[Federal Register Volume 77, Number 62 (Friday, March 30, 2012)]
[Proposed Rules]
[Pages 19165-19169]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7604]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 622

[Docket No. 100812344-2165-01]
RIN 0648-AY74


Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; 
Snapper-Grouper Fishery Off the Southern Atlantic States; Amendment 20A

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

ACTION: Proposed rule; request for comments.

-----------------------------------------------------------------------

SUMMARY: NMFS proposes regulations to implement Amendment 20A 
(Amendment 20A) to the Fishery Management Plan for the Snapper-Grouper 
Fishery of the South Atlantic Region (FMP) as prepared and submitted by 
the South Atlantic Fishery Management Council (Council). If 
implemented, this rule would revise the wreckfish individual 
transferable quota (ITQ) program, by defining and reverting inactive 
wreckfish quota shares, redistributing reverted quota shares to 
remaining shareholders, establishing a cap on the number of wreckfish 
quota shares a single entity may own, and establishing an appeals 
process for redistribution of reverted wreckfish quota shares. The 
intent of this rule is to help achieve the optimum yield (OY) from the 
wreckfish commercial sector in accordance with the Magnuson-Stevens 
Fishery Conservation and Management Act (Magnuson-Stevens Act).

DATES: Written comments must be received on or before April 30, 2012.

ADDRESSES: You may submit comments on the amendment identified by 
``NOAA-NMFS-2011-0277'' by any of the following methods:
     Electronic submissions: Submit electronic comments via the 
Federal e-Rulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
     Mail: Nikhil Mehta, Southeast Regional Office, NMFS, 263 
13th Avenue South, St. Petersburg, FL 33701.
    Instructions: 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 (for example, name, 
address, etc.)

[[Page 19166]]

voluntarily submitted by the commenter may be publicly accessible. Do 
not submit Confidential Business Information or otherwise sensitive or 
protected information.
    To submit comments through the Federal e-Rulemaking Portal: http://www.regulations.gov, click on ``submit a comment'', then enter ``NOAA-
NMFS-2011-0277'' in the keyword search and click on ``search''. To view 
posted comments during the comment period, enter ``NOAA-NMFS-2011-
0277'' in the keyword search and click on ``search''. NMFS will accept 
anonymous comments (enter N/A in the required field if you wish to 
remain anonymous). You may submit attachments to electronic comments in 
Microsoft Word, Excel, WordPerfect, or Adobe PDF file formats only.
    Comments received through means not specified in this rule will not 
be considered.
    Electronic copies of Amendment 20A may be obtained from the 
Southeast Regional Office Web Site at http://sero.nmfs.noaa.gov/sf/SASnapperGrouperHomepage.htm.
    Comments regarding the burden-hour estimates or other aspects of 
the collection-of-information requirements contained in this proposed 
rule may be submitted in writing to Anik Clemens, Southeast Regional 
Office, NMFS, 263 13th Avenue South, St. Petersburg, FL 33701; and OMB, 
by email at OIRA [email protected], or by fax to 202-395-7285.

FOR FURTHER INFORMATION CONTACT: Nikhil Mehta, telephone: 727-824-5305, 
or email: [email protected].

SUPPLEMENTARY INFORMATION: Wreckfish is part of the snapper-grouper 
fishery and is managed under the FMP. The FMP was prepared by the 
Council and is implemented through regulations at 50 CFR part 622 under 
the authority of the Magnuson-Stevens Act.

Background

    The wreckfish commercial sector has been managed under an ITQ 
program since March 1992, through Amendment 5 to the FMP, in order to 
end derby fishing (race to fish) practices. Currently, latent effort 
exists in the wreckfish commercial sector with very few active 
participants. In August 2010, the Council's Scientific and Statistical 
Committee (SSC) recommended an acceptable biological catch (ABC) for 
wreckfish off the southern Atlantic states of 250,000 lb (113,389 kg), 
round weight. The proposed rule for the South Atlantic Comprehensive 
Annual Catch Limit Amendment (Comprehensive ACL Amendment), which 
published on December 1, 2011 (76 FR 74757), proposed an ACL of 250,000 
lb (113,389 kg), round weight for wreckfish. However, in November 2011, 
the Council's SSC recommended a revised wreckfish ABC equal to 235,000 
lb (106,594 kg), round weight, and the Council approved revising the 
ACL to reflect the lower ABC at its December meeting. Thus, NMFS 
published an amended proposed rule for the Comprehensive ACL Amendment 
on December 30, 2011 (76 FR 82264), to propose the ACL of 235,000 lb 
(106,594 kg), round weight. The Comprehensive ACL Amendment was 
approved on January 18, 2012, and the final rule for the Comprehensive 
ACL Amendment will allocate 95 percent of the wreckfish ACL to the 
commercial sector, which represents a commercial ACL of 223,250 lb 
(101,264 kg), round weight. The commercial ACL would be an 89-percent 
reduction from the current total allowable catch for wreckfish of 2 
million lb (907,185 kg), round weight. The purpose of Amendment 20A is 
to identify and revert inactive wreckfish shares for redistribution 
among remaining shareholders and establish a share cap and an appeals 
process. The intent of this amendment is to achieve OY in the wreckfish 
commercial sector while maximizing harvest potential and not exceeding 
the ACL.

Management Measures Contained in This Proposed Rule

Define and Revert Inactive Wreckfish Quota Shares

    The ACL for the wreckfish commercial sector in the Comprehensive 
ACL Amendment and in the amended proposed rule, will result in a 
significant reduction in the amount of available harvest associated 
with each wreckfish quota share, including inactive wreckfish quota 
shares, in order to maintain harvest at or below the ACL. If inactive 
wreckfish quota shares are not reverted and redistributed to active 
wreckfish quota shareholders, harvest would likely only be 
approximately 130,735-160,338 lb (59,300-72,728 kg), round weight, 
after applying the new ACL. As of November 17, 2011, there were 20 
shareholders in the wreckfish commercial sector of the snapper-grouper 
fishery. Out of those 20 wreckfish shareholders, 13 inactive wreckfish 
quota shareholders held a combined 28.18 percent of wreckfish quota 
shares. Amendment 20A defines inactive shares as those shares held by 
ITQ shareholders who did not report any wreckfish landings between 
April 16, 2006, and January 14, 2011. This rule, if implemented, would 
revert these inactive wreckfish quota shares and redistribute them 
among the seven remaining active wreckfish quota shareholders.

Redistribute Reverted Wreckfish Quota Shares

    This rule, if implemented, would redistribute the above mentioned 
wreckfish quota shares to remaining wreckfish quota shareholders based 
on landings history from fishing years 2006/2007 through 2010/2011. The 
percentage of individual wreckfish quota shares redistributed to the 
remaining wreckfish quota shareholders would range from 0.04 percent to 
9.91 percent, depending on the remaining wreckfish quota shareholder's 
landings history.

Establish a Share Cap

    This rule, if implemented, would establish a share ownership cap of 
49 percent of the total wreckfish quota shares. This would prevent any 
one entity from holding the majority of wreckfish quota shares. NMFS 
would determine a corporation's total ITQ share, which would not exceed 
the 49 percent share cap, by adding the corporation's ITQ shares to any 
other ITQ shares the corporation owns in another corporation. If an 
individual ITQ shareholder is also a shareholder in a corporation that 
holds ITQ shares, the applicable ITQ shares held by the individual is 
added to the applicable ITQ shares equivalent to the corporate share 
the individual holds in a corporation. A corporation must provide the 
Regional Administrator (RA) the identity of the shareholders of the 
corporation and their percent of shares in the corporation, and provide 
updated information to the RA within 30 days of when changes occur. 
This information must also be provided to the RA any time a commercial 
vessel permit for wreckfish is renewed or transferred.

Establish an Appeals Process

    Five percent of the wreckfish quota shares for the 2012/2013 
fishing year would be set-aside if Amendment 20A is approved, to 
resolve any appeals, for a period of 90 days starting on the effective 
date of the final rule. The RA would review, evaluate, and provide 
final decisions on appeals. Hardship arguments would not be considered. 
The only items subject to appeal are the status of wreckfish quota 
shares, as active or inactive and the accuracy of the amount of 
landings. The RA would determine the outcome of appeals based on NMFS' 
logbooks. If NMFS' logbooks are not available, the RA could use state 
landings records. Appellants would

[[Page 19167]]

submit NMFS logbooks, or state landings records if appropriate, to 
support their appeal. Any portion of the 5-percent share remaining 
after the appeals process is completed will be distributed as soon as 
possible among the remaining shareholders, based on each shareholder's 
wreckfish landings reported between April 16, 2006, and January 14, 
2011.

Availability of Amendment 20A

    Additional background and rationale for the measures previously 
discussed are contained in Amendment 20A. The availability of Amendment 
20A was announced in the Federal Register on January 12, 2012 (77 FR 
1908). Written comments on Amendment 20A must be received by March 12, 
2012. All comments received on the amendment or the proposed rule 
during their respective comment periods will be addressed in the 
preamble to the final rule, if the Amendment is approved.

Classification

    Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the 
NMFS Assistant Administrator has determined that this proposed rule is 
consistent with Amendment 20A, other provisions of the Magnuson-Stevens 
Act, and other applicable law, subject to further consideration after 
public comment.
    This proposed 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 that this rule, if adopted, would not have a significant 
economic impact on a substantial number of small entities. The factual 
basis for this determination is as follows.
    This rule, if implemented, would define and revert inactive shares 
of wreckfish quota, redistribute any reverted shares to active 
shareholders, establish a share cap, and establish an appeals process. 
The objectives of this rule are to achieve OY in the commercial 
wreckfish sector of the South Atlantic snapper-grouper fishery in 
accordance with National Standard 1 of the Magnuson-Stevens Act, which 
will in turn result in a more efficient use of the species in 
accordance with National Standard 5 of the Magnuson-Stevens Act. 
Establishment of a share cap is necessary to comply with requirements 
for limited access privilege programs under Section 303A of the 
Magnuson-Stevens Act. The management measures contained in this rule 
are described in the preamble and are not repeated here.
    This rule is expected to directly affect shareholders that possess 
quota shares in the wreckfish commercial sector of the snapper-grouper 
fishery. The Small Business Administration has established size 
criteria for all major industry sectors in the U.S. including fish 
harvesters. A business involved in fish harvesting is classified as a 
small business if it is independently owned and operated, is not 
dominant in its field of operation (including its affiliates), and has 
combined annual receipts not in excess of $4.0 million (NAICS code 
114111, finfish fishing) for all its affiliated operations worldwide.
    As of November 17, 2011, 20 entities held shares in the wreckfish 
commercial sector of the snapper-grouper fishery. The minimum quota 
share held by a shareholder was 0.06 percent. The maximum quota share 
was 20.63 percent. The average quota share was approximately 5 percent. 
With respect to the distribution of shares, as of November 17, 2011, 13 
shareholders owned less than 5 percent, 4 shareholders owned between 5 
percent and 10 percent, 2 shareholders owned between 10 percent and 15 
percent, and 1 shareholder owned more than 20 percent of the quota 
shares. Given that the current market value of a 1 percent share is 
$6,407, the minimum market value of a shareholder's quota shares is 
$384, the maximum market value of a shareholder's quota shares is 
approximately $132,176, while the average market value of a 
shareholder's quota shares is approximately $32,035.
    Based on landings data from the 5 most recent fishing years (i.e., 
2006/2007 to 2010/2011), 13 of the 20 shareholders had no wreckfish 
commercial landings during this time. Further, 11 of the 13 inactive 
shareholders were not commercially active in any fisheries, and thus 
earned no gross revenue or profit from commercial fishing activities, 
between 2006 and 2010. The other two inactive shareholders commercially 
harvested species other than wreckfish during this time. The extent to 
which these two shareholders were involved in other commercial 
harvesting activities differs greatly, as one was only minimally 
involved and the other significantly involved in such activities. 
Specific information regarding their landings and gross revenue is 
confidential, while information regarding their profits is currently 
not available.
    Seven of the 20 shareholders had at least 1 lb (0.45 kg) of 
wreckfish commercial landings during the 5 most recent fishing years. 
More specifically, these shareholders' annual wreckfish landings and 
gross revenue were 32,804 lb (14,880 kg) and $82,085 on average during 
this time, respectively. On average, these shareholders also earned 
$90,582 in annual gross revenue from other species during this time. 
Thus, annual gross revenue from commercial fishing was $172,668 per 
shareholder on average during the 5 most recent fishing years. 
Information regarding these shareholders' profits is not currently 
available. The maximum gross revenue earned by a single shareholder in 
any of the 5 most recent fishing years was $484,372. Based on these 
figures, all 20 shareholders that are expected to be directly affected 
by this rule are treated as small business entities for the purpose of 
this analysis.
    The rule would define 28.18 percent of the quota shares as inactive 
and would revert them for redistribution to shareholders determined to 
be active. By definition, the 13 inactive shareholders possessing these 
quota shares would not incur any losses in wreckfish landings or gross 
revenue. Eleven of these inactive shareholders had no commercial 
landings of any species between 2006 and 2010 and, thus, have no gross 
revenue or profits from commercial fishing. As such, this action would 
not reduce their profits from commercial fishing. The other two 
inactive shareholders did have commercial landings and gross revenue of 
other species during 2006 and 2010. Because all of their landings, 
gross revenue, and thus profit come from the commercial harvest of 
species other than wreckfish, NMFS does not expect the loss of 
wreckfish shares to affect the current operations of these two 
shareholders' vessels. However, they would no longer have the option of 
fishing for wreckfish in the future. The loss of shares would also 
prevent the inactive shareholders from leasing their annual allocation 
of wreckfish coupons. However, as no coupons have been leased by any 
shareholder since 1995, no loss in profits is expected. NMFS estimates 
the value of the loss of quota share to these 13 inactive shareholders 
to be approximately $180,600, or about $13,890 per shareholder. 
However, these losses represent a loss in asset value or wealth rather 
than a loss in profits.
    If implemented, this rule would redistribute reverted shares to the 
7 active shareholders in the wreckfish segment of the snapper-grouper 
fishery, who would see an increase in shares by 0.04 percent, 0.06 
percent, 1.43 percent, 2.37 percent, 5.07 percent, 9.3 percent, and 9.9 
percent, respectively. After the redistribution, the final distribution 
of total wreckfish shares across the 7 active shareholders would be 
3.55 percent,

[[Page 19168]]

9.05 percent, 11.24 percent, 11.62 percent, 18.38 percent, 23 percent, 
and 23.16 percent, respectively. Because the proposed action would 
distribute reverted shares proportionate to current share holdings, the 
distribution of reverted shares will be unequal. All active 
shareholders would, nevertheless receive redistributed shares and 
associated economic benefits. With respect to short-term economic 
benefits, the increase in annual allocation for each active shareholder 
ranges from 86 lb (39 kg) to 22,114 lb (10,052 kg), or approximately 
8,986 lb (4,085 kg) on average. In turn, the expected increase in 
annual gross revenue from wreckfish landings ranges from $257 to 
$65,457 per shareholder, or approximately $26,603 on average. This 
increase in shareholders' gross revenue from wreckfish landings 
represents an increase of approximately 15.4 percent in gross revenue 
from all of their commercial fishing activities on average. Thus, NMFS 
expects this action to increase the profits of the seven active 
shareholders relative to the profits they would earn if the reverted 
shares were not redistributed. With respect to long-term economic 
benefits, the expected increase in the total value of shareholders' 
shares is approximately $180,600. On a per shareholder basis, the 
increase in the value of each shareholder's shares ranges from $249 to 
$63,465, or approximately $13,890 on average. These gains represent an 
increase in asset value or wealth rather than an increase in profits.
    No person, including a corporation or other entity, may 
individually or collectively hold ITQ shares in excess of 49 percent of 
the total shares. If implemented, this share cap would prevent any one 
person, including a corporation or other entity, from holding the 
majority of wreckfish quota shares, and would not result in any of the 
7 active shareholders exceeding the quota share cap. The maximum quota 
share held by a person, including a corporation or other entity, as a 
result of the actions to define and revert inactive shares and 
redistribute those shares to remaining shareholders is 41.54 percent. 
Thus, no person, including a corporation or other entity, would exceed 
the 49 percent share cap and, in turn, no person, including a 
corporation or other entity, would possess excess shares that would be 
subject to further redistribution. As a result, no direct, adverse 
economic effects are expected and profits would not be reduced.
    Because the RA would have sole authority with respect to reviewing, 
evaluating, and rendering final decisions on appeals, the cost to a 
shareholder for filing an appeal is expected to be minimal. Further, 
the set aside of 11,163 lb (5,074 kg) to resolve appeals is likely 
small enough relative to the total shares distributed to avoid creating 
any significant adverse economic effects on active shareholders.
    As discussed above, this rule, if implemented, is not expected to 
have a significant direct adverse economic effect on the profits of the 
small entities impacted by this rule. For this reason, the Chief 
Counsel for Regulation certified that this rule would not have a 
significant economic impact on a substantial number of small entities. 
Thus, an initial regulatory flexibility analysis is not required and 
none has been prepared.
    No duplicative, overlapping, or conflicting Federal rules have been 
identified.
    Notwithstanding any other provision of law, no person is required 
to respond to, nor shall a person be subject to a penalty for failure 
to comply with, a collection-of-information subject to the requirements 
of the Paperwork Reduction Act (PRA), unless that collection-of-
information displays a currently valid Office of Management and Budget 
(OMB) control number.
    This proposed rule contains a collection-of-information requirement 
that has been approved under OMB control number 0648-0205, on May 24, 
2011. Participants in the South Atlantic wreckfish ITQ program are 
required to identify the shareholders of the corporation and their 
percent of shares in the corporation in the Federal Wreckfish Permit 
Application Form, to allow NMFS to determine the share cap for the 
wreckfish ITQ program. NMFS requires this information upon renewal or 
transfer of a commercial vessel permit for wreckfish and within 30 days 
of when such changes occur.
    Additionally, this proposed rule contains a new collection of 
information requirement that is subject to the PRA. Under this proposed 
rule, NMFS would implement a process to allow participants in the South 
Atlantic wreckfish ITQ program to submit an appeal of ITQ landings 
information. Under this proposed rule, those participants would be 
required to submit documentation, including NMFS' logbooks or state 
landings records to support their appeal.
    An application for this information collection requirement has been 
submitted to OMB for approval. The public reporting burden for this 
collection-of-information is estimated to average 2 hours per 
appellant. This estimate of the public reporting burden includes the 
time for reviewing instructions, gathering and maintaining the data 
needed, and completing and reviewing the collection-of-information. 
NMFS seeks public comment regarding whether this proposed collection-
of-information is necessary for the proper performance of the functions 
of the agency, including whether the information will have practical 
utility; the accuracy of the burden estimate; ways to enhance the 
quality, utility, and clarity of the information to be collected; and 
ways to minimize the burden of the collection-of-information, including 
the use of automated collection techniques or other forms of 
information technology. Send comments regarding the burden estimate or 
any other aspect of the collection-of-information requirement, 
including suggestions for reducing the burden, to NMFS and to OMB (see 
ADDRESSES).

List of Subjects in 50 CFR Part 622

    Fisheries, Fishing, Puerto Rico, Reporting and recordkeeping 
requirements, Virgin Islands.

    Dated: March 26, 2012.
Alan D. Risenhoover,
Acting Deputy Assistant Administrator for Regulatory Programs, National 
Marine Fisheries Service.

    For the reasons set out in the preamble, 50 CFR part 622 is 
proposed to be amended as follows:

PART 622--FISHERIES OF THE CARIBBEAN, GULF, AND SOUTH ATLANTIC

    1. The authority citation for part 622 continues to read as 
follows:


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

    2. In Sec.  622.15, paragraph (a) is revised to read as follows:


Sec.  622.15  Wreckfish individual transferable quota (ITQ) system.

* * * * *
    (a) General--(1) Percentage shares-- (i) Initial ITQ shares. In 
accordance with the procedure specified in the Fishery Management Plan 
for the Snapper-Grouper Fishery of the South Atlantic Region, 
percentage shares of the quota for wreckfish were assigned at the 
beginning of the program. Each person was notified by the RA of his or 
her percentage share and shareholder certificate number.
    (ii) Reverted ITQ shares. Any shares determined by NMFS to be 
inactive, will be redistributed proportionately among remaining 
shareholders (subject to cap restrictions) based on shareholder 
landings history. Inactive shares are, for purposes of this section, 
those shares held by ITQ shareholders who have not

[[Page 19169]]

reported any wreckfish landings between April 16, 2006, and January 14, 
2011.
    (iii) Percentage share set-aside to accommodate resolution of 
appeals. During the 2012-2013 fishing year, the RA will reserve 5 
percent of wreckfish ITQ shares prior to redistributing shares (see 
paragraph (a)(1)(ii) of this section) to accommodate resolution of 
appeals, if necessary. NMFS will distribute any portion of the 5-
percent share remaining after the appeals process as soon as possible 
among the remaining shareholders.
    (iv) Procedure for appealing wreckfish quota share status and 
landings information. Appeals must be submitted to the RA postmarked no 
later than [date 90 days after the effective date of the final rule] 
and must contain documentation supporting the basis for the appeal. The 
only items subject to appeal are the status of wreckfish quota shares, 
as active or inactive and the accuracy of the amount of landings. The 
RA will review and evaluate all appeals, render final decisions on the 
appeals, and advise the appellant of the final decision. Appeals based 
on hardship factors will not be considered. The RA will determine the 
outcome of appeals based on NMFS' logbooks. If NMFS' logbooks are not 
available, the RA may use state landings records. Appellants must 
submit NMFS' logbooks or state landings records, as appropriate, to 
support their appeal.
    (2) Share transfers. All or a portion of a person's percentage 
shares are transferrable. Transfer of shares must be reported on a form 
available from the RA. The RA will confirm, in writing, each transfer 
of shares. The effective date of each transfer is the confirmation date 
provided by the RA. NMFS charges a fee for each transfer of shares and 
calculates the amount in accordance with the procedures of the NOAA 
Finance Handbook. The handbook is available from the RA. The fee may 
not exceed such costs and is specified with each transfer form. The 
appropriate fee must accompany each transfer form.
    (3) ITQ share cap. No person, including a corporation or other 
entity, may individually or collectively hold ITQ shares in excess of 
49 percent of the total shares. For the purposes of considering the 
share cap, a corporation's total ITQ share is determined by adding the 
corporation's ITQ shares to any other ITQ shares the corporation owns 
in another corporation. If an individual ITQ shareholder is also a 
shareholder in a corporation that holds ITQ shares, an individual's 
total ITQ share is determined by adding the applicable ITQ shares held 
by the individual to the applicable ITQ shares equivalent to the 
corporate share the individual holds in a corporation. A corporation 
must provide the RA the identity of the shareholders of the corporation 
and their percent of shares in the corporation, and provide updated 
information to the RA within 30 days of when a change occurs. This 
information must also be provided to the RA any time a commercial 
vessel permit for wreckfish is renewed or transferred.
* * * * *
[FR Doc. 2012-7604 Filed 3-29-12; 8:45 am]
BILLING CODE 3510-22-P