[Federal Register Volume 77, Number 187 (Wednesday, September 26, 2012)]
[Rules and Regulations]
[Pages 59129-59132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-23731]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 622

[Docket No. 100812344-2449-02]
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: Final rule.

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SUMMARY: NMFS issues this final rule to implement the management 
measures of 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). This final rule revises 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: This rule is effective October 26, 2012.

ADDRESSES: Electronic copies of Amendment 20A may be obtained from the 
Southeast Regional Office Web Site at http://sero.nmfs.noaa.gov/sf/SASnapperGrouperHomepage.htm. Written comments regarding burden-hour 
estimates or other aspects of collection-of-information requirements 
contained in this final rule may be submitted to Anik Clemens by email 
[email protected], or telephone 727-824-5305, and by email to 
[email protected], or 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.
    On January 12, 2012, NMFS published a notice of availability for 
Amendment 20A and requested comments (77 FR 1908). On March 30, 2012, 
NMFS published a proposed rule for Amendment 20A and requested public 
comments (77 FR 19165). The proposed rule and Amendment 20A outline the 
rationale for the actions contained in this final rule. Amendment 20A 
was approved by the Secretary of Commerce on April 6, 2012. A summary 
of the actions implemented by this final rule are provided below.
    This final rule revises the wreckfish ITQ program, established in 
1992, by defining and reverting inactive wreckfish quota shares, 
redistributing reverted quota shares to remaining shareholders, 
establishing a share cap, and establishing an appeals process for 
redistribution of reverted wreckfish quota shares. The intent of this 
rule is to achieve OY in the wreckfish commercial sector while 
maximizing harvest potential and not exceeding the annual catch limit 
(ACL).

Changes From the Proposed Rule

    When the Council took final action to approve Amendment 20A in 
December 2011, there were 20 wreckfish shareholders. Of those 20 
shareholders, 13 were considered to be ``inactive'' and 7 ``active'' as 
defined in Amendment 20A. The 13 inactive shareholders held 28.18 
percent of the shares, which would be redistributed among the 7 active 
wreckfish shareholders. After the Council took final action, several 
share transfers occurred which changed the distribution of shares in 
the wreckfish commercial sector of the snapper-grouper fishery. As of 
September 26, 2012, there are 6 active shareholders and 4 inactive 
shareholders. The active shareholders now hold 98.599 percent of the 
shares, and the inactive shareholders now hold 1.401 percent of the 
shares. The proposed rule and Amendment 20A state that 5 percent of the 
wreckfish quota shares will be set-aside, to resolve any appeals, for a 
period of 90 days starting on the effective date of the final rule. Due 
to the share transfers that occurred after the Council took final 
action to approve Amendment 20A in December 2011, only 1.401 percent of 
the shares remains ``inactive'' and thus are available to be reverted 
and redistributed. Therefore, only 1.401 percent is available as the 
set-aside to resolve any appeals, and NMFS will redistribute any shares 
remaining after the appeals process is complete. Any shares remaining 
after

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completion of the appeals process, up to 1.401 percent of the shares, 
will be reverted and redistributed among the remaining active 
shareholders, depending on the remaining individual shareholder's 
landings history from April 16, 2006, through January 14, 2011.

Comments and Responses

    NMFS received a total of 13 comments on Amendment 20A and the 
proposed rule, which include comments from individuals, including those 
in the recreational sector, restaurant and seafood businesses, and a 
consulting firm. Comments received regarding the value of the wreckfish 
ACL, the acceptable biological catch level, and the recreational 
wreckfish allocation, are related to actions contained in the South 
Atlantic Comprehensive Annual Catch Limit Amendment (Comprehensive ACL 
Amendment), and are not in Amendment 20A. The final rule to implement 
the Comprehensive ACL Amendment (77 FR 15916, March 16, 2012), which 
became effective April 16, 2012, addressed all comments received on 
that amendment and its proposed rules. Specific comments related to the 
actions contained in Amendment 20A and the proposed rule and NMFS' 
respective responses, are summarized below.
    Comment 1: Inactive shares should be allocated to the recreational 
sector for wreckfish.
    Response: The Council did not consider redistributing inactive 
commercial wreckfish shares to the recreational sector in Amendment 
20A. Prior to the implementation of the Comprehensive ACL Amendment on 
April 16, 2012, a specific allocation of wreckfish for the recreational 
sector did not exist within the FMP. Due to recreational snapper-
grouper fishermen reporting an increased incidence of wreckfish 
encounters in recent years, and the fact that wreckfish are caught in 
very deep water, it is assumed all incidentally caught wreckfish by 
recreational fishermen are released dead. The Council decided to create 
a wreckfish recreational allocation of five percent in the 
Comprehensive ACL Amendment to allow recreational fishermen to retain 
fish, which would otherwise likely die. The recreational ACL is 11,750 
lb (5,330 kg) round weight.
    The Council chose to redistribute latent (inactive) shares to 
active commercial participants to optimize commercial wreckfish harvest 
and minimize latent effort. The Council's decision allows those 
participants, who are more dependent on wreckfish harvest, to retain 
their current shares and to be eligible to receive shares from 
redistribution. The Council chose to redistribute inactive shares to 
wreckfish shareholders who reported wreckfish landings during the 
fishing years 2006/2007 through 2010/2011.
    Comment 2: Redistributed reverted shares should be based on 50-
percent equal allocation in addition to 50-percent landings history for 
the total wreckfish landings from April 16, 2006, through January 14, 
2011.
    Response: The Council analyzed and evaluated using that approach, 
but chose to redistribute reverted shares to remaining shareholders 
based on landings history only from April 16, 2006, through January 14, 
2011. The Council's decision allows those participants who are more 
dependent on wreckfish harvest to retain their current shares and to be 
eligible to receive shares from redistribution.
    Comment 3: The final outcome of Amendment 20A is questionable since 
the purchase (or transfer) of inactive shares (those with no recent 
activity) would render these shares ineligible for redistribution. An 
analysis of what can be appealed is requested.
    Response: One of the purposes of Amendment 20A is to redistribute 
any inactive shares to active shareholders. After the Council approved 
Amendment 20A for Secretarial review at its December 2011 meeting, many 
inactive shares were purchased and transferred to active shareholders. 
Any inactive shares remaining after implementation of this final rule 
are available for redistribution. Though the number of shares to be 
redistributed has changed since the Council took final action (from 
28.18 to 1.401 percent of the shares), the items that may be appealed 
have not changed. The appeals process allows inactive wreckfish 
shareholders to appeal the reversion of their shares that NMFS 
considers ``inactive'', and active shareholders can appeal the 
percentage of reverted shares that NMFS redistributes to them. Any 
shares remaining after completion of the appeals process, up to 1.401 
percent of the shares, will be reverted and redistributed among the 
remaining active shareholders, depending on the remaining individual 
shareholder's landings history from April 16, 2006, through January 14, 
2011.
    Comment 4: The 49-percent share cap seems excessive for a public 
resource.
    Response: The Council considered seven alternatives with respect to 
establishing a share cap in the wreckfish ITQ program: no share cap, 
and share caps of 15 percent, 25 percent, 49 percent, 65 percent, and 
the highest percentage of total shares held by a single shareholder 
after redistribution of inactive quota shares. The Council considered a 
variety of factors in determining what constitutes an excessive share 
for this public resource and an appropriate share cap, in the wreckfish 
ITQ program, including market power in the product, input, and quota 
share markets, management objectives contained in the Magnuson Stevens 
Act, and its management objectives for Amendment 20A.
    The creation of market power in seafood markets through 
concentration of wreckfish quota shares is unlikely because wreckfish 
directly competes against other domestically harvested and imported 
groupers, snappers, and other fish. Further, most of the important 
inputs (e.g., fuel, crew, hooks, line, etc.) used by commercial 
wreckfish fishermen are also used by commercial fishermen harvesting 
other species in competition with wreckfish fishermen, recreational 
fishermen, or the general public. Thus, even if a single shareholder 
possessed all of the quota shares, that shareholder very likely would 
not possess any control over input prices because of competition from 
other buyers.
    A share cap implemented in a commercial sector operating under a 
catch share program customarily applies at the individual rather than 
the shareholder level. This approach prevents individuals from 
exceeding the share cap by being or becoming partial or full owners of 
other entities that also own quota shares, or more specifically share 
certificates in the case of wreckfish.
    With respect to the 49-percent share cap alternative, although this 
alternative does not allow the historically largest harvester to 
maintain his recent level of landings, it does allow this individual to 
come relatively close, particularly if the individual chooses to buy 
additional shares up to the 49-percent cap. As such, the Council 
expected this individual to have sufficient quota shares to continue 
operations after redistribution of the inactive shares. Further, the 
other individuals were expected to have sufficient shares to maintain 
or even exceed their recent landings after redistribution of the 
inactive shares. Thus, the 49-percent share cap alternative was the 
most likely to ensure the commercial ACL is harvested and OY is 
attained. The Council thought it was equitable to allow shareholders 
with greater economic dependence on wreckfish landings to possess 
relatively more of the quota shares. Given the benefits of the 49-
percent share cap alternative

[[Page 59131]]

relative to the other alternatives, for this public resource, the 
Council selected a 49-percent share cap.
    Comment 5: The appeals process will only be as good as the NMFS 
wishes that effort to become.
    Response: The appeals process included in Amendment 20A allows 
inactive wreckfish shareholders to appeal the reversion of shares they 
hold (inactive status), and active shareholders to appeal the 
percentage of reverted shares redistributed to them. The Regional 
Administrator will render decisions on appeals based on NMFS logbooks 
or state landings data if NMFS logbooks are not available. Hardship 
appeals will not be considered. NMFS finds this appeals process to be 
appropriate for the commercial wreckfish sector.

Classification

    The Regional Administrator, Southeast Region, NMFS has determined 
that the actions contained in this final rule are necessary for the 
conservation and management of the snapper-grouper fishery in the South 
Atlantic and that they are consistent with Amendment 20A, the Magnuson-
Stevens Act, and other applicable law.
    This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    The Chief Counsel for Regulation of the Department of Commerce 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration during the proposed rule stage that this action would 
not have a significant economic impact on a substantial number of small 
entities. The factual basis for the certification was published in the 
proposed rule and is not repeated here.
    One of the comments addressed in the Supplementary Information 
section, regarding the distribution of the latent shares that would be 
revoked, included economic implications and is also addressed here. 
This comment stated that the latent shares should be retired and not 
redistributed to other commercial shareholders with the exception that 
a small unspecified portion should be given to the recreational sector. 
The final rule for the Comprehensive ACL Amendment, which became 
effective on April 16, 2012 (77 FR 15916, March 16, 2012), allocated 95 
percent of the wreckfish ACL to the commercial sector and 5 percent to 
the recreational sector. Allocating some portion of latent shares to 
the recreational sector and retiring the rest would be inconsistent 
with the allocation established by the Council in the Comprehensive ACL 
Amendment, would not allow the commercial ACL to be harvested, and 
would result in reduced economic benefits to commercial small business 
entities. Therefore, no change has been made to this final rule as a 
result of this comment.
    Because this final rule reduces the set-aside for appeals from 5 
percent to 1.401 percent and, more importantly, inactive shareholders 
hold all of the quota shares being set-aside, active shareholders are 
not expected to experience any direct, adverse economic effects due to 
this action. Further, because the inactive shareholders have no gross 
revenue or profits from commercial fishing for wreckfish, the set-aside 
of their quota shares in the short-term to resolve appeals would not 
reduce their gross revenue or profit. Thus, the direct, adverse 
economic effects on shareholders as a result of this action and final 
rule will be less than what was estimated in the proposed rule. No 
other new information has been received that would affect the analysis 
of impacts on small entities. As a result, a final regulatory 
flexibility analysis was not required and none was prepared.
    This final rule contains a collection-of-information requirement 
subject to the Paperwork Reduction Act (PRA), which has been approved 
by OMB under control number 0648-0551. Public reporting burden for the 
appeals process regarding the redistribution of inactive wreckfish 
shares is estimated to average 2 hours per response, including the time 
for reviewing instructions, searching existing data sources, gathering 
and maintaining the data needed, and completing and reviewing the 
collection of information. Send comments regarding these burden 
estimates or any other aspect of this data collection, including 
suggestions for reducing the burden, to NMFS (see ADDRESSES) and by 
email to [email protected], or fax to 202-395-7285.
    Notwithstanding any other provision of the law, no person is 
required to respond to, and no person shall be subject to penalty for 
failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB control number.

List of Subjects in 50 CFR Part 622

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

    Dated: September 20, 2012.
Alan D. Risenhoover,
Director, Office of Sustainable Fisheries, performing the functions and 
duties of the Deputy Assistant Administrator for Regulatory Programs, 
National Marine Fisheries Service.

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

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

0
1. The authority citation for part 622 continues to read as follows:

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


0
2. In Sec.  622.15, paragraph (a) is revised to read as follows:


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

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    (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 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 1.401 
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 1.401-
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 January 24, 2013 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,

[[Page 59132]]

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.
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[FR Doc. 2012-23731 Filed 9-25-12; 8:45 am]
BILLING CODE 3510-22-P