[Federal Register Volume 74, Number 248 (Tuesday, December 29, 2009)]
[Rules and Regulations]
[Pages 68710-68713]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-30838]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 648

[Docket No. 0909011267-91427-02]
RIN 0648-AY19


Magnuson-Stevens Fishery Conservation and Management Act 
Provisions; Fisheries of the Northeastern United States

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

ACTION: Final rule.

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[[Page 68711]]

SUMMARY: NMFS is modifying the fishing vessel permit regulations to 
include specific terms and conditions for Federal fishing vessel 
permits obtained through the purchase of fishing vessels using Federal 
grant awards. The terms and conditions authorize the NMFS 
Administrator, Northeast Region (Regional Administrator), to suspend, 
cancel, fail to renew, modify, or otherwise rescind any Federal fishing 
vessel permit, or the rights thereto, if the terms and conditions of 
any Federal grant award used to obtain said permit, or an associated 
memorandum of understanding or agreement, are violated by the grant 
recipient.

DATES: This final rule is effective on January 28, 2010.

ADDRESSES: Copies of the Regulatory Impact Review (RIR) are available 
upon request from Patricia A. Kurkul, Regional Administrator, NMFS, 
Northeast Regional Office, 55 Great Republic Drive, Gloucester, MA 
01930.

FOR FURTHER INFORMATION CONTACT: Michael Pentony, Senior Fishery Policy 
Analyst, phone (978) 281-9283.

SUPPLEMENTARY INFORMATION:

Background

    This final rule implements changes to the Northeast (NE) fisheries 
regulations at 50 CFR part 648 to authorize the Regional Administrator 
to suspend, cancel, fail to renew, modify, or otherwise rescind any 
Federal fishing vessel permit, including the rights thereto, held by a 
person, corporation, non-profit organization, or government entity if 
the terms and conditions of any Federal grant award used to obtain said 
permit, or an associated memorandum of understanding or agreement, are 
violated by the grant recipient. The intent of this action is to 
establish an effective regulatory mechanism through which NOAA will be 
able to enforce the terms and conditions of any Federal grant award 
used to obtain Federal fishing vessel permits in the NE Region.
    As several fisheries in the NE Region begin to transition to catch-
share management strategies, various fishing organizations, 
conservations groups, and states are exploring alternatives to the 
traditional vessel-permit ownership model. An alternative model known 
as ``permit banking'' is developing in the Northeast, whereby an 
organization obtains a suite of permits in a particular fishery, with 
the option to lease out the fishing rights associated with those 
permits.
    Permit banks hold promise for addressing two important issues 
related to the development and implementation of effective catch-share 
management programs: First, permit banks could be used to ease the 
transition to catch-share management by expanding the pool of catch 
shares available for use; and, second, permit banks could be used to 
demonstrate that small fishing operations and small communities can be 
successful participants in catch-share management programs. Depending 
on the structure of the permit bank, and the criteria used for 
participation, permit banks could be very effective at protecting the 
fishing interests of small communities and small-scale fishing 
operations by mitigating some of the consolidation of fishing rights 
that often follows implementation of catch-share programs.
    Interest in developing permit banking programs is expanding in the 
NE and, because of NOAA's policy position promoting catch-share 
management, the NMFS NE Regional Office has proposed a pilot program 
designed to guide the development and expansion of permit banks in 
order to facilitate the implementation of effective catch-share 
programs. In the spending plan for a recent Congressional authorization 
for New England fisheries assistance, NOAA proposed to award a $1-
million grant to develop this pilot permit banking program in Maine. 
Since then, NMFS has been working in partnership with Maine's 
Department of Marine Resources on a program that would allow the State 
to use the grant award to purchase fishing vessels with associated 
permits. The fishing rights associated with the permits would then 
serve as the basis for a permit bank to be operated by the State, in 
partnership with NMFS, to facilitate the transition to catch-share 
management by leasing additional fishing opportunities to qualified 
vessel owners in small ports. The State of Maine is very interested in 
developing such a partnership and establishing a permit bank. If the 
pilot program proves successful, NOAA may consider expanding the 
program throughout other parts of the NE Region.
    Absent this regulatory change, NOAA would not be able to retain 
sufficient control and oversight of the resulting permit banking 
program to ensure its success. Under current grant management rules and 
fishing vessel permit regulations, once a grant award is made to an 
organization, and the award is used to obtain fishing vessel permits, 
NOAA risks losing control over the implementation and operation of the 
resulting permit bank. Even if the grant includes special award 
conditions specifying the criteria to be used in operation of the 
permit bank, NOAA would have limited mechanisms to enforce those 
criteria once an organization obtains the permits. In order to protect 
NOAA's and the public's interests in the successful development, 
implementation, and operation of such a program, this regulatory change 
is necessary to provide NOAA with an appropriate oversight mechanism.
    This action amends the NMFS NE Region regulations regarding fishing 
vessel permits to include specific terms and conditions that will apply 
to Federal fishing vessel permits obtained through the purchase of 
fishing vessels using Federal grant awards. The terms and conditions 
authorize the Regional Administrator to suspend, cancel, fail to renew, 
modify, or otherwise rescind any Federal fishing vessel permit, 
including the rights thereto, held by a person, corporation, non-profit 
organization, or government entity if the terms and conditions of any 
Federal grant award used to obtain said permit, or an associated 
memorandum of understanding or agreement, are violated by the grant 
recipient.
    In addition, this final rule responds to three issues raised in the 
comments received on the proposed rule for this action. First, NMFS's 
intent is for this action to apply only to Federal grants issued by 
NOAA for the express purpose of purchasing fishing vessels, obtaining 
fishing vessel permits, and/or establishing or expanding a permit bank, 
and this action would not apply to permits obtained through grants of a 
more general nature or those awarded by other Federal agencies. Second, 
the new regulation implemented by this final rule is intended to 
provide an oversight mechanism for vessel permit-related grants that 
supplements but does not replace, supersede, or contravene existing 
enforcement provisions and procedures established under Department of 
Commerce regulations at 15 CFR parts 14 and 24. Third, it is NMFS's 
intent that any such controls applied to a permit bank as authorized by 
this action would be imposed either at the time of an application for a 
permit lease transaction or at the time of permit renewal, and it is 
not NMFS's intent for such permit sanctions to affect the intended 
recipients of the permit lease transactions.

Comments and Responses

    Nine individual comment letters were received on the proposed rule.
    Comment 1: One commenter objected to the suggestion that a 
potential pilot permit bank with the State of Maine may be limited to 
qualified vessels in small ports, and took issue with statements in the 
preamble to the

[[Page 68712]]

proposed rule regarding potential benefits of permit banks.
    Response: NMFS understands that some stakeholders may object to 
some of the terms and conditions that may be placed on Federal grant 
awards used to obtain fishing vessel permits for the purpose of 
establishing one or more permit banks. However, nothing in this action 
imposes or constrains any future actions with respect to the specific 
terms and conditions that may be imposed on a state, or other party, 
regarding a Federal grant award that may be used to establish a permit 
bank. This action is wholly constrained to establishing an effective 
oversight mechanism such that NOAA, should it at some future time 
provide a Federal grant award to a state, or other party, for the 
purpose of obtaining one or more fishing vessels and the associated 
Federal permits, as a means to retain some level of oversight and 
control over how the fishing rights associated with the permits are 
used, beyond the duration of the Federal grant award. Regarding the 
perceived implications of permit banks for the affected public, NMFS 
considers permit banks as one potential tool to ease the transition to 
catch-share management programs and as a potential way to preserve 
fishing opportunities for small fishing operations and/or small fishing 
communities so that they can participate effectively in catch-share 
management programs. However, NMFS acknowledges that permit banks are 
not proven to achieve these goals in all cases. This is why the 
preamble to the proposed rule referred to a potential permit bank with 
the State of Maine as a pilot program. NMFS intends to utilize this 
opportunity, should a grant be awarded to the State of Maine for this 
purpose, to study the implications of establishing such a permit bank 
and would utilize the results of the pilot program to inform decisions 
on potential future expansion of the permit bank concept.
    Comment 2: A commenter opposed the authority proposed in the rule 
because it would deny the permit bank the opportunity to be heard on 
the issues by an Administrative Law Judge, and because the fishermen 
who leased the fishing rights associated with the permits in question 
may suffer economic hardship if the permits are rescinded.
    Response: Existing Department of Commerce regulations at 15 CFR 
parts 14 and 24 establish the overarching procedures and requirements 
for Federal grants to institutions of higher education, hospitals, 
other non-profits, commercial organization, and state and local 
governments, and also stipulate procedures to enforce the terms and 
conditions of such grants. Regulations at 15 CFR 14.62(a) and 15 CFR 
24.43(a) provide as ``remedies for noncompliance,'' that the awarding 
agency may take actions that include temporarily withholding cash 
payments, suspending or terminating the current award, withholding 
future awards, or taking ``other remedies that may be legally 
available.'' By this rule, NMFS is establishing an additional remedy to 
be available for the enforcement of a Federal grant intended to be used 
for a permit bank. Regarding the comment that the rule would ``deny the 
permit bank the opportunity to be heard on the issues,'' existing 
regulations at 15 CFR 14.62(b) and 24.43(b) provide such an opportunity 
for a hearing or appeal, as follows ``In taking an enforcement action, 
the awarding agency will provide the grantee or subgrantee an 
opportunity for such hearing, appeal, or other administrative 
proceeding to which the grantee or subgrantee is entitled . . .'' 
Nothing in this rule preempts or replaces these existing regulations. 
Also, as clarified above, NMFS does not intend for any enforcement 
action taken pursuant to this rule to adversely affect fishermen who 
leased the fishing rights associated with the subject permits. NMFS 
intends that any such enforcement action would be taken either at the 
time of an application for a permit lease transaction, at the time of 
permit renewal, or prior to the start of a fishing year.
    Comment 3: A number of commenters indicated general support for the 
intent of the proposed rule and for permit banks in general, but raised 
several relevant questions regarding how this rule would be 
implemented. The commenters questioned: (1) The definition of what 
qualified as a Federal grant for the purposes of this rule; (2) who is 
responsible for determining when a violation of a grant agreement has 
occurred and what specific enforcement action the violation would 
merit; and (3) whether there would be a formal appeals or arbitration 
process established for cases when the parties disagree as to whether a 
violation has occurred.
    Response: In response to the first question raised by the 
commenters, NMFS clarifies in this final rule that the intent is for 
this action to apply only to Federal grants issued by NOAA for the 
express purpose of purchasing fishing vessels, obtaining fishing vessel 
permits, and/or establishing or expanding a permit bank, and this 
action would not apply to permits obtained through grants of a more 
general nature or those awarded by other Federal agencies. Regarding 
who is responsible for determining whether a violation of a grant 
agreement has occurred, Department of Commerce regulations at 15 CFR 
14.61, 14.62, 24.43, and 24.44 establish that the Grants Officer may 
terminate grant awards, or take appropriate enforcement actions. Upon 
closeout of the grant award, if the operation of a permit bank program 
continues under the terms of a memorandum of understanding or agreement 
between NMFS and the grant recipient, this authority shall transition 
to the Regional Administrator for the remaining effective period of the 
subject memorandum of understanding or agreement. Regarding the 
determination of the specific enforcement action would be taken if a 
violation is determined to have occurred, NMFS intends that this would 
depend on the scope and severity of the violation in question. NMFS 
intends first to attempt to resolve any concerns with the operation of 
a NOAA-funded permit bank informally between the program contact 
representatives for the respective parties. Failing this, concerns may 
be raised to the level of the respective signatories of the memorandum 
of understanding or agreement for resolution. If resolution cannot be 
achieved at this level, the Grants Officer or Regional Administrator 
will reserve the right to take appropriate enforcement action, as 
authorized by 15 CFR 14.62 and 24.43, and this action. Regarding the 
potential for an appeals or arbitration process in the event the 
parties disagree as to whether a violation has occurred, the Department 
of Commerce regulations at 15 CFR 14.62(b) and 14.43(b) provide for the 
grantee to have an opportunity for a hearing, appeal, or other 
administrative proceeding. Nothing in this action is intended to 
replace, supersede, or contravene existing Department of Commerce 
regulations on administration of Federal grants.
    Comment 4: A comment letter on behalf of the State of Maine 
indicated general support for the proposed rule, but also raised a 
concern about the potential terms of the proposed grant to the State of 
Maine to establish a permit bank.
    Response: The details of any terms and conditions applicable to a 
proposed grant to the State of Maine will be developed and finalized in 
a separate and future action, and are not relevant to this rule.
    Comment 5: A comment letter on behalf of the New England Fishery 
Management Council requested that the

[[Page 68713]]

final rule make clear that all vessel permits obtained using Federal 
grant awards be used in a manner consistent with all fishery management 
plan provisions governing those permits, and that the permits should 
not be subject to additional constraints without Council consideration.
    Response: NMFS intends for any fishing operations conducted by a 
vessel using access rights (e.g., DAS, ACE) associated with a Federal 
permit obtained using a Federal grant award to be consistent with 
applicable fishery management plan provisions and to fully comply with 
all applicable fishing regulations. However, NMFS reserves the right to 
establish more restrictive criteria for the operations of any permit 
banks established using Federal grant awards.
    Comment 6: A commenter opposed the use of Federal funds to 
establish permit banks.
    Response: While NMFS acknowledges that some stakeholders may have 
concerns regarding the use of Federal funds to establish permit banks, 
this action does not, in itself, create or authorize the use of Federal 
funds in this manner. This action is wholly constrained to establishing 
an effective enforcement mechanism such that NOAA, should it at some 
future time provide a Federal grant award to a state, or other party, 
for the purpose of obtaining one or more fishing vessels, and the 
associated Federal permits, retains some level of oversight and control 
over how the fishing rights associated with the permits are used, 
beyond the duration of the Federal grant award.

Classification

    Pursuant to section 305(d) of the Magnuson-Stevens Act, the NMFS 
Assistant Administrator determined that this final rule is consistent 
with the Fishery Management Plans (FMPs) of the NE Region, other 
provisions of the Magnuson-Stevens Act, and other applicable law, and 
is necessary to discharge the general responsibility to carry out said 
FMPs.
    This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    The Chief Counsel for Regulation of the Department of Commerce 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration during the proposed rule stage that this action would 
not have a significant economic impact on a substantial number of small 
entities. The factual basis for the certification was published in the 
proposed rule and is not repeated here. No comments were received 
regarding this certification. As a result, a regulatory flexibility 
analysis was not required and none was prepared.

List of Subjects in 50 CFR part 648

    Fisheries, Fishing, Reporting and recordkeeping requirements.

    Dated: December 22, 2009.
Samuel D. Rauch III,
Deputy Assistant Administrator For Regulatory Programs, National Marine 
Fisheries Service.

0
For the reasons set out in the preamble, 50 CFR part 648 is amended as 
follows:

PART 648--FISHERIES OF THE NORTHEASTERN UNITED STATES

0
1. The authority citation for part 648 continues to read as follows:

    Authority: 16 U.S.C. 1801 et seq.

0
2. In Sec.  648.4, add paragraph (n) to read as follows:


Sec.  648.4  Vessel permits.

* * * * *
    (n) Federal grant awards. The Regional Administrator may suspend, 
cancel, fail to renew, modify, or otherwise rescind any Federal fishing 
vessel permit, issued pursuant to this section, including the rights 
thereto, held by a person, corporation, non-profit organization, or 
government entity if the terms and conditions of any Federal grant 
award used to obtain said permit, or an associated memorandum of 
understanding or agreement, are violated by the grant recipient.
[FR Doc. E9-30838 Filed 12-28-09; 8:45 am]
BILLING CODE 3510-22-S