[Federal Register Volume 76, Number 154 (Wednesday, August 10, 2011)]
[Proposed Rules]
[Pages 49417-49423]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-20191]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 679

[Docket No. 100819383-0386-01]
RIN 0648-BA18


Fisheries of the Exclusive Economic Zone Off Alaska; Bering Sea 
and Aleutian Islands Management Area; Limited Access Privilege Program

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 that would implement Amendment 93 to 
the Fishery Management Plan for Groundfish of the Bering Sea and 
Aleutian Islands Management Area (FMP). This proposed rule would amend 
the Bering Sea and Aleutian Islands Amendment 80 Program to modify the 
criteria for forming and participating in a harvesting cooperative. 
This action is necessary to encourage greater participation in 
harvesting cooperatives, which enable members to more efficiently 
target species, avoid areas with undesirable bycatch, and improve the 
quality of products produced. This action is intended to promote the 
goals and objectives of the Magnuson-Stevens Fishery Conservation and 
Management Act, the Fishery Management Plan, and other applicable law.

DATES: Comments must be received no later than September 9, 2011.

ADDRESSES: Send comments to James W. Balsiger, Ph.D., Administrator, 
Alaska Region, NMFS, Attn: Ellen Sebastian. You may submit comments, 
identified by RIN 0648-BA18, by any one of the following methods:
     Electronic Submissions: Submit all electronic public 
comments via the Federal eRulemaking Portal at http://www.regulations.gov.
     Fax: (907) 586-7557, Attn: Ellen Sebastian.
     Mail: P.O. Box 21668, Juneau, AK 99802.
     Hand Delivery to the Federal Building: 709 West 9th 
Street, Room 420A, Juneau, AK.
    All comments received are a part of the public record and will 
generally be posted to http://www.regulations.gov without change. All 
Personal Identifying Information (e.g., name, address) voluntarily 
submitted by the commenter may be publicly accessible. Do not submit 
Confidential Business Information or otherwise sensitive or protected 
information.
    NMFS will accept anonymous comments (enter N/A in required fields 
if you wish to remain anonymous). Attachments to electronic comments 
will be accepted in Microsoft Word, Excel, WordPerfect, or Adobe 
portable document file (pdf) formats only.
    Copies of Amendment 93, the Environmental Assessment (EA), 
Regulatory Impact Review (RIR), and the Initial Regulatory Flexibility 
Analysis (IRFA)--collectively known as the Analysis--for this action 
are available from the Alaska Region Web site at http://alaskafisheries.noaa.gov.

FOR FURTHER INFORMATION CONTACT: Gwen Herrewig, (907) 586-7091.

SUPPLEMENTARY INFORMATION: The groundfish fisheries in the exclusive 
economic zone off Alaska are managed under the Fishery Management Plan 
for Groundfish of the Bering Sea and Aleutian Islands Management Area 
(BSAI FMP). The FMP was prepared by the North Pacific Fishery 
Management Council (Council) under the Magnuson-Stevens Fishery 
Conservation and Management Act (MSA). Amendment 80 to the BSAI FMP 
implemented the Amendment 80 Program. Regulations implementing 
Amendment 80 were published on September 14, 2007 (72 FR 52668). These 
regulations are located at 50 CFR part 679.

Background

    The Amendment 80 program is commonly known as a limited access 
privilege program (LAPP). Eligible fishery participants may receive 
exclusive access to specific fishery resources if certain conditions 
are met. Under the Amendment 80 Program, NMFS issues a quota share (QS) 
permit to a person holding the catch history of an original qualifying 
non-American Fisheries Act (AFA) trawl catcher/processor that met 
specific criteria designated by Congress under the Capacity Reduction 
Program (CRP) (Pub. L. 108-447). NMFS determined that 28 vessels met 
the criteria specified in the CRP. These vessels comprise the 
originally qualifying Amendment 80 vessels. NMFS determined the amount 
of QS issued based on the catch history of six Amendment 80 species 
(Atka mackerel, Aleutian Islands Pacific ocean perch, flathead sole, 
Pacific cod, rock sole, and yellowfin sole) in the Bering Sea and 
Aleutian Islands Management Area (BSAI), from 1998 through 2004, 
derived from the 28 originally

[[Page 49418]]

qualifying non-AFA trawl catcher processors.
    A QS permit details the total number of QS units for each of the 
six allocated Amendment 80 species. A QS permit may not be subdivided, 
and QS allocations of specific QS species may not be transferred or 
otherwise reassigned. Once NMFS issues a QS permit, it may not be 
transferred separately from the originally qualifying Amendment 80 
vessel to which it has been assigned, except under specific conditions.
    NMFS may issue a QS permit based on the catch history of each of 
the 28 originally qualifying Amendment 80 vessels to either the owner 
of the originally qualifying Amendment 80 vessel, the owner of a 
replacement vessel if the original qualifying Amendment 80 vessel has 
been lost, or the holder of the License Limitation Program (LLP) 
license issued to the originally qualifying Amendment 80 vessel The 
Amendment 80 Program defined a specific LLP license for each originally 
qualifying Amendment 80 vessel to which a QS permit may be assigned in 
cases where a vessel has been lost. Additional details on the transfer 
of QS permits to LLP licenses is provided in the final rule to 
implement Amendment 80 and are not repeated here (September 14, 2007; 
72 FR 52668). NMFS issued QS to the owner of the Amendment 80 vessel in 
most cases. As of the publication of this proposed rule, NMFS has 
issued QS permits based on the catch history of 27 of the 28 originally 
qualifying Amendment 80 vessels. One originally qualifying Amendment 80 
vessel owner did not submit an application as of the publication date 
of this rule.
    Under the Amendment 80 Program, NMFS allocates a specific portion 
of the BSAI total allowable catch (TAC) to the Amendment 80 sector for 
each of the six defined Amendment 80 species. NMFS allocates the 
remainders of the TACs for Atka mackerel, Pacific cod, Pacific ocean 
perch, and yellowfin sole to non-Amendment 80 vessels participating in 
the BSAI trawl fisheries. In addition, NMFS allocates a specific 
portion of the allowable bycatch of BSAI halibut, Bristol Bay red king 
crab, snow crab, and Tanner crab to the Amendment 80 sector. This 
allowable bycatch is commonly known as prohibited species catch (PSC) 
because these species may not be retained, but are known to be 
incidentally taken in BSAI trawl fisheries. NMFS will limit groundfish 
fishing in the BSAI if the PSC limit for a species is reached. The 
specific groundfish species for which NMFS issues a QS permit, and the 
PSC species assigned to the Amendment 80 sector, are shown in Table 1.

Table 1--Groundfish and PSC Species Assigned to the Amendment 80 Program
------------------------------------------------------------------------
    Groundfish species assigned to the       PSC species assigned to the
            Amendment 80 sector                  Amendment 80 sector
------------------------------------------------------------------------
Aleutian Islands Pacific ocean perch......  Pacific halibut.
Atka mackerel.............................  Zone 1 Bristol Bay red king
                                             crab.
Flathead sole.............................  Zone 1 Chionoecetes opilio
                                             crab.
Pacific cod...............................  Zone 2 C. opilio crab.
Rock sole.................................  Zone 1 C. bairdi crab.
Yellowfin sole............................  Zone 2 C. bairdi crab.
------------------------------------------------------------------------

    The specific amounts of the TAC and PSC limits assigned to the 
Amendment 80 sector and the non-Amendment 80 BSAI trawl fishery on an 
annual basis are defined in regulations at 50 part 679 and are not 
repeated here (see Tables 33, 34, and 35 to part 679). The amount of 
the TAC and PSC assigned to the Amendment 80 sector is further divided 
between those who participate in Amendment 80 harvesting cooperatives, 
and those who participate in the ``Amendment 80 limited access 
fishery.''
    Generally, the Amendment 80 Program is intended to facilitate the 
formation of cooperatives. As described in Section 2 of the Analysis, 
cooperative management improves fishery management, because Amendment 
80 participants who join a cooperative receive cooperative quota (CQ), 
which are exclusive harvest privileges for a portion of these fishery 
resources. The allocation of CQ allows vessel operators to make 
operational choices to improve fishing practices and reduce discards of 
fish, because the incentives to maximize catch rates to capture a share 
of the available catch are removed. Cooperatives fishing under an 
exclusive harvest privilege can tailor their operations to more 
efficiently target species, avoid areas with undesirable bycatch, and 
improve the quality of products produced. Participants in the limited 
access fishery do not receive an exclusive harvest allocation, and may 
have little incentive to coordinate harvest strategies if they perceive 
a benefit by competing with other participants in a race for fish.
    A person who chooses to join a cooperative must designate the catch 
derived from his QS to the cooperative, the specific vessels that will 
be fishing for that cooperative, and the LLP licenses assigned to each 
designated vessel. For example, a person wishing to participate in an 
Amendment 80 cooperative may assign all, or a portion, of the QS 
permits held by that person to an Amendment 80 cooperative by November 
1 of each year to be eligible to fish in that cooperative for the 
following calendar year. Once a person assigns a QS permit, Amendment 
80 vessel, or LLP license to a cooperative for a year, that person 
cannot reassign that QS permit, vessel, or LLP license to another 
cooperative or to the limited access fishery for that same calendar 
year. A person can also assign QS permits to the Amendment 80 limited 
access fishery if that person is unable or unwilling to meet the 
requirements established by an Amendment 80 cooperative. NMFS assigns 
any QS permits, vessels, and LLP licenses not assigned to a cooperative 
to the Amendment 80 limited access fishery by default.
    The proportion of the TAC that is assigned to an Amendment 80 
cooperative is based on the amount of QS held by the members of the 
cooperative relative to the total Amendment 80 QS pool for a given 
groundfish fishery. For example, if a cooperative was comprised of 
members holding QS permits with a total number of QS units equaling 40 
percent of the Amendment 80 QS pool in the yellowfin sole fishery, that 
cooperative would receive CQ to harvest 40 percent of the annual total 
allowable catch (TAC) of yellowfin sole that is assigned to the 
Amendment 80 sector for that year. A similar calculation is made for 
all other Amendment 80 species and allocation of PSC limits. Any catch 
of groundfish or PSC species that is assigned CQ is debited from a 
cooperative's CQ account. NMFS allocates TAC and PSC limits first to 
cooperatives. The remaining TAC and PSC limits after allocation to 
cooperatives is available collectively to the participants in the 
Amendment 80 limited access fishery.

The Proposed Action

    The proposed action would result in two changes to the Amendment 80 
Program. First, it would reduce the minimum number of persons and 
licenses required to form a harvesting cooperative. Second, it would 
require that a person holding multiple QS permits, Amendment 80 
vessels, and LLP licenses assign all those QS permits, vessels, and LLP 
licenses to either one or more cooperatives, or the limited access 
fishery, but not to both a cooperative and the limited access fishery. 
If approved, this second provision would not be applicable until

[[Page 49419]]

the first fishing year 2 years after the effective date of the final 
rule.

Modifying Cooperative Formation Standards

    The first aspect of this proposed action would allow a cooperative 
to form with a minimum of two unique persons holding a total of at 
least seven QS permits. The current requirement is that a minimum of 
three unique persons and nine QS permits must be assigned to a 
cooperative. Reducing the number of unique persons and number of QS 
permits could provide additional opportunities for QS holders to 
establish cooperative relationships that could reduce the number of 
participants engaged in the race for fish.
    Since the implementation of the Amendment 80 Program in 2008, some 
Amendment 80 sector participants have expressed concern that the 
current cooperative formation requirements could impede participants 
from joining a cooperative and receiving an exclusive allocation of 
Amendment 80 species. Most participants in the Amendment 80 sector have 
successfully established a cooperative in the first 3 years of the 
program. However, some participants have expressed concern that, over 
the long term, cooperative formation standards may put them at a 
disadvantage.
    Section 2.4 of the Analysis prepared for this action notes that 
vessel owners would be likely to have weakened negotiating leverage 
when seeking membership in a cooperative if they cannot be competitive 
in the limited access fishery and if fishing options in the Gulf of 
Alaska would not be viable. Participants may find it difficult to 
receive the benefits of cooperative management if they cannot reach 
agreement on negotiated terms, if the limited access fishery is not an 
economically viable option, or if members of a cooperative are able to 
derive some benefit from forcing an entity into the limited access 
fishery.
    Relaxing cooperative formation standards either by reducing the 
number of QS permits that must be assigned or the number of unique 
vessel owners required could: (1) Provide additional opportunities to 
QS holders to form cooperatives because more relationships are 
possible; (2) diminish the negotiating leverage of vessel owners who 
may be necessary to meet the threshold requirements under more 
stringent cooperative formation standards; (3) reduce the potential 
risk of any one company being unable to negotiate settlement and be 
able to fish only in the limited access fishery; and (4) reduce the 
incentive for members of a cooperative to attempt to create conditions 
that are unfavorable for certain fishery participants to form a 
cooperative.
    Section 2.4 estimates that there are approximately nine unique 
persons in the Amendment 80 sector holding 27 QS permits. Most, but not 
all, of these persons have joined a cooperative. The Alaska Seafood 
Cooperative (AKSC), formerly known as the Best Use Cooperative (BUC), 
includes most of the participants in the Amendment 80 sector. It is 
comprised of seven unique persons holding 17 to 18 QS permits annually 
during 2008 through 2011. The Amendment 80 limited access fishery had 
two to four unique persons holding seven to nine QS permits annually 
during 2008 through 2010. Recent business transactions in the Amendment 
80 sector have resulted in a greater consolidation in the ownership of 
the Amendment 80 sector. In 2010, one of the QS permits that had been 
assigned to the limited access fishery was transferred to a participant 
in AKSC. In 2011, all Amendment 80 QS holders participated in a 
cooperative, with most participants joining AKSC. A second cooperative 
representing nine QS permits held by four unique persons was assigned 
to the Alaska Groundfish Cooperative (AGC). Two of the members of AGC 
own multiple QS permits and participate in both the AKSC and AGC.
    Conditions in the Amendment 80 sector suggest that cooperative 
formation may continue to be challenging even though two cooperatives 
formed in 2011. For example, some AKSC members have raised concerns 
that accepting members into a cooperative could adversely affect the 
cooperative's internal management agreements and expose existing 
members to a potentially increased risk of enforcement actions under 
joint and several liability provisions because of perceived concerns 
about the past enforcement record of some Amendment 80 sector 
participants.
    The Council considered extensive testimony and input from the 
Amendment 80 sector during the development of the proposed action, as 
well as a review of the suite of decisions that affect cooperative 
formation and the potential incentives to include or exclude a member 
from a cooperative. Section 2.3.8 of the Analysis describes these 
factors. The Council developed the alternatives listed below:
     Alternative 1: Status quo. A minimum of three unique QS 
holders holding at least nine QS permits are required to form a 
cooperative.
     Alternative 2: Reduce the number of unique QS holders 
required to form a cooperative from the existing three QS holders to 
two or one unique QS holder.
     Alternative 3: Reduce the number of QS permits required to 
form a cooperative from the existing nine permits to eight, seven, six, 
or three permits.
     Alternative 4: Reduce both the number of unique QS holders 
and the number of QS permits required to form a cooperative 
(combination of Alternatives 2 and 3 above).
     Alternative 5: Allow a cooperative to form with a minimum 
of three unique QS holders holding at least nine QS permits (status 
quo), or a single or collective group of entities that represent 20 
percent, 25 percent, or 30 percent of the sector QS.
     Alternative 6: Require that a cooperative accept all 
persons who are otherwise eligible to join a cooperative subject to the 
same terms and conditions as all other members.
    Section 2.4 of the Analysis notes that less strict cooperative 
formation standards might provide greater opportunities for 
cooperatives to form, in general, and greater opportunities for any 
specific participant to find arrangements that allow them to 
participate in a cooperative. Overall, Section 2.4 of the Analysis 
concludes that relaxing the cooperative formation standard would 
provide an increased likelihood that a greater proportion of the TAC 
assigned to the Amendment 80 sector is harvested under cooperative 
management.
    Ultimately, the Council chose Alternative 4 and the option for a 
minimum of two unique persons and seven QS permits. The Council chose 
an alternative that would provide some additional flexibility to the 
Amendment 80 sector to form cooperatives, without requiring drastic 
changes from the status quo structure of the most established 
cooperative, AKSC. The Council noted its preferred alternative would 
require more than one company to coordinate operations to receive an 
exclusive annual harvest allocation. The Council noted that maintaining 
a multi-company cooperative structure would extend the Council's 
overall goal of enhancing coordination among a variety of different 
industry participants.
    Section 2.3.8 of the Analysis notes that the alternatives 
considered, including the Council's preferred alternative that 
comprises the proposed action, are consistent with the overall goals of 
the Amendment 80 Program, including the goal of allocating groundfish 
species to harvesting cooperatives to encourage fishing practices with 
lower discard rates and to improve the opportunity for increasing

[[Page 49420]]

the value of harvested species while lowering costs. The Council noted 
that modifying the cooperative standards originally selected under 
Amendment 80 to reflect the changing negotiating positions of various 
industry participants was responsive to the best available information 
on current fishery conditions. Public input during the Council's 
consideration of the proposed action generally supported the reduced 
cooperative formation standard as a mechanism to provide additional 
opportunities for cooperative formation. NMFS agrees with the Council's 
rationale for this proposed change. This proposed rule would not modify 
the specific species that are allocated or the amount of the TAC 
allocated to the Amendment 80 Program.

Requiring QS To Be Assigned to Cooperatives or the Limited Access 
Fishery

    The second modification under this proposed action would require 
that a person assign all QS permits either to a cooperative or to the 
limited access fishery, but not to both during the same calendar year. 
If this provision is approved, it would not apply until the first 
fishing year 2 years after a final rule, if implemented, becomes 
effective.
    Excluding a person from cooperative membership could benefit a 
cooperative, or specific members of a cooperative, who choose to 
participate in both a cooperative and the limited access fishery. For 
example, if a cooperative member who holds multiple QS permits and 
vessels can assign one vessel and QS permit to the limited access 
fishery and another vessel and QS permit to a cooperative, that member 
could harvest more fish in the limited access fishery than would be 
derived from their QS if it were assigned to a cooperative. A person 
participating in both a cooperative and the limited access fishery has 
an incentive to exclude participants in the limited access fishery from 
joining a cooperative or creating an additional cooperative. For 
example, a person participating in a cooperative and the limited access 
fishery could seek to exclude a person from fishing in a cooperative if 
the person to be excluded was unlikely to be able to join another 
cooperative. Under that scenario, the person excluded from a 
cooperative could be forced into the Amendment 80 limited access 
fishery. If the person participating in the cooperative also assigned a 
vessel to the Amendment 80 limited access fishery that was capable of 
effectively competing against the other Amendment 80 limited access 
fishery participants, that person could maximize their catch in a race 
for fish. Under that scenario, a person with participation in both an 
Amendment 80 cooperative and the limited access fishery would have 
little incentive to allow a person to join a cooperative because they 
would lose access to fish that would otherwise be available in the 
Amendment 80 limited access fishery. Data from the first three years of 
the Amendment 80 Program indicate that one vessel owner with multiple 
vessels and QS permits has chosen to participate in both a cooperative 
and the limited access fishery. During the development of Amendment 93, 
participants in the limited access fishery testified that they have 
sought to join the existing cooperative (at that time, the Best Use 
Cooperative), but were unable to do so. The Council determined, and 
NMFS agrees, that this provision would reduce the incentive for a 
cooperative member to exclude another person from forming a cooperative 
in order to force them into a race for fish in the limited access 
fishery.
    The requirement that a vessel owner and QS holder assign all QS 
permits and vessels to either a cooperative or the limited access 
fishery would not apply until the first fishing year 2 years after the 
final rule would be effective. For example, if the final rule became 
effective in October 2011, this requirement would not apply until the 
2014 fishing year, but QS holders would have to assign all QS permits 
and vessels to one or more cooperatives or to the limited access 
fishery by the Amendment 80 annual cooperative application deadline of 
November 1, 2013. The proposed rule text implementing this provision 
uses the 2014 fishing year as the first year in which this provision 
would be applicable because, it assumes the final rule for this action 
would be published by the end of 2011. The Council determined, and NMFS 
agrees, that this 2-year delay would provide vessel owners and QS 
holders time to establish relationships to ensure that all QS permits 
and vessels could be assigned to either the limited access fishery or a 
cooperative. The 2-year delay would allow vessel owners to ensure that 
they are well-coordinated with other participants in the fishery and 
all of their QS permits can be assigned to either one or more 
cooperative, or the limited access fishery. Some industry participants 
have expressed concerns that the ``all-in'' nature of this requirement 
could create contentious and complicated cooperative negotiations if 
vessel owners are unable to enter all their vessels into a cooperative. 
If this provision becomes effective, NMFS would enforce this provision 
by not allowing the owner of multiple QS permits or vessels to assign 
QS permits or vessels to one or more cooperatives and the Amendment 80 
limited access fishery during the annual cooperative application 
process.
    Conceivably, if a vessel owner is not able to assign all vessels or 
QS permits to a cooperative, that vessel owner would be required to 
assign those vessels or permits to the limited access fishery. Based on 
the demonstrated ability of the Amendment 80 participants to establish 
cooperatives, this scenario is unlikely. In 2011, both Amendment 80 
cooperatives were comprised of vessel owners with a wide range of 
vessels. Their cooperative contracts govern the specific obligations 
that each member has and ensures that overall cooperative harvests meet 
those requirements. It is likely that these cooperative relationships 
will continue. The 2-year timeframe would provide the industry time to 
structure their cooperative contracts to incorporate ``all-in'' 
provisions necessary to allow owners of multiple vessels and QS permits 
to maintain membership in a cooperative.

Expected Effects of the Proposed Action

    The RIR describes the predicted effects of the proposed action on 
harvesters, processors, communities, management and enforcement, 
consumers, and the nation (see ADDRESSES). Only the effects of the 
proposed action on harvesters are described here. Overall, the proposed 
action would be expected to increase the potential for cooperative 
formation. Vessels fishing under a cooperative would realize the 
benefits of LAPP management, including a strong incentive to reduce the 
race for fish. Based on a preliminary review of the first 3 years of 
the Amendment 80 Program (2008 through 2010) and past experience with 
cooperative-based management in other LAPPs (e.g., AFA, Central GOA 
Rockfish Program, and BSAI Crab Rationalization Program), participation 
in a cooperative is likely to allow optimization of harvest rates for 
product recovery and quality, reduce incentives to operate in adverse 
weather conditions, facilitate reductions of bycatch, and streamline 
operations to maximize profits.

Recordkeeping and Reporting Requirements

    NMFS would continue to oversee the submission of cooperative 
applications and the issuance and transfer of CQ. The

[[Page 49421]]

proposed rule would not change the information required to be submitted 
by cooperative applicants.

Classification

    The Assistant Administrator for Fisheries, NOAA, has determined 
that this proposed rule is consistent with Amendment 93, the FMP, the 
MSA, and other applicable laws, subject to further consideration after 
public comment.
    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866.

Initial Regulatory Flexibility Analysis (IRFA)

    An IRFA was prepared, as required by section 603 of the Regulatory 
Flexibility Act (RFA). Copies of the IRFA prepared for this proposed 
rule are available from NMFS (see ADDRESSES). The IRFA describes the 
economic impact this proposed rule, if adopted, would have on small 
entities. A description of the action, the reasons why it is being 
considered, and a statement of the objectives of, and the legal basis 
for, this action are contained in the SUMMARY section of the preamble 
and are not repeated in detail here. The IRFA for this proposed action 
describes the reasons why this action is being proposed; describes the 
objectives and legal basis for the proposed rule; describes and 
estimates the number of small entities to which the proposed rule would 
apply; describes any projected reporting, recordkeeping, or other 
compliance requirements of the proposed rule; identifies any 
overlapping, duplicative, or conflicting Federal rules; and describes 
any significant alternatives to the proposed rule that accomplish the 
stated objectives of the MSA and any other applicable statutes, and 
that would minimize any significant adverse economic impact of the 
proposed rule on small entities. A summary of that analysis follows.

Rationale, Objectives, and Legal Basis of the Proposed Rule

    The IRFA describes the reasons why this action is being proposed, 
describes the objectives and legal basis for the proposed rule, and 
discusses both small and other regulated entities to adequately 
characterize the fishery participants. The MSA is the legal basis for 
the proposed rule. The objectives of the proposed rule are to 
facilitate cooperative formation among the Amendment 80 sector to 
ensure that fishery participants can realize the intended benefits of 
fishing under an exclusive harvest privilege. The proposed rule would 
accomplish this goal by reducing the minimum number of persons and 
licenses required for cooperative formation under the Amendment 80 
Program. NMFS expects the proposed action to provide additional 
opportunities for cooperative formation among participants in the 
Amendment 80 sector.

Number of Small Entities To Which the Proposed Rule Would Apply

    The directly regulated entities under this proposed rule are 
holders of Amendment 80 QS. For purposes of an IRFA, the Small Business 
Administration (SBA) has established that a business involved in fish 
harvesting is a small business if it is independently owned and 
operated, not dominant in its field of operation (including its 
affiliates), and if it has combined annual gross receipts not in excess 
of $4.0 million for all its affiliated operations worldwide. A seafood 
processor is a small business if it is independently owned and 
operated, not dominant in its field of operation, and employs 500 or 
fewer persons on a full-time, part-time, temporary, or other basis, at 
all its affiliated operations worldwide. Because the SBA does not have 
a size criterion for businesses that are involved in both the 
harvesting and processing of seafood products, NMFS has in the past 
applied, and continues to apply, SBA's fish harvesting criterion for 
these businesses because catcher/processors are first and foremost fish 
harvesting businesses. Therefore, a business involved in both the 
harvesting and processing of seafood products is a small business if it 
meets the $4.0 million criterion for fish harvesting operations. NMFS 
is reviewing its small entity size classification for all catcher/
processors in the United States. However, until new guidance is 
adopted, NMFS will continue to use the annual receipts standard for 
catcher/processors. Even if additional catcher/processors would have 
been identified as small entities under a revised small-entity size 
classification, NMFS would have analyzed the effect on small entities 
using the same methods that were used in the IRFA prepared for the 
proposed rule. NMFS considered the effects of the proposed rule and 
attempted to reduce costs to all directly regulated entities regardless 
of the number of small entities.
    The IRFA estimates that 28 non-AFA trawl catcher/processors could 
generate Amendment 80 QS, based on the provisions of the Amendment 80 
Program. Those persons who apply for and receive Amendment 80 QS are 
eligible to fish in the Amendment 80 sector, and those QS holders would 
be directly regulated by the proposed action. Based on the known 
affiliations and ownership of the Amendment 80 vessels, all but one of 
the Amendment QS holders would be categorized as large entities for the 
purpose of the RFA under the principles of affiliation, due to their 
participation in a harvest cooperative or through known ownership of 
multiple vessels, co-ownership and ``shares'' ownership among vessels, 
and other economic and operational affiliations. Thus, this analysis 
estimates that only one small entity would be directly regulated by the 
proposed action. It is possible that this one small entity could be 
linked by company affiliation to a large entity, which may then qualify 
that entity as a large entity, but complete information is not 
available to determine any such linkages.
    The estimate of the number of small entities is conservative. Other 
supporting businesses may also be indirectly affected by this action if 
it leads to fewer vessels participating in the fishery. These impacts 
are analyzed in the RIR prepared for this action (see ADDRESSES).

Impacts on Directly Regulated Small Entities

    The proposed action would modify the cooperative formation 
standards and requirements for assigning QS and Amendment 80 vessels to 
either a cooperative or the limited access fishery. The overall impact 
to small entities is expected to be positive. Impacts from the proposed 
rule would accrue differentially (i.e., some entities could be 
negatively affected and others positively affected). The Council 
considered an extensive range of alternatives and options as it 
designed and evaluated the potential for changes to the Amendment 80 
sector, including the ``no action'' alternative.
    Six alternative approaches for modifying cooperative formation 
criteria were considered. Alternative 1: Status quo. A minimum of three 
unique QS holders holding at least nine QS permits are required to form 
a cooperative. Alternative 2: Reduce the number of unique QS holders 
required to form a cooperative from the existing three QS holders to 
two or one unique QS holder. Alternative 3: Reduce the number of QS 
permits required to form a cooperative from the existing nine permits 
to eight, seven, six, or three permits. Alternative 4: Reduce both the 
number of unique QS holders and the number of QS permits required to 
form a cooperative (combination of Alternatives 2 and 3 above). 
Alternative 5: Allow a cooperative to form with a minimum of

[[Page 49422]]

three unique QS holders holding at least nine QS permits (status quo), 
or a single or collective group of entities that represent 20 percent, 
25 percent, or 30 percent of the sector QS. Alternative 6: Require that 
a cooperative accept all persons who are otherwise eligible to join a 
cooperative subject to the same terms and conditions as all other 
members. The Council recommended Alternative 4, reducing the number of 
unique QS holders to two unique persons and reducing the number of QS 
permits required to form a cooperative to seven QS permits, as its 
preferred alternative.
    Two alternative approaches were considered for the QS and vessel 
assignment provision. Alternative 1: status quo. QS holders with 
multiple QS permits and vessels may assign those QS permits and vessels 
to one or more cooperatives and the limited access fishery. Alternative 
2: QS holders with multiple QS permits and vessels may assign those QS 
permits and vessels to one or more cooperatives or the limited access 
fishery, but not both. If approved, this alternative would be effective 
two years after the effective date of the final rule.
    Collectively, the alternatives and options considered under these 
two proposed actions provided a broad suite of alternatives from which 
the Council chose to modify the factors affecting cooperative 
formation.
    Compared with the status quo, the proposed action selected by the 
Council minimizes the adverse economic impacts on the directly 
regulated small entity. The alternatives under consideration in this 
proposed rule would be expected to provide greater opportunity for 
cooperative formation among the various industries. In no case are 
these combined impacts expected to be substantial. Alternative 4 of 
action 1, with the two unique persons and seven QS permit option, would 
not be expected to adversely affect the existing Amendment 80 
cooperatives, but could provide additional cooperative formation 
opportunities for participants in the Amendment 80 limited access 
fishery. The proposed QS assignment provision would reduce the 
incentive for owners of multiple vessels to exclude a person from a 
cooperative. This proposed provision would be expected to enhance the 
likelihood of cooperative formation.

Projected Reporting, Recordkeeping and Other Compliance Requirements

    Existing recordkeeping and reporting requirements necessary to 
apply to form an Amendment 80 cooperative would not be modified.

Duplicate, Overlapping, or Conflicting Federal Rules

    No Federal rules that might duplicate, overlap, or conflict with 
this proposed action have been identified.

List of Subjects in 50 CFR Part 679

    Alaska, Fisheries, Reporting and recordkeeping requirements.

    Dated: August 3, 2011.
Samuel D. Rauch III,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.

    For the reasons set out in the preamble, 50 CFR part 679 is 
proposed to be amended as follows:

PART 679--FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA

    1. The authority citation for 50 CFR part 679 continues to read as 
follows:

    Authority: 16 U.S.C. 773 et seq.; 1801 et seq.; 3631 et seq.; 
Pub. L. 108-447

    2. In Sec.  679.91, paragraphs (h)(3)(ii), (h)(3)(iii), and 
(h)(3)(xii) are revised to read as follows:


Sec.  679.91  Amendment 80 Program annual harvester privileges.

* * * * *
    (h) * * *
    (3) * * *

------------------------------------------------------------------------
 
------------------------------------------------------------------------
(ii) What is the minimum number of       Any combination of at least
 Amendment 80 QS permits that must be     seven Amendment 80 QS permits
 assigned to an Amendment 80              which would include Amendment
 cooperative to allow it to form?         80 LLP/QS licenses.
(iii) How many Amendment 80 QS holders   At least two Amendment 80 QS
 are required to form an Amendment 80     holders each of whom may not
 cooperative?                             have a ten percent or greater
                                          direct or indirect ownership
                                          interest in any of the other
                                          Amendment 80 QS holders.
 
                              * * * * * * *
(xii) Can an Amendment 80 QS permit,     No, an Amendment 80 QS permit,
 Amendment 80 LLP license, or Amendment   Amendment 80 LLP license, or
 80 vessel be assigned to an Amendment    Amendment 80 vessel assigned
 80 cooperative and the Amendment 80      to an Amendment 80 cooperative
 limited access fishery?                  may not be assigned to the
                                          Amendment 80 limited access
                                          fishery for that calendar
                                          year. Prior to the 2014
                                          fishing year, a person holding
                                          multiple Amendment 80 QS
                                          permits, Amendment 80 LLP
                                          licenses, or owning multiple
                                          Amendment 80 vessels is not
                                          required to assign all
                                          Amendment 80 QS permits,
                                          Amendment 80 LLP licenses, or
                                          Amendment 80 vessels to the
                                          same Amendment 80 cooperative
                                          or the Amendment 80 limited
                                          access fishery. Starting with
                                          the 2014 fishing year and
                                          thereafter, a person holding
                                          multiple Amendment 80 QS
                                          permits, Amendment 80 LLP
                                          licenses, or owning multiple
                                          Amendment 80 vessels must
                                          assign all Amendment 80 QS
                                          permits, Amendment 80 LLP
                                          licenses, or Amendment 80
                                          vessels to either one or more
                                          Amendment 80 cooperatives, or
                                          the Amendment 80 limited
                                          access fishery.
 
                              * * * * * * *
------------------------------------------------------------------------


[[Page 49423]]

[FR Doc. 2011-20191 Filed 8-9-11; 8:45 am]
BILLING CODE 3510-22-P