landings for that year will not be used as the basis for 
presumed landings.
    (vii) LLP license history exemption. An applicant for CVO or CPO QS 
who:
    (A) Deployed a vessel in a crab QS fishery under the authority of 
an interim or permanent fully transferable LLP license; and
    (B) Prior to January 1, 2002, received by transfer, as authorized 
by NMFS, a permanent fully transferable LLP license for use in that 
crab QS fishery to insure that a vessel would remain authorized to 
participate in the fishery, may choose to use as the legal landings 
which are the basis for QS allocation on his or her application for 
crab QS or PQS either:
    (1) The legal landings made on that vessel for that crab QS fishery 
prior to the transfer of the permanent fully transferable LLP license 
for use on that vessel; or
    (2) The legal landings made on the vessel that gave rise to the 
permanent fully transferable LLP license and the legal landings made 
under the authority of that same LLP license in that crab QS fishery 
prior to January 1, 2002.
    (C) If the history described in paragraph (c)(2)(vii)(B)(1) of this 
section is being used by another person for an allocation with an LLP 
license, then the allocation in paragraph (c)(2)(vii) will be based on 
the legal landings as described under paragraph (c)(2)(vii)(B)(2) of 
this section.
    (3) Adjustment of CVO and CVC QS allocation for North and South 
regional designation. The Regional Administrator may adjust the 
regional designation of QS to ensure that it is initially allocated in 
the same proportion as the regional designation of PQS for that crab QS 
fishery. A person who would receive QS based on the legal landings in 
only one region, will receive QS with only that regional designation. A 
person who would receive QS with more than one regional designation for 
that crab QS fishery would have his or her QS holdings regionally 
adjusted on a pro rata basis as follows:
    (i) Determine the ratio of the Initial PQS pool in the North and 
South regions.

[[Page 10277]]

    (ii) Multiply the Initial QS pool by the ratio of North and South 
PQS. This will yield the target QS pool for each region.
    (iii) Sum the QS for all persons who are eligible to receive North 
QS yielding the unadjusted North QS pool, and sum the QS for all 
persons who are eligible to receive South QS yielding the unadjusted 
South QS pool.
    (iv) To calculate the amount of QS available for adjustment, 
subtract the amount of QS for persons receiving North only QS from the 
unadjusted North QS pool and subtract the amount of QS for persons 
receiving South only QS from the unadjusted South QS pool, as presented 
in the following equations:

(A) Unadj. North QS -North QS only = North QS for [North & South] QS 
holders.

(B) Unadj. South QS -South QS only = South QS for [North & South] QS 
holders.

    (v) Determine which region becomes the gaining region if the target 
QS pool is greater than the unadjusted QS pool.
    (vi) Subtract the gaining region unadjusted QS pool from the 
gaining region target QS pool to calculate the number of QS units that 
need to be applied to the gaining region. This amount is the Adjustment 
Amount as presented in the following equation:

Unadj. gaining region QS -Target gaining region QS pool = Adjustment 
Amount

    (vii) Divide the Adjustment Amount by the unadjusted losing region 
QS pool for North and South QS holders. This yields the regional 
adjustment factor (RAF) for each person as presented in the following 
equation:

Adj. Amount/unadjusted losing region QS pool for [North & South] QS 
holders = RAF

    (viii) For each person (p) who holds both North and South Region 
QS, the QS adjustment (QS Adj. (p)) to that person's Unadjusted losing 
region QS is expressed in the following equation as:

QS adj. p = Unadjusted losing region QS p x RAF

    (ix) The QS adjustment for person (p) is made by subtracting the QS 
adjustment from that person's unadjusted losing region QS amount and 
added to that person's unadjusted gaining region QS. These adjustments 
will yield the regional adjustment QS amounts for that person.
    (4) Regional designation of Western Aleutian Islands golden king 
crab. Fifty percent of the CVO and CVC QS that is issued in the WAG 
crab QS fishery will be initially issued with a West regional 
designation. The West regional designation applies to QS for delivery 
West of 174[deg] W. longitude. The remaining 50 percent of the CVO and 
CVC QS initially issued for this fishery is not subject to regional 
designation (Undesignated QS). A person (p) who would receive QS based 
on the legal landings in only one region, will receive QS with only 
that regional designation. A person who would receive QS with more than 
one regional designation for that crab QS fishery would have his or her 
QS holdings regionally adjusted on a pro rata basis as follows:
    (i) The West QS pool is equal to 50 percent of the initial QS pool.
    (ii) The Undesignated QS pool is equal to 50 percent of the initial 
QS pool.
    (iii) Sum the QS for all persons who are eligible to receive West 
QS yielding the unadjusted West QS pool, and sum the QS for all persons 
who are eligible to receive undesignated QS yielding the unadjusted 
undesignated QS pool.
    (iv) To calculate the amount of QS available for adjustment, 
subtract the amount of QS for persons receiving West only QS from the 
unadjusted West QS pool and subtract the amount of QS for persons 
receiving undesignated only QS from the unadjusted undesignated QS 
pool, as presented in the following equation:

(A) Unadj. West QS-West QS only = West QS for [West & Undesignated] QS 
holders.
(B) Unadj. Undesignated QS-Undesignated QS only = Undesignated QS for 
[West & Undesignated] QS holders.

    (v) Subtract the gaining region Unadjusted QS pool from the gaining 
region Target QS pool to calculate the number of QS units that will 
need to be applied to the gaining region. This amount is the Adjustment 
Amount as presented in the following equation:

Target gaining region QS pool-unadjusted region QS = Adjustment Amount

    (vi) Divide the Adjustment Amount by the unadjusted losing region 
QS pool for West and Undesignated QS holders. This yields the regional 
adjustment factor (RAF) for each person as presented in the following 
equation:

Adj. Factor/unadjusted losing region QS pool for West & Undesignated QS 
holders = RAF

    (vii) For each person (p) who holds both unadjusted West and 
Undesignated Region QS, the QS adjustment (QS Adj. p) to that person's 
Unadjusted West QS is expressed in the following equation as:

QS adj. p = Unadjusted West QS p x RAF

    (viii) The QS adjustment for person (p) is made by subtracting the 
QS adjustment for that person's unadjusted losing region QS amount and 
subtracted from that person's unadjusted gaining region QS. These 
adjustments will yield the regional adjustment QS amounts for that 
person.
    (d) Crab PQS and Crab PQS Fisheries--(1) General. The Regional 
Administrator shall initially assign to qualified persons defined in 
paragraph (d)(3) of this section crab PQS specific to crab QS fisheries 
defined in paragraph (a)(1) of this section. The crab PQS amount issued 
will be based on total legal processing of crab made in those crab QS 
fisheries. PQS shall yield annual IPQ as defined under paragraph (j) of 
this section.
    (2) Regional designations. For each crab QS fishery, PQS shall be 
initially regionally designated based on the legal processing that gave 
rise to the PQS as follows:
    (i) North PQS if the processing that gave rise to the PQS for a 
crab QS fishery occurred in the Bering Sea subarea north of 56[deg]20' 
N. lat.; or
    (ii) South PQS if the processing that gave rise the PQS for a crab 
QS fishery did not occur in the North Region, and PQS allocated to the 
WAI crab QS fishery; or
    (iii) West PQS for a portion of the PQS allocated to the WAG crab 
QS fishery subject to the provisions under paragraph (e)(2) of this 
section; or
    (iv) Undesignated. Regional designations do not apply to:
    (A) That portion of the WAG crab QS fishery that is not regionally 
designated as West Region PQS; and
    (B) The BST crab QS fishery.
    (v) The specific regional designations that apply to PQS in each of 
the crab QS fisheries are described in paragraph (b)(2)(iii) of this 
section.
    (3) Qualified person, for the purposes of PQS issuance, means a 
person, as defined at Sec.  679.2, who at the time of application for 
PQS is a U.S. citizen, or a U.S. corporation, partnership, association, 
or other entity, and who:
    (i) Legally processed any crab QS species established in paragraph 
(a)(1) of this section during 1998 or 1999 as demonstrated on the 
official crab rationalization record; or
    (ii) Did not legally process any crab QS species during 1998 or 
1999 according to the official crab rationalization record, but who:
    (A) Processed BSS crab QS species in each crab season for that 
fishery during the period from 1988 through 1997; and
    (B) From January 1, 1996, through June 10, 2002, invested in a 
processing facility, processing equipment, or a

[[Page 10278]]

vessel for use in processing operations, including any improvements 
made to existing facilities with a total expenditure in excess of 
$1,000,000; or
    (C) Is the person to whom the history of legal processing of crab 
has been transferred by the express terms of a written contract that 
clearly and unambiguously provides that such legal processing of crab 
has been transferred. This provision would apply only if that applicant 
for PQS:
    (1) Legally processed any crab QS species established in paragraph 
(a)(1) of this section during 1998 or 1999, as demonstrated on the 
official crab rationalization record; or
    (2) Received history of crab processing that was legally processed 
during 1998 or 1999, as demonstrated on the official crab 
rationalization record.
    (iii) Qualified persons, or their successors-in-interest, must 
exist at the time of application for PQS.
    (iv) A former partner of a dissolved partnership or a former 
shareholder of a dissolved corporation who would otherwise be a 
qualified person may apply for PQS in proportion to his or her 
ownership interest in the dissolved partnership or corporation.
    (v) A person who has acquired a processing corporation, 
partnership, or other entity that has a history of legal processing of 
crab is presumed to have received by transfer all of that history of 
legal processing of crab unless a clear and unambiguous written 
contract establishes otherwise.
    (4) Qualification for initial allocation of PQS--(i) Years. The 
qualifying years for each crab QS fishery are designated in Table 9 to 
this part.
    (ii) Ownership interest. Documentation of ownership interest in a 
dissolved partnership or corporation, association, or other entity 
shall be limited to corporate documents (e.g., articles of 
incorporation) or notarized statements signed by each former partner, 
shareholder or director, and specifying their proportions of interest.
    (iii) Legal processing of crab means, for the purpose of initial 
allocation of PQS, raw crab pounds processed in the crab QS fisheries 
designated under paragraph (a)(1) of this section in compliance with 
state and Federal permitting, landing, and reporting regulations in 
effect at the time of the landing. Legal processing excludes any 
deadloss, processing of crab harvested in a test fishery or under a 
scientific, education, exploratory, or experimental permit, or under 
the Western Alaska CDQ Program.
    (iv) Documentation. Evidence of legal processing shall be limited 
to State of Alaska fish tickets, except that:
    (A) NMFS may use information from a State of Alaska Commercial 
Operators Annual Report, State of Alaska fishery tax records, or 
evidence of direct payment from a receiver of crab to a harvester if 
that information indicates that the buyer of crab differs from the 
receiver indicated on State of Alaska fish ticket records; however:
    (B) Information on State of Alaska fish tickets shall be presumed 
to be correct for the purpose of determining evidence of legal 
processing of crab. An applicant will have the burden of proving the 
validity of information submitted in an application that is 
inconsistent with the information on the State of Alaska fish ticket.
    (e) Calculation of PQS allocation--(1) Computation for initial 
issuance of PQS. (i) The Regional Administrator shall establish the 
Total Processing Denominator (TPD) which represents the amount of 
legally processed raw crab pounds in each crab QS fishery in all 
qualifying years.
    (ii) For each crab QS fishery, the percentage of the initial PQS 
pool that will be distributed to each qualified person shall be based 
on their percentage of the TPD according to the following procedure:
    (A) Sum the raw crab pounds purchased for each person for all 
qualifying years.
    (B) Divide the sum calculated in paragraph (e)(1)(ii)(A) of this 
section by the TPD. Multiply by 100. This yields a person's percentage 
of the TPD.
    (C) Sum the TPD percentages of all persons.
    (D) Divide the percentage for a person calculated in paragraph 
(e)(1)(ii)(B) of this section by the sum calculated in paragraph 
(e)(1)(ii)(C) of this section for all persons. This yields a person's 
percentage of the TPD.
    (E) Multiply the amount calculated in paragraph (e)(1)(ii)(D) of 
this section by the PQS pool for that crab QS fishery as that amount is 
defined in Table 8 to this part.
    (F) Determine the percentages of legally processed crab that were 
processed in each region. The percentages calculated in paragraph 
(e)(1)(ii)(E) of this section are multiplied by the amount determined 
within each regional designation. Regional designations will apply to 
that PQS according to the provisions established in paragraphs (d)(2) 
and (e)(2) of this section.
    (2) Regional designation of Western Aleutian Islands golden king 
crab. (i) Fifty percent of the PQS that is issued in the WAG crab QS 
fishery will be issued with a West regional designation. The West 
regional designation applies to PQS for processing west of 174[deg] N. 
long. The remaining 50 percent of the PQS issued for this fishery is 
Undesignated region PQS.
    (ii) A person will receive only West PQS if, at the time of 
application, that person owns a crab processing facility that is 
located in the West region. A person will receive West region and 
Undesignated Region PQS if, at the time of application, that person 
does not own a crab processing facility located in the West region. 
Expressed algebraically, for any person (p) allocated both West region 
PQS and undesignated region PQS the formula is as follows:

(A) PQSWest = PQS x 0.50
(B) PQSUnd. = PQS x 0.50
(C) PQSWest for PQSWest & Und. holders = 
PQSWest-PQSWest only
(D) PQSWest for Personp West & Und. = 
PQSp x PQSWest for PQSWest & Und. 
holders/(PQSWest for PQSWest & Und. holders + 
PQSUnd.)
(E) PQSUnd. for Personp = PQSp-
PQSWest for Personp

    (iii) For purposes of the allocation of PQS in the WAG crab 
fishery:
    (A) Ownership of a processing facility is defined as:
    (1) A sole proprietor; or
    (2) A relationship between two or more entities in which a person 
directly or indirectly owns a 10 percent or greater interest in 
another, or a third entity directly or indirectly owns a 10 percent or 
greater interest in both.
    (B) A processing facility is a shoreside crab processor or a 
stationary floating crab processor.
    (f) Application for crab QS or PQS process--(1) General. The 
Regional Administrator will issue QS and/or PQS to an applicant if a 
complete application for crab QS or PQS is submitted by or on behalf of 
the applicant during the specified application period, and if the 
applicant meets all criteria for eligibility as specified at paragraphs 
(b)(3) and (d)(3) of this section.
    (i) The Regional Administrator will send application materials to 
the person identified by NMFS as an eligible applicant based on the 
official crab rationalization record. An application form may also be 
obtained from the Internet or requested from the Regional 
Administrator.
    (ii) An application for crab QS or PQS may be submitted by mail to 
NMFS, Alaska Region, Restricted Access Management, P.O. Box 21668, 
Juneau, AK 99802, by facsimile (907-586-7354), or by hand delivery to 
the NMFS, 709 West 9th Street, room 713, Juneau, AK.

[[Page 10279]]

    (iii) An application that is postmarked, faxed, or hand delivered 
after the ending date for the application period for the Crab QS 
Program specified in the Federal Register will be denied.
    (2) Contents of application. A complete application for crab QS or 
PQS must be signed by the applicant, or the individual representing the 
applicant, and include the following, as applicable:
    (i) Type of QS or PQS for which the person is applying. Select the 
type of QS or PQS for which the applicant is applying.
    (A) If applying for CVO QS or CPO QS, submit information required 
in paragraphs (f)(2)(ii) through (f)(2)(iv) of this section;
    (B) If applying for CVC QS or CPC QS, submit information required 
in paragraphs (f)(2)(ii), (f)(2)(iii) and (f)(2)(v) of this section;
    (C) If applying for PQS, submit information required in paragraphs 
(f)(2)(ii), (f)(2)(iii) and (f)(2)(vi) of this section.
    (ii) Applicant information. (A) Enter the applicant's name, NMFS 
person ID (if applicable), tax ID or social security number (required), 
permanent business mailing address, business telephone number, 
facsimile number, and e-mail (if available);
    (B) Indicate (YES or NO) whether applicant is a U.S. citizen; if 
YES, enter his or her date of birth. You must be a U.S. citizen or U.S. 
corporation, partnership, or other business entity to obtain CVO, CPO, 
CVC, or CPC QS.
    (C) Indicate (YES or NO) whether applicant is a U.S. corporation, 
partnership, association, or other business entity; if YES, enter the 
date of incorporation;
    (D) Indicate (YES or NO) whether applicant is deceased; if YES, 
enter date of death. A copy of the death certificate must be attached 
to the application;
    (E) Indicate (YES or NO) whether applicant described in paragraph 
(f)(2)(ii)(C) of this section is no longer in existence; if YES, enter 
date of dissolution and attach evidence of dissolution to the 
application;
    (iii) Fishery and QS/PQS type. Indicate the crab QS fishery and 
type of QS/PQS for which applying.
    (iv) CVO or CPO QS. (A) For vessels whose catch histories are being 
claimed for purposes of the crab QS program, enter the following 
information: name of the vessel, ADF&G vessel registration number, USCG 
documentation number, moratorium crab permit number(s), and crab LLP 
license number(s) held by the applicant and used on that vessel, 
qualifying years or seasons fished by fishery, and dates during which 
those permits were used on that vessel.
    (B) Indicate (YES or NO) whether applicant is applying for QS for 
any crab QS fishery for which the applicant purchased an LLP license 
prior to January 1, 2002, in order to remain in that fishery. If YES, 
include LLP crab license number, and the vessel's name, ADF&G vessel 
registration number, and USCG documentation number.
    (C) Indicate (YES or NO) whether QS is being claimed based on the 
fishing history of a a vessel that was lost or destroyed. If YES, 
include the name, ADF&G registration number, and USCG documentation 
number of the lost or destroyed vessel, the date the vessel was lost or 
destroyed, and evidence of the loss or destruction.
    (D) Indicate (YES or NO) whether the lost or destroyed vessel 
described in paragraph (f)(2)(iv)(C) of this section was replaced with 
a newly constructed vessel. If YES, include the name, ADF&G vessel 
registration number, and USCG documentation number of the replacement 
vessel, date of vessel construction, and date vessel entered 
fishery(ies). Indicate (YES or NO) if the replacement vessel 
participated in a Bering Sea crab fishery by October 31, 2002. If YES, 
provide documentation of the replacement vessel's participation by 
October 31, 2002, in a Bering Sea crab fishery.
    (E) If the applicant is applying for CPO QS, indicate (YES or NO) 
whether the applicant processed crab from any of the crab QS fisheries 
listed on Table 1 to this part on board a vessel authorized by one of 
the LLP licenses listed in paragraph (f)(2)(iv)(A) of this section in 
1998 or 1999. If YES, enter information for the processed crab, 
including harvest area, date of landing, and crab species.
    (v) CVC or CPC QS. (A) Indicate (YES or NO) whether applicant had 
at least one landing in three of the qualifying years for each crab 
species for which the applicant is applying for QS (see Table 7 to this 
part).
    (B) Indicate (YES or NO) whether applicant has recent participation 
in a crab QS fishery as defined in Table 7 to this part.
    (C) If the answer to paragraph (f)(2)(v)(A) or paragraph 
(f)(2)(v)(B) of this section is YES, enter State of Alaska Interim Use 
Permit number and the name, ADF&G vessel registration number, and USCG 
documentation number of vessel on which harvesting occurred. Select the 
qualifying years or seasons fished by QS fishery, and the dates during 
which those permits were used on that vessel;
    (D) Indicate (YES or NO) whether a person is applying as the 
successor-in-interest to an eligible applicant. If YES, attach to the 
application documentation proving the person's status as a successor-
in-interest and evidence of the death of the eligible applicant.
    (vi) Processor QS. (A) Indicate (YES or NO) whether applicant 
processed any of the crab species included in the Crab QS program (see 
Table 1 to this part) in 1998 or 1999.
    (B) If answer to paragraph (f)(2)(vi)(A) of this section is YES, 
enter the facility name and ADF&G processor code for each processing 
facility where crab, from any of the crab QS fisheries listed in Table 
1 of this part, were processed and the qualifying years or seasons by 
fishery for which applicant is claiming eligibility for PQS.
    (C) If answer to paragraph (f)(2)(vi)(A) of this section is NO, 
indicate (YES or NO) whether applicant is claiming eligibility under 
hardship provisions;
    (D) If answer to paragraph (f)(2)(vi)(C) of this section is YES, 
both of the following provisions must apply to a processor to obtain 
hardship provisions. Attach documentation of the following 
circumstances:
    (1) Applicant processed QS crab during 1998 or 1999, or processed 
BSS crab in each season between 1988 and 1997; and
    (2) Applicant invested a total expenditure in excess of $1,000,000 
for any processing facility, processing equipment, or a vessel for use 
in processing operations, including any improvements made to existing 
facilities from January 1, 1996, to June 10, 2002;
    (E) Indicate (YES or NO) whether applicant has entered into a 
Community Right of First Refusal (ROFR) contract consistent with 
paragraph (f)(3) of this section pertaining to the transfer of any PQS 
and/or IPQ subject to ROFR and issued as a result of this application.
    (F) Contract that the legal processing history and rights to apply 
for and receive PQS based on that legal processing history have been 
transferred or retained; and
    (G) Any other information deemed necessary by the Regional 
Administrator.
    (H) If applicant is applying to receive PQS for the WAG crab QS 
fishery, indicate (YES or NO) whether applicant owns a crab processing 
facility in the West region (see paragraph (b)(2) (iii) of this 
section).
    (vii) Applicant signature and certification. The applicant must 
sign and date the application certifying that all information is true, 
correct, and complete to the best of his/her knowledge and belief. If 
the application is completed by an authorized

[[Page 10280]]

representative, then authorization must accompany the application.
    (3) Notice and contract provisions for community right of first 
refusal (ROFR) for initial issuance of PQS. (i) To be complete, an 
application for PQS from a person based on legal processing that 
occurred in an ECC, other than Adak, must also include an affidavit 
signed by the applicant stating that notice has been provided to the 
ECC of the applicant's intent to apply for PQS 60 days prior to the end 
of the application period. If the ECC designates an entity to represent 
it in the exercise of ROFR under Sec.  680.41(l), then the application 
also must include an affidavit of completion of a contract for ROFR 
that includes the terms enacted under section 313(j) of the Magnuson-
Stevens Act. The affidavit must be signed by the applicant for initial 
allocation of PQS and the ECC entity designated under Sec.  
680.41(l)(2). A list of contract terms is available from the NMFS 
Alaska Region Web site at http://www.fakr.noaa.gov. A copy of these 
contract terms also will be made available by mail or facsimile by 
contacting the Regional Administrator at 907-586-7221.
    (ii) To be complete, an application for crab QS or PQS from a 
person based on legal processing that occurred in the GOA north of a 
line at 56[deg]20' N. lat. must also include an affidavit signed by the 
applicant stating that notice has been provided to the City of Kodiak 
and Kodiak Island Borough of the applicant's intent to apply for PQS 60 
days prior to the end of the application period. If the City of Kodiak 
and Kodiak Island Borough designate an entity to represent it in the 
exercise of ROFR under Sec.  680.41(l), then the application also must 
include an affidavit of completion of a contract for ROFR that includes 
the terms enacted under the Consolidated Appropriations Act of 2004 
(Pub. L. 108-199) and that is signed by the applicant for initial 
allocation of PQS and the ECC entity designated by the City of Kodiak 
and Kodiak Island Borough under Sec.  680.41(l)(2). A list of contract 
terms is available from the NMFS Alaska Region Web site at http://www.fakr.noaa.gov. A copy of these contract terms also will be made 
available by mail or facsimile by contacting the Regional Administrator 
at (907) 586-7221.
    (4) Application evaluation. The Regional Administrator will 
evaluate Applications for Crab QS or PQS submitted during the specified 
application period and compare all claims in an application with the 
information in the official crab rationalization record. Claims in an 
application that are consistent with information in the official crab 
rationalization record will be accepted by the Regional Administrator. 
Inconsistent claims in the Applications for Crab QS or PQS, unless 
verified by documentation, will not be accepted. An applicant who 
submits inconsistent claims, or an applicant who fails to submit the 
information specified in paragraph (f)(2) of this section, will be 
provided a single 30-day evidentiary period as provided in paragraph 
(f)(5) of this section to submit the specified information, submit 
evidence to verify his or her inconsistent claims, or submit a revised 
application with claims consistent with information in the official 
crab rationalization record. An applicant who submits claims that are 
inconsistent with information in the official crab rationalization 
record has the burden of proving that the submitted claims are correct.
    (5) Additional information or evidence. The Regional Administrator 
will evaluate additional information or evidence to support an 
applicant's inconsistent claims submitted prior to or within the 30-day 
evidentiary period. If the Regional Administrator determines that the 
additional information or evidence meets the applicant's burden of 
proving that the inconsistent claims in his or her application are 
correct, the official crab rationalization record will be amended and 
the information will be used in determining whether the applicant is 
eligible for QS or PQS. However, if the Regional Administrator 
determines that the additional information or evidence does not meet 
the applicant's burden of proving that the inconsistent claims in his 
or her application are correct, the applicant will be notified by an 
IAD, that the applicant did not meet the burden of proof to change the 
information in the official crab rationalization record.
    (6) 30-day evidentiary period. The Regional Administrator will 
specify by letter a single 30-day evidentiary period during which an 
applicant may provide additional information or evidence to support the 
claims made in his or her application, or to submit a revised 
application with claims consistent with information in the official 
crab rationalization record, if the Regional Administrator determines 
that the applicant did not meet the burden of proving that the 
information on the application is correct through evidence provided 
with the application. Also, an applicant who fails to submit 
information as specified in paragraphs (b)(3)(iii) and (b)(3)(iv) of 
this section will have 30 days to provide that information. An 
applicant will be limited to one 30-day evidentiary period per 
application. Additional information or evidence, or a revised 
application, received after the 30-day evidentiary period specified in 
the letter has expired will not be considered for purposes of the IAD.
    (7) Right of First Refusal (ROFR) contract provisions. If an ECC 
designates an entity to represent it in the exercise of ROFR under 
Sec.  680.41(l), then the Regional Administrator will not prepare an 
IAD on unverified claims or issue PQS until an affidavit is received 
from the applicant confirming the completion of a civil contract for 
ROFR as required under section 313(j) of the Magnuson-Stevens Act.
    (8) Initial administrative determinations (IAD). The Regional 
Administrator will prepare and send an IAD to the applicant following 
the expiration of the 30-day evidentiary period if the Regional 
Administrator determines that the information or evidence provided by 
the applicant fails to support the applicant's claims and is 
insufficient to rebut the presumption that the official crab 
rationalization record is correct, or if the additional information, 
evidence, or revised application is not provided within the time period 
specified in the letter that notifies the applicant of his or her 30-
day evidentiary period. The IAD will indicate the deficiencies in the 
application, including any deficiencies with the information, the 
evidence submitted in support of the information, or the revised 
application. The IAD will also indicate which claims cannot be approved 
based on the available information or evidence. An applicant who 
receives an IAD may appeal pursuant to Sec.  679.43. An applicant who 
avails himself or herself of the opportunity to appeal an IAD will not 
receive crab QS or PQS until after the final resolution of that appeal 
in the applicant's favor.
    (g) Annual allocation of IFQ. IFQ is assigned based on the 
underlying QS. The Regional Administrator shall assign crab IFQs to 
each person who holds QS and submits a complete annual application for 
crab IFQ/IPQ permit as described under Sec.  680.4. IFQ will be 
assigned to a crab QS fishery with the appropriate regional 
designation, QS sector, and IFQ class. This amount will represent the 
maximum amount of crab that may be harvested from the specified crab QS 
fishery by the person to whom it is assigned during the specified crab 
fishing year, unless the IFQ assignment is changed by the Regional 
Administrator because of an approved transfer, revoked, suspended, or 
modified under 15 CFR part 904.

[[Page 10281]]

    (h) Calculation of annual IFQ allocation--(1) General. The annual 
allocation of IFQ to any person (p) in any crab QS fishery (f) will be 
based on the TAC of crab for that crab QS fishery less the allocation 
to the Western Alaska CDQ Program (``CDQ Reserve'') and Western 
Aleutian Islands golden king crab fishery. Expressed algebraically, the 
annual IFQ allocation formula is as follows:
    (i) IFQ TACf = TACf-(CDQ reservef 
+ Allocation for the Western Aleutian Island golden king crab fishery)
    (ii) IFQpf = IFQ TACf x (QSpf/QS 
poolf).
    (2) Class A/B IFQ. (i) QS shall yield Class A or Class B IFQ if:
    (A) Initially assigned to the CVO QS sector;
    (B) Transferred to the CVO QS sector from the CPO QS sector; or
    (C) After July 1, 2008, if initially issued to the CVC QS sector.
    (ii) The Class A/B IFQ TAC is the portion of the TAC assigned as 
Class A/B IFQ under paragraphs (h)(2)(i)(A) through (C) of this 
section.
    (3) Class A/B IFQ issuance ratio. (i) Class A and Class B IFQ shall 
be assigned on an annual basis such that the total amount of Class A 
and B IFQ assigned in a crab fishing year in each crab QS fishery for 
each region will be in a ratio of 90 percent Class A IFQ and 10 percent 
Class B IFQ.
    (ii) The Regional Administrator will determine the amount of Class 
A and Class B IFQ that is assigned to each QS holder. The Class A IFQ 
is calculated by allocating 90 percent of the Class A/B IFQ TAC (TAC a) 
to Class A IFQ. A portion of the IFQ TAC a is allocated to persons 
eligible to hold only Class A IFQ (TAC a only), the remaining IFQ TAC 
(TAC r) is allocated for harvest by a person (p) eligible to receive 
both Class A IFQ and Class B IFQ. Expressed algebraically, for an 
individual person (p) eligible to hold both Class A and Class B IFQ the 
annual allocation formula is as follows:

(A) TACa = Class A/B IFQ TAC x 0.90
(B) TACr = TACa-TACa only
(C) IFQap = TACr/(Class A/B IFQ TAC-
TACa only) x IFQp
(D) IFQbp = IFQp-IFQap

    (4) Class A IFQ and Class B IFQ issuance to IPQ holders. If a 
person holds IPQ and IFQ, than that person will be issued Class A IFQ 
only for the amount of IFQ equal to the amount of IPQ held by that 
person. Any remaining IFQ held by that person would be issued as Class 
A and Class B IFQ in a ratio so that the total Class A and Class B IFQ 
issued in that crab QS fishery is issued as 90 percent Class A IFQ and 
10 percent Class B IFQ;
    (5) Class A IFQ and Class B IFQ issuance to persons affiliated with 
IPQ holders. If an IPQ holder holds IPQ in excess of the amount of IFQ 
held by that person, all IFQ holders affiliated with that IPQ holder 
will receive only Class A IFQ in proportion to the amount of IFQ held 
by those affiliated persons relative to that amount of IPQ held by that 
IPQ holder. Any remaining IFQ held by persons affiliated with the IPQ 
holder would be issued as Class A and Class B IFQ in a ratio so that 
the total Class A and Class B IFQ issued in that fishery is issued as 
90 percent Class A IFQ and 10 percent Class B IFQ.
    (6) CVC IFQ. (i) QS that is initially allocated to the CVC QS 
sector shall yield CVC IFQ.
    (ii) After July 1, 2008, CVC IFQ will be assigned as CVC Class A 
and CVC Class B IFQ under the provisions established in paragraph 
(h)(5)(ii) of this section.
    (7) CPO IFQ. (i) QS that is initially allocated to the CPO QS 
sector shall yield CPO IFQ.
    (ii) CPO IFQ is not subject to regional designation.
    (8) CPC IFQ. (i) QS that is initially allocated to the CPC QS 
sector shall yield CPC IFQ.
    (ii) CPC IFQ is not subject to regional designation.
    (9) QS amounts for IFQ calculation. For purposes of calculating IFQ 
for any crab fishing year, the amount of a person's QS and the amount 
of the QS pool for any crab QS fishery will be the amounts on record 
with the Alaska Region, NMFS, at the time of calculation.
    (10) Class A IFQ. (i)The amount of Class A IFQ issued in excess of 
the IPQ issuance limits for the BSS or BBR crab QS fisheries, as 
described in paragraph (j)(3) of this section, will be issued to all 
Class A IFQ recipients on a pro rata basis in proportion to the amount 
of Class A IFQ held by each person.
    (ii) Any amount of Class A IFQ that is issued in excess of the IPQ 
issuance limits for the BSS or BBR crab QS fisheries, as described in 
paragraph (j)(3) of this section, is not required to be delivered to an 
RCR with unused IPQ.
    (i) Annual allocation of IPQ. IPQ is assigned based on the 
underlying PQS. The Regional Administrator shall assign crab IPQs to 
each person who submits a complete annual application for crab IFQ/IPQ 
permit as described under Sec.  680.4. Each assigned IPQ will be 
specific to a crab QS fishery with the appropriate regional 
designation. This amount will represent the maximum amount of crab that 
may be received from the specified crab QS fishery by the person to 
whom it is assigned during the specified crab fishing year, unless the 
IPQ assignment is changed by the Regional Administrator because of an 
approved transfer, revoked, suspended, or modified under 15 CFR part 
904.
    (j) Calculation of annual IPQ allocation--(1) General. The annual 
allocation of TAC to PQS and the resulting IPQ in any crab QS fishery 
(f) is the Class A IFQ TAC (TACa). A person's annual IPQ is 
based on the amount of PQS held by a person (PQS p) divided by the PQS 
pool for that crab QS fishery for all PQS holders (PQS pool f). 
Expressed algebraically, the annual IPQ allocation formula is as 
follows:

IPQpf = TACaf x PQSpf/PQS 
poolf.

    (2) PQS amounts for IPQ calculation. For purposes of calculating 
IPQs for any crab fishing year, the amount of a person's PQS and the 
amount of the PQS pool for any crab PQS fishery will be the amounts on 
record with the Alaska Region, NMFS, at the time of calculation.
    (3) IPQ issuance limits. The amount of IPQ issued in any crab 
fishing year shall not exceed:
    (i) 175,000,000 raw crab pounds (79,378.6 mt) in the BSS crab QS 
fishery; and
    (ii) 20,000,000 raw crab pounds (9,071.8 mt) in the BBR crab QS 
fishery.
    (k) Timing for issuance of IFQ or IPQ. IFQ and IPQ will be issued 
once the TAC for that crab QS fishery in that crab fishing year has 
been specified by the State of Alaska. All IFQ and IPQ for all persons 
will be issued once for a crab fishing year for a crab QS fishery. QS 
issued after NMFS has issued annual IFQ for a crab QS fishery for a 
crab fishing year will not result in IFQ for that crab QS fishery for 
that crab fishing year.
    (l) Harvesting and processing privilege. QS and PQS allocated or 
permits issued pursuant to this part do not represent either an 
absolute right to the resource or any interest that is subject to the 
``takings'' provision of the Fifth Amendment of the U.S. Constitution. 
Rather, such QS, PQS, or permits represent only a harvesting or 
processing privilege that may be revoked or amended pursuant to the 
Magnuson-Stevens Act and other applicable law. IPQs do not create a 
right, title, or interest in any crab until that crab is purchased from 
a fisherman.


Sec.  680.41  Transfer of QS, PQS, IFQ and IPQ.

    (a) General. (1) Transfer of crab QS, PQS, IFQ, or IPQ means any 
transaction, approved by NMFS, requiring QS or PQS, or the use thereof 
in the form of

[[Page 10282]]

IFQ or IPQ, to pass from one person to another, permanently or for a 
fixed period of time, except that:
    (2) A crab IFQ hired master permit issued by NMFS, as described in 
Sec.  680.4, is not a transfer of crab QS or IFQ; and
    (3) The use of IFQ assigned to a crab harvesting cooperative and 
used within that cooperative is not a transfer of IFQ.
    (b) Transfer applications. An application is required to transfer 
any amount of QS, PQS, IFQ, or IPQ. The Regional Administrator shall 
provide applications to any person on request or on the Internet at 
http://www.fakr.noaa.gov/. Any transfer application will not be 
approved until the necessary eligibility application in paragraph (c) 
of this section has been submitted and approved by NMFS.
    (1) Application for transfer of crab QS/IFQ or PQS/IPQ. This 
application, as described in paragraph (h) of this section, is required 
to transfer any amount of QS, PQS, IFQ, or IPQ from an entity that is 
not an ECCO or a crab harvesting cooperative.
    (2) Application for transfer of crab QS/IFQ to or from an ECCO. 
This application, as described in paragraph (k) of this section, is 
required to transfer any amount of QS or IFQ to or from an entity that 
is an ECCO.
    (3) Application for inter-cooperative transfer. This application, 
as described in Sec.  680.21, is required to transfer any amount of IFQ 
from an entity that is a crab harvesting cooperative to another crab 
harvesting cooperative.
    (4) Application deadline. The Regional Administrator will not 
approve any transfers of QS, PQS, IFQ, or IPQ in any crab QS fishery 
from August 1 until the date of the issuance of IFQ or IPQ for that 
crab QS fishery.
    (5) Notification of approval or disapproval of applications. (i) 
Applicants submitting any application under this section will be 
notified by mail of the Regional Administrator's approval of an 
application. The Regional Administrator will notify applicants if an 
application submitted under this section is disapproved. This 
notification of disapproval will include an explanation why the 
application was not approved.
    (ii) Reasons for disapproval. Reasons for disapproval of an 
application include, but are not limited to:
    (A) Lack of U.S. citizenship, where U.S. citizenship is required.;
    (B) Failure to meet minimum requirements for sea time as a member 
of a harvesting crew;
    (C) An incomplete application, including fees and an EDR, if 
required;
    (D) An untimely application; or
    (E) Fines, civil penalties, or other payments due and owing, or 
outstanding permit sanctions resulting from Federal fishery violations.
    (6) QS, PQS, IFQ, or IPQ accounts. QS, PQS, IFQ, or IPQ accounts 
affected by a transfer approved by the Regional Administrator will 
change on the date of approval. Any necessary IFQ or IPQ permits will 
be sent with the notification of approval if the receiver of the IFQ or 
IPQ permit has completed an annual application for crab IFQ/IPQ permit 
for the current fishing year as required under Sec.  680.4.
    (c) Eligibility to receive QS, PQS, IFQ, or IPQ by transfer. 
Persons, other than persons initially issued QS or PQS, must establish 
eligibility to receive QS, PQS, IFQ, or IPQ by transfer.
    (1) To be eligible to receive QS, PQS, IFQ, or IPQ by transfer, a 
person must first meet the requirements specified in the following 
table:

------------------------------------------------------------------------
                                                        Eligibility
          Quota type             Eligible person        requirements
------------------------------------------------------------------------
(i) PQS.......................  Any person.......  None.
(ii) IPQ......................  Any person.......  None.
(iii) CVO or CPO QS...........  (A) A person       No other eligibility
                                 initially issued   requirements.
                                 QS.
                                (B) An individual  who is a U.S. citizen
                                                    with at least 150
                                                    days of sea time as
                                                    part of a harvesting
                                                    crew in any U.S.
                                                    commercial fishery.
                                (C) A              with at least one
                                 corporation,       individual member
                                 partnership, or    who is a U.S.
                                 other entity.      citizen and who:
                                                   (1) owns at least 20
                                                    percent of the
                                                    corporation,
                                                    partnership, or
                                                    other entity; and
                                                   (2) has at least 150
                                                    days of sea time as
                                                    part of a harvesting
                                                    crew in any U.S.
                                                    commercial fishery.
                                (D) An ECCO......  that meets the
                                                    eligibility
                                                    requirements
                                                    described under
                                                    paragraph (j) of
                                                    this section.
                                (E) A CDQ group..  No other eligibility
                                                    requirements.
(iv) CVO or CPO IFQ...........  All eligible       according to the
                                 persons for CVO    requirements in
                                 or CPO QS.         paragraph
                                                    (c)(1)(iii) of this
                                                    section.
(v) CVC or CPC QS.............  An individual....  who is a U.S. citizen
                                                    with:
                                                   (A) at least 150 days
                                                    of sea time as part
                                                    of a harvesting crew
                                                    in any U.S.
                                                    commercial fishery;
                                                    and
                                                   (B) recent
                                                    participation in a
                                                    CR crab fishery in
                                                    the 365 days prior
                                                    to submission of the
                                                    application for
                                                    eligibility.
(vi) CVC or CPC IFQ...........  All eligible       according to the
                                 persons for CVC    requirements in
                                 or CPC QS.         paragraph (c)(1)(v)
                                                    of this section.
------------------------------------------------------------------------

    (2) Application for eligibility to receive QS/IFQ and PQS/IPQ by 
transfer. (i) This application is required to establish a person's 
eligibility to receive QS, PQS, IFQ, or IPQ by transfer, if the person 
is not an ECCO. See paragraph (j) of this section for eligibility to 
transfer of QS/IFQ to or from an ECCO. The Regional Administrator shall 
provide an application to any person on request or on the Internet at 
http://www.fakr.noaa.gov/.
    (ii) Contents. A complete Application for Eligibility to Receive 
QS/IFQ or PQS/IPQ by Transfer must include the following:
    (A) Type of QS, IFQ, PQS, or IPQ for which the applicant is seeking 
eligibility. Indicate type of QS, IFQ, PQS, IPQ for which applicant is 
seeking eligibility.
    (1) If seeking CVO or CPO QS/IFQ, complete paragraphs 
(c)(2)(ii)(B), (c)(2)(ii)(D) if applicable, (c)(2)(ii)(E), and 
(c)(2)(ii)(F) of this section;
    (2) If seeking CVC or CPC QS/IFQ, complete paragraphs 
(c)(2)(ii)(B), (c)(2)(ii)(C), (c)(2)(ii)(E), and (c)(2)(ii)(F) of this 
section;
    (3) If seeking PQS/IPQ, complete paragraphs (c)(2)(ii)(B) and 
(c)(2)(ii)(F) of this section;

[[Page 10283]]

    (B) Applicant information. (1) Enter applicant's name and NMFS 
Person ID, applicant's date of birth or, if not an individual, date of 
incorporation; applicant's social security number or tax ID number; 
applicant's permanent business mailing address and any temporary 
business mailing address the applicant wishes to use, and the 
applicant's business telephone number, business facsimile number, and 
e-mail address (if available).
    (2) Indicate (YES or NO) whether the applicant is a U.S. citizen or 
U.S. corporation, partnership or other business entity. Applicants for 
CVO, CPO, CVC or CPC QS (and associated IFQ) must be U.S. Citizens or 
U.S. Corporations, Partnerships or Other Business Entity. Applicants 
for PQS (and associated IPQ) are not required to be U.S. Citizens.
    (C) Eligibility for CVC or CPC QS/IFQ. Indicate (YES or NO) whether 
this application is intended for a person who wishes to buy CVC or CPC 
QS/IFQ. If YES, provide evidence of at least one delivery of a crab 
species in any CR crab fishery in the 365 days prior to submission of 
this application. Acceptable evidence of such delivery shall be limited 
to an ADF&G fish ticket imprinted with applicant's State of Alaska 
permit card and signed by the applicant, an affidavit from the vessel 
owner, or a signed receipt for an IFQ crab landing on which applicant 
was acting as the permit holder's crab IFQ hired master.
    (D) U.S. Corporations, partnerships, or business entities. (1) 
Indicate (YES or NO) whether this application is submitted by a CDQ 
Group. If YES, complete paragraph (c)(2)(ii)(F) of this section;
    (2) Indicate (YES or NO) whether this application is submitted on 
behalf of a corporation, partnership or other business entity (not 
including CDQ groups). If YES: At least one member of the corporation, 
partnership or other business entity must submit documentation showing 
at least 20 percent interest in the corporation, partnership, or other 
entity and must provide evidence of at least 150 days as part of a 
harvesting crew in any U.S. commercial fishery. Identify the individual 
member and provide this individual's commercial fishing experience, 
name, NMFS person ID, and social security number, and business mailing 
address, business telephone number, and business facsimile number.
    (E) Commercial fishing experience. (1) Species; enter any targeted 
species in a U.S. commercial fishery;
    (2) Gear Type; enter any gear type used to legally harvest in a 
U.S. commercial fishery;
    (3) Location; enter actual regulatory, statistical, or geographic 
harvesting location;
    (4) Starting date and ending date of claimed fishing period (MMYY);
    (5) Number of actual days spent harvesting;
    (6) Duties performed while directly involved in the harvesting of 
(be specific):
    (7) Name and ADF&G vessel registration number or USCG documentation 
number of the vessel upon which above duties were performed;
    (8) Name of vessel owner;
    (9) Name of vessel operator;
    (10) Reference name. Enter the name of a person (other than 
applicant) who is able to verify the above experience;
    (11) Reference's relationship to applicant;
    (12) Reference's business mailing address and telephone number.
    (F) Applicant certification. (1) Printed name and signature of 
applicant and date signed;
    (2) Notary Public signature, date commission expires, and notary 
stamp or seal.
    (G) Verification that the applicant applying for eligibility to 
receive crab QS/IFQ or PQS/IPQ by transfer has submitted an EDR, if 
required to do so under Sec.  680.6;
    (H) A non-profit entity seeking approval to receive crab QS or IFQ 
by transfer on behalf of a ECC must first complete an Application to 
Become an ECCO under paragraph (j) of this section.
    (d) Transfer of CVO, CPO, CVC, CPC QS or PQS--(1) General. PQS or 
QS may be transferred, with approval of the Regional Administrator, to 
persons qualified to receive PQS or QS by transfer. However, the 
Regional Administrator will not approve a transfer of any type of PQS 
or QS that would cause a person to exceed the maximum amount of PQS or 
QS allowable under the use limits provided for in Sec.  680.42, except 
as provided for under paragraph (f) of this section.
    (2) CVO QS. CVO QS may be transferred to any person eligible to 
receive CVO or CPO QS as defined under paragraph (c) of this section.
    (3) CPO QS. Persons holding CPO QS may transfer CPO QS as CVO QS 
and PQS to eligible recipients under the following provisions:
    (i) Each unit of CPO QS shall yield 1 unit of CVO QS, and 0.9 units 
of PQS; and
    (ii) The CVO QS and PQS derived from the transfer of CPO QS may be 
transferred separately, except that these shares must receive the same 
regional designation. The regional designation shall be determined at 
the time of transfer by the person receiving the CVO QS.
    (4) CVC or CPC QS. CVC or CPC QS may be transferred to any person 
eligible to receive CVC or CPC QS as defined under paragraph (c) of 
this section. CVC and CPC QS may only be used in the sector for which 
it is originally designated.
    (e) Transfer of IFQ or IPQ by Lease--(1) IFQ derived from CVO or 
CPO QS. IFQ derived from CVO or CPO QS may be transferred by lease 
until June 30, 2010. IFQ derived from CVO or CPO QS must be leased:
    (i) If the IFQ will be used on a vessel on which the QS holder has 
less than a 10 percent ownership interest; or
    (ii) If the IFQ will be used on a vessel on which the QS holder or 
the holder of a crab IFQ hired master permit, under Sec.  680.4, is not 
present.
    (2) Ownership of a vessel, for the purposes of this section, means:
    (i) A sole proprietor; or
    (ii) A relationship between 2 or more entities in which one 
directly or indirectly owns a 10 percent or greater interest in a 
vessel.
    (3) IFQ derived from CVC QS or CPC QS. (i) IFQ derived from CVC or 
CPC QS may be transferred by lease only until June 30, 2008, unless the 
IFQ permit holder demonstrates a hardship.
    (ii) In the event of a hardship, as described at paragraph 
(e)(2)(iii) in this section, a holder of CVC or CPC QS may lease the 
IFQ derived from this QS for the term of the hardship. However, the 
holder of CVC or CPC QS may not lease the IFQ under this provision for 
more than 2 crab fishing years total in any 10 crab fishing year 
period. Such transfers are valid only during the crab fishing year for 
which the IFQ permit is issued and the QS holder must re-apply for any 
subsequent transfers.
    (iii) NMFS will not approve transfers of IFQ under this provision 
unless the QS holder can demonstrate a hardship by an inability to 
participate in the crab QS fisheries because:
    (A) Of a medical condition of the QS holder. The QS holder is 
required to provide documentation of the medical condition from a 
licensed medical doctor who verifies that the QS holder cannot 
participate in the fishery because of the medical condition.
    (B) Of a medical condition involving an individual who requires the 
QS holder's care. The QS holder is required to provide documentation of 
the individual's medical condition from a licensed medical doctor. The 
QS holder

[[Page 10284]]

must verify that he or she provides care for that individual and that 
the QS holder cannot participate in the fishery because of the medical 
condition of that individual.
    (C) Of the total or constructive physical loss of a vessel. The QS 
holder must provide evidence that the vessel was lost and could not be 
replaced in time to participate in the fishery for which the person is 
claiming a hardship.
    (4) IPQ derived from PQS. IPQ derived from PQS may be leased.
    (f) Transfer of QS, PQS, IFQ or IPQ with restrictions. If QS, PQS, 
IFQ or IPQ must be transferred as a result of a court order, operation 
of law, or as part of a security agreement, but the person receiving 
the QS, PQS, IFQ or IPQ by transfer does not meet the eligibility 
requirements of this section, the Regional Administrator will approve, 
with restrictions, an Application for transfer of crab QS/IFQ or PQS/
IPQ. The Regional Administrator will not assign IFQ or IPQ resulting 
from the restricted QS or PQS to any person. IFQ or IPQ with 
restrictions may not be used for harvesting or processing species 
covered under the CR program. The QS, PQS, IFQ or IPQ will remain 
restricted until:
    (1) The person who received the QS, PQS, IFQ or IPQ with 
restrictions meets the eligibility requirements of this section and the 
Regional Administrator approves an application for eligibility for that 
person; or
    (2) The Regional Administrator approves the application for 
transfer from the person who received the QS, PQS, IFQ or IPQ with 
restrictions to a person who meets the eligibility requirements of this 
section.
    (g) Survivorship transfer privileges. (1) On the death of an 
individual who holds QS or PQS, the surviving spouse or, in the absence 
of a surviving spouse, a beneficiary designated pursuant to paragraph 
(g)(3) of this section, receives all QS, PQS and IFQ or IPQ held by the 
decedent by right of survivorship, unless a contrary intent was 
expressed by the decedent in a will. The Regional Administrator will 
approve an application for transfer to the surviving spouse or 
designated beneficiary when sufficient evidence has been provided to 
verify the death of the individual.
    (2) A QS or PQS holder may provide the Regional Administrator with 
the name of the designated beneficiary from the QS or PQS holder's 
immediate family to receive survivorship transfer privileges in the 
event of the QS or PQS holders death and in the absence of a surviving 
spouse.
    (3) The Regional Administrator will approve, for 3 calendar years 
following the date of the death of an individual, an Application for 
transfer of crab QS/IFQ or PQS/IPQ from the surviving spouse or, in the 
absence of a surviving spouse, a beneficiary from the QS or PQS 
holder's immediate family designated pursuant to this section, to a 
person eligible to receive IFQ or IPQ under the provisions of this 
section, notwithstanding the limitations on transfers of IFQ and IPQ in 
this section and the use limitations under Sec.  680.42.
    (h) Application for transfer of crab QS/IFQ or PQS/IPQ--(1) 
General. (i) An Application for transfer of crab QS/IFQ or PQS/IPQ must 
be approved by the Regional Administrator before the transferee may use 
the IFQ or IPQ to harvest or process crab QS species.
    (ii) Persons who submit an Application for transfer of crab QS/IFQ 
or PQS/IPQ for approval will receive notification of the Regional 
Administrator's decision to approve or disapprove the application, and 
if applicable, the reason(s) for disapproval, by mail, unless another 
communication mode is requested on the application.
    (2) Contents. A complete Application for transfer of crab QS/IFQ or 
PQS/IPQ must include the following information:
    (i) Type of transfer. (A) Indicate type of transfer requesting.
    (B) Indicate (YES or NO) whether this is a transfer of IFQ or IPQ 
only due to a hardship (medical emergency, etc.). If YES, provide 
documentation supporting the need for such transfer (doctor's 
statement, etc.).
    (C) If requesting transfer of PQS/IPQ for use outside an ECC that 
has designated an entity to represent it in exercise of ROFR under 
paragraph (l), the application must include an affidavit signed by the 
applicant stating that notice of the desired transfer has been provided 
to the ECC entity under civil contract terms referenced under Sec.  
680.40(f)(3) for the transfer of any PQS or IPQ subject to ROFR.
    (ii) Transferor information. (A) The transferor is the person 
currently holding the QS, PQS, IFQ, or IPQ.
    (B) Enter the transferor's name and NMFS Person ID, social security 
number or tax ID number, transferor's permanent business mailing 
address and any temporary mailing address the transferor wishes to use, 
business telephone, business facsimile, and business e-mail address (if 
available).
    (iii) Transferee information. (A) The transferee is person 
receiving QS, PQS or IFQ, IPQ by transfer.
    (B) Enter the transferee's name and NMFS Person ID, social security 
number or tax ID number, transferee's permanent business mailing 
address and any temporary mailing address the transferee wishes to use, 
business telephone, business facsimile, and business e-mail address (if 
available);
    (iv) Transfer of QS or PQS and IFQ or IPQ. Complete the following 
information if QS or PQS and IFQ or IPQ are to be transferred together 
or if transferring only QS or PQS:
    (A) QS species;
    (B) QS type;
    (C) Range of serial numbers to be transferred (shown on QS 
certificate) numbered to and from;
    (D) Number of QS units to be transferred;
    (E) Transferor (seller) IFQ or IPQ permit number;
    (F) Indicate (YES or NO) whether remaining IFQ or IPQ pounds for 
the current fishing year should be transferred; if NO, specify the 
number of pounds to be transferred;
    (G) If this is a transfer of CPO QS, indicate whether being 
transferred as CPO QS or CVO QS and PQS;
    (H) If CPO QS is being transferred as both CVO QS and PQS, specify 
number of units of each; and
    (I) If CPO QS is being transferred as CVO QS, select region for 
which the QS is designated.
    (v) Transfer of IFQ or IPQ only. Complete the following information 
if transferring IFQ or IPQ only:
    (A) QS species;
    (B) IFQ/IPQ type;
    (C) Range of serial numbers shown on QS certificate, numbered to 
and from;
    (D) Number of IFQ or IPQ pounds to be transferred;
    (E) Transferor (seller) IFQ or IPQ permit number; and
    (F) Crab fishing year of the transfer.
    (vi) Price paid for the QS, PQS and/or IFQ, IPQ. The transferor 
must provide the following information.
    (A) Indicate whether (YES or NO) a broker was used for this 
transaction; If YES, provide dollar amount paid in brokerage fees or 
percentage of total price.
    (B) Provide the total amount paid for the QS/IFQ or PQS/IPQ in this 
transaction, including all fees.
    (C) Provide the price per unit of QS (price divided by QS units) 
and the price per pound (price divided by IFQ or IPQ pounds) of IFQ or 
IPQ.
    (D) Indicate all reasons that apply for transferring the QS/IFQ or 
PQS/IPQ.
    (vii) Method of financing for the QS, PQS and/or IFQ, IPQ. The 
transferee must provide the following information.
    (A) Indicate (YES or NO) whether QS/IFQ or PQS/IPQ purchase will 
have a lien attached; if YES, provide the name of lien holder.
    (B) Indicate one primary source of financing for this transfer.

[[Page 10285]]

    (C) Indicate the sources used to locate the QS, PQS and/or IFQ, IPQ 
being transferred.
    (D) Indicate the relationship, if any, between the transferor and 
the transferee.
    (E) Indicate (YES or NO) whether an agreement exists to return the 
QS/IFQ or PQS/IPQ to the transferor or any other person, or with a 
condition placed on resale; If YES, provide written explanation.
    (F) Attach a copy of the terms of agreement for the transfer, the 
bill of sale for QS or PQS, or lease agreement for IFQ or IPQ.
    (G) Indicate whether an EDR was submitted, if required by Sec.  
680.6, and whether all fees have been paid, as required under Sec.  
680.44.
    (viii) Notary information--(A) Certification of transferor. (1) 
Printed name and signature of transferor or authorized agent and date 
signed. If authorized agent, proof of authorization to act on behalf of 
the transferor must be provided with the application; and
    (2) Notary Public signature, date commission expires, and notary 
stamp or seal
    (B) Certification of transferee. (1) Printed name and signature of 
transferee or authorized agent and date signed. If authorized agent, 
proof of authorization to act on behalf of the transferee must be 
provided with the application; and
    (2) Notary Public signature, date commission expires, and notary 
stamp or seal.
    (ix) Attachments to the application and other conditions to be met. 
(A) Indicate whether the person applying to make or receive the QS, 
PQS, IFQ or IPQ transfer has submitted an EDR, if required to do so 
under Sec.  680.6, and has paid all fees, as required by Sec.  680.44; 
and
    (B) All individuals applying to receive CVC QS or IFQ or CPC QS or 
IFQ by transfer must submit proof of at least one delivery of a crab 
species in any CR crab fishery in the 365 days prior to submission to 
NMFS of the Application for Transfer of QS/IFQ or PQS/IPQ. Proof of 
this landing is:
    (1) Signature of the applicant on an ADF&G Fish Ticket; or
    (2) An affidavit from the vessel owner attesting to that 
individual's participation as a member of a fish harvesting crew on 
board a vessel during a landing of a crab QS species within the 365 
days prior to submission of an Application for transfer of crab QS/IFQ 
or PQS/IPQ.
    (i) Approval criteria for an Application for transfer of crab QS/
IFQ or PQS/IPQ. Except as provided in paragraph (f) of this section, an 
application for transfer of QS/IFQ or PQS/IPQ will not be approved 
until the Regional Administrator has determined that:
    (1) The person applying to receive the QS, PQS, IFQ or IPQ meets 
the requirements of eligibility in paragraph (c) of this section;
    (2) The person applying for transfer and the person applying to 
receive QS or IFQ/IPQ have their original notarized signatures on the 
application;
    (3) No fines, civil penalties, or other payments due and owing, or 
outstanding permit sanctions, resulting from Federal fishery violations 
involving either party exist;
    (4) The person applying to receive QS, PQS, IFQ or IPQ currently 
exists;
    (5) The transfer would not cause the person applying to receive the 
QS, PQS, IFQ or IPQ to exceed the use limits in Sec.  680.42;
    (6) The person applying to make or receive the QS, PQS, IFQ or IPQ 
transfer has paid all IFQ or IPQ fees described under Sec.  680.44; or 
has timely appealed the IAD of underpayment as described under Sec.  
680.44;
    (7) The person applying to make or receive the QS, PQS, IFQ or IPQ 
transfer has submitted an EDR, if required to do so under Sec.  680.6;
    (8) In the case of an application for transfer of PQS or IPQ for 
use outside an ECC that has designated an entity to represent it in 
exercise of ROFR under paragraph (l), the Regional Administrator will 
not act upon the application for a period of 10 days. At the end of 
that time period, the application will be approved pending meeting the 
criteria set forth in this paragraph (i).
    (9) In the case of an application for transfer of PQS for use 
within an ECC that has designated an entity to represent it in exercise 
of ROFR under paragraph (l), The Regional Administrator will not 
approve the application unless either the ECC entity provides an 
affidavit to the Regional Administrator that the ECC wishes to 
permanently waive ROFR for the PQS or the proposed recipient of the PQS 
provides an affidavit affirming the completion of a contract for ROFR 
that includes the terms enacted under section 313(j) of the Magnuson-
Stevens Act and referenced under Sec.  680.40(f)(3).
    (10) Other pertinent information requested on the application for 
transfer has been supplied to the satisfaction of the Regional 
Administrator.
    (j) Transfer of crab QS/IFQ to or from and ECCO--(1) Designation of 
an ECCO. (i) The appropriate governing body of each ECC may designate a 
non-profit organization to serve as the ECCO for that ECC. To transfer 
and hold QS on the behalf of that ECC, this designation must be 
submitted by the non-profit organization in its Application to Become 
an ECCO.
    (ii) If the non-profit entity is approved by NMFS to serve as the 
ECCO, then the appropriate governing body of the ECC must authorize the 
transfer of any QS from the ECCO.
    (iii) The appropriate governing body for purposes of designating a 
non-profit organization for the Application to Become an ECCO, or 
acknowledging the transfer of any QS from an ECCO in each ECC is as 
follows:
    (A) If the ECC is also a community eligible to participate in the 
Western Alaska CDQ Program, then the CDQ group is the appropriate 
governing body;
    (B) If the ECC is not a CDQ community and is incorporated as a 
municipality and is not within an incorporated borough, then the 
municipal government is the appropriate governing body;
    (C) If the ECC is not a CDQ community and is incorporated as a 
municipality and also within an incorporated borough, then the 
municipality and borough jointly serve as the appropriate governing 
body and both must agree to designate the same non-profit organization 
to serve as the ECCO or acknowledge the transfer of QS from the ECCO; 
and
    (D) If the ECC is not a CDQ community and is not incorporated as a 
municipality and is in a borough, then the borough in which the ECC is 
located is the appropriate governing body.
    (iv) The appropriate governing body in each ECC may designate only 
one non-profit organization to serve as the ECCO for that community at 
any one time.
    (2) Application to become an ECCO. Prior to initially receiving QS 
or IFQ by transfer on behalf of a specific ECC, a non-profit 
organization that intends to represent that ECC as a ECCO must submit 
an application to become an ECCO and have that application approved by 
the Regional Administrator. The Regional Administrator shall provide an 
application to become an ECCO to any person on request or on the 
Internet at http://www.fakr.noaa.gov/.
    (i) Contents of application--(A) Applicant identification. (1) 
Enter the name of the non-profit organization, taxpayer ID number, and 
NMFS Person ID, applicant's permanent business mailing address and any 
temporary business mailing address the applicant wishes to use, and the 
name of contact person, business telephone number,

[[Page 10286]]

business facsimile number, and e-mail address (if available);
    (2) Name of community or communities represented by the non-profit 
organization; and
    (3) Name of contact person for the governing body of each community 
represented.
    (B) Required attachments to the application. (1) The articles of 
incorporation under the laws of the State of Alaska for that non-profit 
organization;
    (2) A statement indicating the ECC(s) represented by that non-
profit organization for purposes of holding QS;
    (3) The bylaws of the non-profit organization;
    (4) A list of key personnel of the management organization 
including, but not limited to, the board of directors, officers, 
representatives, and any managers;
    (5) Additional contact information of the managing personnel for 
the non-profit organization and resumes of management personnel;
    (6) A description of how the non-profit organization is qualified 
to manage QS on behalf of the ECC it is designated to represent, and a 
demonstration that the non-profit organization has the management 
skills and technical expertise to manage QS and IFQ; and
    (7) A statement describing the procedures that will be used to 
determine the distribution of IFQ to residents of the ECC represented 
by that non-profit organization, including procedures used to solicit 
requests from residents to lease IFQ and criteria used to determine the 
distribution of IFQ leases among qualified community residents and the 
relative weighting of those criteria.
    (C) Applicant certification. (1) Printed name of applicant or 
authorized agent, notarized signature, and date signed. If authorized 
agent, proof of authorization to act on behalf of the applicant must be 
provided with the application.
    (2) Notary Public signature and date when commission expires, and 
notary seal or stamp.
    (ii) [Reserved].
    (k) Application for transfer of crab QS/IFQ to or from an ECCO. (1) 
An application for transfer of crab QS/IFQ to or from an ECCO must be 
approved by the Regional Administrator before the transferee may use 
the IFQ to harvest crab QS species.
    (2) An application for transfer of crab QS/IFQ to or from an ECCO 
will not be approved until the Regional Administrator has reviewed and 
approved the transfer agreement signed by the parties to the 
transaction. Persons who submit an application for transfer of crab QS/
IFQ to or from an ECCO for approval will receive notification of the 
Regional Administrator's decision to approve or disapprove the 
application, and if applicable, the reason(s) for disapproval, by mail, 
unless another communication mode is requested on the application.
    (3) Contents. A complete application for transfer of crab QS/IFQ to 
or from an ECCO includes the following:
    (i) General requirements. (A) This form may only be used if an ECCO 
is the proposed transferor or the proposed transferee of the QS or IFQ.
    (B) The party to whom an ECCO is seeking to transfer the QS/IFQ 
must be eligible to receive QS/IFQ by transfer.
    (C) If the ECCO is applying to permanently transfer QS, a 
representative of the community on whose behalf the QS is held must 
sign the application.
    (D) If authorized representative represents either the transferor 
or transferee, proof of authorization to act on behalf of transferor or 
transferee must be attached to the application.
    (ii) Transferor information. Enter the transferor's (person 
currently holding the QS or IFQ) name, NMFS Person ID, social security 
number or Tax ID, permanent business mailing address, business 
telephone, business facsimile, and business e-mail address. If 
transferor is an ECCO, enter the name of ECC represented by the ECCO. 
The transferor may also provide a temporary address for each 
transaction in addition to the permanent business mailing address.
    (iii) Transferee information. Enter the transferee's (person 
receiving QS or IFQ by transfer) name, NMFS Person ID, social security 
number or Tax ID, permanent business mailing address, business 
telephone, business facsimile, and business e-mail. If transferee is an 
ECCO, name of the community (ECC) represented by the ECCO. The 
transferee may also provide a temporary address for each transaction in 
addition to the permanent business mailing address.
    (iv) Identification of QS/IFQ to be transferred. Complete the 
following information if QS and IFQ are to be transferred together or 
if transferring only QS:
    (A) QS species;
    (B) QS type;
    (C) Number of QS or IFQ units to be transferred;
    (D) Total QS units;
    (E) Number of IFQ pounds;
    (F) Range of serial numbers to be transferred (shown on QS 
certificate) numbered to and from;
    (G) Name of community to which QS are currently assigned; and
    (H) Indicate (YES or NO) whether remaining IFQ pounds for the 
current fishing year should be transferred; if NO, specify the number 
of pounds to be transferred.
    (v) Transfer of IFQ only. (A) IFQ permit number and year of permit, 
and
    (B) Actual number of IFQ pounds to be transferred.
    (vi) Transferor Information, if an ECCO. Reason(s) for transfer:
    (A) ECCO management and administration;
    (B) Fund additional QS purchase;
    (C) Participation by community residents;
    (D) Dissolution of ECCO; and
    (E) Other (specify).
    (vii) Price paid for QS, PQS, and/or IFQ, IPQ (Transferor). The 
transferor must provide the following information:
    (A) Whether (YES or NO) a broker was used for this transaction; If 
YES, provide dollar amount paid in brokerage fees or percentage of 
total price;
    (B) Provide the total amount paid for the QS/IFQ in this 
transaction, including all fees;
    (C) Provide the price per unit of QS (price divided by QS units) 
and the price per pound (price divided by IFQ) of IFQ; and
    (D) Indicate all reasons that apply for transferring the QS/IFQ.
    (viii) Price paid for QS, PQS, and/or IFQ, IPQ (Transferee). The 
transferee must provide the following information:
    (A) Indicate (YES or NO) whether QS/IFQ purchase will have a lien 
attached; if YES, provide the name of lien holder;
    (B) Indicate one primary source of financing for this transfer;
    (C) Indicate the sources used to locate the QS or IFQ being 
transferred;
    (D) Indicate the relationship, if any, between the transferor and 
the transferee;
    (E) Indicate (YES or NO) whether an agreement exists to return the 
QS or IFQ to the transferor or any other person, or with a condition 
placed on resale; If YES, explain; and
    (F) Attach a copy of the terms of agreement for the transfer, the 
bill of sale for QS, or lease agreement for IFQ.
    (ix) Notary information--(A) Certification of transferor. (1) 
Printed name and signature of transferor or authorized agent and date 
signed. If authorized agent, proof of authorization to act on behalf of 
the transferor must be provided with the application.
    (2) Notary Public signature, date commission expires, and notary 
stamp or seal.
    (B) Certification of transferee. (1) Printed name and signature of 
transferor

[[Page 10287]]

or authorized agent and date signed. If authorized agent, proof of 
authorization to act on behalf of the transferee must be provided with 
the application.
    (2) Notary Public signature, date commission expires, and notary 
stamp or seal.
    (C) Certification of authorized representative of community. (1) 
Printed name, title and signature of authorized community 
representative, date signed, and printed name of community.
    (2) Notary Public signature, date commission expires, and notary 
stamp or seal;
    (4) Attachments to the application and other conditions to be met. 
(i) Indicate whether the person applying to make or receive the QS, 
PQS, IFQ or IPQ transfer has submitted an EDR, if required to do so 
under Sec.  680.6, and paid all fees, as required by Sec.  680.44.
    (ii) A copy of the terms of agreement for the transfer, the bill of 
sale for QS or PQS, or lease agreement for IFQ or IPQ.
    (iii) An affirmation that the individual receiving IFQ from an ECCO 
has been a permanent resident in the ECC for a period of 12 months 
prior to the submission of the Application for Transfer QS/IFQ to or 
from an ECCO on whose behalf the ECCO holds QS.
    (5) Approval criteria for an application for transfer of crab QS/
IFQ to or from an ECCO. In addition to the criteria required for 
approval under paragraph (i) of this section, the following criteria 
are also required:
    (i) The ECCO applying to receive or transfer crab QS has submitted 
a complete annual report(s) required by Sec.  680.5;
    (ii) The ECCO applying to transfer crab QS has provided information 
on the reasons for the transfer as described in paragraph (e) of this 
section; and
    (iii) An individual applying to receive IFQ from an ECCO is a 
permanent resident of the ECC in whose name the ECCO is holding QS.
    (l) Eligible crab community right of first refusal (ROFR)--(1) 
Applicability--(i) Exempt Fisheries. PQS and IPQ issued for the BST, 
WAG, or WAI crab QS fisheries are exempt from ROFR provisions.
    (ii) Eligible Crab Communities (ECCs). The ROFR extends to the 
ECCs, other than Adak, and their associated governing bodies. The ROFR 
may be exercised by the ECC entity representing that ECC.
    (2) Community representation--(i) CDQ Communities. ECC entity for 
purposes of exercise of ROFR for any ECC that is also a CDQ community 
shall be the CDQ group to which the ECC is a member.
    (ii) Non-CDQ communities. (A) Any ECC, other than Adak, that is a 
non-CDQ community may designate an ECC entity that will represent the 
community in the exercise of ROFR at least 30 days prior to the ending 
date for the initial application period for the crab QS program 
specified in the Federal Register.
    (B) The ECC entity eligible to exercise the right of first refusal 
on behalf of an ECC will be identified by the governing body(s) of the 
ECC. If the ECC is incorporated under the laws of the State of Alaska, 
and not within an incorporated borough, then the municipality is the 
governing body; if the ECC is incorporated and within an incorporated 
borough, then the municipality and borough are the governing bodies and 
must agree to designate the same ECC entity; if the ECC is not 
incorporated and in an incorporated borough, then the borough is the 
governing body.
    (C) Each ECC may designate only one ECC entity to represent that 
community in the exercise of ROFR at any one time through a statement 
of support from the governing body of the ECC. That statement of 
support identifying the ECC entity must be submitted to the Regional 
Administrator, NMFS, Post Office Box 21668, Juneau, Alaska 99802, at 
least 30 days prior to the ending date of the initial application 
period for the crab QS program under Sec.  680.40.
    (D) The ECC ROFR is not assignable by the ECC entity.
    (3) Restrictions on transfer of PQS or IPQ out of North Gulf of 
Alaska communities--(i) Applicability. Any community in the Gulf of 
Alaska north of a line at 56[deg]20' N. lat.
    (ii) Notification of PQS or IPQ transfer. A PQS holder submitting 
an application to transfer PQS or IPQ for use in processing outside any 
community identified under paragraph (l)(3)(i) must notify the ECC 
entity designated by the City of Kodiak and Kodiak Island Borough under 
paragraph (l)(2) of this section 10 days prior to the intended transfer 
of PQS or IPQ for use outside the community. At the end of that time 
period, the application will be approved pending meeting the criteria 
set forth in paragraph (i) of this section.


Sec.  680.42  Limitations on use of QS, PQS, IFQ, and IPQ.

    (a) QS and IFQ use caps--(1) General. Separate and distinct QS and 
IFQ use caps apply to all QS and IFQ categories pertaining to a given 
crab QS fishery with the following provisions:
    (i) A person who receives an initial allocation of QS that exceeds 
the use cap listed in paragraph (a)(2) of this section may not receive 
QS by transfer unless and until that person's holdings are reduced to 
an amount below the use cap.
    (ii) A person will not be issued QS in excess of the use cap 
established in this section based on QS derived from landings 
attributed to an LLP license obtained via transfer after June 10, 2002 
unless;
    (A) The person applies to receive QS based on an LLP transferred 
after June 10, 2002 but prior to November 24, 2004, and
    (B) The person will receive the amount of QS associated with that 
transferred LLP in excess of the use cap established in this section 
for a crab QS fishery solely because of the adjustment to legal 
landings available for QS allocation resulting from the BSAI Crab 
Capacity Reduction Program.
    (iii) QS and IFQ use caps shall be based on the initial QS pools 
used to determine initial allocations of QS.
    (2) Except for non-individual persons who hold PQS, as provided for 
in paragraph (b)(1)(ii) of this section, or a CDQ group, as provided 
for in paragraph (b)(3) of this section, a person, individually or 
collectively, may not:
    (i) Hold QS in amounts in excess of the amounts specified in the 
following table, unless that person's QS was received in the initial 
allocation:

----------------------------------------------------------------------------------------------------------------
               Fishery                        CVO/CPO use cap in QS units           CVC/CPC use cap in QS units
----------------------------------------------------------------------------------------------------------------
(A) Percent of the initial QS pool      1.0% = 3,880,000........................   2.0% = 240,00
 for BBR.
(B) Percent of the initial QS pool      1.0% = 9,700,000........................   2.0% = 600,00
 for BSS.
(C) Percent of the initial QS pool      1.0% = 1,940,000........................   2.0% = 120,00
 for BST.
(D) Percent of the initial QS pool      2.0% = 582,000..........................   4.0% = 36,000
 for PIK.
(E) Percent of the initial QS pool      2.0% = 582,000..........................   4.0% = 36,000
 for SMB.
(F) Percent of the initial QS pool     10.0% = 970,000..........................  20.0% = 60,000
 for EAG.
(G) Percent of the initial QS pool     10.0% = 3,880,000........................  20.0% = 240,000
 for WAG.

[[Page 10288]]

 
(H) Percent of the initial QS pool     10.0% = 5,820,000........................  20.0% = 360,000
 for WAI.
----------------------------------------------------------------------------------------------------------------

    (ii) Use IFQ in excess of the amount of IFQ that results from the 
QS caps in paragraph (a)(2)(i) of this section, unless that IFQ results 
from QS that was received by that person in the initial allocation of 
QS for that crab QS fishery.
    (3) A CDQ Group, individually or collectively, may not:
    (i) Hold QS in excess of more than the amounts of QS specified in 
the following table:

------------------------------------------------------------------------
                                                         CDQ CVO/CPO use
                        Fishery                          cap in QS units
------------------------------------------------------------------------
(A) 5.0 percent of the initial QS pool for BBR.........       19,400,000
(B) 5.0 percent of the initial QS pool for BSS.........       48,500,000
(C) 5.0 percent of the initial QS pool for BST.........        9,700,000
(D) 10.0 percent of the initial QS pool for PIK........        2,910,000
(E) 10.0 percent of the initial QS pool for SMB........        2,910,000
(F) 20.0 percent of the initial QS pool for EAG........        1,940,000
(G) 20.0 percent of the initial QS pool for WAG........        7,760,000
(H) 20.0 percent of the initial QS pool for WAI........       11,640,000
------------------------------------------------------------------------

    (ii) Use IFQ in excess of the amount of IFQ that results from the 
QS caps in paragraph (a)(2)(i) of this section, unless that IFQ results 
from QS that was received by that person in the initial allocation of 
QS for that crab QS fishery.
    (4) A person who is not an individual and who holds PQS may not:
    (i) Hold QS in excess of the amounts specified in the following 
table:

------------------------------------------------------------------------
                                                         CVO/CPO use cap
                        Fishery                            in QS units
------------------------------------------------------------------------
(A) 5.0 percent of the initial QS pool for BBR.........       19,400,000
(B) 5.0 percent of the initial QS pool for BSS.........       48,500,000
(C) 5.0 percent of the initial QS pool for BST.........        9,700,000
(D) 5.0 percent of the initial QS pool for PIK.........        1,455,000
(E) 5.0 percent of the initial QS pool for SMB.........        1,455,000
(F) 5.0 percent of the initial QS pool for EAG.........          485,000
(G) 5.0 percent of the initial QS pool for WAG.........        1,940,000
(H) 5.0 percent of the initial QS pool for WAI.........        2,910,000
------------------------------------------------------------------------

    (ii) Use IFQ in excess of the amount of IFQ that results from the 
QS caps in paragraph (a)(2)(i) of this section, unless that IFQ results 
from QS that was received by that person in the initial allocation of 
QS for that crab QS fishery.
    (iii) A non-individual person that holds PQS would be limited to a 
QS and IFQ cap that would be calculated based on the sum of all QS or 
IFQ held by that PQS holder and all QS or IFQ held by any entity in 
which that PQS holder has a 10 percent or greater direct or indirect 
ownership interest.
    (5) IFQ that is used by a crab harvesting cooperative is not 
subject to the use caps in paragraph (b) of this section.
    (6) Non-individual persons holding QS will be required to provide, 
on an annual basis, a list of persons with an ownership interest in the 
non-individual QS holder. This list of owners shall be provided to the 
individual level and will include the percentage of ownership held by 
each individual. This annual submission of information must be 
submitted as part of the complete annual application for crab IFQ/IPQ 
permit.
    (b) PQS and IPQ Use Caps. (1) A person may not:
    (i) Hold more than 30 percent of the initial PQS pool in any crab 
QS fishery unless that person received an initial allocation of PQS in 
excess of this limit. A person will not be issued PQS in excess of the 
use caps established in this section based on PQS derived from the 
transfer of legal processing history after June 10, 2002.
    (ii) Use IPQ in excess of the amount of IPQ that results from the 
PQS caps in paragraph (b)(1)(i) of this section unless that IPQ is 
yielded from PQS that was received by that person in the initial 
allocation of PQS for that crab QS fishery.
    (2) A person may not use more than 60 percent of the IPQ issued in 
the BSS crab QS fishery with a North region designation during a crab 
fishing year.
    (3) Non-individual persons holding PQS will be required to provide, 
on an annual basis, a list of persons with an ownership interest in the 
non-individual PQS holder. This list of owners shall be provided to the 
individual level and will include the percentage of ownership held by 
each individual. This annual submission of information must be 
submitted as part of the complete annual application for crab IFQ/IPQ 
permit. A person will be considered to be a holder of PQS for purposes 
of applying the PQS use caps in this paragraph if that person:
    (i) Is the sole proprietor of an entity that holds PQS; or
    (ii) Directly or indirectly owns a 10 percent or greater interest 
in an entity that holds PQS.
    (iii) A person that holds PQS would be limited to a PQS use cap 
that would be calculated based on the sum of all PQS held by that PQS 
holder and all PQS held by any entity in which that PQS holder has a 10 
percent or greater direct or indirect ownership interest.
    (iv) A person that holds IPQ would be limited to an IPQ use cap 
that would be calculated based on the sum of all IPQ held by that IPQ 
holder and all IPQ held by any entity in which that IPQ holder has a 10 
percent or greater direct or indirect ownership interest.
    (4) Before July 1, 2007, IPQ for the BSS, BBR, PIK, SMB, and EAG 
crab QS fisheries may not be used to process crab derived from PQS 
based on activities in an ECC, except in the geographic boundaries 
established in paragraph (b)(4)(iv) of this section, except that, 
before July 1, 2007:
    (i) Ten percent of the IPQs that are issued for a crab QS fishery 
or an amount of IPQ that yields up to 500,000 raw crab pounds (226.7 
mt) on an annual basis, whichever is less, may be leased for use in 
processing crab outside that ECC. The amount of IPQ that is issued on 
an annual basis for use in that ECC and the amount that may be leased 
outside that ECC will be established annually and will be divided on a 
pro rata basis among all PQS permit holders issued IPQ for use in that 
ECC for that year.
    (ii) IPQ in excess of the amounts specified in paragraph (c)(7)(i) 
of this section may be used outside the ECC for which that IPQ is 
designated if an unavoidable circumstance prevents crab processing 
within that ECC. For purposes of this section, an unavoidable 
circumstance exists if the specific intent to conduct processing for a 
crab QS species in that ECC was thwarted by a circumstance that was:
    (A) Unavoidable;
    (B) Unique to the IPQ permit holder, or to the processing facility 
used by the IPQ permit holder in that ECC;
    (C) Unforeseen and reasonably unforeseeable to the IPQ permit 
holder;
    (D) The circumstance that prevented the IPQ permit holder from 
processing crab in that ECC actually occurred; and

[[Page 10289]]

    (E) The IPQ permit holder took all reasonable steps to overcome the 
circumstance that prevented the IPQ permit holder from conducting 
processing for that crab QS fishery in that ECC.
    (iii) This provision does not exempt any IPQ permit holder from any 
regional designation that may apply to that IPQ.
    (iv) Geographic boundaries for use of IPQ outside ECCs for purposes 
of paragraph (b)(4) of this section:
    (A) Akutan, False Pass, King Cove, or Port Moller: IPQ may not be 
used outside of the boundaries of the Aleutians East Borough as those 
boundaries are established by the State of Alaska;
    (B) Kodiak: IPQ may not be used outside of the boundaries of the 
Kodiak Island Borough as those boundaries are established by the State 
of Alaska;
    (C) Adak: IPQ may not be used outside of the boundaries of the City 
of Adak as those boundaries are established by the State of Alaska;
    (D) Unalaska/Dutch Harbor: IPQ may not be used outside of the 
boundaries of the City of Unalaska as those boundaries are established 
by the State of Alaska.
    (E) St. George: IPQ may not be used outside of the boundaries of 
the City of St. George as those boundaries are established by the State 
of Alaska.
    (F) St. Paul: IPQ may not be used outside of the boundaries of the 
City of St. Paul as those boundaries are established by the State of 
Alaska.
    (5) Any person harvesting crab under a Class A CVO or Class A CVC 
IFQ Permit, except as provided under paragraph (b)(4) of this section, 
must deliver that crab:
    (i) Only to RCRs with unused IPQ for the same crab QS fishery; and
    (ii) Only to an RCR in the region for which the QS and IFQ is 
designated.
    (6) Any person harvesting crab under a Class B IFQ, CPO IFQ, CVC 
IFQ prior to July 1, 2008, or CPC IFQ permit may deliver that crab to 
any RCR.
    (c) Vessel limitations. (1) Except for vessels that participate 
solely in a crab harvesting cooperative as described under Sec.  680.21 
and under the provisions described in paragraph (c)(4) of this section, 
no vessel may be used to harvest CVO or CPO IFQ in excess of the 
following percentages of the TAC for that crab QS fishery for that crab 
fishing year:
    (i) 2.0 percent for BSS;
    (ii) 2.0 percent for BBR;
    (iii) 2.0 percent for BST;
    (iv) 4.0 percent for PIK;
    (v) 4.0 percent for SMB;
    (vi) 20.0 percent for EAG;
    (vii) 20.0 percent for WAG; or
    (viii) 20.0 percent for the WAI crab QS fishery west of 179[deg] W. 
long.
    (2) CVC or CPC QS used on a vessel will not be included in 
determining whether a vessel use cap is met.
    (3) A single person who receives an initial allocation of QS that 
results in IFQ that is in excess of the vessel use caps, in paragraph 
(c)(1) of this section, that person may catch and retain crab harvested 
with the resulting IFQ with a single vessel. However, this provision 
does not apply to IFQ resulting from QS derived from transfer of an LLP 
crab license that occurred after June 10, 2002. Two or more persons may 
not catch and retain their IFQ with one vessel in excess of these 
limitations.
    (4) A vessel use cap would not apply to a vessel if all of the IFQ 
used on that vessel in a crab fishing year is held by a crab harvesting 
cooperative. This exemption is forfeited if that vessel is used to 
harvest any amount of IFQ not held by a crab harvesting cooperative 
during the same crab fishing year.
    (5) A person holding a CVC or CPC IFQ permit is required to be 
aboard the vessel upon which their IFQ is being harvested.
    (6) A person holding CVO or CPO QS does not have to be aboard the 
vessel being used to harvest their IFQ if they hold at least a 10 
percent ownership interest in the vessel upon which the IFQ is to be 
harvested and are represented on board the vessel by a crab IFQ hired 
master employed by that QS holder as authorized under Sec.  680.4.
    (7) Ownership of a vessel means, for purposes of this section:
    (i) A sole proprietor; or
    (ii) A person that directly or indirectly owns a 10 percent or 
greater interest in an entity that owns a vessel.


Sec.  680.43  Determinations and appeals.

    See Sec.  679.43 of this chapter.


Sec.  680.44  Cost recovery.

    (a) Cost recovery fees--(1) Responsibility. The person documented 
on the IFQ, IPQ, CDQ, RCR, Commercial Fisheries Entry Commission 
(CFEC), or State of Alaska Commissioner's permit as the permit holder 
at the time of a CR crab landing must comply with the requirements of 
this section.
    (i) Subsequent transfer of IFQ, IPQ, CDQ, or QS does not affect the 
permit holder's liability for noncompliance with this section.
    (ii) Non-renewal of an RCR permit does not affect the permit 
holder's liability for noncompliance with this section.
    (2) Fee liability determination. (i) All CR allocation holders and 
RCR permit holders will be subject to a fee liability for any CR crab 
debited from a CR allocation during a crab fishing year.
    (ii) Fee liability must be calculated by multiplying the applicable 
fee percentage by the ex-vessel value of the CR crab received by the 
RCR at the time of receipt, except as provided by paragraph (b)(3) of 
this section.
    (iii) NMFS will provide a summary to all CR allocation and RCR 
permit holders available through a secure Internet site or on request 
during the last quarter of the crab fishing year. The summary will 
explain the fee liability determination including the current fee 
percentage, details of raw crab pounds debited from CR allocations by 
permit, port or port-group, species, date, and prices.
    (3) Fee collection. (i) All RCRs who receive CR crab are 
responsible for submitting the cost recovery payment for all CR crab 
received.
    (ii) All RCRs who receive CR crab in a crab fishing year must 
maintain and submit records for any crab cost recovery fees collected 
under the corresponding RCR permit.
    (4) Payment--(i) Payment due date. An RCR permit holder must submit 
any crab cost recovery fee liability payment(s) to NMFS at the address 
provided in paragraph (a)(4)(iii) of this section no later than July 31 
of the crab fishing year following the crab fishing year in which the 
payment for a CR crab landing was made.
    (ii) Payment recipient. Make payment payable to NMFS.
    (iii) Payment address. Mail payment and related documents to the 
Administrator, Alaska Region, NMFS, Attn: Operations, Management, & 
Information Division (OMI), P.O. Box 21668, Juneau, AK 99802-1668, 
Facsimile (907-586-7354). Payments may also be submitted electronically 
to NMFS via forms available from RAM or on the RAM area of the Alaska 
Region Home Page at http://www.fakr.noaa.gov/ram.
    (iv) Payment method. Payment must be made in U.S. dollars by 
personal check drawn on a U.S. bank account, money order, bank 
certified check, or credit card.
    (b) Ex-vessel value determination and use--(1) General. An RCR 
permit holder must use either the ex-vessel value determined for 
shoreside processors or the ex-vessel value determined for at-sea 
Catcher/Processors (CP), depending on their activity. Ex-vessel value 
includes all cash, services, or other goods-in-kind exchanged for CR 
crab.
    (2) Shoreside ex-vessel value. Shoreside processing facilities must 
use the price paid at the time of purchase as ex-vessel value for the 
purposes of calculating fee liability. Shoreside processing facilities 
must include any

[[Page 10290]]

subsequent retroactive payments as adjustments to the initial 
calculation of fee liability.
    (3) Catcher/processor ex-vessel value--(i) General. Catcher/
processors must use the corresponding CP standard price(s) for the 
purposes of calculating fee liability.
    (ii) CP standard prices. As part of the summary described in 
paragraph (a)(2)(iii) of this section, the Regional Administrator will 
provide CP standard prices calculated for the current year during the 
last quarter of each crab fishing year. The CP standard prices will be 
described in U.S. dollars per raw crab pound, for CR crab debited from 
CR allocations during the current crab fishing year.
    (iii) Effective period. CP standard prices established by NMFS 
shall apply to all landings made in the same crab fishing year as the 
CP standard price provided for that year and shall replace any CP 
standard prices previously provided by NMFS.
    (iv) Determination. NMFS will calculate the CP standard prices to 
reflect, as closely as possible, the current crab fishing year's 
average shoreside processor price by fishery and by species, and any 
variations in reported shoreside ex-vessel values of CR crab. The 
Regional Administrator will base CP standard prices on the following 
types of information:
    (A) Landed pounds by CR crab, port-group, and month;
    (B) Total shoreside ex-vessel value by CR crab, port-group, and 
month; and
    (C) Price adjustments, including retroactive payments.
    (4) Fee liability calculation. All RCRs must base all fee liability 
calculations on the ex-vessel value that correlates to CR crab that is 
debited from a CR allocation and recorded in raw crab pounds.
    (c) Crab fee percentage--(1) Default percentage. The crab fee 
percentage is 3 percent of the ex-vessel value of crab unless adjusted 
by the Regional Administrator by publication in the Federal Register in 
accordance with paragraphs (c)(3) and (c)(4) of this section.
    (i) The calculated crab fee percentage will be divided equally 
between the harvesting and processing sectors.
    (ii) Catcher/processors must pay the full crab fee percentage 
determined by the fee percentage calculation for all CR crab debited 
from a CR allocation.
    (2) Calculating fee percentage value. Each year the Regional 
Administrator will calculate the fee percentage.
    (i) Factors. In making the calculations the Regional Administrator 
will consider the following factors:
    (A) The catch to which the crab cost recovery fee will apply;
    (B) The projected ex-vessel value of that catch;
    (C) The costs directly related to the management and enforcement of 
the Crab Rationalization Program;
    (D) The funds available for the Crab Rationalization Program in the 
Limited Access System Administrative Fund (LASAF);
    (E) Nonpayment of fee liabilities.
    (ii) Methodology. In making the calculation, the Regional 
Administrator will use the following methodology:
    Harvesting and Processing Sectors: [[100 x (DPC-AB)/ V] / (1-NPR)] 
x 0.5
    Catcher/Processors: [100 x (DPC-AB) /V]/ (1-NPR)

Where:

DPC is the direct program costs for the Crab Rationalization Program 
for the previous fiscal year,
AB is the projected end of the year LASAF account balance for the Crab 
Rationalization Program, and
V is the projected ex-vessel value of the catch subject to the crab 
cost recovery fee liability for the current year, and NPR is the 
fraction of the fee assessments that is expected to result in 
nonpayment.

    (3) Adjustments. During the first quarter of each crab fishing 
year, the Regional Administrator will consider adjusting the crab fee 
percentage. Consideration will be based on the calculations described 
in paragraph (c)(2) of this section.
    (4) Publication. The Regional Administrator will make any 
adjustments in the crab fee percentage by publication in the Federal 
Register.
    (5) Applicable percentage. The RCR permit holder must use the crab 
fee percentage in effect at the time a CR crab is debited from a CR 
allocation to calculate the crab cost recovery fee liability for such 
CR crab. The RCR permit holder must use the crab fee percentage in 
effect at the time a CR crab is debited from a CR allocation to 
calculate the crab cost recovery fee liability for any retroactive 
payments for that CR crab.
    (d) Underpayment of fee liability. (1) Under Sec.  680.4, an 
applicant will not receive new IFQ, IPQ, or RCR permits until he or she 
submits a complete application. A complete application shall include 
full payment of an applicant's complete crab cost recovery fee 
liability as reported by the RCR.
    (2) If an RCR fails to submit full payment for crab cost recovery 
fee liability by the date described in paragraph (a)(4) of this 
section, the Regional Administrator may:
    (i) At any time thereafter send an IAD to the RCR permit holder 
stating that the RCR permit holder's estimated fee liability, as 
indicated by his or her own submitted information, is the crab cost 
recovery fee liability due from the RCR permit holder.
    (ii) Disapprove any transfer of IFQ, IPQ, QS, or PQS to or from the 
RCR permit holder in accordance with Sec.  680.41.
    (3) If an RCR fails to submit full payment by the application 
deadline described at Sec.  680.4, no IFQ or IPQ permit will be issued 
to that RCR for that crab fishing year.
    (4) Upon final agency action determining that an RCR permit holder 
has not paid his or her crab cost recovery fee liability, the Regional 
Administrator may continue to withhold issuance of any new IFQ, IPQ, or 
RCR permit for any subsequent crab fishing years. If payment is not 
received by the 30th day after the final agency action, the matter will 
be referred to the appropriate authorities for purposes of collection.
    (e) Over payment. Upon issuance of final agency action, any amount 
submitted to NMFS in excess of the crab cost recovery fee liability 
determined to be due by the final agency action will be returned to the 
RCR permit holder unless the permit holder requests the agency to 
credit the excess amount against the permit holder's future crab cost 
recovery fee liability.
    (f) Appeals and requests for reconsideration. An RCR permit holder 
who receives an IAD may either appeal the IAD pursuant to 50 CFR 679.43 
or request reconsideration. Within 60 days from the date of issuance of 
the IAD, the Regional Administrator may undertake reconsideration of 
the IAD on his or her own initiative. If a request for reconsideration 
is submitted or the Regional Administrator initiates reconsideration, 
the 60-day period for appeal under 50 CFR 679.43 will begin anew upon 
issuance of the Regional Administrator's reconsidered IAD. The Regional 
Administrator may undertake only one reconsideration of the IAD, if 
any. If an RCR permit holder fails to file an appeal of the IAD 
pursuant to 50 CFR 679.43 or request reconsideration within the time 
period provided, the IAD will become the final agency action. In any 
appeal or reconsideration of an IAD made under this section, an RCR 
permit holder has the burden of proving his or her claim.
    (g) Fee submission form. An RCR must submit an RCR permit holder 
fee submission form according to Sec.  680.5(f).

[[Page 10291]]



        Table 1 to Part 680.--Crab Rationalization (CR) Fisheries
------------------------------------------------------------------------
    Fishery code         CR fishery              Geographic area
------------------------------------------------------------------------
BBR................  Bristol Bay red    In waters of the EEZ with:
                      king crab         (1) a northern boundary of
                      (Paralithodes      58[deg]30' N. lat.,
                      camtshaticus).    (2) a southern boundary of
                                         54[deg]36' N. lat., and
                                        (3) a western boundary of
                                         168[deg] W. long. and including
                                         all waters of Bristol Bay.
BSS................  Bering Sea Snow    In waters of the EEZ with:
                      crab              (1) a northern and western
                      (Chionoecetes      boundary of the Maritime
                      opilio).           Boundary Agreement Line as that
                                         line is described in the text
                                         of and depicted in the annex to
                                         the Maritime Boundary Agreement
                                         between the United States and
                                         the Union of Soviet Socialist
                                         Republics signed in Washington,
                                         June 1, 1990, and as the
                                         Maritime Boundary Agreement
                                         Line as depicted on NOAA Chart
                                         No. 513 (6th edition, February
                                         23, 1991) and NOAA Chart No.
                                         514 (6th edition, February 16,
                                         1991).
                                        (2) a southern boundary of
                                         54[deg]30' N. lat. to 171[deg]
                                         W. long., and then south to
                                         54[deg]36' N. lat.
BST................  Bering Sea Tanner  In waters of the EEZ with:
                      crab              (1) a northern and western
                      (Chionoecetes      boundary of the Maritime
                      bairdi).           Boundary Agreement Line as that
                                         line is described in the text
                                         of and depicted in the annex to
                                         the Maritime Boundary Agreement
                                         between the United States and
                                         the Union of Soviet Socialist
                                         Republics signed in Washington,
                                         June 1, 1990, and as the
                                         Maritime Boundary Agreement
                                         Line as depicted on NOAA Chart
                                         No. 513 (6th edition, February
                                         23, 1991) and NOAA Chart No.
                                         514 (6th edition, February 16,
                                         1991).
                                        (2) a southern boundary of
                                         54[deg]30' N. lat. to 171[deg]
                                         W. long., and then south to
                                         54[deg]36' N. lat.
EAG................  Eastern Aleutian   In waters of the EEZ with:
                      Islands golden    (1) an eastern boundary the
                      king crab          longitude of Scotch Cap Light
                      (Lithodes          (164[deg]44' W. long.) To
                      aequispinus).      53[deg]30' N. lat., then West
                                         to 165[deg] W. long.
                                        (2) a western boundary of
                                         174[deg] W. long., and
                                        (3) a northern boundary of a
                                         line from the latitude of Cape
                                         Sarichef (54[deg]36' N. lat.)
                                         westward to 171[deg] W. long.,
                                         then north to 55[deg]30' N.
                                         lat., then west to 174[deg] W.
                                         long.
PIK................  Pribilof red king  In waters of the EEZ with:
                      and blue king     (1) a northern boundary of
                      crab               58[deg]30' N. lat.,
                      (Paralithodes     (2) an eastern boundary of
                      camtshaticus and   168[deg] W. long.,
                      P. platypus).     (3) a southern boundary line
                                         from 54[deg]36' N. lat.,
                                         168[deg] W. long., to
                                         54[deg]36' N. lat., 171[deg] W.
                                         long., to 55[deg]30' N. lat.,
                                         171[deg] W. long., to
                                         55[deg]30' N. lat., 173[deg]30'
                                         E. lat., and then westward to
                                         the Maritime Boundary Agreement
                                         Line as that line is described
                                         in the text of and depicted in
                                         the annex to the Maritime
                                         Boundary Agreement between the
                                         United States and the Union of
                                         Soviet Socialist Republics
                                         signed in Washington, June 1,
                                         1990, and as the Maritime
                                         Boundary Agreement Line as
                                         depicted on NOAA Chart No. 513
                                         (6th edition, February 23,
                                         1991) and NOAA Chart No. 514
                                         (6th edition, February 16,
                                         1991).
SMB................  St. Matthew blue   In waters of the EEZ with:
                      king crab         (1) a northern boundary of
                      (Paralithodes      62[deg] N. lat.,
                      platypus).        (2) a southern boundary of
                                         58[deg]30' N. lat., and
                                        (3) a western boundary of the
                                         Maritime Boundary Agreement
                                         Line as that line is described
                                         in the text of and depicted in
                                         the annex to the Maritime
                                         Boundary Agreement between the
                                         United States and the Union of
                                         Soviet Socialist Republics
                                         signed in Washington, June 1,
                                         1990, and as the Maritime
                                         Boundary Agreement Line as
                                         depicted on NOAA Chart No. 513
                                         (6th edition, February 23,
                                         1991) and NOAA Chart No. 514
                                         (6th edition, February 16,
                                         1991).
WAG................  Western Aleutian   In waters of the EEZ with:
                      Islands golden    (1) an eastern boundary the
                      king crab          longitude 174[deg] W. long.,
                      (Lithodes         (2) a western boundary the
                      aequispinus).      Maritime Boundary Agreement
                                         Line as that line is described
                                         in the text of and depicted in
                                         the annex to the Maritime
                                         Boundary Agreement between the
                                         United States and the Union of
                                         Soviet Socialist Republics
                                         signed in Washington, June 1,
                                         1990, and as the Maritime
                                         Boundary Agreement Line as
                                         depicted on NOAA Chart No. 513
                                         (6th edition, February 23,
                                         1991) and NOAA Chart No. 514
                                         (6th edition, February 16,
                                         1991), and
                                        (3) a northern boundary of a
                                         line from the latitude of
                                         55[deg]30' N. lat., then west
                                         to the U.S.-Russian Convention
                                         line of 1867.
WAI................  Western Aleutian   In waters of the EEZ with:
                      Islands red king  (1) an eastern boundary the
                      (Paralithodes      longitude 179[deg] crab W.
                      camtshaticus).     long.,
                                        (2) a western boundary of the
                                         Maritime Boundary Agreement
                                         Line as that line is described
                                         in the text of and depicted in
                                         the annex to the Maritime
                                         Boundary Agreement between the
                                         United States and the Union of
                                         Soviet Socialist Republics
                                         signed in Washington, June 1,
                                         1990, and as the Maritime
                                         Boundary Agreement Line as
                                         depicted on NOAA Chart No. 513
                                         (6th edition, February 23,
                                         1991) and NOAA Chart No. 514
                                         (6th edition, February 16,
                                         1991), and
                                        (3) a northern boundary of a
                                         line from the latitude of
                                         55[deg]30' N. lat., then west
                                         to the Maritime Boundary
                                         Agreement Line as that line is
                                         described in the text of and
                                         depicted in the annex to the
                                         Maritime Boundary Agreement
                                         between the United States and
                                         the Union of Soviet Socialist
                                         Republics signed in Washington,
                                         June 1, 1990, and as the
                                         Maritime Boundary Agreement
                                         Line as depicted on NOAA Chart
                                         No. 513 (6th edition, February
                                         23, 1991) and NOAA Chart No.
                                         514 (6th edition, February 16,
                                         1991).
------------------------------------------------------------------------


[[Page 10292]]


                                    Table 2 to Part 680.--Crab Species Codes
----------------------------------------------------------------------------------------------------------------
             Species code                       Common name                         Scientific name
----------------------------------------------------------------------------------------------------------------
900..................................  Box..........................  Lopholithodes mandtii.
910..................................  Dungeness....................  Cancer magister.
921..................................  Red king crab................  Paralithodes camtshaticus.
922..................................  Blue king crab...............  Paralithodes platypus.
923..................................  Golden (brown) king crab.....  Lithodes aequispinus.
924..................................  Scarlet king crab............  Lithodes couesi.
931..................................  Tanner crab..................  Chionoecetes bairdi.
932..................................  Snow crab....................  Chionoecetes opilio.
933..................................  Grooved Tanner crab..........  Chionoecetes tanneri.
934..................................  Triangle Tanner crab.........  Chionoecetes angulatus.
940..................................  Korean horsehair crab........  Erimacrus isenbeckii.
951..................................  Multispinus crab.............  Paralomis multispinus.
953..................................  Verrilli crab................  Paralomis verrilli.
----------------------------------------------------------------------------------------------------------------


          Table 3a to Part 680.--Crab Delivery Condition Codes
 [The condition of the fish or shellfish at the point it is weighed and
                   recorded on the ADF&G fish ticket]
------------------------------------------------------------------------
               Code                             Description
------------------------------------------------------------------------
01...............................  Whole crab, live.
79...............................  Deadloss.
------------------------------------------------------------------------


        Table 3b to Part 680.--Crab Disposition or Product Codes
------------------------------------------------------------------------
               Code                             Description
------------------------------------------------------------------------
80...............................  Sections.
95...............................  Personal use--not sold.
97...............................  Other retained product (specify
                                    condition).
------------------------------------------------------------------------


   Table 3c to Part 680.--Crab Product Codes for Economic Data Reports
------------------------------------------------------------------------
               Code                             Description
------------------------------------------------------------------------
01...............................  Whole crab.
80...............................  Sections.
81...............................  Meats.
97...............................  Other (specify).
------------------------------------------------------------------------


                Table 4 to Part 680.--Crab Process Codes
------------------------------------------------------------------------
           Process code                         Description
------------------------------------------------------------------------
0................................   Other (specify).
1................................   Fresh.
2................................   Frozen.
3................................   Salted/brined.
6................................   Cooked.
7................................   Live.
18...............................   Fresh/vacuum pack.
21...............................   Frozen/block.
22...............................   Frozen/shatter pack.
28...............................   Frozen/vacuum pack.
------------------------------------------------------------------------


                  Table 5 to Part 680.--Crab Size Codes
------------------------------------------------------------------------
            Size code                           Description
------------------------------------------------------------------------
1................................  Standard or large sized crab or crab
                                    sections.
2................................  Smaller size crab or crab sections,
                                    e.g., snow crab less than 4 inches.
------------------------------------------------------------------------


                 Table 6 to Part 680.--Crab Grade Codes
------------------------------------------------------------------------
            Grade/code                          Description
------------------------------------------------------------------------
1................................   Standard or premium quality crab or
                                    crab sections.
2................................   Lower quality product, e.g., dirty
                                    shelled crab or a pack that is of
                                    lower quality than No. 1 crab.
------------------------------------------------------------------------


                      Table 7 to Part 680.--Initial Issuance of Crab QS by Crab QS Fishery
----------------------------------------------------------------------------------------------------------------
                                              Column C: Eligibility     Column D: Recent
  Column A: Crab QS     Column B: Qualifying  years for CVC and CPC  participation seasons   Column E: Subset of
      Fisheries             years for QS                QS             for CVC and CPC QS     qualifying years
----------------------------------------------------------------------------------------------------------------
For each crab QS       QS for any qualified   In addition, each      In addition, each      The maximum number
 fishery the Regional   person based on that   person receiving CVC   person receiving CVC   of qualifying years
 Administrator shall    person's total legal   and CPC QS must have   or CPC QS, must have   that can be used to
 calculate (see Sec.    landings of crab in    made at least one      made at least one      calculate QS for
  680.40(c)(2):         each of the crab QS    landing per year, as   landing, as recorded   each QS fishery is:
                        fisheries for any:     recorded on a State    on a State of Alaska
                                               of Alaska fish         fish ticket, in at
                                               ticket, in any three   least 2 of the last
                                               years during the       3 fishing seasons in
                                               base period            each of the crab QS
                                               described below:       fisheries as those
                                                                      seasons are
                                                                      described below:

[[Page 10293]]

 
1. Bristol Bay red     4 years of the 5-year  3 years of the 5-year  (1) October 16, 2000   4
 king crab (BBR)        QS base period         QS base period         through October 20,
                        beginning on:          beginning on:          2000.
                       (1) November 1, 1996   (1) November 1, 1996   (2) October 15, 2001
                        through November 5,    through November 5,    through October 18,
                        1996;                  1996;                  2001.
                       (2) November 1, 1997   (2) November 1, 1997   (3) October 15, 2002
                        through November 5,    through November 5,    through October 18,
                        1997;                  1997;                  2002.
                       (3) November 1, 1998   (3) November 1, 1998
                        through November 6,    through November 6,
                        1998;                  1998;
                       (4) October 15, 1999   (4) October 15, 1999
                        through October 20,    through October 20,
                        1999; and              1999; and
                       (5) October 16, 2000   (5) October 16, 2000
                        through October 20,    through October 20,
                        2000                   2000
2. Bering Sea snow     4 years of the 5-year  3 years of the 5-year  (1) April 1, 2000      4
 crab (BSS)             period beginning on:   period beginning on:   through April 8,
                       (1) January 15, 1996   (1) January 15, 1996    2000.
                        through February 29,   through February 29,  (2) January 15, 2001
                        1996;                  1996;                  through February 14,
                       (2) January 15, 1997   (2) January 15, 1997    2001.
                        through March 21,      through March 21,     (3) January 15, 2002
                        1997;                  1997;                  through February 8,
                       (3) January 15, 1998   (3) January 15, 1998    2002.
                        through March 21,      through March 21,
                        1998;                  1998;
                       (4) January 15, 1999   (4) January 15, 1999
                        through March 22,      through March 22,
                        1999; and              1999; and
                       (5) April 1, 2000      (5) April 1, 2000
                        through April 8,       through April 8,
                        2000                   2000
3. Bering Sea Tanner   4 of the 6 seasons     3 of the 6 seasons     In any 2 of the last   4
 crab (BST)             beginning on:          beginning on:          3 seasons prior to
                       (1) November 15, 1992  (1) November 15, 1991   June 10, 2002 in the
                        through March 31,      through March 31,      Eastern Aleutian
                        1993;                  1992;                  Island golden
                       (2) November 1, 1993   (2) November 15, 1992   (brown) king crab,
                        through November 10,   through March 31,      Western Aleutian
                        1993;                  1993;                  Island golden
                       (3) November 20, 1993  (3) November 1, 1993    (brown) king crab,
                        through January 1,     through November 10,   Bering Sea snow
                        1994;                  1993, and November     crab, or Bristol Bay
                       (4) November 1, 1994    20, 1993 through       red king crab
                        through November 21,   January 1, 1994;       fisheries.
                        1994;                 (4) November 1, 1994
                       (5) November 1, 1995    through November 21,
                        through November 16,   1994;
                        1995; and             (5) November 1, 1995
                       (6) November 1, 1996    through November 16,
                        through November 5,    1995; and
                        1996 and November     (6) November 1, 1996
                        15, 1996 through       through November 5,
                        November 27, 1996.     1996 and November
                                               15, 1996 through
                                               November 27, 1996.

[[Page 10294]]

 
4. Eastern Aleutian    5 years of the 5-year  3 years of the 5-year  (1) September 1, 1999  5
 Islands golden king    base period            base period            through October 25,
 crab (EAG)             beginning on:          beginning on:          1999.
                       (1) September 1, 1996  (1) September 1, 1996  (2) August 15, 2000
                        through December 25,   through December 25,   through September
                        1996;                  1996;                  24, 2000.
                       (2) September 1, 1997  (2) September 1, 1997  (3) August 15, 2001
                        through November 24,   through November 24,   through September
                        1997;                  1997;                  10, 2001.
                       (3) September 1, 1998  (3) September 1, 1998
                        through November 7,    through November 7,
                        1998;                  1998;
                       (4) September 1, 1999  (4) September 1, 1999
                        through October 25,    through October 25,
                        1999; and              1999; and
                       (5) August 15, 2000    (5) August 15, 2000
                        through September      through September
                        24, 2000.              25, 2000.
5. Pribilof red king   4 years of the 5-year  3 years of the 5-year  In any 2 of the last   4
 and blue king crab     period beginning on:   period beginning on:   3 seasons prior to
 (PIK)                 (1) September 15,      (1) September 15,       June 10, 2002 in the
                        1994 through           1994 through           Eastern Aleutian
                        September 21, 1994;    September 21, 1994;    Island golden
                       (2) September 15,      (2) September 15,       (brown) king crab,
                        1995 through           1995 through           Western Aleutian
                        September 22, 1995;    September 22, 1995;    Island golden
                       (3) September 15,      (3) September 15,       (brown) king crab,
                        1996 through           1996 through           Bering Sea snow
                        September 26, 1996;    September 26, 1996;    crab, or Bristol Bay
                       (4) September 15,      (4) September 15,       red king crab
                        1997 through           1997 through           fisheries, except
                        September 29, 1997;    September 29, 1997;    that persons
                        and                    and                    applying for an
                       (5) September 15,      (5) September 15,       allocation to
                        1998 through           1998 through           receive QS based on
                        September 28, 1998.    September 28, 1998.    legal landings made
                                                                      aboard a vessel less
                                                                      than 60' LOA at the
                                                                      time of harvest are
                                                                      exempt from this
                                                                      requirement.
6. St. Matthew blue    4 years of the 5-year  3 years of the 5-year  In any 2 of the last   4
 king crab (SMB)        period beginning on:   period beginning on:   3 seasons prior to
                       (1) September 15,      (1) September 15,       June 10, 2002 in the
                        1994 through           1994 through           Eastern Aleutian
                        September 22, 1994;    September 22, 1994;    Island golden
                       (2) September 15,      (2) September 15,       (brown) king crab,
                        1995 through           1995 through           Western Aleutian
                        September 20, 1995;    September 20, 1995;    Island golden
                       (3) September 15,      (3) September 15,       (brown) king crab,
                        1996 through           1996 through           Western Aleutian
                        September 23, 1996;    September 23, 1996;    Island golden
                       (4) September 15,      (4) September 15,       (brown) king crab,
                        1997 through           1997 through           Bering Sea snow
                        September 22, 1997;    September 22, 1997;    crab, or Bristol Bay
                        and                    and                    red king crab
                       (5) September 15,      (5) September 15,       fisheries
                        1998 through           1998 through
                        September 26, 1998.    September 26, 1998.
7. Western Aleutian    5 of the 5 seasons     3 of the 5 seasons     (1) September 1 1999   5
 Islands golden king    beginning on:          beginning on:          through August 14,
 crab (WAG)            (1) September 1, 1996  (1) September 1, 1996   2000.
                        through August 31,     through August 31,    (2) August 15, 2000
                        1997;                  1997;                  through March 28,
                       (2) September 1, 1997  (2) September 1, 1997   2001.
                        through August 21,     through August 31,    (3) August 15 2001
                        1998;                  1998;                  through March 30,
                       (3) September 1, 1998  (3) September 1, 1998   2002.
                        through August 31,     through August 31,
                        1999;                  1999;
                       (4) September 1, 1999  (4) September 1, 1999
                        through August 14,     through August 14,
                        2000; and              2000; and
                       (5) August 15, 2000    (5) August 15, 2000
                        through March 28,      through March 28,
                        2001.                  2001.

[[Page 10295]]

 
8. Western Aleutian    3 of the 4 seasons     3 of the 4 seasons     In any 2 of the last   3
 Islands red king       beginning on:          beginning on:          3 seasons prior to
 crab (WAI)            (1) November 1, 1992   3 of the 4 seaons       June 10, 2002 in the
                        through January 15,    beginning on:          Eastern Aleutian
                        1993;                 (1) November 1, 1992    Island golden
                       (2) November 1, 1993    through January 15,    (brown) king crab,
                        through February 15,   1993;                  Western Aleutian
                        1994;                 (2) November 1, 1995    Island golden
                       (3) November 1, 1994    through February 15,   (brown) king crab,
                        through November 28,   1994;                  Bering Sea snow
                        1994; and             (3) November 1, 1994    crab, or Bristol Bay
                       (4) November 1, 1995    through November 28,   red king crab
                        through February 13,   1994; and              fishiers.
                        1996.                 (4) November 1, 1995
                                               through February 13,
                                               1996.
----------------------------------------------------------------------------------------------------------------


 Table 8 to Part 680.--Initial QS and PQS Pool for Each Crab QS Fishery
------------------------------------------------------------------------
           Crab QS fishery             Initial QS pool  Initial PQS pool
------------------------------------------------------------------------
BBR--Bristol Bay red king crab......       400,000,000       400,000,000
BSS--Bering Sea snow crab (C.            1,000,000,000     1,000,000,000
 opilio)............................
BST--Bering Sea Tanner crab (C.            200,000,000       200,000,000
 bairdi)............................
EAG--Eastern Aleutian Islands golden        10,000,000        10,000,000
 king crab..........................
PIK--Pribilof Islands red and blue          30,000,000        30,000,000
 king crab..........................
SMB--St. Matthew blue king crab.....        30,000,000        30,000,000
WAG--Western Aleutian Islands golden        40,000,000        40,000,000
 king crab..........................
WAI--Western Aleutian Islands red           60,000,000        60,000,000
 king crab..........................
------------------------------------------------------------------------


                      Table 9 to Part 680.--Initial Issuance of Crab PQS by Crab QS Fishery
----------------------------------------------------------------------------------------------------------------
                                               Column B: The Regional Administrator shall calculate PQS for any
     Column A: For each crab QS fishery         qualified person based on that person's total legal purchase of
                                                      crab in each of the crab QS fisheries for any . . .
----------------------------------------------------------------------------------------------------------------
Bristol Bay red king crab (BBR).............  3 years of the 3-year QS base period beginning on:
                                              (1) November 1, 1997 through November 5, 1997;
                                              (2) November 1, 1998 through November 6, 1998; and
                                              (3) October 15, 1999 through October 20, 1999.
Bering Sea snow crab (BSS)..................  3 years of the 3-year period beginning on:
                                              (1) January 15, 1997 through March 21, 1997;
                                              (2) January 15, 1998 through March 21, 1998; and
                                              (3) January 15, 1999 through March 22, 1999.
Bering Sea Tanner crab (BST)................  Equivalent to 50 percent of the total legally processed crab in
                                               the Bering Sea snow crab fishery during the qualifying years
                                               established for that fishery, and 50 percent of the total legally
                                               processed crab in the Bristol Bay red king crab fishery during
                                               the qualifying years established for that fishery.
Eastern Aleutian Island golden king crab      4 years of the 4-year base period beginning on:
 (EAG).                                       (1) September 1, 1996 through December 25, 1996;
                                              (2) September 1, 1997 though November 24, 1997;
                                              (3) September 1, 1998 through November 7, 1998; and
                                              (4) September 1, 1999 through October 25, 1999.
Pribilof Islands red and blue king crab       3 years of the 3-year period beginning on:
 (PIK).                                       (1) September 15, 1996 through September 26, 1996;
                                              (2) September 15, 1997 through September 29, 1997; and
                                              (3) September 15, 1998 through September 28, 1998.
St. Matthew blue king crab (SMB)............  3 years of the 3-year period beginning on:
                                              (1) September 15, 1996 through September 23, 1996;
                                              (2) September 15, 1997 through September 22, 1997; and
                                              (3) September 15, 1998 through September 26, 1998.
Western Aleutian Island golden king crab      4 years of the 4-year base period beginning on:
 (WAG).                                       (1) September 1, 1996 through August 31, 1997;
                                              (2) September 1, 1997 though August 31, 1998;
                                              (3) September 1, 1998 through August 31, 1999; and
                                              (4) September 1, 1999 through August 14, 2000.
Western Aleutian Island red king crab (WAI).  Equivalent to the total legally processed crab in the Western
                                               Aleutian Islands golden (brown) king crab fishery during the
                                               qualifying years established for that fishery.
----------------------------------------------------------------------------------------------------------------

[FR Doc. 05-3486 Filed 3-1-05; 8:45 am]
BILLING CODE 3510-22-P