[Federal Register Volume 78, Number 1 (Wednesday, January 2, 2013)]
[Proposed Rules]
[Pages 72-82]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-31546]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 660

[Docket No. 120313185-2727-01]
RIN 0648-BC01


Fisheries Off West Coast States; Pacific Coast Groundfish Fishery 
Management Plan; Trawl Rationalization Program; Reconsideration of 
Allocation of Whiting

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

ACTION: Proposed rule; request for comments.

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SUMMARY: This action proposes revisions to several portions of the 
Pacific Coast Groundfish Fishery Trawl Rationalization Program 
regulations and requests comments on NMFS' preliminary conclusion that 
the Pacific Fishery Management Council's (Council's) selection of the 
no action alternative regarding the reconsideration of initial 
allocation of Pacific whiting (whiting) is consistent with the 
Magnuson-Stevens Fishery Conservation and Management Act (MSA), the 
Pacific Coast Groundfish Fishery Management Plan (FMP), and other 
applicable law.. This action is necessary to comply with a court order 
requiring NMFS to reconsider the initial allocation of whiting to the 
shorebased individual fishing quota (IFQ) fishery and the at-sea 
mothership fishery. These proposed regulatory changes would affect the 
transfer of quota share (QS) and individual bycatch quota (IBQ) between 
QS accounts in the shorebased IFQ fishery, and severability of catch 
history assignments in the mothership fishery, both of which would be 
allowed on specified dates with the exception of widow rockfish. Widow 
rockfish is no longer an overfished species and transfer of QS for this 
species will be reinstated pending reconsideration of the allocation of 
widow rockfish QS in a future action. The divestiture period for widow 
rockfish QS in the IFQ fishery is also proposed to be delayed 
indefinitely.

DATES: Comments on this proposed rule must be received no later than 5 
p.m., local time on February 1, 2013.

ADDRESSES: You may submit comments on this document, identified by 
NOAA-NMFS-2012-0063, by any of the following methods:
     Electronic Submission: Submit all electronic public 
comments via the Federal e-Rulemaking Portal. Go to 
www.regulations.gov/#!docketDetail;D= NOAA-NMFS-2012-0063, click the 
``Comment Now!'' icon, complete the required fields, and enter or 
attach your comments.
     Mail: Submit written comments to William W. Stelle, Jr., 
Regional Administrator, Northwest Region, NMFS, 7600 Sand Point Way 
NE., Seattle, WA 98115-0070; Attn: Ariel Jacobs.
     Fax: 206-526-6736; Attn: Ariel Jacobs.
    Instructions: Comments sent by any other method, to any other 
address or individual, or received after the end of the comment period, 
may not be considered by NMFS. All comments received are a part of the 
public record and will generally be posted for public viewing on 
www.regulations.gov without change. All personal identifying

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information (e.g., name, address, etc.), confidential business 
information, or otherwise sensitive information submitted voluntarily 
by the sender will be publicly accessible. NMFS will accept anonymous 
comments (enter ``N/A'' in the required fields if you wish to remain 
anonymous). Attachments to electronic comments will be accepted in 
Microsoft Word, Excel, or Adobe PDF file formats only.

FOR FURTHER INFORMATION CONTACT: Ariel Jacobs, 206-526-4491; (fax) 206-
526-6736; [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    In January 2011, NMFS implemented the trawl rationalization program 
for the Pacific coast groundfish fishery's trawl fleet (see 75 FR 
78344; Dec. 15, 2010). The program was adopted in 2010 through 
Amendments 20 and 21 to the FMP and consists of an IFQ program for the 
shorebased trawl fleet (including whiting and non-whiting fisheries); 
and cooperative (coop) programs for the at-sea mothership and catcher/
processor trawl fleets (whiting only). The initial allocations of 
whiting were challenged in Pacific Dawn v. Bryson, No. C10-4829 TEH 
(N.D. Cal.) (Pacific Dawn). Following a decision on summary judgment 
that NMFS had not considered all of the required information and failed 
to provide an adequate basis in setting the initial whiting 
allocations, the court, on February 21, 2012, issued an order remanding 
the regulations establishing the initial allocations of whiting for the 
shorebased IFQ fishery and the at-sea mothership fishery ``for further 
consideration'' consistent with the court's December 22, 2011, summary 
judgment ruling. The order requires NMFS to implement revised 
regulations before the 2013 Pacific whiting fishing season begins on 
April 1, 2013.
    On February 29, 2012, NMFS informed the Council of the order issued 
in Pacific Dawn. NMFS requested that the Council initiate the 
reconsideration of the initial allocations for QS of whiting in the 
shorebased IFQ fishery and for whiting catch history assignments in the 
at-sea mothership fishery. NMFS also determined that a rulemaking was 
needed to delay or revise portions of the existing regulations while 
the Council and NMFS reconsidered the initial allocation of whiting, 
and informed the Council of its intent to publish an Advance Notice of 
Proposed Rulemaking (ANPR) to notify the public of the reconsideration 
and the process the agency and Council would follow.
    NMFS published the ANPR on April 4, 2012 (77 FR 20337), which, 
among other things, announced the court's order, the Council meetings 
that would be addressing the whiting reconsideration, and NMFS' plan to 
publish two rulemakings in response to the court order. These two 
rulemakings are referred to as Reconsideration of Allocation of 
Whiting, Rules 1 and 2 (RAW 1 and RAW 2, respectively).

RAW 1

    NMFS used emergency action authority under the MSA section 
305(c)(1), 16 U.S.C. 1855(c), for RAW 1, which was proposed on May 21, 
2012 (77 FR 29955), with the final rule published on August 1, 2012 (77 
FR 45508). RAW 1 delayed the ability to transfer QS and IBQ between QS 
accounts in the shorebased IFQ fishery, and to the ability to sever 
mothership/catcher vessel endorsement and its associated catch history 
assignment (CHA) from limited entry trawl permits in the mothership 
fishery, pending the outcome of the reconsideration. The August 1 
emergency rule also delayed issuance of quota associated with whiting 
directed trips at the beginning of the 2013 fishing year, as 
recommended by the Council. The RAW 1 rule is effective through January 
28, 2013, and may be extended for an additional 186 days, consistent 
with the MSA.

RAW 2

    At its March 2-7, 2012, meeting, the Council received briefings 
from NMFS regarding the remedy order issued in Pacific Dawn and 
selected a three-meeting Council rulemaking process. On March 15, 2012, 
NMFS submitted a letter to the Council that provided a potential range 
of alternatives for reconsideration that NMFS believed was appropriate.
    At its April 1-6, 2012, meeting, the Council received briefings 
from NMFS on the range of alternatives included in the March 15, 2012, 
letter, as well as guidance on allocation issues addressed in the MSA, 
agency guidance documents, and FMP goals and objectives. The Council 
received approximately two hours of public comment from nine 
individuals or groups of individuals and also received recommendations 
from its Groundfish Advisory Subpanel. After consideration of the 
public comment and advisory group recommendations, the Council added an 
additional alternative for analysis that would consider an allocation 
period of 2000-2010.
    At the June 21-26, 2012, Council meeting, NMFS and Council staff 
gave an overview on the Draft Environmental Assessment (EA) and briefed 
the Council on the analysis of the range of alternatives. The Council, 
after listening to recommendations from its Groundfish Advisory 
Subpanel and public testimony, refined one alternative and asked staff 
to update the analyses over the summer based on this refinement. The 
Council did not select a preliminary preferred alternative, stating 
that it needed additional time to understand the analyses and 
information presented. The Council reconfirmed its intention to select 
a final preferred alternative at its September 2012 meeting.
    At the September 13-18, 2012, Council meeting, the Council 
considered the Draft EA, which had been revised to incorporate more 
detailed information and analyzed a range of whiting allocation periods 
spanning the years between 1994 and 2010 for shoreside and mothership 
catcher vessels, and the years between 1998 and 2010 for shoreside 
processors. The Council listened to testimony from 24 individuals or 
groups of individuals, totaling nearly seven hours of public testimony 
and also received advisory body reports from both the Groundfish 
Advisory Subpanel and the Scientific and Statistical Committee. 
Following Council discussion, the Council voted to select the no-action 
alternative (initial whiting allocation qualifying years of 1994 
through 2003 for the shoreside and mothership catcher vessels and 1998 
through 2004 for shoreside whiting processors) as the final preferred 
alternative.
    On October 30, 2012, the Council transmitted to NMFS its 
recommendation that the no-action alternative be adopted; the letter 
and its accompanying rationale are available at the Council's Web site 
at http://www.pcouncil.org/wp-content/uploads/Xmit_WhtgRealloc_Ltr.pdf.

Rationale for Proposing No Changes to the Initial Allocations of 
Whiting

    The MSA requires NMFS to review all regulations that the Council 
submits to determine whether the regulations are consistent with the 
MSA, the FMP, and other applicable law (16 U.S.C. 1854(b)). NMFS 
reviewed the Council record and the proposed regulatory language and 
has preliminarily determined that the Council's recommendation to 
maintain the existing initial whiting allocations is consistent the 
MSA, the FMP, the court's order in Pacific Dawn, and other applicable 
law. NMFS requests comments on this conclusion; after review of the 
comments and the record as a whole, NMFS will make a final

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decision that will be announced in the Federal Register. The reasons 
for NMFS' preliminary determination are discussed below.
    The MSA establishes the general requirement that allocations be 
fair and equitable (see e.g., 16 U.S.C. 1851(a)(4)). For allocations 
made in association with limited access privilege programs, the MSA 
further requires that the Council or NMFS must ``establish procedures 
to ensure fair and equitable initial allocations, including 
consideration of: (i) Current and historical harvests; (ii) employment 
in the harvesting and processing sectors; (iii) investments in, and 
dependence upon, the fishery; and (iv) the current and historical 
participation of fishing communities'' (16 U.S.C. 1853a(c)(5)(A)). 
Although the Council's recommendation must be consistent with the MSA 
as a whole when viewed in light of the FMP, the factors listed above 
were essential to the Council's and NMFS' decisions.
    Ultimately, NMFS believes that irrespective of the qualifying years 
chosen as a result of the reconsideration, there is not one alternative 
that would be perceived as equally fair and equitable by all 
participants. Further, as long as the Council recommendation provides 
for a fair and equitable allocation by consideration of the required 
factors, and the Council and NMFS provide a reasonable explanation for 
that decision, then the requirements of 16 U.S.C. 1853a(c)(5)(A) are 
satisfied. Simply put, the MSA does not require a particular outcome 
for the allocation decision at issue here. This section addresses each 
factor from 16 U.S.C. 1853a(c)(5)(A) in a general fashion, followed by 
the overarching considerations that lead NMFS to preliminarily conclude 
that the initial whiting allocations are fair and equitable.

Current and Historical Harvests

    The alternatives that the Council examined allocated quota using 
catch history based on a range of years--1994 through 2010--that is as 
wide as possible given the best available scientific information on the 
groundfish trawl fleet prior to implementation of Amendment 20. Under 
the existing qualifying period for harvesters of 1994 through 2003, 
previously qualifying permits with catch history post-2003 or new 
entrants after 2003 do not have that catch history count towards their 
initial allocation of whiting. However, in light of the overarching 
considerations, the whiting allocation to harvesters based on a 
qualifying period of 1994 through 2003 is fair and equitable, and 
furthers the purposes of Amendment 20.
    Consideration of current and historical harvests appears less 
relevant to the issue of the qualifying period for processors because 
processors do not ``harvest'' fish. To the extent that current and 
historical harvests relate to the decision on an appropriate qualifying 
period for processors, this factor is considered by examining the 
current and historical harvests delivered to shorebased processors. 
Current and historical harvests and their relationship to processors 
are also considered indirectly through the other three factors. NMFS 
specifically requests comment on the relevance of ``current and 
historical harvests'' to the determination of the qualifying period for 
processors.

Employment in the Harvesting and Processing Sectors

    The Draft EA concludes that rationalization brings changes in the 
nature and patterns of employment in both the processing and harvesting 
sectors. While there may be some initial local shifts or variations in 
employment depending on the whiting allocation alternative chosen, the 
analysis did not anticipate notable variation in the stability or level 
of employment overall among the identified alternatives. However, the 
Groundfish Advisory Subpanel and the Draft EA also noted that moving 
the end year of the qualifying periods to include more recent years 
could result in additional QS being allocated to processors in the 
north, which is where much of the whiting harvest and processing has 
more recently been taking place. Although the Draft EA indicates that 
the actual location of whiting harvest and delivery to processors 
appears to be predominately affected by factors other than the amount 
of whiting QS held in a given geographic area, the QS is still an asset 
for processors that can be used to offset the effects of some of the 
geographic shifts that may occur irrespective of QS distribution. 
Additionally, some processors testified as to the importance of their 
QS in attracting additional whiting deliveries to their facilities. 
Maintaining the 1998-2004 time period for processors and its broader 
geographic distribution may contribute to employment in coastal 
communities when paired with the 1994-2003 qualifying period for 
harvesters. Further, in light of the overarching considerations, the 
existing qualifying periods result in a fair and equitable allocation. 
NMFS specifically requests comments on the degree to which the existing 
qualifying periods, or the alternative qualifying periods considered, 
could affect employment in the harvesting and processing sectors.

Investments In, and Dependence Upon, the Fishery

    The MSA does not provide a definition of ``dependence.'' In general 
terms, dependence upon the fishery relates to the degree to which 
participants rely on the whiting fishery as a source of wealth, income, 
or employment to financially support their business. Current harvests, 
historical harvests, levels of investment over time, and levels of 
participation over time are all aspects of dependence, as they can all 
be connected to the processes that fishers and processors use to 
generate income. The level of dependence could be viewed as a function 
of any number of metrics including: The number of the years an entity 
has participated in the fishery; the total whiting harvested or the 
amount processed by an entity; the sum total of all fish harvested or 
processed by an entity; the total income earning activities by an 
entity (for example, some processors process fish for other processors, 
or help in the trucking of fish); or an entity's relationship to other 
entities (for example, one company may own several processing plants or 
limited entry permits another company may be closely affiliated with 
another company either through ownership relationships or through sales 
agreements). However, these are all just individual measurements of 
factors that are related to dependence, not measures of dependence in 
and of themselves. Furthermore, it is difficult to calculate 
``dependence'' per se even using all of these measures.
    The extent to which participation in the harvesting or processing 
of whiting past the 2003-2004 end of the qualifying periods reflects 
dependence upon the fishery is largely reliant upon the metric used to 
evaluate dependence and the time periods during which that metric is 
applied. Although some of the alternatives considered would allocate 
more quota to the most recent participants in the fishery, even 
assuming recent participation in the fishery is the appropriate metric 
for evaluating the level of dependence, the overarching considerations 
lead NMFS to preliminarily conclude that the existing qualifying 
periods for harvesters and processors result in a fair and equitable 
allocation, consistent with the MSA. As discussed more fully below, the 
choice of ending the qualifying period for processors in 2004 rather 
than the 2003 control date was done to explicitly recognize investments

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in processing while still furthering the purposes of Amendment 20.
    Moreover, the fact that the existing qualifying period for 
harvesters results in some limited QS allocation to permits without 
activity in the whiting fishery post 2003 does not alter NMFS' 
conclusion. Under the status quo qualifying period, there were twenty-
one limited entry trawl permits and 14 mothership/catcher vessel 
endorsed limited entry trawl permits that received whiting quota share 
or catch history assignments even though they did not fish after 2003. 
The analysis then researched whether these permits were fished in the 
other whiting sector, other Pacific groundfish fisheries, other west 
coast fisheries, or in other Alaska fisheries. After accounting for 
participation in other fisheries, there were a total of nine permits 
(shoreside or mothership) that apparently had no fishing activity off 
the West Coast or Alaska after 2003. These nine permits translate into 
1.3 percent of the total shoreside whiting QS and 1.0 percent of the 
total mothership catch history assignments used for the 2011 and 2012 
fisheries. However, the data set used for analysis may not have been 
complete as the permit may be owned by an entity that participates in 
fisheries other than west coast and Alaska fisheries. Furthermore, 
while some quota goes to harvester permits with no recent history under 
a 2003 end year for harvesters, the analysis in the record reflects 
that the extent of truly latent permits (not associated with an entity 
with recent whiting landings) is very small (roughly one percent for 
both shoreside and mothership harvesters). Awarding QS to these 
``latent'' permits is consistent with the goal of reducing 
overcapitalization in the fishery and ending the ``race for fish'' 
because to do otherwise (i.e. award QS for activities beyond the 
control date) would create incentives for participants to expand their 
activities and investments after control dates are announced in the 
hope that they would be rewarded quota share.
    The Council analysis characterizes the limited entry permit as an 
asset or investment, a highly fishery dependent investment. The EA 
states that ``after 2003, it is reported that permit prices varied 
substantially based on the history associated with the permit, in 
anticipation of the trawl program.'' Excluding changes due to company 
restructuring and changes due to death or divorce, eighteen permits 
changed hands after 2003 and before the end of 2010. Based on data 
recently collected by the NWFSC and public comment, during 2009-2010, 
three permits were sold at values that averaged about $315,000. The 
Council analysis also discussed the portfolio concept of permits. 
Fishermen frequently own several different types of permits as a 
business strategy to respond to the ups and downs of various fisheries. 
(A portfolio could include one or more limited entry trawl permits 
along with permits to crab, shrimp, or to fish in the Alaska Pollock 
fishery.) To participate in the trawl fishery, a person first needs to 
obtain one of a limited number of permits (at the time of 
implementation of the trawl rationalization program, there were 175 
trawl endorsed permits). However, after investing in a permit, a permit 
owner has several options on how to use that investment. The permit 
owner can fish the permit with his vessel or lease the permit to 
another person. The owner can also sell the permit or choose not to 
fish the permit or have anyone else fish the permit. As evidence of the 
importance of this investment, the permit owner needs to renew and pay 
a permit fee annually. The Region has preliminarily concluded that 
these types of investments are an important factor in determining 
dependence on the fishery. NMFS is requesting comment on the extent 
that such investments reflect dependence on the fishery.
    Some believe that most recent fishing history is the best 
reflection of dependence on the fishery. There is no NMFS guidance on 
the measurement of dependence. Equating dependence solely to recent 
fishing history could be in a sense ``double counting'' as the MSA 
already indicates that ``current'' harvests are to be considered as a 
separate factor. From review of other NMFS and Council analyses, 
indicators of dependence are typically based on measures that relate 
the IFQ fishery revenues (whiting) to total revenues earned by the 
entity (whiting, crab, shrimp, pollock, etc.). It is not NMFS policy to 
use recent fishing as the only reflection of dependence on the fishery, 
nor is it NMFS policy to use recent fishing as the sole basis for 
determining the allocation period; such a determination must always be 
based on the specific facts each time allocations are considered. NMFS 
specifically requests comments on the degree to which the existing 
qualifying periods, or the alternative qualifying periods considered, 
result in a fair and equitable allocation when considering investments 
in and dependence upon the fishery, including what metrics should be 
considered in measuring investment in and dependence on the fishery and 
why, based on those metrics, any of the alternatives result in a fair 
and equitable allocation.

The Current and Historical Participation of Fishing Communities

    The Council considered the current and historical participation of 
fishing communities in several ways. Similar to the analysis for 
current and historical harvests, by examining alternatives with a wide 
range of years, the Council and NMFS were able to review the current 
and historical participation of communities as they changed over time. 
Further, the original decision on Amendment 20 contained measures that 
examined the role of fishing communities over time. For example, the 20 
percent allocation to processors was intended to provide increased 
stability to communities by creating an added incentive for catcher 
vessels to land whiting in those communities and increase bargaining 
parity between harvesters and processors. The Draft EA also notes that:

    More certain than the initial allocation's effect on long-term 
distribution of fishing activity among communities is the one-time 
distribution of wealth in the form of quota shares going to members 
of the communities and the secondary effects that this one-time 
distribution of wealth may have as it affects expenditures within 
the community. Thus, what is at stake in the initial allocation is 
not necessarily a disruption to what entities are able to harvest, 
but rather an initial allocation of wealth and, through the wealth 
represented by the QS/CHA, an augmented ability to make up any 
shortfalls through QS/CHA acquisitions in the market place. Those 
receiving larger initial allocations, larger initial grants of 
wealth, will be better-positioned to finance or other wise make 
additional purchases of QS/CHA to make up for any shortfalls in 
their initial allocations.

    NMFS preliminarily concludes that the existing qualifying periods 
reflect fair and equitable allocations that were intended to spread the 
impacts of the trawl rationalization program along the coast. NMFS 
specifically requests comments with respect to current and historical 
participation of fishing communities and how consideration of this 
factor supports the existing whiting allocations, or the other 
alternative qualifying periods considered.

Overarching Considerations

    NMFS believes a crucial consideration that must be taken into 
account when reviewing the initial whiting allocation decision is the 
control date. Historically, the Council and other fishery management 
councils have announced and adopted control dates to prevent 
speculative participation in a fishery pending development of a limited 
access

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program, with the intent that the developed program may use the control 
date as the end date of fishing history that would count toward 
establishing initial allocations, if appropriate. Since adopting the 
initial control date in 2003 (announced in a Federal Register notice in 
early 2004), the Council and NMFS have actively worked on developing 
and refining the groundfish trawl catch share program. As discussed in 
detail in the draft EA, beginning in 2003, the Council held numerous 
public committee meetings (averaging ten a year), conducted public 
discussions on the trawl program during numerous Council meetings, and 
worked consistently on the program over a seven year period (2003-
2010).
    In deciding to develop a catch share program for the groundfish 
trawl fishery, the Council was concerned with the problems of 
overcapitalization and ending the race for fish. By notifying existing 
and potential participants that the Council was seriously pursuing 
development of a catch share program, the Council intended to deter 
additional unwanted effort and capital in the fishery. NMFS recognizes 
that the plain language of the Federal Register notice announcing the 
control date does not ``guarantee'' that activity occurring in any 
specific period will count toward initial allocations. In addition, 
control dates have been abandoned in the past for various reasons by 
this Council and in other regions. However, NMFS also believes it was 
reasonable for participants to interpret the control date as signaling 
a potential end date for the qualifying period, and there was extensive 
public testimony reflecting the fact that many participants did in fact 
make business decisions based on the control date. Testimony from some 
participants indicated that had they thought the control date would not 
be used as the end of the qualifying period, they would have changed 
plans to increase their whiting harvests while leasing their quota in 
other fisheries. In addition, if fishermen believed that activity 
beyond the control date would result in more quota, they could have 
chosen to invest additional capital into their boats, thus increasing 
overcapitalization and exacerbating the race for fish. Accordingly, 
participants who made business decisions based on the assumption that 
the control date would be used as the end of the qualifying period 
acted in a manner consistent with the conservation goals of the 
Council. In addition, based on the fact that the control date modified 
at least some participants' fishing behavior, extending the qualifying 
period further into the future could result in participants in other 
fisheries disregarding any signal sent by announcing a new control date 
in a different program.
    Although the length of time between the original control date and 
the agency approval in 2010, implementation of the program in 2011, and 
this proposed decision in 2012, is longer than the comparable time span 
in most programs that announce control dates, this is explained by the 
complexity of the program, which resulted in significant time needed to 
involve the public and fishery participants, develop alternatives, 
develop appropriate analytical documents, reach a final decision, and 
implement that decision. The trawl rationalization program includes 
multi-species trading in a diverse fleet composed of small trawlers, 
large motherships, and catcher-processors in communities along most of 
the West Coast of the United States. From the time the control date was 
announced, there was continuous and systematic effort by the Council 
and the agency to develop and implement, with full public 
participation, one of the most complex rationalization programs ever 
devised.
    For the harvesters, the 1994-2003 period is the widest date range 
possible to base allocations on landings history while ending the 
qualifying period on the control date. Using this qualifying period 
recognizes the conservation benefits accruing from those whose fishing 
behavior did not change in an effort to gain more quota. While some 
public testimony indicated that their increased effort post-2003 was 
not a result of speculation, there is no mechanism available to 
separate out speculative behavior from non-speculative nor is there any 
way to quantify the extent to which the control date prevented 
additional speculative effort or capital. By maintaining the control 
date as the cut-off, however, those who did engage in such speculation 
are not rewarded and those who honored the control date are not 
penalized. Although the Council and NMFS were aware that new entrants 
had come into the whiting fishery since 2003, these entrants did so 
aware of the control date and that their activity after 2003 may not 
count toward any initial allocation decision. While maintaining the 
existing cutoffs for initial allocations excludes more current harvest 
and landings from the allocation formulas, the impacts to the 
dependence and investments of most participants are relatively modest. 
For example, the shift of whiting quota shares that would result from 
status quo to Alternative 4 (which most favors recent history) 
represents only 17 percent for shorebased catcher vessels, and 3.1 
percent for shorebased processors. Therefore it is still fair and 
equitable to have some recent catch history not count toward initial 
allocations. Maintaining the control date as the end of the qualifying 
period for harvesters is fully consistent with the original purposes of 
Amendment 20, including reducing overcapitalization and ending the race 
for fish. However, for processors, the Council chose the end year of 
2004, contrary to the 2003 control date, fairly late in the original 
decision-making process.
    NMFS preliminarily concludes that the Council's recommendation to 
use 2004 as the end year for processors is supported by several 
rationales. First, the Council received testimony that there was a 
significant investment in whiting processing capability made in 2002 
and 2003 before the control date was announced, and as discussed 
further below, before the applicability of the control date to 
processors was clarified. That investment did not begin to earn 
processing history until 2003 and 2004. The Council considered this 
information in making its original initial allocation, and in more 
detail during the reconsideration. The Council concluded that it would 
be unfair to not recognize this investment decision that was made prior 
to the control date. By extending the qualifying period for processors 
to 2004, some of the additional processing capabilities could be 
recognized as part of the qualifying history. Furthermore, testimony 
received during the Council's reconsideration revealed no significant 
change from their knowledge of processor investments in the whiting 
fishery, i.e., no testimony indicated other processors made a 
significant investment before the 2003 control that became operational 
in 2004 or later.
    In addition, the originally published Federal Register notice of 
the 2003 control date did not clearly indicate that the date applied to 
processors. Subsequent clarifications were published in the middle of 
the 2004 season and just prior to the start of the 2005 fishing season. 
Accordingly, in addition to at least partially crediting investment 
decisions made prior to the control date, extending the end year of the 
qualifying period to 2004 reasonably accounts for the fact that 
processors may not have had adequate notice of the applicability of the 
2003 control date until after the start of the 2004 whiting season.
    Since the investment decision was made before the control date, 
changing the end year of the qualifying period for

[[Page 77]]

processors to 2004 did not benefit those who decided to increase 
processing capacity after they were aware that 2003 control date could 
potentially apply to processors. While adopting 2004 for processors 
does move beyond the original control date, it only departs by a single 
year and does so for what NMFS preliminary concludes are valid 
justifications. NMFS specifically requests comment on the importance of 
using the control date as the end of the qualifying period for 
harvesters and the rationale for varying the end of the qualifying 
period for processor by one year to 2004.
    Overall, there is a sufficient basis for NMFS to preliminarily 
conclude that the Council's initial whiting allocation recommendation, 
including using qualification years of 1994-2003 for whiting harvesters 
and 1998-2004 for whiting processors, is consistent with the 
requirements of the MSA, the FMP, and other applicable law, and 
provides for a fair and equitable initial allocation to the shoreside 
and mothership sectors of the whiting fishery. As the NOAA Technical 
Memorandum entitled ``The Design and Use of Limited Access Privilege 
Programs, (Anderson and Holliday, November 2007) suggests, the record 
to date confirms that it does not appear to be possible to devise 
whiting allocations that will be perceived as equally fair by all 
eligible entities. Consistent with that guidance, however, the Council 
and agency have followed a public and transparent process that involved 
all concerned stakeholders and allowed repeated opportunities to 
provide input. NMFS believes this process has been appropriate and 
essential to advancing a fair and equitable allocation. The record also 
establishes that in weighing the various factors identified under the 
MSA for initial allocations, there are inevitably tradeoffs that result 
under the various alternatives. In striking an overall balance, NMFS 
preliminarily finds that the reasons supporting maintaining the 
existing allocations for the shoreside and mothership whiting fisheries 
(e.g., honoring the control date and the policy goals of Amendment 20, 
wide geographic distribution of the program benefits and costs along 
the coast and the corresponding fishing communities) outweigh those 
favoring more recent history (e.g., reflection of the more current 
market and fishery conditions, providing greater amounts of quota to 
the most recent fishery participants, and reducing or eliminating quota 
shares to some pemit holders that do not have recent history). NMFS 
also notes that the draft EA indicates that the action alternatives 
result in a larger number of permits losing quota share to the benefit 
of a smaller number of permits that would gain quota share. NMFS 
requests comment on the overall balancing of the factors and impacts of 
this initial allocation decision.

Additional Considerations

    NMFS requests comment on the following additional considerations 
relating to its preliminary determination that the proposed initial 
whiting allocations are fair and equitable and consistent with the MSA, 
FMP, and other applicable law.

Consideration of All the Relevant Factors and Information

    NMFS finds that the relevant factors and best available information 
have been considered in compliance with requirements of the MSA in 
reaching its preliminary determination. NMFS requests comment over the 
degree to which there has been adequate consideration of the factors 
identified for initial allocations under the MSA including: current and 
historical harvests; employment in the harvesting and processing 
sectors; investments in, and dependence upon, the fishery; and, the 
current and historical participation of fishing communities. As 
reflected in the Council record and draft EA, additional factors have 
also been considered, and NMFS also requests comment on whether all 
other relevant factors and related information for each factor have 
been adequately considered.

Industry Support for Allocation

    NMFS notes that at the time of the original initial allocation 
decision and during the reconsideration before the Council, it appeared 
that the most, but not all, of participants supported the use of the 
existing qualifying periods rather than any of the alternatives 
considered. NMFS finds that the industry support for the original 
allocations referred to in the earlier record and the court summary 
judgment order in Pacific Dawn as a ``compromise'' was in fact 
appropriate input from the affected industry that was developed as part 
of the overall transparent and public process that established the 
catch shares program. NMFS requests comment from the public on this 
issue, including on the degree to which industry supports the existing 
allocations, the extent to which NMFS should take into account the 
degree of industry support, and how the amount of support should inform 
consideration of the factors listed in the MSA for allocation decisions 
in light of the analysis provided in the draft EA.

Regulatory Proposals

    NMFS proposes to revise the portions of the regulations that were 
temporarily delayed or revised by RAW 1. Additionally, to be consistent 
with Council action at its November 2012 meeting on a QS transfer 
provision affecting widow rockfish, NMFS proposes to extend the 
moratorium on transfer of widow rockfish QS in the IFQ fishery 
indefinitely pending the Council's reconsideration of the allocation of 
QS for widow rockfish. Specifically, NMFS proposes to:
    (1) Allow transfer of QS or IBQ (except for widow rockfish QS) 
between QS permit holders in the shorebased IFQ fishery beginning 
January 1, 2014;
    (2) Require QS permit holders in the shorebased IFQ fishery holding 
QS or IBQ in excess of the accumulation limits to divest themselves of 
excess QS (except for widow QS) or IBQ by November 30, 2015;
    (3) Allow limited entry trawl permit holders in the mothership 
fishery to request a change (or transfer) of mothership/catcher vessel 
(MS/CV) endorsement and its associated catch history assignment (CHA) 
beginning September 1, 2014;
    (4) Require MS/CV endorsed limited entry trawl permit owners to 
divest themselves of ownership in permits in excess of the accumulation 
limits by August 31, 2016; and
    (5) Extend the divestiture period delay and moratorium on transfer 
of widow rockfish QS in the shorebased IFQ fishery indefinitely.
    Each of these elements is described in further detail below.

Allow Transfer of QS or IBQ, Except Widow QS, Between QS Permit Holders 
Beginning January 1, 2014

    The trawl rationalization program, as implemented in January 2011, 
delayed QS holders' ability to transfer QS and IBQ between QS accounts 
in the shorebased IFQ fishery through December 31, 2012 (i.e., transfer 
could begin in 2013). RAW 1 further delayed QS holders' ability to 
transfer QS and IBQ between QS accounts. This suspension of QS 
transfers was necessary to avoid complications which would occur if QS 
permit owners in the shorebased IFQ fishery were allowed to transfer QS 
percentages prior to the whiting allocation reconsideration. Since NMFS 
proposes to concur with the Council's no action recommendation, no 
changes to the initial whiting allocations are proposed. However, NMFS 
still requires adequate time to develop the regulations and software 
necessary to allow for transfer

[[Page 78]]

of QS, and the Council has not taken final action regarding 
reallocation of widow rockfish quota. Therefore, the Council 
recommended and NMFS proposes to revise Sec.  660.140(d)(3)(ii)(B)(2) 
to allow transfer of QS or IBQ (except for widow rockfish QS) between 
QS permit holders in the shorebased IFQ fishery, subject to 
accumulation limits and approval by NMFS, beginning January 1, 2014. 
Additionally, the rule would reinstate language that QS and IBQ cannot 
be transferred between December 1 and December 31 of each year, nor may 
QS and IBQ be transferred to a vessel account.

Require QS Permit Holders in the Shorebased IFQ Fishery Holding QS or 
IBQ in Excess of the Accumulation Limits To Divest Themselves of Excess 
QS (Except for Widow QS) or IBQ by November 30, 2015

    The delayed implementation of regulations that allow for the 
transfer of QS necessitates a corresponding delay to the divestiture 
periods for those QS permit owners with QS over the accumulation limits 
(also called QS control limits) in the shorebased IFQ fishery. The 
current regulations, as revised by RAW 1, state that QS permit owners 
that have an initial allocation of QS or IBQ in excess of the 
accumulation limits will be allowed to receive that allocation, but 
must divest themselves of the excess QS or IBQ during the first two 
years once QS transfers are allowed. Maintaining the full two years for 
divestiture would provide QS permit owners with sufficient time to plan 
and arrange sales of excess QS, as originally recommended by the 
Council for this provision of the trawl rationalization program. While 
two years from January 1, 2014, is December 31, 2015, the regulations 
prior to RAW 1 and being proposed to be reinstated with this rule at 
Sec.  660.140(d)(3)(ii)(B)(2) state that the transfer of QS between QS 
accounts and from a QS account to a vessel account is prohibited 
between December 1 through December 31. Therefore, this rule proposes 
to revise Sec.  660.140(d)(4)(v) to require QS permit holders in the 
shoreside IFQ fishery holding QS or IBQ in excess of the accumulation 
limits to divest themselves of excess QS (except for widow rockfish QS) 
or IBQ by November 30, 2015. Widow rockfish QS in excess of the 
accumulation limit would not be subject to the November 30, 2015, 
deadline for divestiture because widow rockfish QS may be reallocated 
as described later in the preamble under the extended moratorium on 
widow QS transfers.

Allow Limited Entry Trawl Permit Holders in the Mothership Sector To 
Request a Change (or Transfer) of MS/CV Endorsement and Its Associated 
CHA Beginning September 1, 2014

    RAW 1 instituted a delay in the ability of limited entry trawl 
permit owners in the mothership sector to transfer MS/CV endorsements 
and CHAs between limited entry trawl permits. The rationale for this 
action was similar to that for delaying QS transfers in the shorebased 
IFQ fishery; if permit owners were allowed to transfer ownership of 
CHAs before the reconsideration took place, then it would be difficult 
for NMFS to track changes to the initial allocations of whiting and 
other incidentally caught species. As recommended by the Council, 
consistent with the recommendation to make no changes to the initial 
allocations of whiting, NMFS proposes to revise Sec.  
660.150(g)(2)(iv)(B) and (C) to allow limited entry trawl permit 
holders in the mothership sector to request a change (or transfer) of 
MS/CV endorsement and its associated CHA beginning September 1, 2014.

Require MS/CV-Endorsed Limited Entry Trawl Permit Owners To Divest 
Themselves of Ownership in Permits in Excess of the Accumulation Limits 
by August 31, 2016

    Delayed implementation of regulations that allow for severability 
of the MS/CV endorsement and its associated CHA from the limited entry 
trawl permit in the mothership sector necessitates a corresponding 
delay to the divestiture periods for those limited entry trawl permit 
owners with CHA in excess of the accumulation limits for that sector. 
As recommended by the Council, NMFS proposes to revise Sec.  
660.150(g)(3)(i)(D) to require MS/CV-endorsed limited entry trawl 
permit owners to divest themselves of ownership in permits that have 
CHA in excess of the accumulation limits by August 31, 2016. 
Additionally, NMFS proposes that after August 31, 2016, any MS/CV-
endorsed permits owned by a person (including any person who has 
ownership interest in the owner named on the permit) in excess of the 
accumulation limits will not be issued (renewed) until the permit owner 
complies with the accumulation limits.

Extend Moratorium on Transfer of Widow Rockfish QS in the Shorebased 
IFQ Fishery Indefinitely

    This rule proposes to extend the moratorium on transfer of widow 
rockfish QS in the IFQ fishery indefinitely pending reconsideration of 
the allocation of QS for widow rockfish. The Council intends to 
reconsider widow rockfish QS allocations in the future because widow 
rockfish is no longer an overfished species and will be managed as a 
healthy, rebuilt stock beginning in 2013. NMFS proposes this change at 
Sec.  660.140(d)(3)(ii)(B)(2).

Classification

    Pursuant to section 304(b)(1)(A) of the MSA, the NMFS Assistant 
Administrator has determined that this proposed rule is consistent with 
the Pacific Coast Groundfish FMP, other provisions of the MSA, and 
other applicable law, subject to further consideration after public 
comment. To the extent that the regulations in this rule differ from 
what was deemed by the Council, NMFS invokes its independent authority 
under 16 U.S.C. 1855(d).
    The Council and NMFS prepared a draft environmental assessment (EA) 
for the reconsideration of initial whiting allocation that discusses 
the impact on the human environment of the proposed rule. While the 
draft EA considers more recent information, the Council recommended and 
NMFS is proposing the ``No Action'' alternative which retains the 
original initial allocations of whiting in the IFQ and mothership 
fisheries from Amendment 20. A copy of the EA is available on NMFS' Web 
site at http://www.nwr.noaa.gov/Groundfish-Halibut/Groundfish-Fishery-Management/Trawl-Program/index.cfm. Aspects related to this action were 
previously discussed in the final environmental impact statement (EIS) 
for Amendments 20 to the Pacific Coast Groundfish FMP which discussed 
the structure and features of the original trawl rationalization 
program. A notice of availability for the final EIS published on June 
25, 2010 (75 FR 36386). The Amendment 20 EIS is available on the 
Council's Web site at http://www.pcouncil.org/ or on NMFS' Web site.
    OMB has determined that this action is not significant for purposes 
of Executive Order 12866.
    A Regulatory Impact Review (RIR) was prepared on the action in its 
entirety and is included as part of the initial regulatory flexibility 
analysis (IRFA) on the proposed regulatory changes. The IRFA and RIR 
describe the impact this proposed rule, if adopted, would have on small 
entities. A description of the action, why it is being considered, and 
the legal basis for this action are contained at the beginning of this 
section in the preamble and in the SUMMARY section of the preamble. A 
copy of the IRFA is available from NMFS (see ADDRESSES).

[[Page 79]]

Reconsideration of Initial Allocation of Whiting

    The Council considered four alternatives for allocating whiting. 
The following analysis compares the ``status quo'' alternative to 
Alternative 4 as they show greatest differences between the pre-control 
date fishery and post-control date fishery. The ``status quo'' 
alternative allocates whiting using the years 1994 to 2003 for 
harvesters (shoreside and mothership) and 1998-2004 for processors. 
Alternative 4 allocates whiting using the years 2000-2010 for both 
harvesters (shoreside and mothership) and processors. Over the years 
1994-2010, there were 65 fishing permit holders that participated in 
the shoreside fishery and 37 permit holders that participated in the 
mothership fishery. Over the years 1998 to 2010, there were 16 
processors that participated in the fishery and that meet the recent 
participation criteria of the various alternatives.
    Comparing the status quo alternative to Alternative 4 in terms of 
2011 ex-vessel revenues, information on the gainers and losers in each 
of these affected groups can be developed from information in the Draft 
EA. The allocation of 98,000 mt to the 2011 shorebased whiting fishery 
was worth approximately $21 million (exvessel value). Based on the 
status quo allocations, eighty percent of these quota pounds were 
allocated to fishing permits ($17 million) and 20 percent to the 
shorebased processors ($4 million). The allocation of 57,000 mt whiting 
to the whiting mothership catcher vessels was worth $12 million in 
exvessel value. It is important to note that 2011 was a peak year for 
the shorebased fishery and a near-peak year for the mothership fishery 
(see Figure 3-5 of the Draft EA). (Note: although exprocessor or 
``first wholesale'' revenues are higher than exvessel values and would 
be a better indicator of processing activity levels, data on 
exprocessor sales were not readily available for use by the Council. A 
better indicator of the gains and losses by groups would be changes in 
profits (revenues less operating costs)).
    The NWFSC has developed an estimate of economic net revenue that is 
an indicator of profits. Economic net revenue seeks to measure economic 
profit, which includes the opportunity costs of operating a commercial 
fishing vessel. The NWFSC collected and assessed 2008 cost-earning data 
on vessels participating in the shoreside groundfish fisheries 
including whiting. Vessels that participate in the shoreside whiting 
fishery are typically classified as either ``whiting'' vessels or 
``Alaska'' vessels depending on whether or not they operated in Alaska. 
Whiting vessels are defined as those with at least $100,000 revenue, of 
which at least 33% comes from whiting. Alaska vessels are defined at 
those vessels that earned at least $100,000 in revenue of which at 
least 50% comes from Alaska fisheries. The average economic net revenue 
of a whiting vessel in 2008 was $167,457, which represents 19.2% of 
revenue from all fisheries. Limited entry trawl vessels classified as 
Alaska vessels had an average economic net revenue of $493,915, 28.3% 
of the $1,744,793 revenue earned from all sources by these vessels. 
These estimates on based on revenue and cost information directly 
related to the operation of a commercial fishing vessel such as those 
associated with office space. Revenues are from West coast landings, 
Alaska landings, at-sea deliveries, sale and leasing of permits, 
chartering for research purposes and other activities related to the 
operation of the vessel. Compared to other years, these estimates may 
be high as whiting revenues and overall groundfish revenues were at 
their highest annual level during the 2001-2010 period during 2008. 
However, crab revenues during 2008 on the West Coast were at their 
lowest level since 2003.
    Compared with the status quo alternative, under Alternative 4 
approximately 17% ($3.7 million) of the allocation to shorebased 
catcher vessels would be transferred away from the status quo holders; 
twenty eight permit holders would gain quota share including six 
permits that did not qualify under the status quo alternative (Table 4-
4 of the Draft EA). The largest gain by a single permit holder is 3.3% 
($700,000). Alternative 4 would lead to 37 permits losing quota share 
including 12 permits that would not receive any quota share. The 
largest loss by a single permit holder would be 2.0% of quota share 
($340,000). A total of 41 out of 65 permits will see a change of less 
than $100,000 (increase or decrease) in revenues in comparing 
Alternative 4 to the status quo alternative.
    In comparing Alternative 4 to the Status Quo alternative for 
shorebased processors, approximately 3.1% ($660,000) of the allocation 
to shorebased processors would be transferred away from the status quo 
holders; nine processors would gain including seven processors that did 
not qualify under the status quo alternative (Table 4-29 of the Draft 
EA). The largest gain by a single processor would be 1.3% of quota 
share ($275,000). Alternative 4 would lead to seven processors losing 
quota share, including three processors that would not receive any 
quota share. The largest loss by a single processor would be 0.8% of 
quota share ($170,000). Nine out of 16 processors would see a change of 
less than $100,000.
    In comparing Alternative 4 to the Status Quo alternative for 
whiting mothership catcher vessels, approximately 18% ($2 million) of 
the total catch history assignment would be transferred away from the 
status quo holders; 16 mothership catcher vessel endorsed permits would 
gain (Table 4-16 of the Draft EA). No new permits would qualify. The 
largest gain by a single permit holder would be 4.5% of catch history 
assignment ($545,000). Alternative 4 would lead to 21 permits with 
reduced catch history assignments, including 10 permits that would not 
receive any catch history assignment. The largest loss by a single 
catch history assignment holder would be 2.7% ($333,000). Eighteen out 
of 36 permits would see a change of less than $100,000.
    However, in terms of net economic benefit to the nation, the 
effects of the alternatives are similar. According to the PSMFC's 
Scientific and Statistical Committee: ``The way the fisheries are 
actually prosecuted (geographic location of fishing and landings, 
timing of fishing, and participants) will in the long-term tend not to 
be affected by who receives the initial allocation of catch shares.'' 
Over time, the use of the catch shares will likely migrate through 
leases or sales to the participants who can put them to their most 
profitable use. This means that the eventual biological, ecological, 
and economic performance of the fisheries will be relatively 
independent of the initial allocation of catch shares. It has been the 
experience of many catch share programs that such transitions occur 
rather quickly, often within the first few years. As a consequence, the 
initial allocation of quota shares is not an effective tool to direct 
fishing or processing effort to particular geographic locations.''
    The initial allocation of whiting is a one-time distribution of 
wealth in the form of quota shares and catch history assignments to 
members of the fishing industry. The initial allocation is essentially 
the granting of a capital asset that will affect harvester and 
processor competitiveness and assist existing participants in the 
transition to the new management system. To the degree that initial 
allocation match up with the harvesters that will use the quota, 
transition costs and disruption will be lessened as the fishery moves 
to its long-term, more efficient state.

[[Page 80]]

Similarly, those processors who receive an initial allocation may 
experience a boost in their competitive advantage due to the infusion 
of new wealth (the value of the QS received).
    The initial allocation does not affect the long-term efficiency and 
operation of the fishery. However, liquidity constraints, and perhaps 
other unknown constraints, may mean that there are some short-term 
inefficiencies. For example, this one time distribution of wealth may 
affect expenditures in the communities depending on location and 
spending patterns of recipients of these quota shares and catch history 
assignments. The Draft EA provides the following regarding impacts on 
communities: ``The effects of the initial allocations on the 
distribution of fishing among communities are difficult to predict. 
Quota is tradable and highly divisible, giving it a fluidity such that 
it will likely move toward those ports in which profit margins tend to 
be the highest, regardless of the initial allocations. Where profit 
margins are similar, allocations given to entities that are already 
invested in whiting fishery-dependent capital assets are likely to stay 
with those entities at least in the near term. Similarly, where profit 
margins are similar, there will likely be some tendency in the near 
term for quota that is traded to move toward locations where whiting 
fishery-dependent capital assets already exist. Regardless of how the 
quota is distributed, vessels may move operations between ports during 
the year based on the geographic distribution of fishing opportunities. 
Processors are likely to use their shares in the port in which their 
facilities are located, however, some processors have facilities in 
more than one port and so may shift harvest between ports in response 
to the location of fishing opportunities. At the same time, the recent 
shift of harvest toward more northern ports appears to be a response to 
investments in those ports, indicating that the location of fish is not 
the only factor driving the location of landings. Over the long term, 
it is expected that operations will move, or quota will be traded, to 
the ports in which the highest profits can be earned, taking into 
account all forms of costs such as average distance to fishing grounds 
and catch and bycatch rates.''
    While the discussion above concerns the long run efficiency and 
operation of the fishery, short run effects matter. The initial 
allocation of quota shares affects each participant's business 
operation, investments, and community. With the choice of the status 
quo alternative over alternatives that reflect more recent history, 
NMFS and the Council are providing to those who have historically 
participated in the fishery (the majority of which are also recent 
participants) are anticipated to have a better chance to benefit from 
the market processes described above.

RAW 1

    This action also would revise several regulations that were delayed 
on an emergency basis in response to the Court order. RAW 1 delayed the 
ability to transfer QS and IBQ between QS accounts in the shorebased 
IFQ fishery, and to the ability to sever mothership/catcher vessel 
endorsement and its associated catch history assignment (CHA) from 
limited entry trawl permits in the mothership fishery, pending the 
outcome of the reconsideration.
    NMFS postponed the ability to trade quota shares as well as the 
ability of mothership catcher vessels to trade their endorsements and 
catch history assignments separately from their limited entry permits. 
NMFS also postponed a delay in all trading of QS species/species groups 
because for many affected parties, their QS allocations (especially for 
bycatch species) are a composite of whiting-trip calculations and non-
whiting trip calculations. Postponing these activities, while NMFS and 
the Council reconsidered the whiting allocation, minimize confusion and 
disruption in the fishery from trading quota shares that have not yet 
been firmly established by regulation. For example, if QS trading was 
not delayed, QS permit owners would be transferring QS amounts that 
potentially could change (increase or decrease) after the 
reconsideration. For similar reasons, NMFS also delayed the ability to 
transfer a mothership catcher vessel (MS/CV) endorsement and associated 
catch history assignment from one limited entry trawl permit to another 
in the mothership sector. The ability to sell or trade a limited entry 
permit with the endorsement and catch history remains. The use of the 
catch history assignment to be assigned to a co-op to be fished 
continues. NMFS intends to announce any changes to the amount of catch 
history assignments associated with MS/CV-endorsed limited entry trawl 
permits by April 1, 2013 which is before the May 15 start date for the 
whiting mothership fishery. These delays were expected to be temporary 
in nature and to benefit both small and large entities as they help 
smooth the transition to any changes in how Pacific whiting is 
allocated, and reduce the uncertainty to existing and potential new 
holders of these allocations.
    With these proposed regulations, those who find themselves with 
excess QS (except for widow QS) and IBQ, have until November 30, 2015, 
to divest. MS/CV-endorsed limited entry trawl permit owners will have 
to divest themselves of ownership in permits in excess of the 
accumulation limits by August 31, 2016. This rule allows limited entry 
trawl permit holders in the mothership sector to request a change (or 
transfer) of MS/CV endorsement and its associated CHA beginning 
September 1, 2014. Finally, this rule allows transfer of QS or IBQ, 
except widow rockfish QS, between QS permit holders beginning January 
1, 2014.
    The Small Business Administration has established size criteria for 
all major industry sectors in the US, including fish harvesting and 
fish processing businesses. A business involved in fish harvesting is a 
small business if it is independently owned and operated and not 
dominant in its field of operation (including its affiliates) and if it 
has combined annual 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. 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. A wholesale business 
servicing the fishing industry is a small business if it employs 100 or 
fewer persons on a full-time, part-time, temporary, or other basis, at 
all its affiliated operations worldwide. For marinas and charter/party 
boats, a small business is one with annual receipts not in excess of 
$7.0 million.
    Over the years 1994-2010, there were 65 limited entry trawl fishing 
permit holders that participated in the shoreside whiting fishery and 
37 limited entry trawl fishing permit holders that participated in the 
mothership fishery. Over the years 1998 to 2010, 16 processors have 
participated in the fishery. NMFS NWR now collects small business 
information as part of its permit renewal processes. Based on that 
information and on other information, there are three large companies 
associated with the 16 processors and 13 small companies. Sixteen of 
the limited entry trawl permits that participated in the whiting 
fishery are associated with large companies and 49 of these permits are 
associated with small companies. In the mothership fishery 14 catcher 
vessel permits are

[[Page 81]]

associated with large companies and 23 with small companies.
    No Federal rules have been identified that duplicate, overlap, or 
conflict with the alternatives. Public comment is hereby solicited, 
identifying such rules. A copy of this analysis is available from NMFS 
(see ADDRESSES).
    NMFS issued Biological Opinions under the Endangered Species Act 
(ESA) on August 10, 1990, November 26, 1991, August 28, 1992, September 
27, 1993, May 14, 1996, and December 15, 1999, pertaining to the 
effects of the Pacific Coast groundfish PCGFMP fisheries on Chinook 
salmon (Puget Sound, Snake River spring/summer, Snake River fall, upper 
Columbia River spring, lower Columbia River, upper Willamette River, 
Sacramento River winter, Central Valley spring, California coastal), 
coho salmon (Central California coastal, southern Oregon/northern 
California coastal), chum salmon (Hood Canal summer, Columbia River), 
sockeye salmon (Snake River, Ozette Lake), and steelhead (upper, middle 
and lower Columbia River, Snake River Basin, upper Willamette River, 
central California coast, California Central Valley, south/central 
California, northern California, southern California). These biological 
opinions have concluded that implementation of the PCGFMP for the 
Pacific Coast groundfish fishery is not expected to jeopardize the 
continued existence of any endangered or threatened species under the 
jurisdiction of NMFS, or result in the destruction or adverse 
modification of critical habitat.
    NMFS issued a Supplemental Biological Opinion on March 11, 2006, 
concluding that neither the higher observed bycatch of Chinook in the 
2005 whiting fishery nor new data regarding salmon bycatch in the 
groundfish bottom trawl fishery required a reconsideration of its prior 
``no jeopardy'' conclusion. NMFS also reaffirmed its prior 
determination that implementation of the Groundfish PCGFMP is not 
likely to jeopardize the continued existence of any of the affected 
ESUs. Lower Columbia River coho (70 FR 37160, June 28, 2005) and Oregon 
Coastal coho (73 FR 7816, February 11, 2008) were recently relisted as 
threatened under the ESA. The 1999 biological opinion concluded that 
the bycatch of salmonids in the Pacific whiting fishery were almost 
entirely Chinook salmon, with little or no bycatch of coho, chum, 
sockeye, and steelhead.
    On December 7, 2012, NMFS completed a biological opinion concluding 
that the groundfish fishery is not likely to jeopardize non-salmonid 
marine species including listed eulachon, green sturgeon, humpback 
whales, Steller sea lions, and leatherback sea turtles. The opinion 
also concludes that the fishery is not likely to adversely modify 
critical habitat for green sturgeon and leatherback sea turtles. An 
analysis included in the same document as the opinion concludes that 
the fishery is not likely to adversely affect green sea turtles, olive 
ridley sea turtles, loggerhead sea turtles, sei whales, North Pacific 
right whales, blue whales, fin whales, sperm whales, Southern Resident 
killer whales, Guadalupe fur seals, or the critical habitat for Steller 
sea lions.
    As Steller sea lions and humpback whales are also protected under 
the Marine Mammal Protection Act, incidental take of these species from 
the groundfish fishery must be addressed under MMPA section 
101(a)(5)(E). On February 27, 2012, NMFS published notice that the 
incidental taking of Steller sea lions in the West Coast groundfish 
fisheries was addressed in NMFS' December 29, 2010, Negligible Impact 
Determination (NID) and this fishery has been added to the list of 
fisheries authorized to take Steller sea lions (77 FR 11493, Feb. 27, 
2012). NMFS is currently developing MMPA authorization for the 
incidental take of humpback whales in the fishery.
    On November 21, 2012, the U.S. Fish and Wildlife Service (FWS) 
issued a biological opinion concluding that the groundfish fishery will 
not jeopardize the continued existence of the short-tailed albatross. 
The (FWS) also concurred that the fishery is not likely to adversely 
affect the marbled murrelet, California least tern, southern sea otter, 
bull trout, nor bull trout critical habitat.
    This proposed rule was developed after meaningful consultation and 
collaboration, through the Council process, with the tribal 
representative on the Council. The proposed regulations have no direct 
effect on the tribes.

List of Subjects in 50 CFR Part 660

    Fisheries, Fishing, and Indian fisheries.

    Dated: December 27, 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 stated in the preamble, 50 CFR part 660 is proposed 
to be amended as follows:

PART 660-FISHERIES OFF WEST COAST STATES

0
1. The authority citation for part 660 continues to read as follows:

    Authority:  16 U.S.C. 1801 et seq., 16 U.S.C. 773 et seq., and 
16 U.S.C. 7001 et seq.

0
2. In Sec.  660.140, revise paragraphs (d)(3)(ii)(B)(2) and (d)(4)(v) 
to read as follows:


Sec.  660.140  Shorebased IFQ Program.

* * * * *
    (d) * * *
    (3) * * *
    (ii) * * *
    (B) * * *
    (2) Transfer of QS or IBQ between QS accounts. Beginning January 1, 
2014, QS permit owners may transfer QS (except for widow rockfish QS) 
or IBQ to another QS permit owner, subject to accumulation limits and 
approval by NMFS. QS or IBQ is transferred as a percent, divisible to 
one-thousandth of a percent (i.e., greater than or equal to 0.001%). 
Until January 1, 2014, QS or IBQ cannot be transferred to another QS 
permit owner, except under U.S. court order or authorization and as 
approved by NMFS. QS or IBQ may not be transferred between December 1 
through December 31 each year. QS or IBQ may not be transferred to a 
vessel account. The prohibition on transferability of widow rockfish QS 
is extended indefinitely pending final action on reallocation of widow 
rockfish QS.
* * * * *
    (4) * * *
    (v) Divestiture. Accumulation limits will be calculated by first 
calculating the aggregate non-whiting QS limit and then the individual 
species QS or IBQ control limits. For QS permit owners (including any 
person who has ownership interest in the owner named on the permit) 
that are found to exceed the accumulation limits during the initial 
issuance of QS permits, an adjustment period will be provided after 
which they will have to completely divest their QS or IBQ in excess of 
the accumulation limits. QS or IBQ will be issued for amounts in excess 
of accumulation limits only for owners of limited entry permits as of 
November 8, 2008, if such ownership has been registered with NMFS by 
November 30, 2008. The owner of any permit acquired after November 8, 
2008, or if acquired earlier, not registered with NMFS by November 30, 
2008, will only be eligible to receive an initial allocation for that 
permit of those QS or IBQ that are within the accumulation limits; any 
QS or IBQ in excess of the accumulation limits will be redistributed to 
the

[[Page 82]]

remainder of the initial recipients of QS or IBQ in proportion to each 
recipient's initial allocation of QS or IBQ for each species. Any 
person that qualifies for an initial allocation of QS or IBQ in excess 
of the accumulation limits will be allowed to receive that allocation, 
but must divest themselves of the QS (except for widow rockfish QS) or 
IBQ in excess of the accumulation limits by November 30, 2015. Holders 
of QS or IBQ in excess of the control limits may receive and use the QP 
or IBQ pounds associated with that excess, up to the time their 
divestiture is completed. Once the divestiture period is completed, any 
QS or IBQ held by a person (including any person who has ownership 
interest in the owner named on the permit) in excess of the 
accumulation limits will be revoked and redistributed to the remainder 
of the QS or IBQ owners in proportion to the QS or IBQ. On or about 
January 1, 2016, NMFS will redistribute the revoked QS or IBQ excess 
percentages to the QS or IBQ owners in proportion to their QS or IBQ 
holdings based on ownership records as of January 1, 2016. No 
compensation will be due for any revoked shares.
* * * * *
0
3. In Sec.  660.150, revise paragraph (g)(2)(iv)(B) and add paragraph 
(g)(2)(iv)(C), and revise paragraph (g)(3)(i)(D) to read as follows:


Sec.  660.150  Mothership (MS) Coop Program.

* * * * *
    (g) * * *
    (2) * * *
    (iv) * * *
    (B) Application. NMFS will begin accepting applications for a 
change in MS/CV endorsement registration beginning September 1, 2014. A 
request for a change in MS/CV endorsement registration must be made 
between September 1 and December 31 of each year. Any transfer of MS/CV 
endorsement and its associated CHA to another limited entry trawl 
permit must be requested using a Change in Registration of a 
Mothership/Catcher Vessel Endorsement/Catch History Assignment 
Application form and the permit owner or an authorized representative 
of the permit owner must certify that the application is true and 
correct by signing and dating the form. In addition, the form must be 
notarized, and the permit owner selling the MS/CV endorsement and its 
CHA must provide the sale price of the MS/CV endorsement and its 
associated CHA. If any assets in addition to the MS/CV endorsement and 
its associated CHA are included in the sale price, those assets must be 
itemized and described.
    (C) Effective date. Any change in MS/CV endorsement registration 
from one limited entry trawl permit to another limited entry trawl 
permit will be effective on January 1 in the year following the 
application period.
* * * * *
    (3) * * *
    (i) * * *
    (D) Divestiture. For MS/CV-endorsed permit owners that are found to 
exceed the accumulation limits during the initial issuance of MS/CV-
endorsed permits, an adjustment period will be provided after which 
they will have to completely divest of ownership in permits that exceed 
the accumulation limits. Any person that NMFS determines, as a result 
of the initial issuance of MS/CV-endorsed permits, to own in excess of 
20 percent of the total catch history assignment in the MS Coop Program 
applying the individual and collective rule described at paragraph 
(g)(3)(i)(A) of this section will be allowed to receive such permit(s), 
but must divest themselves of the excess ownership by August 31, 2016. 
Owners of such permit(s) may receive and use the MS/CV-endorsed 
permit(s), up to the time their divestiture is completed. After August 
31, 2016, any MS/CV-endorsed permits owned by a person (including any 
person who has ownership interest in the owner named on the permit) in 
excess of the accumulation limits will not be issued (renewed) until 
the permit owner complies with the accumulation limits.
* * * * *
[FR Doc. 2012-31546 Filed 12-31-12; 8:45 am]
BILLING CODE 3510-22-P