[Federal Register Volume 70, Number 78 (Monday, April 25, 2005)]
[Proposed Rules]
[Pages 21170-21172]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-8224]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 622

[Docket No. 050408096-5096-01; I.D. 033105A]
RIN 0648-AS69


Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; 
Reef Fish Fishery of the Gulf of Mexico; Gulf Reef Fish Limited Access 
System

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

ACTION: Proposed rule; request for comments.

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SUMMARY: NMFS issues this proposed rule to implement Amendment 24 to 
the Fishery Management Plan (FMP) for the Reef Fish Resources of the 
Gulf of Mexico (Amendment 24) prepared by the Gulf of Mexico Fishery 
Management Council (Council). This proposed rule would establish a 
limited access system for the commercial reef fish fishery in the Gulf 
of Mexico by capping participation at the current level. The intended 
effect of this proposed rule is to provide economic and social 
stability in the fishery by preventing speculative entry into the 
fishery.

DATES: Written comments on the proposed rule must be received no later 
than 5 p.m., eastern time, on June 9, 2005.

ADDRESSES: You may submit comments on the proposed rule by any of the 
following methods:
     E-mail: [email protected]. Include in the 
subject line the following document identifier: 0648-AS69.
     Federal e-Rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Peter Hood, Southeast Regional Office, NMFS, 263 
13th Avenue South, St. Petersburg, FL 33701.
     Fax: 727-824-5308; Attention: Peter Hood.
    Copies of Amendment 24, which includes a Regulatory Impact Review 
(RIR), Initial Regulatory Flexibility Analyses (IRFA), and an 
Environmental Assessment, may be obtained from the Gulf of Mexico 
Fishery Management Council, The Commons at Rivergate, 3018 U.S. Highway 
301 North, Suite 1000, Tampa, FL 33619-2266; telephone: 813-228-2815; 
fax: 813-225-7015; e-mail: [email protected]. Copies of 
Amendment 24 can also be downloaded from the Council's website at 
www.gulfcouncil.org.

FOR FURTHER INFORMATION CONTACT: Peter Hood, telephone: 727-551-5728, 
fax: 727-824-5308, e-mail: [email protected].

SUPPLEMENTARY INFORMATION: The reef fish fishery in the exclusive 
economic zone (EEZ) of the Gulf of Mexico is managed under the FMP. The 
FMP was prepared by the Council and is implemented under the authority 
of the Magnuson-Stevens Fishery Conservation and Management Act 
(Magnuson-Stevens Act) by regulations at 50 CFR part 622.

Background

    Prior to 1992, the commercial reef fish fishery in the EEZ of the 
Gulf of Mexico operated under open access. In 1992, due to concerns 
about increasing levels of participation in the fishery, a 3-year 
moratorium on the issuance of new commercial vessel permits for Gulf 
reef fish was implemented under Amendment 4 to the FMP (April 8, 1992; 
57 FR 11914). The moratorium was designed to stabilize the level of 
participation in the fishery and to allow for evaluation and 
development of a more comprehensive controlled access system for the 
commercial reef fish fishery. The moratorium was subsequently extended 
through 1995 (Amendment 9) (August 2, 1994; 59 FR 39301); through 2000 
(Amendment 11) (December 15, 1995; 60 FR 64350); and through 2005, or 
until replaced by a more comprehensive access/effort control program 
(Amendment 17) (July 3, 2000; 65 FR 41016).
    The effects of the existing permit moratorium have been to prevent 
increases in effort, reduce the number of permittees in the reef fish 
fishery, and help stabilize the economic performance of current 
participants. Under the moratoria, the number of commercial vessel reef 
fish permits has declined from 1,718 in 1993 to 1,129 in 2004.
    Current commercial reef fish fishery participants have demonstrated 
the capability of harvesting the applicable quotas well in advance of 
the end of the fishing season, resulting in early closures of the 
fishery. Allowing the fishery to revert to open access would result in 
an increased number of participants in the fishery, most likely 
negating any reductions in effort that have been achieved as a result 
of the current moratorium. An increase in participants would lead to 
even earlier fishery closures and would have an adverse impact on the 
economic performance of current participants. Increased participation 
would also compound the complexity of any future consideration by the 
Council to develop a more comprehensive controlled access or effort 
limitation system for this fishery. For these reasons, the Council has 
concluded that a limited access system to continue restrictions on 
participation levels in the fishery is appropriate.

Limited Access System

    Amendment 24 would establish a limited access system for the 
commercial fishery for Gulf reef fish by capping participation at the 
current level. Under the proposed limited access system, an owner of a 
vessel with a valid commercial vessel permit for Gulf reef fish on the 
date that Amendment 24 is approved (assuming approval) would be issued 
the applicable permits under the limited access system. Commercial 
vessel permits for Gulf reef fish would become limited access permits 
upon their renewal. Other than the changes in the terminology, i.e., 
``limited access'' versus ``moratorium,'' there would be no changes to 
the current procedures for application, qualification, issuance, 
renewal, or transferability of these permits.

Classification

    At this time, NMFS has not determined that Amendment 24, which this 
proposed rule would implement, is consistent with the national 
standards of the Magnuson-Stevens Act and other applicable laws. In 
making that determination, NMFS will take into account the data, views, 
and comments received during the comment period on Amendment 24 ending 
June 6, 2005, and the comment period on this proposed rule ending June 
9, 2005.
    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866.
    NMFS prepared an IRFA as required by section 603 of the Regulatory 
Flexibility Act. The IRFA describes the economic impact this proposed 
rule, if adopted, would have on small entities. A description of the 
action, why it is being considered, and the legal basis for this action 
are contained in this Classification section and in the SUMMARY of this 
proposed rule. A summary of the analysis follows.
    This proposed rule would establish a limited access system for the 
commercial reef fish fishery in the Gulf of Mexico. The purpose of the 
proposed

[[Page 21171]]

rule is to provide stability in the Gulf of Mexico commercial reef fish 
fishery as part of the strategy to achieve optimum yield (OY) and 
maximize the overall benefits to the Nation provided by the fishery. 
The Magnuson-Stevens Act provides the statutory basis for the proposed 
rule.
    No duplicative, overlapping, or conflicting Federal rules have been 
identified.
    An estimated 1,161 vessels were permitted to fish commercially for 
Gulf reef fish in 2003, down from 1,718 in 1993, and 61 percent to 74 
percent of those vessels had logbook-reported landings during 1993 
through 2003. The median annual gross revenue from all logbook-reported 
sales of finfish by these vessels ranged from approximately $12,000 to 
$23,000 during this period. The median percentage of gross revenues 
attributable to Gulf reef fish ranged from 95 percent to 98 percent. 
Although participation in the fishery has declined since 1993, this 
decline has been voluntary and presumed attributable to economic 
conditions in the fishery and fishing in general and not due to 
regulatory requirements. Although a limited access program has been in 
place in this fishery since 1992, transfer of permits is not 
restricted, and those seeking to enter the fishery can purchase a 
permit from a permit holder. Such transfers in fact occur, and 253 of 
the 1,175 valid permits as of February 6, 2004 were permits that had 
been transferred at some time since 1998. Thus, entry into the fishery 
occurs. However, total participation, in terms of both the number of 
permits and the number of permitted vessels that land fish, has 
consistently declined since 1993, indicating that entry is not limited 
by a lack of available permits.
    This proposed rule will affect all current participants in the 
fishery and all entities that may be interested in entering the 
fishery. Although the number of current participants is known, no 
estimate of the number of prospective participants can be provided, 
although it is not expected to be substantial due to a decline in total 
participation in the fishery even though permit transfer and entry 
opportunities are available.
    This proposed rule would not change current reporting, 
recordkeeping, and other compliance requirements under the FMP. These 
requirements include qualification criteria for the commercial vessel 
permit, and logbook landing reports. All of the information elements 
required for these processes are standard elements essential to the 
successful operation of a fishing business and should, therefore, 
already be collected and maintained as standard operating practice by 
the business. The requirements do not require professional skills and, 
therefore, are determined not to be onerous.
    One general class of small business entities would be directly 
affected by the final rule: commercial fishing vessels. The Small 
Business Administration defines a small business that engages in 
commercial fishing as a firm that is independently owned and operated, 
is not dominant in its field of operation, and has annual receipts up 
to $3.5 million per year. Based on the revenue profiles provided above, 
all commercial entities operating in the Gulf reef fish fishery are 
considered small entities.
    This proposed rule will apply to all entities that operate in the 
Gulf of Mexico commercial reef fish fishery and those entities 
interested in or seeking to enter the fishery. The proposed rule will, 
therefore, affect a substantial number of small entities.
    The outcome of ``significant economic impact'' can be ascertained 
by examining two issues: disproportionality and profitability. The 
disproportionality question is, do the regulations place a substantial 
number of small entities at a significant competitive disadvantage to 
large entities? All the vessel operations affected by the proposed rule 
are considered small entities, so the issue of disproportionality does 
not arise in the present case.
    The profitability question is, do the regulations significantly 
reduce profit for a substantial number of small entities? The proposed 
rule would continue the limited access system in the fishery. 
Continuation of this system would be expected to increase profitability 
for the entities remaining in the fishery if participation continues to 
decline, as has occurred since 1993. Should the decline in 
participation cease, profits would be expected to continue at current 
levels. Should the fishery revert to open access, participation would 
be expected to increase, and average profit per participant would be 
expected to decline, possibly to the point of elimination of all 
profits from this fishery.
    This proposed rule would continue the requirement to have a vessel 
permit in order to participate in the commercial reef fish fishery. The 
cost of the permit is $50, and renewal is required every other year 
(the permit is automatically renewed the second year). Because this is 
a current requirement, there would be no additional impacts on 
participant profits as a result of this requirement.
    Three alternatives were considered to the proposed rule. The first, 
status quo alternative would allow the fishery to revert to open 
access. Open access conditions would be expected to lead to an increase 
in the number of permitted vessels, or, at least, slow the rate of 
decline in participation that has occurred. Any increase in the number 
of permitted vessels landing Gulf reef fish would lead to an expected 
decrease in producer surplus from that in 2003, estimated at $404,500 
to $647,200.
    The two remaining alternatives would continue the current 
moratorium on issuing new Gulf reef fish permits for five years and 10 
years, respectively, compared to the proposed rule, which would 
continue the moratorium indefinitely. Thus, the fishery would continue 
as a limited access fishery under each alternative. It is not possible 
to distinguish these alternatives empirically in terms of fishery 
behavior using available data. However, it is reasonable to assume that 
fishermen believe that regardless of the duration of the program 
specified, a precedent for indefinite use of private market mechanisms 
to allow entry into the fishery has been established, given the history 
of successfully functioning private markets for vessel permits. Thus, 
the outcomes of these three alternatives are expected to be 
functionally equivalent. As stated previously, under the current 
limited access program, the fishery is estimated to have generated 
$404,500 to $647,200 in producer surplus in 2003. Assuming the increase 
in producer surplus mirrors that of fleet contraction exhibited 
recently (1.15 percent), the resultant estimates of producer surplus 
are approximately $450,000 to $720,000 by 2010, and $484,000 to 
$775,000 by 2015. Each alternative would also continue to provide for 
market-based compensation for vessels that exit the fishery, and the 
permit market would continue to provide an economically rational basis 
for regulating the entry of vessels into the commercial Gulf reef fish 
fishery and allocating access to fishery resources among competing 
users in the commercial fisheries.
    It should be noted that although this proposed rule would imply a 
more permanent system than the alternatives, the system established 
under any alternative could be suspended at any time through 
appropriate regulatory action. Adopting an indefinite duration, 
however, eliminates the need for action at specific intervals to 
continue the system, thereby eliminating the costs associated with the 
additional regulatory process. The administrative and development cost 
of the current

[[Page 21172]]

action is estimated to be $200,000. Further, the proposed rule may 
better address the Council's purpose of providing stability in the 
commercial and recreational fisheries for Gulf reef fish, preventing 
speculative entry into the commercial fisheries, and achieving OY. The 
status quo alternative would not achieve the Council's objectives.
    Copies of the IRFA are available (see ADDRESSES).

List of Subjects in 50 CFR Part 622

    Fisheries, Fishing, Puerto Rico, Reporting and recordkeeping 
requirements, Virgin Islands.

    Dated: April 20, 2005.
Rebecca Lent,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.
    For the reasons set out in the preamble, 50 CFR part 622 is 
proposed to be amended as follows:

PART 622--FISHERIES OF THE CARIBBEAN, GULF, AND SOUTH ATLANTIC

    1. The authority citation for part 622 continues to read as 
follows:

    Authority: 16 U.S.C. 1801 et seq.
    2. In Sec.  622.4, revise the last sentence of paragraph (a)(2)(v) 
and introductory paragraph (m) to read as follows:


Sec.  622.4  Permits and fees.

    (a) * * *
    (2) * * *
    (v) * * * See paragraph (m) of this section regarding a limited 
access system for commercial vessel permits for Gulf reef fish and 
limited exceptions to the earned income requirement for a permit.
* * * * *
    (m) Limited access system for commercial vessel permits for Gulf 
reef fish.
* * * * *
[FR Doc. 05-8224 Filed 4-22-05; 8:45 am]
BILLING CODE 3510-22-S