[Federal Register Volume 70, Number 133 (Wednesday, July 13, 2005)]
[Rules and Regulations]
[Pages 40225-40231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-13692]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 600

[Docket No. 041029298-5168-03; I.D. 052004A]
RIN 0648-AS38


Magnuson-Stevens Act Provisions; Fishing Capacity Reduction 
Program; Pacific Coast Groundfish Fishery; California, Washington, and 
Oregon Fisheries for Coastal Dungeness Crab and Pink Shrimp; Industry 
Fee System for Fishing Capacity Reduction Loan

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

ACTION: Final rule.

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SUMMARY: NMFS establishes regulations to implement an industry fee 
system for repaying a $35,662,471 Federal loan. The loan financed most 
of the cost of a fishing capacity reduction program in the Pacific 
Coast groundfish fishery. The industry fee system imposes fees on the 
value of future groundfish landed in the trawl portion (excluding 
whiting catcher-processors) of the Pacific Coast groundfish fishery. It 
also imposes fees on coastal Dungeness crab and pink shrimp landed in 
the California, Washington, and Oregon fisheries for coastal Dungeness 
crab and pink shrimp. This action's intent is to implement the industry 
fee system.

DATES: This final rule is effective August 12, 2005.

ADDRESSES: Copies of the Environmental Assessment, Regulatory Impact 
Review (EA/RIR) and Final Regulatory Flexibility Analysis (FRFA) for 
the fee collection system may be obtained from Michael L. Grable, 
Chief, Financial Services Division, National Marine Fisheries Service, 
1315 East-West Highway, Silver Spring, MD 20910-3282.
    Written comments involving the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
final rule should be submitted in writing to Michael L. Grable, at the 
above address, and to David Rostker, Office of Management and Budget 
(OMB), by e-mail at [email protected] or by fax to 202-395-
7285.

FOR FURTHER INFORMATION CONTACT: Michael L. Grable, (301) 713-2390.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 312(b)-(e) of the Magnuson-Stevens Fishery Conservation and 
Management Act (16 U.S.C. 1861a(b) through (e)) (Magnuson-Stevens Act) 
generally authorized fishing capacity reduction programs. In 
particular, Magnuson-Stevens Act section 312(d) authorized industry fee 
systems for repaying fishing capacity reduction loans which finance 
program costs.
    Subpart L of 50 CFR part 600 contains the framework regulations 
(framework) generally implementing Magnuson-Stevens Act sections 
312(b)-(e).
    Sections 1111 and 1112 of the Merchant Marine Act, 1936 (46 App. 
U.S.C. 1279f and 1279g), generally authorized fishing capacity 
reduction loans.
    Section 212 of Division B, Title II, of Public Law 108-7 (section 
212) specifically authorized a $46 million program (groundfish program) 
for that portion of the limited entry trawl fishery under the Pacific 
Coast Groundfish Fishery Management Plan whose permits, excluding those 
registered to whiting catcher-processors, were endorsed for trawl gear 
operation (reduction fishery). Section 212 also authorized a fee system 
for repaying the reduction loan partially financing the groundfish 
program's cost. The fee system includes both the reduction fishery and 
the fisheries for California, Washington, and Oregon coastal Dungeness 
crab and pink shrimp (fee-share fisheries).
    Section 501(c) of Division N, Title V, of Public Law 108-7 (section 
501(c)) appropriated $10 million to partially fund the groundfish 
program's cost.
    Public Law 107-206 authorized a reduction loan with a ceiling of 
$36 million to finance the groundfish program's cost.
    Section 212 required NMFS to implement the groundfish program by a 
public notice in the Federal Register. NMFS published the groundfish 
program's initial public notice on May 28, 2003 (68 FR 31653) and final 
notice on July 18, 2003 (68 FR 42613).
    The groundfish program's maximum cost was $46 million, of which an 
appropriation funded $10 million and a reduction loan financed $36 
million. Voluntary participants in the groundfish program relinquished, 
among other things, their fishing permits in the reduction fishery, 
their fishing permits or licenses in the fee-share fisheries, their 
fishing histories in both the reduction and fee-share fisheries, and 
their vessels' worldwide fishing privileges. These relinquishments were 
in return for reduction payments whose amounts the participants' 
reduction bids determined.
    On July 18, 2003, NMFS invited reduction bids from the reduction 
fishery's permit holders. The bidding period opened on August 4, 2003, 
and closed on August 29, 2003. NMFS scored each bid's amount against 
the bidder's past ex-vessel revenues and, in a reverse auction, 
accepted the bids whose amounts were the lowest percentages of the 
revenues. This created reduction contracts whose performance was 
subject only to a successful referendum about the fee system.
    Bid offers totaled $59,786,471. NMFS accepted bids totaling 
$45,662,471. The next lowest scoring bid would have exceeded the 
groundfish program's maximum cost. The accepted bids involved 91 
fishing vessels as well as 239 fishing permits and licenses (91 in the 
reduction fishery, 121 in the fee-share fisheries, and 27 other Federal 
permits).

[[Page 40226]]

    In accordance with the section 212 formula, NMFS allocated portions 
of the $35,662,471 reduction loan amount to the reduction fishery and 
to each of the six fee share fisheries, as follows:
    1. Reduction fishery, $28,428,719; and
    2. Fee-share fisheries:
    a. California coastal Dungeness crab fishery, $2,334,334;
    b. California pink shrimp fishery, $674,202;
    c. Oregon coastal Dungeness crab fishery, $1,367,545;
    d. Oregon pink shrimp fishery, $2,228,845;
    e. Washington coastal Dungeness crab fishery, $369,426; and
    f. Washington pink shrimp fishery, $259,400.
    Each of these portions became reduction loan subamounts repayable 
by fees from each of the seven subamount fisheries.
    NMFS next held a referendum on the fee system. The reduction 
contracts would have become void unless the majority of votes cast in 
the referendum approved the fee system. On September 30, 2003, NMFS 
mailed ballots to referendum voters in the reduction fishery and in 
each of the six fee-share fisheries. The voting period opened on 
October 15, 2003, and closed on October 29, 2003. NMFS received 1,105 
responsive votes. In accordance with the section 212 formula, NMFS 
weighted the votes from each of the seven fisheries. Over 85 percent of 
the weighted votes approved the fee system. This successful referendum 
result removed the only condition precedent to reduction contract 
performance.
    On November 4, 2003, NMFS published another Federal Register 
document (68 FR 62435) advising the public that NMFS would, beginning 
on December 4, 2003, tender the groundfish program's reduction payments 
to the 91 accepted bidders. On December 4, 2003, NMFS required all 
accepted bidders to permanently stop all further fishing with the 
reduction vessels and permits. Subsequently, NMFS:
    1. Disbursed $45,662,471 in reduction payments to 91 accepted 
bidders;
    2. Revoked the relinquished Federal permits;
    3. Advised California, Oregon, and Washington about the 
relinquished state permits or licenses;
    4. Arranged with the National Vessel Documentation Center for 
revocation of the reduction vessels' fishery trade endorsements; and
    5. Notified the U.S. Maritime Administration to restrict placement 
of the reduction vessels under foreign registry or their operation 
under the authority of foreign countries.
    On November 16, 2004, NMFS published a Federal Register document 
(69 FR 67100) proposing regulations to implement the groundfish 
program's industry fee system (proposal).
    In response to public comment about the proposal, NMFS modified and 
published a second proposal on April 8, 2005, (Federal Register 
document (70 FR 17949)).

II. Summary of Comments and Responses

    NMFS received four comments from organizations representing west 
coast fishing interests.
    Comment 1: One comment regretted the proposal's failure to exercise 
a section 212 option under which the States of California, Oregon, and 
Washington would have ``collected'' the fees.
    Response: NMFS continues to believe, for the reasons given in its 
response to public comment on the first proposal (70 FR 17950), that 
exercising the statutory option for the states to ``collect'' the fees 
is not feasible.
    Comment 2: Three commenters believed reduction loan interest should 
not have accrued during the interim between reduction loan disbursement 
and implementation of fee payment and collection. This comment 
generally reasserts previous comments in this regard.
    Response: Absent express conditions to the contrary, interest on 
loan principal always accrues from the date on which lenders disburse 
loan principal to borrowers. The reduction loan is a loan under Title 
XI of the Merchant Marine Act, 1936 (46 App. U.S.C. 1279f and 1279g). 
Title XI provides no authority for loans which are interest-free during 
any portion of their term. All direct Title XI loans are interest 
bearing for their full term.
    All Title XI loans are subject to the Federal Credit Reform Act of 
1990 (FCRA). The FCRA makes most Federal loan activities dependent on 
loan ceilings authorized in appropriation acts. Moreover, if the 
President's Office of Management and Budget estimates that any portion 
of a prospective loan ceiling cannot be collected, the FCRA requires 
appropriating the net present value of the uncollectible amount before 
the loan ceiling can be authorized. Under the FCRA, the uncollectible 
amount is the loan ceiling's ``cost''.
    Loan ceilings with costs exceeding the appropriated cost are not 
authorized. Cost estimates involve all case inflows and cash outflows 
(including interest accruing on disbursed principal) over the terms of 
a ceiling's prospective loans. Because neither Title XI nor Magnuson-
Stevens Act section 312(b)-(e) authorizes reduction loans which are 
interest-free during any portion of their terms, all reduction loan 
cost calculations required for FCRA compliance were based on a 
principal amount which accrues interest from the day of disbursement. 
Even if NMFS had the authority to do so (which it does not), forgoing a 
year or more worth of reduction loan interest accrual would be 
inconsistent with the reduction loan's FCRA conditions and would 
require the appropriation of any increase in FCRA cost resulting from 
the accrued interest foregone.
    The reduction loan is a direct loan and, under the FCRA, Congress 
does not appropriate any portion of a direct loan ceiling other than 
the ceiling's cost. Consequently, before NMFS could disburse the 
reduction loan, NMFS borrowed the reduction loan's principal amount 
(less the cost) from the U.S. Treasury. NMFS must, like any other 
borrower, pay to the Treasury the interest expense which accrued on the 
Treasury loan's unpaid principal from the day on which Treasury 
disbursed the principal to NMFS. No portion of the Treasury loan's 
principal is interest-free to NMFS for any portion of the loan's term 
any more than any portion of the reduction loan's principal is 
interest-free to the groundfish program's fee payers (i.e., fish 
sellers) for any portion of the reduction loan's term. This is true 
despite NMFS having been unable for a year or more to make payments on 
the Treasury's loan due to the fact that NMFS has had no fee revenue 
with which to do so. When fee payment and collection begins, NMFS will 
be required to pay the interest accrued on the Treasury's loan during 
the elapsed time since the loan's disbursement to NMFS, just as NMFS 
will require the fish sellers to pay the interest accrued on the 
reduction loan during the same elapsed time.
    Moreover, during this elapsed time the fee payers have had the use 
of the funds which they would otherwise have paid as reduction loan 
fees (as well as the benefit of the capacity reduction harvest 
efficiencies achieved by having expended the reduction loan's 
principal). There is no equitable reason why fee payers should not pay 
the past time value of these funds once this action allows fee payment 
and collection to begin.
    NMFS will reschedule the principal amount which the fish sellers 
otherwise would have amortized during this elapsed time as a balloon 
payment at the end of the reduction loan's term. Although rescheduling 
does not forego any accrued interest, it does allow

[[Page 40227]]

applying more initial fee revenues to principal reduction because no 
part of fee revenues up to the balloon payment will be applied to the 
rescheduled principal's reduction. NMFS will, of course, not capitalize 
the interest which accrued on the rescheduled principal.
    Moreover, should the majority of fee payers in any fee paying 
fishery whose fee rate is not already at the maximum rate of 5 percent 
wish at any time to more quickly amortize the principal balloon payment 
applicable to that fishery's reduction loan subamount, NMFS is willing 
to establish the balloon payment as a separate principal amount to be 
amortized concurrently with the rest of the reduction loan principal. 
But the principal amount will be amortized over a much shorter term 
consistent with the level of fee-rate increase which the majority of 
fee payers were contemporaneously willing to pay in order to amortize 
this portion of the principal more quickly and, thus, decrease future 
interest accruals.
    Comment 3: One commenter reasserted it's previously stated belief 
that NMFS' Financial Services Division had verbally advised the 
commenter that reduction loan interest would not accrue during the 
interim between reduction loan disbursement and implementation of fee 
payment and collection.
    Response: As noted in NMFS' previous response to this commenter's 
first assertion, the Financial Services Division neither advised nor 
had the authority to advise anyone that interest would not accrue 
during this or any other portion of the reduction loan's term. NMFS' 
Financial Services Division is fully aware both that it had no 
authority to act as this commenter alleges and of the FCRA and other 
consequences of doing so.
    Comment 4: One commenter believed that proposed section 
600.1102(k)(1) was unclear and might require fish buyers to maintain up 
to seven different accounts for depositing collected fee revenues.
    Response: Section 600.1102(k)(1) does not require maintaining up to 
seven different accounts for this purpose. Instead, this section 
requires fish buyers to maintain only a single account for the purpose 
of depositing collected fees, with separate paperwork (for accounting 
purposes) tracking each such single deposit for the reduction fishery 
and for each of the six fee-share fisheries from which the fish buyer 
expects to collect fee-share fishery fees.
    Comment 5: One commenter assumed that the proposal section 
600.1102(k)(3) meant something other than NMFS receiving the required 
deposits of collected fees not later than the time stated.
    Response: This assumption is wrong. NMFS must have received each 
fish seller's disbursement of collected fees not later than the 14th 
calendar day after the last day of each month. Each fee seller is 
responsible to take whatever action is required to accomplish this, and 
2 weeks is not an unreasonably short time to do so. In addition to 
various U.S. postal and express delivery services, fish buyers will 
also be able to disburse collected fees to NMFS' lockbox by electronic 
wire transfer.
    Comment 6: One commenter suggested replacing the term ``settlement 
sheet'' with the term ``fee collection report'' because the former term 
commonly refers to accountings which fish buyers provide to fish 
sellers, and this could cause potential confusion.
    Response: NMFS agrees, and has replaced the term ``settlement 
sheet'' with the term ``fee collection report''.
    Comment 7: One commenter recommended that fee payment and 
collection begin on September 1, 2005, because that is the beginning of 
a ``bi-monthly cumulative period for trawl groundfish fishery and prior 
to the starting date of the crab fishery.
    Response: NMFS believes there should be as little further delay in 
paying and collecting fees as possible. Accordingly, NMFS will publish 
the required fee notice as soon as practicable after publishing this 
final rule, and fee payment and collection will begin thirty days 
thereafter.
    The terms defined in framework Sec.  600.1000 apply to the 
groundfish program except for the definitions for ``borrower, ``deposit 
principal'', ``fee fish'', and ``reduction fishery''. This action 
redefines the groundfish program meaning of these four framework terms. 
This action also creates four new terms which do not appear in the 
framework. The new groundfish program terms are: ``fee-share fishery'', 
``fee-share fishery subaccount'', ``reduction fishery subaccount'', and 
``subamount''.
    Framework Sec.  600.1012 governs reduction loan obligations in 
general and certain other reduction loan aspects in general. Framework 
Sec.  600.1013 governs fish sellers' payment, and fish buyers' 
collection, of fees under fee systems in general. The framework 
contemplates each program involving only one reduction fishery. The 
groundfish program, however, involves both a reduction fishery and six 
fee-share fisheries. Consequently, for groundfish program purposes, 
this action revises the regulations only to the minimal extent required 
to accommodate the difference between the groundfish program and the 
other programs which the framework contemplates.
    Framework Sec.  600.1014 governs fish buyers' fee collection 
deposits, disbursements, records, and reports in general. Like 
framework Sec. Sec.  600.1012 and 600.1013, this action also revises 
the regulations to reflect the groundfish program's involvement of both 
a reduction fishery and six fee-share fisheries. This action, however, 
also and for groundfish program purposes, more extensively revises the 
regulations in order to adopt some of the commenters' suggestions about 
the manner in which fish buyers' deposit, disburse, account for, and 
report about the groundfish program's collected fees.
    The following briefly summarizes the provisions of framework 
Sec. Sec.  600.1013 and 600.1014.
    Under framework Sec.  600.1013, the first ex-vessel buyers (fish 
buyers) of post-reduction fish subject to a fee system (fee fish) must 
withhold the fee from the trip proceeds which the fish buyers would 
otherwise have paid to the parties (fish sellers) who harvested and 
first sold the fee fish to the fish buyers. Fish buyers calculate the 
fee to be collected by multiplying the applicable fee rate (depending 
on whether the fee fish is from the reduction fishery or from one or 
more of the fee-share fisheries) times the fee fish's full delivery 
value. Delivery value is the fee fish's full fair market value, 
including all in-kind compensation or other goods or services exchanged 
in lieu of cash.
    Fish buyers collect the fee when they withhold it from trip 
proceeds, and fish sellers automatically pay the fee when the fish 
buyers withhold it. Fee payment and fee collection is mandatory, and 
there are substantial penalties for failing to pay and collect fees in 
accordance with the applicable regulations.
    Under framework Sec.  600.1014(a)-(d), fish buyers must, no less 
frequently than at the end of each business week, deposit collected 
fees in segregated and federally insured accounts until, no less 
frequently than on the last business day of each month, they disburse 
all collected fees in the accounts to a lockbox which NMFS has 
specified for this purpose. Fee collection reports must accompany these 
disbursements. Fish buyers must maintain specified fee collection 
records for at least 3 years and send NMFS annual reports of fee 
collection and disbursement activities.
    After evaluating comments received in response to the proposal, 
this action restates, for groundfish program purposes only, some of the 
framework

[[Page 40228]]

Sec.  600.1014 provisions, chiefly as follows:
    1. Segregated bank accounts will not be required for
    depositing collected fees;
    2. Collected fee deposits will be monthly rather than
    weekly;
    3. Fish buyers may disburse deposited fees up to 14 days
    after the end of each month rather than having to do so on the last 
business day of each month;
    4. Fish buyers do not have to disburse deposited fees at
    all until either their total reaches $100 or the 14th day after the 
end of each calendar year, whichever comes first; and
    5. Fish buyers do not have to submit annual fee collection, 
deposit, and disbursement reports.
    Accordingly, this final rule reiterates the applicability for the 
groundfish program of the entirety of framework Sec.  600.1014(a)-(d) 
and the non-applicability of framework Sec.  600.1014(e). The balance 
of framework Sec.  600.1014, i.e., paragraphs(f)-(j), will continue to 
apply, in their entirety, to the groundfish program.
    All parties interested in this final action should carefully read 
the following framework sections, whose detailed provisions, except as 
this action specifically revises them, apply to the fee system for 
repaying the groundfish program's reduction loan:
    1. Sec.  600.1012;
    2. Sec.  600.1013;
    3. Sec.  600.1014;
    4. Sec.  600.1015;
    5. Sec.  600.1016; and
    6. Applicable portions of Sec.  600.1017.
    You will not understand this action's full requirements unless you 
read this action in conjunction with reading at least the framework 
sections listed above.
    Section 212 provides an option for NMFS to enter into agreements 
with California, Washington, and Oregon regarding groundfish program 
fees in the fee-share fisheries. While this would not involve actual 
fee collection (because both Magnuson-Stevens Act section 312(d) and 
the framework require fish buyers to collect the fee), it would allow 
fish buyers to use existing state systems for post-collection fee 
administration.
    After all three states enacted legislation which would have allowed 
them to function in this capacity, NMFS evaluated the feasibility of 
exercising the section 212 option. For the reasons NMFS stated in its 
previous responses to public comment about the proposal, however, NMFS 
concluded that exercising this option was not feasible.
    This action also revises the grammar and/or organization of the 
proposal. None of these revisions intends to make any substantive 
changes to the proposal.
    NMFS, in accordance with framework Sec.  600.1013(d), will 
establish the initial fee applicable to the reduction fishery and to 
each fee-share fishery. Immediately after publishing this action, NMFS 
will, in accordance with framework Sec.  600.1013(d)(1), publish a 
notification in the Federal Register establishing the date from which 
the fee will be effective. NMFS will mail a copy of this notification, 
along with detailed fee payment and collection information and 
guidance, to each affected individual fish seller and fish buyer whom 
NMFS has contact information. Until the date on which the fee first 
becomes effective, fish sellers do not have to pay, and fish buyers do 
not have to collect, the groundfish program fee. The prospective fee 
rates are:
    1. Reduction fishery, 5 percent; and
    2. Fee share fisheries:
    a. California coastal Dungeness crab, 1.24 percent,
    b. California pink shrimp, 5 percent,
    c. Oregon coastal Dungeness crab, 0.55 percent,
    d. Oregon pink shrimp, 3.75 percent,
    e. Washington coastal Dungeness crab, 0.16 percent, and
    f. Washington pink shrimp, 1.50 percent.
    The rates are percentages of delivery value. See framework Sec.  
600.1000 for the definition of ``delivery value'' and for the 
definition of other terms relevant to this action.
    Each disbursement of the $35,662,471 principal amount of the 
reduction loan began accruing interest as of the date of each such 
disbursement. The interest rate is a fixed 6.97 percent, and will not 
change during the term of the reduction loan.

Classification

    The Assistant Administrator for Fisheries, NMFS, determined that 
this final rule is consistent with the Magnuson-Stevens Act and other 
applicable laws.
    In compliance with the National Environmental Policy Act, NMFS 
prepared an EA for the final notice implementing the groundfish 
program. The EA discussed the impact of the groundfish program on the 
natural and human environment and resulted in a finding of no 
significant impact. The EA considered the implementation of this fee 
collection system, among other alternatives. Therefore, this final 
action has received a categorical exclusion from additional analysis. 
NMFS will provide a copy of the EA upon request (see ADDRESSES).
    This final rule has been determined to be not significant for 
purposes of Executive Order 12866. NMFS prepared an RIR for the final 
notice implementing the groundfish program. NMFS will provide a copy of 
the RIR upon request (see ADDRESSES).
    NMFS prepared a FRFA, as required by section 604 of the Regulatory 
Flexibility Act, which describes the impact that the rule will have on 
small entities. NMFS will provide a copy of the FRFA upon request (see 
ADDRESSES). A summary of the FRFA follows:

1. Description of Reasons for Action and Statement of Objective and 
Legal Basis

    Section 212 authorized a $46-million fishing capacity reduction 
program for reduction fishery. Section 212 also authorized a fee system 
for repaying the reduction loan partially financing the groundfish 
program's cost. The fee system includes both the reduction fishery and 
the fee share fisheries.
    Section 501(c) appropriated $10 million to partially fund the 
groundfish program's cost. Public Law 107-206 authorized a reduction 
loan for financing up to $36 million of the groundfish program's cost. 
Pursuant to section 212, NMFS implemented the groundfish program, 
except for a fee system, on July 18, 2003 (68 FR 42613). This action 
establishes a fee system for the groundfish program.

2. Description of Small Entities to Which the Rule Applies

    The Small Business Administration (SBA) has defined any fish 
harvesting business that is independently owned and operated, not 
dominant in its field of operation, and with annual receipts of $3.5 
million or less, as a small entity. In addition, processors with 500 or 
fewer employees involved in related industries such as canned and cured 
fish and seafood or prepared fresh fish and seafood are also considered 
small entities. According to the SBA's definition of a small entity, 
virtually all of the groundfish program's approximate 1,800 fish 
sellers are small entities. This includes 172 fish sellers in the 
reduction fishery and over 1,600 fish sellers in the six fee-share 
fisheries. Most of the groundfish program's fish buyers also are small 
entities.

3. Description of Recordkeeping and Compliance Costs

    Please see collection-of-information requirements listed hereafter.

[[Page 40229]]

4. Duplication or Conflict with Other Federal Rules

    This final rule does not duplicate or conflict with any Federal 
rules.

5. Description of Significant Alternatives Considered

    NMFS considered three alternatives to the proposed action. The 
first alternative was the status quo. Under this alternative, there 
would be no fee system and the fish sellers and fish buyers would not 
have to pay and collect a fee. This alternative was, however, contrary 
to the groundfish program's statutory requirements and was rejected.
    The second alternative was the statutorily mandated industry fee 
system without state involvement. Under this alternative, the fish 
buyers of fee fish would withhold the fee from the trip proceeds. Fish 
buyers would calculate the fee to be collected by multiplying the 
applicable fee rate times the fee fish's full delivery value. This is 
the preferred alternative because the groundfish program's statutory 
authority mandates fee payment and collection.
    The third alternative was the statutorily mandated industry fee 
system with state involvement. This alternative is the same as 
described in the second alternative except that the States of 
California, Oregon, and Washington would, in conjunction with their own 
state tax and fee systems, assume some of the fish buyers' fee deposit 
and disbursement responsibilities. This alternative would have reduced 
compliance costs to individual businesses, both fish buyers and 
sellers. However, this alternative was not chosen because some states:
    1. Assess and collect the state taxes and fees based on pounds 
rather than on dollars,
    2. Do not assess or collect their taxes or fees at the point of 
fish sale, and
    3. Involve quarterly fee disbursements.
    In addition, one state's legislative authority to participate in 
this alternative collection authorizes participation of a state agency 
different than the one administering the existing state system and 
another state's legislative authority to participate in this 
alternative expires in less than 2 years (even though fee collection 
continues for 30 years).
    Furthermore, all states indicated that state funding and staffing 
under this alternative for the reduction loan's 30-year term would be 
problematic for them.
    Finally, the states' collection systems are dissimilar and, without 
significant modification, might not promote efficient and uniform 
groundfish program fee collection.

6. Steps the Agency Has Taken to Mitigate Negative Effects of the 
Action

    NMFS has changed aspects of the framework regulations' fee deposit 
and disbursement requirements to reduce the impact on small entity fish 
buyers. NMFS proposes to require monthly fee deposits as opposed to the 
weekly deposits previously required. NMFS also will allow a 14-day 
grace period from the end of each month for fish buyers to disburse 
deposit fee principal to NMFS. If the deposit fee principal totals less 
than $100, the fish buyers need not disburse the deposit fee principal 
until it totals $100 or more, or until the 14th day after the end of 
the calendar year in which the fees were deposited, whichever comes 
first. Furthermore, NMFS proposes to eliminate annual reporting 
requirements.
    This final rule contains collection-of-information requirements 
subject to the Paperwork Reduction Act (PRA). OMB has approved these 
information collections under OMB control number 0648-0376. NMFS 
estimates that the public reporting burden for these requirements will 
average:
    Two hours for submitting a monthly fish buyer fee collection 
report; and
    Two hours for making a fish buyer/fish seller report when
    one party fails to either pay or collect the fee.
    These response estimates include the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
information collection.
    Send comments regarding this burden estimate, or any other aspect 
of this data collection, including suggestions for reducing the burden, 
to both NMFS and OMB (see ADDRESSES).
    Notwithstanding any other provision of law, no person is required 
to respond to, and no person is subject to a penalty for failure to 
comply with, an information collection subject to the requirements of 
the PRA unless that information collection displays a currently valid 
OMB control number.
    NMFS has determined that this final rule will not significantly 
affect the coastal zone of any state with an approved coastal zone 
management program. This determination was submitted for review by the 
States of Washington, Oregon, and California.

List of Subjects in 50 CFR Part 600

    Fisheries, Fishing capacity reduction, Fishing permits, Fishing 
vessels, Intergovernmental relations, Loan programs business, Reporting 
and recordkeeping requirements.

    Dated: July 7, 2005.
Rebecca Lent,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.

0
For the reasons in the preamble, the National Marine Fisheries Service 
amends 50 CFR part 600 as follows:

PART 600--MAGNUSON-STEVENS ACT PROVISIONS

0
1. An authority citation for part 600 subpart M is added to read as 
follows:

    Authority: 5 U.S.C. 561, 16 U.S.C. 1801 et seq., 16 U.S.C. 
1861a(b) through (e), 46 App. U.S.C. 1279f and 1279g, section 144(d) 
of Division B of Pub. L. 106-554, section 2201 of Pub. L. 107-20, 
section 205 of Pub. L. 107-117, Pub. L. 107-206, and Pub. L. 108-7.

0
2. In Sec.  600.1102 the section heading is revised and text is added 
to read as follows:


Sec.  600.1102  Pacific Coast groundfish fee.

    (a) Purpose. This section implements the fee for repaying the 
reduction loan financing the Pacific Coast Groundfish Program 
authorized by section 212 of Division B, Title II, of Public Law 108-7 
and implemented by a final notification in the Federal Register (July 
18, 2003; 68 FR 42613).
    (b) Definitions. Unless otherwise defined in this section, the 
terms defined in Sec.  600.1000 of subpart L expressly apply to this 
section. The following terms have the following meanings for the 
purpose of this section:
    Borrower means, individually and collectively, each post-reduction 
fishing permit holder and/or fishing vessel owner fishing in the 
reduction fishery, in any or all of the fee-share fisheries, or in both 
the reduction fishery and any or all of the fee-share fisheries.
    Deposit principal means all collected fee revenue that a fish buyer 
deposits in an account maintained at a federally insured financial 
institution for the purpose of aggregating collected fee revenue before 
sending the fee revenue to NMFS for repaying the reduction loan.
    Fee fish means all fish harvested from the reduction fishery during 
the period in which any portion of the reduction fishery's subamount is 
outstanding and all fish harvested from each of the fee-share fisheries 
during the period in which any portion of each fee-share fishery's 
subamount is outstanding.

[[Page 40230]]

    Fee-share fishery means each of the fisheries for coastal Dungeness 
crab and pink shrimp in each of the states of California, Oregon, and 
Washington.
    Fee-share fishery subaccount means each of the six subaccounts 
established in the groundfish program's fund subaccount in which each 
of the six fee-share fishery subamounts are deposited.
    Reduction fishery means all species in, and that portion of, the 
limited entry trawl fishery under the Federal Pacific Coast Groundfish 
Fishery Management Plan that is conducted under permits, excluding 
those registered to whiting catcher-processors, which are endorsed for 
trawl gear operation.
    Reduction fishery subaccount means the subaccount established in 
the groundfish program's fund subaccount in which the reduction fishery 
subamount is deposited.
    Subamount means each portion of the reduction loan's original 
principal amount which is allocated either to the reduction fishery or 
to any one of the fee-share fisheries.
    (c) Reduction loan amount. The reduction loan's original principal 
amount is $35,662,471.
    (d) Subamounts. The subamounts of the reduction loan amount are:
    (1) Reduction fishery, $28,428,719; and
    (2) Fee-share fisheries:
    (i) California coastal Dungeness crab fee-share fishery, 
$2,334,334,
    (ii) California pink shrimp fee-share fishery, $674,202,
    (iii) Oregon coastal Dungeness crab fee-share fishery, $1,367,545,
    (iv) Oregon pink shrimp fee-share fishery, $2,228,845,
    (v) Washington coastal Dungeness crab fee-share fishery, $369,426, 
and
    (vi) Washington pink shrimp fee-share fishery, $259,400.
    (e) Interest accrual inception. Interest began accruing on each 
portion of the reduction loan amount on and from the date each such 
portion was disbursed.
    (f) Interest rate. The reduction loan's interest rate is 6.97 
percent. This is a fixed rate of interest for the full term of the 
reduction loan's life.
    (g) Repayment term. For the purpose of determining fee rates, the 
reduction loan's repayment term shall be 30 years from March 1, 2004, 
but each fee shall continue for as long as necessary to fully repay 
each subamount.
    (h) Reduction loan. The reduction loan shall be subject to the 
provisions of Sec.  600.1012 of subpart L, except that:
    (1) The borrower's obligation to repay the reduction loan shall be 
discharged by fish sellers in the reduction fishery and in each of the 
fee-share fisheries paying the fee applicable to each such fishery's 
subamount in accordance with Sec.  600.1013 of subpart L, and
    (2) Fish buyers in the reduction fishery and in each of the fee-
share fisheries shall be obligated to collect the fee applicable to 
each such fishery's subamount in accordance with Sec.  600.1013 of this 
subpart.
    (i) Fee collection, deposits, disbursements, records, and reports. 
Fish buyers in the reduction fishery and in each of the fee share 
fisheries shall deposit and disburse, as well as keep records for and 
submit reports about, the fees applicable to each such fishery in 
accordance with Sec.  600.1014 of this subpart, except that:
    (1) Deposit accounts. Each fish buyer that this section requires to 
collect a fee shall maintain an account at a federally insured 
financial institution for the purpose of depositing collected fee 
revenue and disbursing the deposit principal directly to NMFS in 
accordance with paragraph (i)(3) of this section. The fish buyer may 
use this account for other operational purposes as well, but the fish 
buyer shall ensure that the account separately accounts for all deposit 
principal collected from the reduction fishery and from each of the six 
fee-share fisheries. The fish buyer shall separately account for all 
fee collections as follows:
    (i) All fee collections from the reduction fishery shall be 
accounted for in a reduction fishery subaccount,
    (ii) All fee collections from the California pink shrimp fee-share 
fishery shall be accounted for in a California shrimp fee-share fishery 
subaccount,
    (iii) All fee collections from the California coastal Dungeness 
crab fishery shall be accounted for in a California crab fee-share 
fishery subaccount,
    (iv) All fee collections from the Oregon pink shrimp fee-share 
fishery shall be accounted for in an Oregon shrimp fee-share fishery 
subaccount,
    (v) All fee collections from the Oregon coastal Dungeness crab fee-
share fishery shall be accounted for in an Oregon crab fee-share 
fishery subaccount,
    (vi) All fee collections from the Washington pink shrimp fee-share 
fishery shall be accounted for in a Washington shrimp fee-share fishery 
subaccount, and
    (vii) All fee collections from the Washington coastal Dungeness 
crab fishery shall be accounted for in a Washington crab fee-share 
fishery subaccount;
    (2) Fee collection deposits. Each fish buyer, no less frequently 
than at the end of each month, shall deposit, in the deposit account 
established under paragraph (i)(1) of this section, all collected fee 
revenue not previously deposited that the fish buyer collects through a 
date not more than two calendar days before the date of deposit. The 
deposit principal may not be pledged, assigned, or used for any purpose 
other than aggregating collected fee revenue for disbursement to the 
fund in accordance with paragraph (i)(3) of this section. The fish 
buyer is entitled, at any time, to withdraw interest (if any) on the 
deposit principal, but never the deposit fee principal itself, for the 
fish buyer's own use and purposes;
    (3) Deposit principal disbursement. Not later than the 14th 
calendar day after the last calendar day of each month, or more 
frequently if the amount in the account exceeds the account limit for 
insurance purposes, the fish buyer shall disburse to NMFS the full 
deposit principal then in the deposit account, provided that the 
deposit principal then totals $100 or more. If the deposit principal 
then totals less than $100, the fish buyer need not disburse the 
deposit principal until either the next month during which the deposit 
principal then totals $100 or more, or not later than the 14th calendar 
day after the last calendar day of any year in which the deposit 
principal has not since the last required disbursement totaled $100 or 
more, whichever comes first. The fish buyer shall disburse deposit 
principal by check made payable to the groundfish program's fund 
subaccount. The fish buyer shall mail each such check to the groundfish 
program's fund subaccount lockbox that NMFS establishes for the receipt 
of groundfish program disbursements. Each disbursement shall be 
accompanied by the fish buyer's fee collection report completed in the 
manner and form which NMFS specifies. NMFS will, before fee payment and 
collection begins, specify the groundfish program's fund subaccount 
lockbox and the manner and form of fee collection report. NMFS will do 
this by means of the notification in Sec.  600.1013(d) of subpart L. 
NMFS' fee collection report instructions will include provisions for 
the fish buyer to specify the amount of each disbursement which was 
disbursed from the reduction fishery subaccount and/or from each of the 
six fee-share fishery subaccounts;
    (4) Records maintenance. Each fish buyer shall maintain, in a 
secure and orderly manner for a period of at least 3 years from the 
date of each transaction involved, at least the following information:
    (i) For all deliveries of fee fish that the fish buyer buys from 
each fish seller:
    (A) The date of delivery,
    (B) The fish seller's identity,

[[Page 40231]]

    (C) The weight, number, or volume of each species of fee fish 
delivered,
    (D) Information sufficient to specifically identify the fishing 
vessel which delivered the fee fish,
    (E) The delivery value of each species of fee fish,
    (F) The net delivery value of each species of fee fish,
    (G) The identity of the payor to whom the net delivery value is 
paid, if different than the fish seller,
    (H) The date the net delivery value was paid,
    (I) The total fee amount collected as a result of all fee fish, and
    (J) The total fee amount collected as a result of all fee fish from 
the reduction fishery and/or all fee fish from each of the six fee-
share fisheries; and
    (ii) For all collected fee deposits to, and disbursements of 
deposit principal from, the deposit account include:
    (A) The date of each deposit,
    (B) The total amount deposited,
    (C) The total amount deposited in the reduction fishery subaccount 
and/or in each of the six fee-share fishery subaccounts,
    (D) The date of each disbursement to the Fund's lockbox,
    (E) The total amount disbursed,
    (F) The total amount disbursed from the reduction fishery 
subaccount and/or from each of the six fee-share fishery subaccounts, 
and
    (G) The dates and amounts of disbursements to the fish buyer, or 
other parties, of interest earned on deposits; and
    (5) Annual report. No fish buyer needs to submit an annual report 
about fee fish collection activities unless, during the course of an 
audit under Sec.  600.1014(g), NMFS requires a fish buyer to submit 
such a report or reports.
    (j) Other provisions. The reduction loan is, in all other respects, 
subject to the provisions of Sec.  600.1012 through applicable portions 
of Sec.  600.1017, except Sec.  600.1014(e).
[FR Doc. 05-13692 Filed 7-12-05; 8:45 am]
BILLING CODE 3510-22-S