[Federal Register Volume 71, Number 76 (Thursday, April 20, 2006)]
[Proposed Rules]
[Pages 20378-20381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-5945]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 680

[Docket No. 060404093-6093-01; I.D. 032406D]
RIN 0648-AU37


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: Proposed rule; request for comments.

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SUMMARY: NMFS proposes regulations implementing Amendment 21 to the 
Fishery Management Plan for Bering Sea/Aleutian Islands (BSAI) King and 
Tanner crabs (FMP). This action proposes a change to the BSAI Crab 
Rationalization Program (Program). If approved, Amendment 21 and its 
implementing rule would modify the timing for harvesters and processors 
to match harvesting and processing shares and the timing for initiating 
arbitration proceedings incorporated in the Program to resolve price 
and other

[[Page 20379]]

delivery disputes. This action is necessary to increase resource 
conservation and economic efficiency in the crab fisheries that are 
subject to the Program. This action is intended to promote the goals 
and objectives of the Magnuson-Stevens Fishery Conservation and 
Management Act (Magnuson-Stevens Act), the FMP, and other applicable 
law.

DATES: Comments must be received no later than June 5, 2006.

ADDRESSES: Send comments to Sue Salveson, Assistant Regional 
Administrator, Sustainable Fisheries Division, Alaska Region, NMFS, 
Attn: Records Office. Comments may be submitted by:
     Mail: P.O. Box 21668, Juneau, AK 99802.
     Hand Delivery to the Federal Building: 709 West 9th 
Street, Room 420A, Juneau, AK.
     Facsimile: 907-586-7557.
     E-mail: [email protected]. Include in the subject 
line of the e-mail the following document identifier: Crab 
Rationalization RIN 0648-AU37. E-mail comments, with or without 
attachments, are limited to 5 megabytes.
     Webform at the Federal eRulemaking Portal: 
www.regulations.gov. Follow the instructions at that site for 
submitting comments.
    Copies of Amendment 21 and the Environmental Assessment/Regulatory 
Impact Review/Initial Regulatory Flexibility Analysis (EA/RIR/IRFA) for 
this action may be obtained from the NMFS Alaska Region at the address 
above or from the Alaska Region Web site at http://www.fakr.noaa.gov/sustainablefisheries.htm.

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

SUPPLEMENTARY INFORMATION: The king and Tanner crab fisheries in the 
exclusive economic zone of the BSAI are managed under the FMP. The FMP 
was prepared by the North Pacific Fishery Management Council (Council) 
under the Magnuson-Stevens Act as amended by the Consolidated 
Appropriations Act of 2004 (Pub. L. 108-199, section 801). Amendments 
18 and 19 to the FMP included the Program. A final rule implementing 
these amendments was published on March 2, 2005 (70 FR 10174). 
Regulations implementing Amendments 18 and 19 are located at 50 CFR 
part 680. Amendment 20 to the FMP, which would authorize the management 
of an Eastern and Western Tanner crab (C. bairdi), is currently under 
Secretarial review. A NOA for Amendment 20 was published in the Federal 
Register on February 27, 2006 (71 FR 9770). The comment period on the 
NOA ends on April 28, 2006. A proposed rule to implement Amendment 20 
was published in the Federal Register on March 21, 2006 (71 FR 14153). 
The comment period on the proposed rule ends on May 5, 2006.
    Under the Program, NMFS issued harvester quota share (QS) that 
yields annual individual fishing quota (IFQ). An IFQ is a permit to 
harvest a specific portion of the total allowable catch (TAC). A 
portion of the IFQ issued are ``Class A'' IFQ. Crab harvested under a 
Class A IFQ permit must be delivered to a specific processor. NMFS 
issued processor quota share (PQS) to processors that yield individual 
processing quota (IPQ). IPQ is a permit to receive and process a 
portion of the TAC harvested with Class A IFQ. A one-to-one 
relationship exists between Class A IFQ and IPQ. The Program includes 
an arbitration system to resolve price, delivery terms, and other 
disputes in the event that holders of Class A IFQ and IPQ are unable to 
negotiate those terms.
    After the annual issuance of IFQ and IPQ, the arbitration system 
regulations at Sec.  680.20(h)(3)(iv)(A) allow harvesters who are not 
affiliated with a processor through ownership or control linkages 
(unaffiliated harvesters) to unilaterally commit delivery of harvests 
from Class A IFQ to a processor with available IPQ. Once committed, the 
unaffiliated harvester is permitted to initiate a binding arbitration 
proceeding under Sec.  680.20(h)(3)(v) if the parties are unable to 
agree to the terms of delivery. Regulations at Sec.  680.20(h)(3)(v) 
require that an IFQ holder initiate binding arbitration at least 15 
days prior to a season opening. This approach is commonly called the 
``share match'' approach to binding arbitration.
    Alternatively, regulations at Sec.  680.20(h)(3)(iii) allow 
unaffiliated harvesters to match IFQ with processors with available IPQ 
using a ``lengthy season approach.'' Although the lengthy season 
approach allows harvesters and processors to use the arbitration 
system, it requires a mutual agreement of both partes to schedule 
arbitration proceedings later in the season, which can affect 
negotiating positions. The arbitration system under the Program was 
intended to provide harvesters and processors with the ability to reach 
price agreements through binding arbitration using two methods: one 
that results in a binding arbitration decision prior to the season, the 
share match approach; and the other that would allow a binding 
arbitration proceeding to begin under a mutually agreed upon 
negotiation timeline, the lengthy season approach.
    Under NMFS' current schedule for stock assessments and TAC setting, 
the share match approach to resolve price disputes has not met the 
needs of IFQ holders. NMFS typically does not issue IFQ and IPQ 15 days 
prior to a season opening, limiting the ability of IFQ holders to rely 
on the share match approach to achieve a price resolution.
    If approved, Amendment 21 to the FMP and its implementing rule 
would link the timing for initiating share matching and a binding 
arbitration proceeding to the issuance of IFQ and IPQ, providing 
participants with a reasonable and reliable opportunity to fully use 
the arbitration system. The timing for share matching and initiation of 
binding arbitration would be based on the issuance of IFQ and IPQ, 
including a five-day assessment period for negotiated commitments. For 
a period of five days after the issuance of IFQ and IPQ, unaffiliated 
harvesters holding Class A IFQ and holders of IPQ could voluntarily 
agree to commit their respective shares. After the five-day assessment 
period, holders of uncommitted Class A IFQ could unilaterally commit 
that IFQ to any holder of uncommitted IPQ. During the 10-day period 
beginning five days after the issuance of IFQ and IPQ, any holder of 
committed Class A IFQ could unilaterally initiate a binding arbitration 
proceeding with the IPQ holder to which the IFQ were committed. This 
proposed rule would not change existing requirements that the parties 
to the arbitration would meet with a contract arbitrator to schedule 
the submission of information to the arbitrator and the terms and 
timing for submission of last best offers.
    Amendment 21 would implement an action that is consistent with the 
original intent of the arbitration system, with the necessary 
modifications to accommodate the existing stock assessment and TAC 
announcement processes. Each year, the State of Alaska Department of 
Fish and Game (ADF&G) establishes a TAC for BSAI crab through a 
collaborative process with NMFS. This process is outlined in the FMP. 
ADF&G considers the most recent and best available scientific data when 
determining the TAC for a fishery. In most cases, crab stock survey 
data become available for analysis between mid-August and mid-
September. Following the availability of the data becoming available, 
NMFS and ADF&G analysts perform stock assessment analyses and 
estimation of stock abundance as needed for determination

[[Page 20380]]

of stock status relative to overfishing and TACs. For most BSAI crab 
fisheries, ADF&G has determined that announcement of TACs will occur on 
October 1. The TAC announcement timing is intended to allow ADF&G and 
NMFS to conduct a thorough review of the data prior to the TAC 
determinations by ADF&G, and for NMFS to issue IFQs and IPQs prior to 
the October 15\th\ season opening. Accelerating the timing of the TAC 
announcement could compromise the integrity of the results, introduce 
additional errors, and limit the ability of ADF&G and NMFS to use the 
most recent and best available data. Once ADF&G announces the TAC, NMFS 
must issue IFQ to harvesters based upon their holdings of QS, and IPQ 
to processors based upon their holdings of PQS. This process requires 
several days after TAC is issued.
    NMFS believes that delaying the start of the season to accommodate 
the stock assessment process and IFQ and IPQ issuance process is not a 
viable option. Under the FMP, the State of Alaska has the authority to 
establish season dates. Modifying season dates would require action by 
the Alaska Board of Fisheries. The Council and NMFS are not proposing a 
change in season dates. Delaying the season dates could reduce access 
to valuable markets and is not supported by the BSAI crab fishing 
industry.
    Modifications proposed under Amendment 21 were discussed and 
reviewed during a Program workshop in Seattle held on November 18, 
2005, (70 FR 10174, November 2, 2005). Industry representatives from 
both the harvesting and processing sector attended the meeting in 
roughly equal proportion. Based upon public comments NMFS received 
during that meeting, the approach described under Amendment 21 was 
favored by industry representatives from both the harvesting and 
processing sector over alternative approaches (e.g., delaying the 
season start date). Particularly favored was a brief assessment period 
once IFQ and IPQ have been issued before unaffiliated harvesters could 
unilaterally match their IFQ to IPQ holders. Several industry attendees 
from the processing sector noted that once IFQ and IPQ have been 
issued, harvesters and processors require time to assess their holdings 
and complete any voluntary matching agreements. In December 2005, NMFS 
briefed the Council detailing the timing conflict and industry comments 
received during the November 2005 public meeting. The Council 
considered additional public comments and proposed limiting the 
alternatives for consideration to those that resolve the timing 
conflict in a manner that closely matches the timing of the share match 
approach to binding arbitration prescribed in the FMP. Amendment 21 as 
adopted by the Council incorporates this approach.
    This proposed rule would not alter the basic structure or 
management of the Program. It would not alter reporting, monitoring, 
fee collection, and other requirements to participate in the 
arbitration system. The proposed rule also would not increase the 
number of harvesters or processors in the Program fisheries or the 
current amount of crab that may be harvested. The proposed action would 
not affect current regional delivery requirements or other restrictions 
on harvesting and processing. Amendment 21 would provide a mechanism to 
ensure that a binding arbitration proceeding could occur early in the 
fishing season in accordance with the original design of the Program. 
Amendment 21 would not modify the lengthy season approach to binding 
arbitration proceeding, and would fulfill the intent of the FMP to 
provide harvesters and processors with effective methods of resolving 
price disputes under the arbitration system.

Classification

    At this time, NMFS has not determined that Amendment 21 and the 
provisions in this rule that would implement Amendment 21 are 
consistent with the national standards of the Magnuson-Stevens Act and 
other applicable laws. NMFS, in making the determination that this 
proposed rule is consistent, will take into account the data, views, 
and comments received during the comment period (see DATES).
    A Regulatory Impact Review (RIR) was prepared to assess all costs 
and benefits of available regulatory alternatives. The RIR considers 
all quantitative and qualitative measures. Additionally, an initial 
regulatory flexibility analysis (IRFA) was prepared that describes the 
impact this proposed rule would have on small entities. Copies of the 
RIR/IRFA prepared for this proposed rule are available from NMFS (see 
ADDRESSES). The RIR/IRFA prepared for this proposed rule incorporates 
by reference an extensive RIR/IRFA prepared for Amendments 18 and 19 
that detailed the impacts of the Program on small entities.
    The IRFA for this proposed action describes in detail the reasons 
why this action is being proposed, describes the objectives and legal 
basis for the proposed rule, and discusses both small and non-small 
regulated entities to adequately characterize the fishery participants. 
The IRFA contains a description and estimate of the number of directly 
affected small entities.
    Estimates of the number of small harvesting entities under the 
Program are complicated by several factors. First, each eligible 
captain will receive an allocation of QS under the program. A total of 
186 captains received allocations of QS for the 2005-2006 fishery. In 
addition, 269 allocations of QS to license limitation permit (LLP) 
license holders were made under the Program, for a total of 454 QS 
allocations. Because some persons participated as LLP license holders 
and captains and others received allocations from the activities of 
multiple vessels, only 294 unique persons received QS. Of those 
entities receiving QS, 287 are small entities because they either 
generated $4.0 million or less in gross revenue, or they are 
independent entities not affiliated with a processor. Estimates of 
gross revenues for purposes of determining the number of small 
entities, relied on the low estimates of prices from the arbitration 
reports based on the 2005/2006 fishing season.
    Allocations of PQS under the Program were made to 29 processors. Of 
these PQS recipients, nine are estimated to be large entities, and 20 
are estimated to be small entities. Estimates of large entities were 
made based on available records of employment and the analysts' 
knowledge of foreign ownership of processing companies. These totals 
exclude catcher/processors, which are included in the LLP license 
holder discussion.
    Other supporting businesses also may be indirectly affected by this 
action if it leads to fewer vessels participating in the fishery. These 
impacts are treated in the RIR/IRFA prepared for this action (see 
ADDRESSES).
    Implementation of the proposed rule would not change the overall 
reporting structure and recordkeeping requirements of the participants 
in the BSAI crab fisheries or arbitration system.
    No Federal rules that may duplicate, overlap, or conflict with this 
proposed action have been identified.
    The Council considered alternatives as it designed and evaluated 
the potential methods for accommodating current fishery management 
timing and the need to provide an opportunity for a binding arbitration 
proceeding early during a crab fishing season in the EA prepared for 
this proposed action. The alternatives differed only in the timing of 
when unaffiliated harvesters with IFQ could match their shares with 
processors with uncommitted IPQ. The alternatives have no effect on 
fishing

[[Page 20381]]

practices or patterns and therefore have no effects on the physical and 
biological environment. Effects of the Program, including the 
arbitration system and the timing of binding arbitration proceedings, 
on the physical and biological environment (including effects on 
benthic species and habitat, essential fish habitat, the ecosystem, 
endangered species, marine mammals, and sea birds) are fully analyzed 
in the EIS prepared for the Program (Crab EIS) and are incorporated by 
reference in the EA prepared for this proposed action.
    This proposed action is not anticipated to have additional impacts 
on the BSAI crab fisheries beyond those identified in the Crab EIS. No 
new significant information is available that would change these 
determinations in the Crab EIS. Please refer to the Crab EIS and its 
appendices for more detail (see ADDRESSES).
    The EA/RIR/IRFA prepared for this action analyzed three 
alternatives. Alternative 1 would maintain the existing timing for 
initiating a binding arbitration proceeding. This would maintain the 
inconsistency between the timing of the issuance of IFQ and IPQ in a 
crab QS fishery and the requirement to initiate a binding arbitration 
prior to the start of the season. Alternative 1 would not provide an 
opportunity for harvesters to initiate a binding arbitration proceeding 
early in the season. Alternative 1 does not effectively implement a 
portion of the Program as recommended by the Council. In effect, the 
reliability of the arbitration system to resolve price disputes earlier 
in the season is limited. Although participants have relied on the 
``lengthy season approach'' to effectively extend the deadline for 
initiating an arbitration proceeding to resolve a dispute concerning 
terms of delivery, the greater degree of cooperation required by the 
approach limits its reliability. In addition, the lengthy season 
approach could delay resolution of disputes beyond the period that 
would be expected, if the process for initiating arbitration could be 
applied as expected. The result could be either a loss of operational 
certainty arising from unsettled terms of delivery and potentially a 
shift in negotiating leverage if one party were disproportionately 
affected by the uncertainty.
    Alternative 2, the preferred alternative, would provide harvesters 
with the opportunity to utilize the arbitration system to resolve 
disputes in a manner consistent with the original intent of Program. 
Although Alternative 2 likely would not provide a price resolution 
through arbitration prior to the start of the season as originally 
envisioned, it would provide an opportunity to resolve price disputes 
shortly after the start of the season. Alternative 2 would not have 
effects on harvesters or processors different from those already 
considered under the EIS prepared for the Program. The five-day 
assessment period would be likely to contribute to stability in 
relationships among IFQ holders and IPQ holders, by permitting persons 
to resolve negotiated commitments prior to allowing unilateral 
commitments. In addition, this 5-day period could result in more 
negotiated commitments by prioritizing negotiated relationships over 
unilateral commitments.
    Alternative 3 is similar to Alternative 2 but does not provide a 
five-day assessment period to match shares after the issuance of IFQ 
and IPQ. The absence of such a period could provide an advantage to 
persons who are unable, or unwilling, to develop voluntary commitments. 
The absence of this period to allow IFQ and IPQ holders to finalize 
negotiated commitments also could be disruptive to markets by flooding 
IPQ holders with unilateral commitments from IFQ holders who fear being 
displaced by others. An orderly settlement of commitments is more 
likely to take place if a period of negotiated commitments were 
permitted prior to allowing unilateral commitments.
    Although the different alternatives under consideration in this 
action would have distributional and efficiency impacts for individual 
participants, in no case are these impacts in the aggregate expected to 
be substantial. Although none of the alternatives has substantial 
negative impacts on small entities, preferred Alternative 2 minimizes 
the potential negative impacts that could arise under Alternative 3. 
Differences in efficiency that could arise are likely to affect most 
participants in a minor way having an overall insubstantial impact. As 
a consequence, none of the alternatives is expected to have any 
significant economic or socioeconomic impacts.

Collection-of-information

    This rule does not contain new collection-of-information 
requirements subject to review and approval by OMB under the Paperwork 
Reduction Act (PRA).
    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866.

List of Subjects in 50 CFR Part 680

    Alaska, Fisheries, Reporting and recordkeeping requirements.

    Dated: April 14, 2006.
James W. Balsiger,
Acting Deputy Assistant Administrator for Regulatory Programs, National 
Marine Fisheries Service.
    For the reasons set out in the preamble, 50 CFR part 680 is 
proposed to be amended as follows:

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

    1. The authority citation for part 680 continues to read as 
follows:

    Authority: 16 U.S.C. 1862.
    2. In Sec.  680.20, paragraphs (h)(3)(iv)(A) and (h)(3)(v) 
introductory text are revised to read as follows:


Sec.  680.20  Arbitration System.

* * * * *
    (h) * * *
    (3) * * *
    (iv) * * *
    (A) At any time 5 days after NMFS issues IFQ and IPQ for that crab 
QS fishery in that 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.
* * * * *
    (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 not later than 15 days 
after NMFS issues IFQ and IPQ for that crab QS fishery in that crab 
fishing year. 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:
* * * * *
[FR Doc. E6-5945 Filed 4-19-06; 8:45 am]
BILLING CODE 3510-22-S