[Federal Register Volume 76, Number 214 (Friday, November 4, 2011)]
[Rules and Regulations]
[Pages 68354-68358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28665]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 679

[Docket No. 100819383-1652-02]
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: Final rule.

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SUMMARY: NMFS issues regulations implementing Amendment 93 to the 
Fishery Management Plan for Groundfish of the Bering Sea and Aleutian 
Islands Management Area (FMP). These regulations 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 FMP, and other applicable law.

DATES: This final rule is effective on December 5, 2011, except for the 
provisions at Sec.  679.91(h)(3)(ii) and (iii), which are effective 
November 4, 2011.

ADDRESSES: Electronic copies of Amendment 93, the final Environmental 
Assessment (EA) and Regulatory Impact Review (RIR); Initial Regulatory 
Flexibility Analysis (IRFA); and Final Regulatory Flexibility Analysis 
(FRFA) prepared for this action are available from the NMFS Alaska 
Region Web site at http://alaskafisheries.noaa.gov. The proposed rule 
to implement Amendment 93 also may be accessed at this Web site.

FOR FURTHER INFORMATION CONTACT: Gwen Herrewig, (907) 586-7228.

SUPPLEMENTARY INFORMATION: The groundfish fisheries in the exclusive 
economic zone off Alaska are managed under the FMP. The FMP was 
prepared by the North Pacific Fishery Management Council (Council) 
under the Magnuson-Stevens Fishery Conservation and Management Act. 
Amendment 80 to the 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. 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, from 1998 through 2004, derived from the 28 
originally qualifying non-AFA trawl catcher/processors.
    Generally, the Amendment 80 Program is intended to facilitate the 
formation of fishing cooperatives, which have been shown to improve 
fishery management. Amendment 80 participants who join a fishing 
cooperative receive cooperative quota, which are exclusive harvest 
privileges for a portion of these fishery resources.

[[Page 68355]]

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 License Limitation Program 
(LLP) licenses assigned to each designated vessel.
    Amendment 93 results in two changes to the Amendment 80 Program. 
First, it reduces the minimum number of persons and licenses required 
to form a harvesting cooperative. Previously, the Amendment 80 program 
required 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. The Council 
and NMFS expect that relaxing the Amendment 80 cooperative formation 
standards by reducing the number of QS permits that must be assigned 
and the number of unique vessel owners required will (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.
    The second revision under Amendment 93 requires that a person 
assign all QS permits either to one or more cooperatives or to the 
limited access fishery, but not to both during the same calendar year. 
This revision is needed to reduce the incentive for a cooperative 
member to prevent another person from forming a cooperative in order to 
force them into a race for fish in the limited access fishery. 
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.
    The revision under Amendment 93 requiring a person to assign all QS 
permits either to a cooperative or to the limited access fishery, but 
not both, is not applicable until the first fishing year 2 years after 
the final rule effective date. Because this final rule is effective in 
2011, this requirement does not apply until the 2014 fishing year and 
QS holders must 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 2-year 
delay allows vessel owners time to coordinate with other participants 
in the fishery and determine if they will assign all of their QS 
permits to either one or more cooperatives, or the limited access 
fishery. NMFS will not allow owners to assign QS permits or vessels to 
one or more cooperatives and the Amendment 80 limited access fishery on 
the annual cooperative applications submitted to NMFS by the November 
1, 2013 deadline.
    NMFS published a notice of availability for Amendment 93 on July 
28, 2011 (76 FR 45219). The public comment period on Amendment 93 ended 
on September 26, 2011. On August 10, 2011, NMFS published a proposed 
rule to implement Amendment 93 (76 FR 49417). The public comment period 
for the proposed rule ended on September 9, 2011. Additional 
information on this action was provided in the preamble of the proposed 
rule and is not repeated here.
    NMFS received three comments on Amendment 93 and the proposed rule 
during the public comment period for the proposed rule. One public 
comment did not directly address Amendment 93 or the proposed rule, but 
was a general comment related to the Federal Government's management of 
marine resources and provided a general criticism of fishery 
management. The other two comments were in support of this action. All 
comments are addressed in the Response to Comment section for this 
rule. The Secretary of Commerce approved Amendment 93 on October 25, 
2011. No modifications were made to the proposed rule.

Response to Comments

    Comment 1: The commenter raises general concerns about NMFS' 
management of fisheries, asserting that fishery policies have not 
benefited American citizens. The commenter also believes that NMFS 
should not be allowed to manage fisheries.
    Response: This comment is not specifically related to the proposed 
rule. The comment recommends broad changes to fisheries management and 
provides opinions of the Federal Government's general management of 
marine resources that are outside the scope of this action. The 
commenter did not raise new relevant issues or concerns that have not 
been addressed in the preamble to the proposed rule or the EA/RIR/FRFA 
prepared to support this action.
    Comment 2: The commenter strongly supports Amendment 93 and the 
proposed regulations. The commenter strongly urges NMFS to implement 
the action at the earliest possible time, preferably in time to be 
effective for the 2012 fishing year, in order to maximize the benefits 
of this amendment.
    Response: NMFS agrees that this action is beneficial to 
participants in the

[[Page 68356]]

Amendment 80 sector and should be implemented as soon as possible.
    Comment 3: The commenter supports Amendment 93 and continues to 
support the objective to promote full participation of Amendment 80 
vessels in cooperatives to facilitate optimal harvest of Amendment 80 
QS through intra and inter-sector trades throughout the year. The 
commenter anticipates that Amendment 93 will result in open and 
productive interactions between all cooperatives within the Amendment 
80 sector, but expressed concern about cooperatives that may be 
unwilling to transfer unharvested allocations, which could result in 
harvest of an Amendment 80 species that is less than the TAC 
established for that species. The commenter is concerned that 
unharvested cooperative allocations of Amendment 80 species could 
result in the Council reducing the TAC of Amendment 80 species because 
it assumes the unharvested QS indicates that TACs were set too high. 
For this reason, the commenter may seek changes in the allocation 
system in the future if some cooperatives are unwilling to transfer 
unused QS.
    Response: NMFS agrees that Amendment 93 promotes full participation 
of Amendment 80 vessels in cooperatives and expects productive 
interactions between Amendment 80 cooperatives. The commenter may 
approach the Council in the future with suggestions for changes to the 
Amendment 80 program.

Changes From the Proposed Rule

    NMFS did not make any changes to the proposed rule published on 
August 10, 2011 (76 FR 49417).

Classification

    The Administrator, Alaska Region, NMFS, determined that FMP 
Amendment 93 is necessary for the conservation and management of the 
BSAI groundfish fishery and that it is consistent with the MSA and 
other applicable laws.
    This final rule has been determined to be not significant for the 
purposes of Executive Order 12866.
    Pursuant to 5 U.S.C. 553(d)(3), the Assistant Administrator for 
Fisheries, NOAA, finds good cause to waive the 30-day delay in 
effectiveness for 50 CFR 679.91(h)(3)(ii) and (iii) as amended in this 
rule. The 30-day delay in effectiveness of these sections is 
impracticable and contrary to the public interest. Amendment 93 reduces 
the number of unique persons and number of QS permits required to form 
a cooperative in the Amendment 80 Program. Reducing the number of 
unique persons and number of QS permits can provide additional 
opportunities for QS holders to establish cooperative relationships 
that could reduce the number of participants engaged in the race for 
fish. The annual Amendment 80 Cooperative Quota Permit Application 
deadline is November 1 of each year and NMFS has informed Amendment 80 
participants that they may submit cooperative applications under the 
minimum formation thresholds established by Amendment 93. However, NMFS 
cannot process these applications until the new minimum formation 
thresholds contained in 50 CFR 679.91(h)(3)(ii) and (iii) are 
effective. Immediate effectiveness of these sections will allow NMFS to 
process applications submitted for Amendment 80 cooperatives in a 
timely manner which will provide the fishing industry the earliest 
possible opportunity to plan and conduct its fishing operations with 
respect to new cooperative formation requirements before the start of 
the 2012 fishing year in January. A 30-day delay in effectiveness would 
prevent NMFS from processing Amendment 80 cooperative applications in a 
timely manner and would create uncertainty within the industry and 
frustrate the affected industry's ability to plan for the upcoming 
fishing year. For these reasons, NMFS finds good cause to waive the 30-
day delay in effectiveness under 5 U.S.C. 553(d)(3) for 50 CFR 
679.91(h)(3)(ii) and (iii). NMFS is not waiving the 30-day delay in 
effectiveness for 50 CFR 679.91(h)(3)(xii) because immediate 
effectiveness of that section is not necessary.
    Pursuant to section 604 of the Regulatory Flexibility Act, 5 U.S.C. 
601 et seq., a FRFA was prepared for this action. The FRFA incorporates 
the IRFA, and includes a summary of the significant issues raised by 
public comments in response to the IRFA, and NMFS' responses to those 
comments, and a summary of the analyses completed to support the 
action. A copy of the EA/RIR/FRFA prepared for this final rule is 
available from NMFS (see ADDRESSES). A description of this action, its 
purpose, and its legal basis are contained at the beginning of the 
preamble to this final rule and are not repeated here.
    NMFS published the proposed rule to implement Amendment 93 on 
August 10, 2011 (76 FR 49417), and the public comment period closed on 
September 9, 2011. An IRFA was prepared and summarized in the 
``Classification'' section of the preamble to the proposed rule. NMFS 
received three public comments on Amendment 93 and the proposed rule. 
None of these comments addressed the IRFA.
    This action modifies the cooperative formation standards and 
requirements for assigning QS and Amendment 80 vessels to either a 
cooperative or the limited access fishery. 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 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. The 
Council rejected Alternatives 2, 3, 5, and 6 because public comments 
and the analysis prepared for this action indicated these alternatives 
likely would not offer substantially greater cooperative formation 
opportunities or have substantially different economic implications 
than the status quo 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. Alternative 2 would be effective two years after 
the effective date of the final rule. The Council rejected the status 
quo alternative because experience under

[[Page 68357]]

the Amendment 80 program has indicated that the status quo cooperative 
formation criteria may disadvantage limited access fishery participants 
and create incentives to discourage fishing cooperative formation.
    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.
    The overall impact of this action to small entities is expected to 
be positive. Impacts from Amendment 93 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.
    Compared with the status quo, the action selected by the Council 
minimizes the adverse economic impacts on the directly regulated small 
entity. The alternatives implemented in this final rule are expected to 
provide greater opportunity for cooperative formation among the various 
Amendment 80 businesses. In no case are these combined impacts expected 
to be substantial. Alternative 4 for the cooperative formation 
standards, which requires two unique persons and seven QS permits to 
form a cooperative, is not 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. For the QS and Amendment 80 vessel assignment component 
of this action, Alternative 2 will reduce the incentive for owners of 
multiple vessels to exclude a person from a cooperative. This 
alternative is expected to enhance the likelihood of cooperative 
formation.
    For purposes of a FRFA, the U.S. Small Business Administration 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 has combined annual 
gross receipts not in excess of $4.0 million for all its affiliated 
operations worldwide. The FRFA 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 will be directly regulated by this action. Based on 
the known affiliations and ownership of the Amendment 80 vessels, all 
but one of the Amendment QS holders are 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, the 
FRFA estimates that only one small entity will 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.
    This final rule will not change existing reporting, recordkeeping, 
or other compliance requirements. This final rule does not contain a 
collection-of-information requirement subject to the Paperwork 
Reduction Act.
    Section 212 of the Small Business Regulatory Enforcement Fairness 
Act of 1996 states that, for each rule or group of related rules for 
which an agency is required to prepare a FRFA, the agency shall publish 
one or more guides to assist small entities in complying with the rule, 
and shall designate such publications as ``small entity compliance 
guides.'' The agency shall explain the actions a small entity is 
required to take to comply with a rule or group of rules. As part of 
this rulemaking process, NMFS has posted a small entity compliance 
guide on its Web site at http://alaskafisheries.noaa.gov/sustainablefisheries/amds/80/default.htm. A letter to permit holders 
that also serves as a small entity compliance guide was prepared.

List of Subjects in 50 CFR Part 679

    Alaska, Fisheries, Reporting and recordkeeping requirements.

    Dated: November 1, 2011.
John Oliver,
Deputy Assistant Administrator for Operations, National Marine 
Fisheries Service.

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

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

0
1. The authority citation for 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.


0
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) * * *

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(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.
 

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                              * * * * * * *
(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.
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[FR Doc. 2011-28665 Filed 11-3-11; 8:45 am]
BILLING CODE 3510-22-P