[Federal Register Volume 78, Number 22 (Friday, February 1, 2013)]
[Proposed Rules]
[Pages 7371-7385]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-02005]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 660

[Docket No. 110708376-3052-01]
RIN 0648-BB17


Fisheries Off West Coast States; Pacific Coast Groundfish 
Fishery; Trawl Rationalization Program; Cost Recovery

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 would implement a cost recovery program for the 
Pacific coast groundfish trawl rationalization program, which is a 
catch share program and type of limited access privilege program 
(LAPP), as required by the Magnuson-Stevens Fishery Conservation and 
Management Act (MSA). This action includes regulations

[[Page 7372]]

that affect all trawl rationalization program sectors (Shorebased 
Individual Fishing Quota (IFQ) Program, Mothership Coop Program, and 
Catcher/Processor Coop Program) managed under the Pacific Coast 
Groundfish Fishery Management Plan (FMP).

DATES: Comments on this proposed rule must be received no later than 
11:59 p.m., eastern time on March 18, 2013.

ADDRESSES: You may submit comments on this document, identified by 
NOAA-NMFS-2012-0218, 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-2012-0218, 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 
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.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection of information requirements contained in this 
proposed rule may be submitted to William W. Stelle, Jr., Regional 
Administrator, Northwest Region, NMFS, 7600 Sand Point Way NE., 
Seattle, WA 98115-0070, and to OMB by email to [email protected], or fax to 202-395-7285.

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

SUPPLEMENTARY INFORMATION:

Background

    In January 2011, NMFS implemented a trawl rationalization program, 
a type of catch share program, for the Pacific coast groundfish 
fishery's trawl fleet. The program was adopted through Amendment 20 to 
the FMP and consists of three sectors: an IFQ program for the 
shorebased trawl fleet (including whiting and non-whiting fisheries); 
and cooperative (coop) programs for the at-sea mothership (MS) and 
catcher/processor (C/P) trawl fleets (whiting only). Allocations to the 
limited entry trawl fleet for certain species were developed through a 
parallel process with Amendment 21 to the FMP.
    Since implementation, the Pacific Fishery Management Council 
(Council) and NMFS have been working to address additional regulatory 
requirements associated with the trawl rationalization program. One 
such requirement is cost recovery, where NFMS collects fees from the 
fishing industry to cover part of the costs of management, data 
collection, and enforcement of the trawl rationalization program. This 
rule would create a cost recovery program for the trawl rationalization 
program in compliance with the requirements of the MSA, and based upon 
a recommended methodology developed in coordination with the Council.
    In accordance with the MSA, 16 U.S.C. 1853(c), 1853a(e), 1854(b), 
1854(d)(2), 1855(d), the cost recovery program would collect mandatory 
fees of up to three percent of the ex-vessel value of groundfish by 
sector (Shorebased IFQ Program, MS Coop Program, and C/P Coop Program). 
The Council discussed the structure and methodology of the cost 
recovery program over its April, June, and September 2011 meetings, 
with final Council recommendations to NMFS during the September 2011 
Council meeting. In addition, NMFS received further guidance on these 
issues from the Council at its September 2012 meeting.

Cost Recovery for Trawl Rationalization Versus Fixed Gear Sablefish 
Permit Stacking

    During the April 2011 Council meeting, NMFS presented some general 
questions that initiated discussion regarding how to structure the cost 
recovery program. One issue addressed was whether one cost recovery 
program could be applied to both the trawl rationalization program and 
the sablefish permit stacking program. The Council recommended and NMFS 
is proposing to first pursue creation of the cost recovery program for 
the trawl rationalization program, with the understanding that this 
cost recovery program could then be used to inform a cost recovery 
program for the sablefish permit stacking program via a future 
rulemaking.

Cost Recovery for Trawl Rationalization by Sector

    A second issue raised during the April 2011 Council meeting was 
whether the cost recovery fee should be assessed for the trawl 
rationalization program as a whole, or on a sector-by-sector basis. The 
Council recommended and NMFS is proposing that the cost recovery 
program should outline the fee methodology on a sector-by-sector basis. 
The use of a sector-by-sector approach in determining and assessing the 
fee was chosen due to the unique characteristics and costs associated 
with each of the three program sectors.

Coordinating Cost Recovery With Buyback

    The Council recommended that NMFS structure the cost recovery 
program to coordinate with the buyback program (also called the federal 
fishing capacity reduction program) to reduce the burden on the 
affected public.
    In 2003, NMFS ``bought back,'' for approximately $46 million, 91 
vessels and 239 fishing permits from the groundfish trawl fishery and 
associated corollary fisheries of Dungeness crab and pink shrimp off 
the California, Oregon, and Washington coast. This $46 million buyback 
program included a $36 million loan to the industry that was to be paid 
by assessing buyback fees on landings (70 FR 40225, July 13, 2005). For 
the groundfish fishery, fees for repayment of the loan are to be paid 
on groundfish harvested using Federal trawl permits. Fish sellers are 
required to pay the fee and all parties making the first ex-vessel 
purchase of groundfish (``fish buyers'') are required to collect the 
fee, account for, and forward the fee revenue for the purpose of 
repaying the loan. Participants in the Shorebased IFQ Program and the 
MS Coop Program are subject to the repayment of the buyback loan, while 
the C/P Coop Program is not. Due to similarities in the need to collect 
and document payment of a fee for both the buyback program and the 
proposed cost recovery program, the cost recovery program would utilize 
elements of the buyback program as much as possible.
    For example, for the Shorebased IFQ Program and MS Coop Programs 
only, the cost recovery program would require the payment of fees to 
NMFS at the same time that buyback fees are paid

[[Page 7373]]

(i.e., no later than the 14th of each month). Because the C/P Coop 
Program is not subject to the buyback program, the Council recommended 
and NMFS is proposing that participants in the C/P Coop Program pay 
their fees for the cost recovery program in the last quarter of the 
calendar year and no later than December 31 each year.
    Another example of structuring the cost recovery program to 
coordinate with the buyback program is that the fish buyer would be 
responsible for payment of the fees to NMFS. For the Shorebased IFQ 
Program, the first receiver site license holder would be the party 
responsible for collecting and remitting cost recovery fees to NMFS. 
For the MS Coop Program, the parties jointly and severally responsible 
for collecting and remitting the cost recovery fee would be the owner 
of a vessel registered to an MS permit, the operator of a vessel 
registered to an MS permit, and the owner of the MS permit registered 
to that vessel.
    While the C/P Coop Program is not subject to buyback, NMFS is 
proposing to structure the cost recovery program for all sectors 
similar to buyback. This means there may be cases where regulations are 
applied to the C/P Coop Program that would not necessarily be applied 
if the cost recovery program was not coordinating with the buyback 
program. Using the term ``fish buyer'' to apply to the C/P Coop Program 
is one such example. Catcher/processors are not in practice referred to 
as ``fish buyers'' because they are vessels that catch and process 
their own fish (i.e., they do not buy it from themselves). However, to 
reduce complexity and keep the regulations as similar as possible for 
all three sectors, NMFS is proposing to define C/Ps as ``fish buyers,'' 
but only for purposes of the cost recovery program. Thus, for the C/P 
Coop Program, the fish buyer would be the responsible party and would 
include: the owner of a vessel registered to a C/P-endorsed limited 
entry trawl permit, the operator of a vessel registered to a C/P-
endorsed limited entry trawl permit, and the owner of the C/P-endorsed 
limited entry trawl permit registered to that vessel. This situation is 
similar to that for the responsible party in the MS Coop Program. For 
the MS and C/P Coop Programs, all three parties are jointly and 
severally responsible for the obligations of a fish buyer.
    In an effort to further coordinate the cost recovery program with 
the buyback program, NMFS intends to use the same online portal for 
payment as the buyback program, Pay.gov. By using the same portal, 
users are able to go to one place to make payments, maintain one 
profile, click on a link to pay buyback fees or click on a link to pay 
cost recovery fees. The forms submitted with payment for each fee would 
be contained in each link. If the user has an account with Pay.gov, 
information from the user's profile (e.g., name, address, etc.) would 
auto-populate on both forms, streamlining the reporting and payment 
process. An example of a similar system is a bank account where you 
have both a credit card and a mortgage payment. You can go to the 
bank's one Web site and use your one user profile to make arrangements 
to pay both your credit card account and your mortgage, but they are 
separate links on the bank's Web site.
    NMFS is exploring using one form to submit two payments, one 
payment to each program (cost recovery and buyback). While NMFS is 
exploring using one form for both programs, this rule proposes a 
separate cost recovery form for two reasons. First, it would delay the 
cost recovery rule to propose one form. Second, in exploring the use of 
one combined form for both programs, NMFS has found several drawbacks 
in addition to the benefits.
    Using one combined form for both programs would likely make it 
easier for the IFQ and MS fish buyers to enter the required information 
(although they would still be required submit multiple payments 
directed to different accounts within NMFS). However, the drawbacks to 
one combined form for both programs include the potential for increased 
misreporting/mispayment, different consequences for misreporting/
mispayment (late fee versus nonrenewal of permit/license), and 
increased time to correct errors, potentially harming business 
operations.
    The cost recovery program and the buyback program are different 
programs with different purposes within NMFS. One is temporary and used 
to pay back a fixed term loan (buyback) while the other is used to 
recover part of NMFS' ongoing costs to manage the fishery (cost 
recovery). The cost recovery form would cover three sectors of one 
fishery (groundfish). The buyback form has fields for six loan payments 
in six separate fisheries, including state-run crab and shrimp 
fisheries. The cost recovery and buyback programs also have different 
consequences for misreporting or mispayment. For buyback, the 
consequences may result in late fees. For cost recovery, the 
consequences may result in a limited entry permit or first receiver 
site license not being renewed or reissued, which may result in lost 
fishing time or lost ability for first receivers to purchase 
groundfish. Using the bank account example, mispayment of your credit 
card online results in late charges (similar to buyback), while 
mispayment of your mortgage has different potential consequences. It is 
in the user's interest to keep these payments separate as they have 
very different consequences for nonpayment, and the user would likely 
not want to risk delay of their permit renewal because of an entry on 
the wrong line of the form.
    In the first year of the buyback program, there were over 200 cases 
of misreporting/mispayment largely due to an entry on the wrong line of 
the fee collection form. Combining reporting for cost recovery payments 
on the same form as buyback could magnify these misreporting/mispayment 
issues. Any misreporting/mispayment on a combined form would likely 
take NMFS longer to correct because two different programs would be 
coordinating to decipher the error, which program it applies to, and 
then to pursue correction/payment. Because these two programs have very 
different misreporting/mispayment consequences, the increased time it 
would take to correct any misreporting/mispayment could harm the 
business operations of the fish buyers due to delayed opportunities. 
Another drawback to a combined form is that any audits of fish buyers 
by either program would be more complex, would involve both programs, 
and would take longer. If an audit uncovers mispayment/misreporting and 
takes a longer time to correct, it could also harm the business 
operations of the fish buyers.
    With this rule, NMFS is proposing to use one online portal, 
Pay.gov, which would include a link to make payments to both programs 
(cost recovery and buyback). The cost recovery form that would be on 
the Pay.gov link would be designed to look very similar to the buyback 
form, with the addition of a box to fill out the weight (in lbs) and 
fees paid based on the cost recovery program fee percentage (which is 
different than the buyback fee percentage). In addition, certain fields 
on the form would auto-populate for users with an account on Pay.gov. 
With this system, NMFS expects that the ex-vessel value reported on the 
cost recovery form should match that reported on the buyback form, 
because both forms report based on the value of all groundfish species. 
NMFS is seeking public comment on the benefits and drawbacks of one 
form versus two. NMFS may implement one form for both programs at the 
final rule stage

[[Page 7374]]

depending on the comments received or other considerations, if 
appropriate.
    While NMFS is proposing a cost recovery program structure that is 
similar to the buyback program, there are some differences. For 
example, NMFS is not proposing the $100 threshold for payment that is 
in the buyback program at 50 CFR 600.1102(i)(3). In addition, NMFS is 
only proposing online payment of fees through Pay.gov (i.e., NMFS would 
not accept checks for payment of the cost recovery program fees). This 
is consistent with Council guidance at its September 2012 meeting.
    Because NMFS is proposing to only allow online payment of fees, 
there is no need to maintain the $100 threshold that is in the buyback 
program. The buyback program requires fish buyers to remit payment only 
when the amount due exceeds $100. If the amount due is less than $100, 
it is carried forward. This reduces transaction costs because the 
buyback program accepts checks for payment, and processing checks for 
amounts less than $100 is inefficient. Since NMFS intends to accept 
only online payment, implementing a similar $100 threshold for the cost 
recovery program is unnecessary.
    The portion of the affected public actually responsible for 
remitting payment to NMFS is limited to fish buyers. By requiring 
online payment, the payment process is more streamlined and more 
secure. In addition, it reduces NMFS' administrative burdens associated 
with processing fee payments, thereby reducing the costs associated 
with implementing the cost recovery program. NMFS does not expect this 
provision to create additional burden for the fleet, since IFQ first 
receivers are already required to use computers for reporting in the 
trawl rationalization program and the at-sea whiting fleet is comprised 
of businesses that are comfortable with online business transactions.

Fee Amount

    The cost recovery fee amount due would be calculated by multiplying 
ex-vessel value by the applicable fee percentage, as proposed at Sec.  
660.115(c). For the C/P Coop Program, an alternate approach to 
calculating the fee amount would be to directly bill the sector. While 
this approach is not included in the regulatory language in this 
proposed rule, NMFS is soliciting public comment on this approach which 
is described in more detail in the preamble under ``Fee Payment and 
Collection.''

Ex-Vessel Value

    Ex-vessel value by sector would be used in the cost recovery 
program in two ways: (1) The fee amount charged in a calendar year 
would be based on a percentage (not to exceed three percent) of the ex-
vessel value of all groundfish, and (2) the percentage used to 
determine the fee amount would be calculated in part from ex-vessel 
value over the previous fiscal year.
    Because the trawl rationalization program manages all groundfish 
species, the cost recovery program for each sector (IFQ, MS, and C/P) 
would be based on the value of all groundfish species. This is 
consistent with the buyback program, which collects fees from fish 
buyers in the Shorebased IFQ Program and the MS Coop Program based on 
the value of all groundfish. Initially, the Council determined that 
cost recovery should apply to the ex-vessel value of IFQ species for 
the Shorebased IFQ Program and to the ex-vessel value of Pacific 
whiting for the at-sea sectors (MS and C/P). However, at its September 
2012 meeting, the Council provided NMFS with further guidance on this 
issue and supported that the ex-vessel value for each sector should be 
based on the value of all groundfish species.
    Ex-vessel value (proposed at Sec.  660.111 for the cost recovery 
program) would include all compensation (based on an arm's length 
transaction between a buyer and seller) that a fish buyer pays to a 
fish seller in exchange for groundfish species, including the value of 
all in-kind compensation and all other goods or services exchanged in 
lieu of cash. Ex-vessel value would also be determined before any 
deductions are made for transferred or leased allocation, or for any 
goods or services. For the Shorebased IFQ Program, the ex-vessel value 
would be based on the value of all groundfish species from IFQ 
landings. For the MS Coop Program, the ex-vessel value would be based 
on the value of all groundfish species delivered by a catcher vessel to 
an MS-permitted vessel. For the C/P Coop Program, the ex-vessel value 
would be based on the value as determined by the aggregate pounds of 
all groundfish species harvested by the vessel registered to a C/P-
endorsed limited entry trawl permit, multiplied by the MS Coop Program 
average price per pound as announced by NMFS. For the C/P Coop Program, 
ex-vessel value is not available because there is no payment between a 
catcher vessel and a processor because the same vessel both catches and 
processes. Therefore, MS pricing is used as a proxy because it is a 
similar fishery (both are at-sea whiting fisheries). NMFS will announce 
the MS pricing that the C/P Coop Program would use in the upcoming 
calendar year with announcement of the fee percentage. See the preamble 
discussion under ``Notification of the Fee Percentage and MS Pricing'' 
for the notification process and how MS pricing will be calculated for 
the first year of the program.

Fee Percentage Calculation

    In addition to structuring the cost recovery program fee payment to 
coordinate with the buyback program requirements, NMFS is proposing to 
structure the fee percentage calculation to be similar to that used by 
NMFS, Alaska Region for their IFQ programs (halibut/sablefish, 
rockfish, crab) because these fisheries have experience implementing 
cost recovery that our Region can utilize. In addition, some 
participants in the trawl rationalization program either participate in 
or are familiar with requirements for Alaska fisheries, so use of this 
formula would provide consistency to the regulated public.
    The fee percentage would be calculated using this formula: (DPC/V) 
x 100, where V is the total ex-vessel value of all groundfish species 
from the previous fiscal year for each of the three sectors as 
described above, and DPC (direct program costs) are the direct, 
recoverable program costs attributable to the sector. The DPC was 
further defined through the Council process, and was determined to be 
the incremental costs associated with ongoing management, data 
collection, and enforcement activities that would not have been 
incurred but for the implementation of the program (i.e., incremental 
costs). Both the V and the DPC variables in the fee percentage equation 
may change every year, but the resulting percentage may not exceed 
three percent as required by the MSA.
    As described in the Supplemental NMFS Report (Agenda Item H.2.b), 
available at the September 2012 Council meeting, data from the previous 
fiscal year can be used to determine the fee percentage to be used and 
applied to calculate the cost recovery fee amounts for the next 
calendar year. Once the fiscal year has ended, NMFS plans to calculate 
the fee percentage in October and/or November each year. Given that the 
fee percentage to be applied in an upcoming calendar year will be 
determined based on NMFS' incremental costs and ex-vessel revenues from 
the previous fiscal year, the actual amount collected in a calendar 
year could differ from the costs NMFS intended to recover. For

[[Page 7375]]

example, if the incremental costs from fiscal year 2012 were equal to 
$100,000, and the ex-vessel value from that sector in fiscal year 2012 
was $3.75 million, the fee percent to be applied in calendar year 2013 
would be 2.67 percent, as calculated by: (100,000/3,750,000) x 100 = 
2.67.
    Under this example, in calendar year 2013, fish buyers would 
determine the fee due by collecting 2.67 percent of the ex-vessel 
revenue of any given delivery. For calendar year 2013, the total fee 
amount collected by NMFS will depend on the actual ex-vessel revenues 
for 2013. To the extent ex-vessel revenues in calendar year 2013 are 
different from fiscal year 2012; the amount NMFS collects could be 
slightly over or under NMFS' costs from fiscal year 2012. Accordingly, 
NMFS will ensure that the aggregate fees being collected are 
appropriate by making an adjustment to the following calendar year's 
fee percentage.
    For example, assume that NMFS collected $125,000 rather than the 
$100,000 in calendar year 2013 because ex-vessel revenue increased in 
2013 as compared to fiscal year 2012. In that case, if NMFS' 
incremental costs for fiscal year 2013 remained the same at an amount 
of $100,000, rather than using $100,000 as the DPC when calculating the 
fee percentage to be applied in 2014, NMFS would use $75,000. 
Therefore, the fee percentage in 2014 would be reduced to account for 
any amount collected in excess.
    NMFS proposes the calculation for the fee percentage at Sec.  
660.115(b). The process to notify the public of the applicable fee 
percentage and how the fee percentage will be calculated for the first 
year of the program are described in this preamble under ``Notification 
of the Fee Percentage and MS Pricing.''

Determining Program Costs

    There was extensive discussion between NMFS, industry, and the 
Council, during the April, June, and September 2011 Council meetings, 
regarding how best to determine which specific costs associated with 
ongoing management, data collection and analysis, and enforcement 
activities were eligible to be recovered. The Council formed a Cost 
Recovery Committee (CRC) tasked with assisting NMFS to identify 
specific incremental costs on a sector-by-sector basis, and to identify 
any opportunities for long-term cost efficiencies within the program. 
The Council recommended using Appendix B of the CRC Report from the 
September 2011 Council meeting (Agenda Item G.6.b) as guidance in 
calculating incremental costs associated with the program. An emphasis 
was placed on the need for transparency within cost accounting 
procedures, and ensuring that the Council has an ongoing, periodic role 
in reviewing fee percentages. NMFS is committed to transparent cost 
accounting practices, including publishing an annual report detailing 
recoverable costs. See the ``NMFS Annual Report'' section of the 
preamble for more details and the timing of the annual report. In 
addition, between the proposed and final rule for the cost recovery 
program, NMFS intends to discuss with the states whether the costs of 
some state-performed activities resulting from the trawl 
rationalization program are costs that could be recovered, consistent 
with the requirements of the MSA. During this time, NMFS will also be 
determining its DPC from the previous fiscal year (October 1, 2011 
through September 30, 2012) to be used for the 2013 fee percentage 
calculation. The 2013 fee percentage would be announced in the preamble 
for the final rule.

Notification of the Fee Percentage and MS Pricing

    In the last quarter of the calendar year, NMFS would announce the 
next year's applicable fee percentage and, for the C/P Coop Program, 
the applicable MS pricing. Once the fiscal year has ended, NMFS plans 
to calculate the fee percentage in October and November each year and 
announce the fee percentage to be applied for the next calendar year in 
November or December before the fee percentage would apply on January 
1. The fee percentage by sector would be announced each year in a 
Federal Register notice. This notice would also include the MS pricing 
to be used by the C/P Coop Program in determining their ex-vessel 
value. The MS pricing will be based on values reported by the MS Coop 
Program from the previous fiscal year. The notification would also 
include information on how and where to pay cost recovery fees.
    For the first year of the cost recovery program, NMFS proposes 
publishing the fee percentages for each sector and, for the C/P Coop 
Program, the MS pricing as a part of the final rule for the cost 
recovery program. At its September 2011 meeting, the Council indicated 
that the fee percentages for the first year for each of three sectors 
(Shorebased IFQ Program, MS Coop Program, and C/P Coop Program) should 
not exceed three percent, two percent, and one percent, respectively. 
NMFS will calculate the actual fee percentage by sector between the 
proposed and final rule using the best available information and 
following the process explained in the preamble at ``Fee Percentage 
Calculation.'' The calculation may result in percentages above the 
Council recommendation, but would not exceed the MSA 3 percent cap. For 
the first year of the cost recovery program, NMFS may calculate the ex-
vessel value to be used in the fee percentage calculation and the MS 
pricing using ex-vessel values reported on the buyback form or 
electronic fish tickets. Cost recovery fee collection would begin when 
the final rule becomes effective and would not be retroactive. In 
addition, NMFS will not include retroactive fees that were not 
collected in 2013, when calculating the fee percentage for 2014.
    NMFS proposes the publication and notification process at Sec.  
660.115(b)(2).

NMFS Annual Report

    NMFS intends to publish an annual report on the cost recovery 
program, likely in the spring of each year. The report would include 
information such as the fee percentage calculation, program costs, and 
ex-vessel value by sector. The report would likely be similar to those 
used by the Alaska Region in their IFQ Cost Recovery Programs (http://www.fakr.noaa.gov/ram/ifqfees.htm and http://www.fakr.noaa.gov/sustainablefisheries/crab/crfaq.htm) and may be included in the annual 
Trawl Rationalization Report. The report would be made available to the 
public electronically via the NMFS Northwest Region Groundfish Web site 
http://www.nwr.noaa.gov/Groundfish-Halibut/Groundfish-Fishery-Management/Trawl-Program/index.cfm.

Fee Payment and Collection

    The structure of fee payment and collection for the Shorebased IFQ 
Program and MS Coop Program is proposed to be different than for the C/
P Coop Program. At the end of the calendar year, NMFS would calculate 
and announce the fee percentage to be applied in the upcoming year for 
all three sectors. For the Shorebased IFQ Program, the IFQ first 
receiver (first receiver site license holder), as the fish buyer, would 
collect the fee from each catcher vessel at the time of landing 
groundfish in the IFQ fishery (fish seller). The IFQ first receiver 
would hold those fee amounts in a separate deposit account. Each fish 
buyer (IFQ first receiver) would be required to maintain a segregated 
account at a federally insured financial institution for the sole 
purpose of depositing collected fee revenue and disbursing the fee 
revenue directly to NMFS. This account is called a ``deposit account,'' 
as proposed in regulation at

[[Page 7376]]

Sec.  660.115(d)(1)(ii)(A). Each fish buyer would also be required to 
deposit all collected fee revenue not previously deposited that the 
fish buyer collects through a date not more than two calendar days 
before the date of deposit. Neither the deposit account nor the 
principal amount of deposits in the account may be pledged, assigned, 
or used for any purpose other than aggregating collected fee revenue 
for disbursement to NMFS. The fish buyer would be entitled, at any 
time, to withdraw deposit interest, if any, but never deposit 
principal, from the deposit account for the fish buyer's own use and 
purposes. The fish buyer would be responsible for remitting payment to 
NMFS on a monthly basis at the same time the buyback fee is due (i.e., 
no later than the 14th of each month, or more frequently if the amount 
in the account exceeds the account limit for insurance purposes). 
Payment to NMFS would be the full amount of deposit principal from the 
deposit account. NMFS is proposing regulatory language for this section 
that very closely mirrors buyback program regulatory language from 
Sec.  600.1102(i).
    For the MS Coop Program, the structure of fee payment and 
collection would be the same as for the Shorebased IFQ Program, except 
that the fish buyer and fish seller would be different and, because the 
fleet operates at sea, there is no ``landing.'' For the MS Coop 
Program, each catcher vessel (fish seller, including vessels registered 
to an MS/CV-endorsed limited entry trawl permit and any limited entry 
trawl permits without an MS/CV endorsement while they are participating 
in the MS Coop Program) would be charged the fee at the time of 
delivery to the mothership (fish buyer--defined as the owner of a 
vessel registered to an MS permit, the operator of a vessel registered 
to an MS permit, and the owner of the MS permit registered to that 
vessel). The fish buyer would then be responsible for remitting payment 
to NMFS monthly in coordination with the buyback fee (i.e., no later 
than the 14th of each month). For any post-delivery payments by the 
mothership to the catcher vessel, the mothership shall charge the fee 
from the catcher vessel at the time of payment and remit that fee to 
NMFS in the upcoming month's payment.
    For the C/P Coop Program, the structure of fee payment and 
collection would be different than the Shorebased IFQ and MS Coop 
Programs. At the end of the calendar year, with NMFS' announcement of 
the fee percentage to be applied in the upcoming year, NMFS would also 
announce the MS pricing to be used by the C/P Coop Program to calculate 
their fee amount in the upcoming year. For the C/P Coop Program, the C/
P (fish buyer--defined as the owner of a vessel registered to a C/P-
endorsed limited entry trawl permit, the operator of a vessel 
registered to a C/P-endorsed limited entry trawl permit, and the owner 
of the C/P-endorsed limited entry trawl permit registered to that 
vessel) would be responsible for paying the full fee in the last 
quarter of the calendar year and by December 31 each year. The fee 
would be for the harvests of groundfish for the calendar year by each 
vessel registered to a C/P-endorsed limited entry trawl permit. For the 
purposes of the cost recovery program, the C/P would be described as 
both the fish buyer and fish seller. Unlike the Shorebased IFQ Program 
and the MS Coop Program, fish buyers in the C/P Coop Program would not 
be required to maintain segregated deposit accounts because the fish 
seller and the fish buyer is always the same entity and they only make 
one payment to NMFS per year.
    As mentioned above under ``Fee Amount,'' for the C/P Coop Program, 
there could be an alternate approach to calculating the fee amount. 
Instead of multiplying the ex-vessel value (using MS pricing) by the 
fee percentage, NMFS could directly bill the sector in the last quarter 
of the year so long as the value for DPC of the C/P Coop Program in the 
fee percentage calculation for the previous fiscal year is an amount 
equal to or less than three percent of the ex-vessel value of the 
fishery (using MS pricing). Under this alternate approach, NMFS would 
still calculate the fee percentage using information from the previous 
fiscal year in order to ensure that the recovery fee would not exceed 
three percent. NMFS would also still announce the amount due from the 
C/P Coop Program in the fall before the fishing year in which the fee 
amount would be applied. This way, the C/P Coop Program would know at 
the start of the fishing year how much money would be due to NMFS for 
cost recovery at the end of the year. Under this alternate approach, 
the C/P Coop would be responsible for figuring out which ``fish 
buyers,'' as defined for the cost recovery program, are responsible for 
which portion of the payment and notifying NMFS. NMFS would then bill 
each fish buyer accordingly. This alternate approach would result in 
more accurate payment and less adjustments for over or under payment 
between years. While this approach is not included in the regulatory 
language in this proposed rule, NMFS is soliciting public comment on 
this approach and may implement it in the final rule.
    NMFS proposes fee payment and collection regulations at Sec.  
660.115(d)(1) for the Shorebased IFQ Program and the MS Coop Program, 
and at Sec.  660.115(d)(2) for the C/P Coop Program. NMFS proposes to 
define ``fish buyer'' and ``fish seller'' at Sec.  660.111.

Recordkeeping, Reporting, and Auditing

    Similar to the buyback program requirements at Sec.  
600.1102(i)(4), each fish buyer would be required to maintain certain 
information, in a secure and orderly manner, for a period of at least 
three years from the date of each transaction involved. The 
recordkeeping requirements for the cost recovery program vary by sector 
and are proposed at Sec.  660.113(b)(5)(ii) for the Shorebased IFQ 
Program, Sec.  660.113(c)(5)(ii) for the MS Coop Program, and Sec.  
660.113(d)(5)(ii) for the C/P Coop Program. The fish buyer would be 
required to maintain records by landing, delivery, or harvest for the 
IFQ, MS, and C/P sectors, respectively. For the Shorebased IFQ Program, 
if electronic fish tickets contain some or all of the data that Sec.  
660.113(b)(5)(ii) proposes to require, then fish buyers could use such 
records to meet appropriate portions of this section's recordkeeping 
requirements. In addition to records by landing, delivery, or harvest, 
fish buyers would be required to maintain records of all fee collection 
deposits to and disbursements from the deposit account. For the 
Shorebased IFQ and MS Coop Programs, this would include the following 
information: the dates and amounts of deposits, the dates and amounts 
of disbursements to NMFS, and the dates and amounts of disbursements to 
the fish buyer or other parties of interest earned on deposits. For the 
C/P Coop Program, which would not be required to have a separate 
deposit account, this would include the following information: the date 
of each fee disbursement and the total amount disbursed.
    NMFS proposes reporting requirements that differ by sector. All 
three sectors would be required to complete a cost recovery form online 
with fee payment (as described above in the preamble under 
``Coordinating Cost Recovery with Buyback''). However, the contents of 
what is reported in the form would vary by sector. In general, each 
fish buyer would be required to report their name, address, phone 
number, identifier (state buyer code or USCG vessel documentation 
number), dates, weight of groundfish, ex-vessel value, and fee 
collected.

[[Page 7377]]

    NMFS also proposes additional reporting requirements for the at-sea 
whiting sectors (MS and C/P) to verify information reported on the cost 
recovery form. All three sectors require 100 percent monitoring which 
can be used to verify weights of groundfish. The Shorebased IFQ Program 
also already requires reporting weight and ex-vessel value through 
electronic fish tickets. This information can be used by NMFS to verify 
that fish buyers are making accurate cost recovery payments and 
reporting accurate information on the cost recovery form. The at-sea 
sectors do not have a similar way to verify the ex-vessel value they 
have paid or reported. In order to hold the three sectors to similar 
standards and to ensure fair and accurate fee payment among the 
sectors, NMFS proposes to require an annual report from the at-sea 
sectors. While the buyback program only requires an annual report of 
fish buyers in the MS Coop Program if requested by NMFS during an audit 
(as specified at Sec.  600.1102(i)(5)), NMFS proposes for the cost 
recovery program to require an annual report from fish buyers in the MS 
and C/P Coop Programs. The report would be due by March 31 of the year 
following the fishing year (which is January 1--December 31). This 
would align with the deadline for the coop report to NMFS, streamlining 
when NMFS receives sector information. However, the cost recovery 
annual report would be submitted by fish buyers rather than the coop 
managers. The cost recovery annual report submitted by fish buyers 
would vary slightly between the at-sea sectors and is proposed at Sec.  
660.113(c)(5)(i)(B) for the MS Coop Program and Sec.  
660.113(d)(5)(i)(B) for the C/P Coop Program. The annual report 
submitted by fish buyers generally would include, but is not limited 
to: total weight, total ex-vessel value, total fee amounts collected, 
and dates and amounts of disbursement(s) to the Fund. NMFS is proposing 
an annual report for both of the at-sea sectors for fairness and 
consistency; however, there are some distinctions between the sectors. 
Because in the C/P Coop Program the fish buyer and fish seller are the 
same entity, because they would only pay at end of year, because they 
would not be required to have a deposit account, and because they are 
not paying the fee amount based on their own ex-vessel value (they pay 
based on MS ex-vessel value), NMFS solicits public comment on the need 
for an annual report in the C/P Coop Program. NMFS considered whether 
the mandatory economic data collection (EDC) report, required at Sec.  
660.114, could be used to verify information reported by the at-sea 
sectors. However, it would be nearly two years before EDC information 
would be available for comparison to ex-vessel values reported for cost 
recovery. If NMFS used that information to pursue any mispayments, it 
could cause problems for the fish buyers and fish sellers whose 
business arrangements may have changed over time. Therefore, NMFS is 
proposing the annual report as a more timely method to verify payment 
and values reported on the cost recovery form.
    NMFS proposes reporting requirements that vary by sector at: Sec.  
660.113(b)(5)(i) for the Shorebased IFQ Program, Sec.  660.113(c)(5)(i) 
for the MS Coop Program, and Sec.  660.113(d)(5)(i) for the C/P Coop 
Program.
    NMFS or its agents may audit the financial records of fish buyers 
and fish sellers in each sector in order to ensure proper fee payment, 
collection, deposit, disbursement, accounting, recordkeeping, and 
reporting. Fish buyers and fish sellers must respond to any inquiry by 
NMFS or an NMFS agent within 20 calendar days of the date of issuance 
of the inquiry, unless an extension is granted by NMFS. Fish buyers and 
fish sellers must make all relevant records available to NMFS or NMFS' 
agents at reasonable times and places and promptly provide all 
requested information reasonably related to these records. NMFS may 
employ a third party agent to conduct the audits. The NMFS auditor may 
review and request copies of additional data provided by the submitter, 
including but not limited to: previously audited or reviewed financial 
statements, worksheets, tax returns, invoices, receipts, and other 
original documents substantiating the data submitted. NMFS proposes 
regulations on audits at Sec.  660.115(d)(4)(iii).

Failure to Pay

    If a fish buyer or fish seller is found responsible for failure to 
pay all or a portion of the cost recovery program fee, NMFS may pursue 
an enforcement action for violation of the MSA, and/or may forward the 
issue to the U.S. Department of Treasury for collections. In addition, 
the Council recommended, and NMFS is proposing, a linkage between 
failure to pay and non-renewal of a limited entry MS permit, non-
renewal of C/P-endorsed limited entry permit, and non-issuance of IFQ 
first receiver site license. This mechanism is being proposed as an 
additional means for ensuring payment. Failure to pay would only affect 
permit renewal and would not affect permit transfers (i.e., changes in 
owner of the permit or the vessel registered to the permit).
    If NMFS determines a fish buyer, as the party responsible for 
payment to NMFS, has not submitted a complete cost recovery form and 
corresponding payment by the due date, NMFS would at any time 
thereafter notify the fish buyer in writing via an initial 
administrative determination (IAD) letter.
    Fish buyers that receive an IAD letter would have 30 calendar days 
to pay the specified amount or appeal the IAD. All appeals must be 
submitted to NMFS in writing and must include any relevant information 
to support the appeal. If the fish buyer does not appeal and is still 
out of compliance, NMFS would notify the fish buyer via a final 
decision letter and would require payment within 30 calendar days of 
the final decision letter. If payment is still not received, NMFS would 
forward the case to the appropriate authorities for the purposes of 
collection. From the date on the final decision, if the fish buyer is 
determined to be out of compliance, NMFS would not renew any subject MS 
permit or C/P-endorsed limited entry trawl permit, or reissue an IFQ 
first receiver site license until all cost recovery fees due have been 
paid.
    NMFS proposes prohibitions at Sec.  660.112(a)(6) and the IAD and 
appeals process at Sec.  660.115(d)(3)(ii).
    NMFS advises the public that NMFS National Appeals Office (http://www.nmfs.noaa.gov/mb/appeals/mb7.htm) is expected to publish a final 
rule that may affect the appeals process for the cost recovery program. 
The National Appeals Office proposed rule (77 FR 33980, June 8, 2012) 
would establish procedures for the National Appeals Office to review, 
and if necessary correct, decisions about certain limited access 
privilege programs under Section 303A of the MSA, 16 U.S.C. 1853a. If 
the National Appeals Office rule goes final before the cost recovery 
program rule and if it would affect the appeals process for cost 
recovery, the cost recovery program final rule would announce those 
changes.
Housekeeping
    NMFS proposes to remove paragraphs at Sec. Sec.  660.150(d)(5) and 
660.160(d)(5) that were previously placeholders for the cost recovery 
program. These paragraphs had the responsibility for payment falling on 
the coop permit when it should be on the MS permit and the C/P-endorsed 
limited entry permit, respectively.
    NMFS proposes to remove paragraphs on initial issuance of MS 
limited entry

[[Page 7378]]

permits and C/P endorsements on limited entry trawl permits at 
Sec. Sec.  660.150(f)(6) and 660.160(e)(6), respectively. These 
paragraphs are no longer needed because they were for a one-time 
issuance of these permits and endorsements and the deadline to apply 
was November 1, 2010. NMFS issued these permits and endorsements to 
qualifying applicants and they became effective beginning in 2011. NMFS 
is not proposing to remove the paragraphs on quota share (QS) permits 
and MS/CV endorsements because these sections of the regulations may be 
changed as a result of litigation.
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.
    The Council prepared a final environmental impact statement (EIS) 
for Amendment 20 and Amendment 21 to the Pacific Coast Groundfish FMP. 
The Amendment 20 and 21 EISs are available on the Council's Web site at 
http://www.pcouncil.org/ or on NMFS' Web site at http://www.nwr.noaa.gov/Groundfish-Halibut/Groundfish-Fishery-Management/Trawl-Program/index.cfm. The regulatory changes in this proposed rule 
were categorically excluded from the requirement to prepare a NEPA 
analysis.
    Pursuant to the procedures established to implement section 6 of 
Executive Order 12866, the Office of Management and Budget has 
determined that this proposed rule is not significant.
    An initial regulatory flexibility analysis (IRFA) was prepared, as 
required by section 603 of the Regulatory Flexibility Act (RFA). The 
IRFA describes the economic 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 Regulatory Impact Review (RIR) was also 
prepared on the action and is included as part of the IRFA. A copy of 
the IRFA is available from NMFS (see ADDRESSES) and a summary of the 
IRFA, per the requirements of 5 U.S.C. 604(a) follows:
    The cost recovery program is a regulatory amendment that further 
implements Amendment 20 to the FMP. While cost recovery is required by 
the MSA, the Council did consider alternative ways of recovering costs. 
Cost recovery was analyzed in the Amendment 20 EIS and additional 
implementation options were discussed over the Council's April, June, 
and September 2011, and September 2012 meetings.
    The regulations proposed in this rule are the basis of the Council 
and NMFS exploring various options. In the Amendment 20 EIS, Appendix 
A, Section A-2.3.3.a and b, provides some options for the cost recovery 
and fee structure in the Shorebased IFQ Program. The Amendment 20 EIS, 
Appendix A options for the Shorebased IFQ Program included options for 
fees of up to three percent of the ex-vessel value, consistent with the 
MSA and full cost recovery. The full cost recovery option would be 
achieved through landing fees and privatization of elements of the 
management system (noting that stock assessments and electronic fish 
tickets would not be privatized). The Council estimated that initially 
the costs of the Shorebased IFQ Program would exceed the three percent 
fee, so the Council also considered adjusting the provisions of 
tracking and monitoring program so that the three percent fee covers 
the agency costs. Appendix B to the Amendment 20 EIS mentions that cost 
recovery may apply to the MS and C/P Coop Programs, but does not 
discuss options.
    The Council further discussed the structure and methodology of the 
cost recovery program over its April, June, and September 2011 
meetings, with final Council recommendations to NMFS during the 
September 2011 Council meeting and further guidance on these issues at 
its September 2012 meeting. Some of the options considered by the 
Council over these meetings were: (1) Cost recovery for the trawl 
rationalization program and the sablefish permit stacking program at 
the same time; (2) cost recovery shared by all three sectors (1 
program), shared by MS and C/P Coop Programs and separate cost recovery 
for IFQ (2 programs), or a program for each sector (3 programs); (3) 
what entity should pay the fee in each sector (catcher vessel, fish 
buyer, coop); (4) how fee collection should be structured (bill entity 
in last quarter of year, bill at time of landing and collect monthly); 
(5) link to permitting requirements (no linkage, suspend quota 
transactions until payment, suspend permit renewal until payment); (6) 
how agency costs are identified (implement a tracking system, random 
sampling, yearly projections); (7) how ex-vessel value is calculated 
(from EDC, from buyback, from electronic fish ticket, from paper fish 
tickets, use shorebased pricing and at-sea tonnage, require new 
document); and (8) what groundfish species to include when calculating 
ex-vessel value.
    The administrative costs of this program are mainly associated with 
groundfish species and bycatch of Pacific halibut as managed under the 
trawl rationalization program. Human observation and electronic 
reporting tools account for all catch of these species. Computer 
programs match the catch against individual species quotas (quota 
pounds or QP) or coop allocations. All vessels must carry observers who 
watch and measure the harvests and discards of these groundfish. All 
shore plants must have catch monitors to watch all vessel offloads and 
record the species and amounts landed. In the Shorebased IFQ Program, 
online accounting programs issue and track QS, QP, and catch by 
species. Computer programs compare fish tickets to catch monitor 
reports and calculate the QP landed by an individual vessel. Observer 
reports are used to account for the vessel's discards. An online 
``banking system'' is used to debit landings and discards against the 
vessel's QP. Quota pounds are deposited to a vessel's account based on 
a transfer from a QS account or from another vessel account.
    The following provides some perspective on the economic dimensions 
of the fisheries. Over the years 2007 through 2010, according to 
Council estimates, shorebased ex-vessel revenues have averaged $38 
million, the mothership sector $8 million, and the catcher-processor 
sector $12 million (http://www.pcouncil.org/groundfish/background/document-library/historical-landings-and-revenue-in-groundfish-fisheries/, Tables 22 and 28). Based on PacFIN data and on NMFS at-sea 
whiting data, in 2011 shorebased revenues increased $54 million, the 
mothership revenues are about $12 million, and the catcher-processor 
revenues are about $17 million. (Note: Ex-vessel revenues are just one 
indicator of ``revenue.'' They understate the wholesale, export, and 
retail revenues earned from the fishery. Data on these other indicators 
is either incomplete or unavailable.)
    The cost recovery program applies to three groups of trawlers. Some 
trawlers deliver to shore-based processing plants. Other trawlers 
deliver to mothership processors. Some trawlers are catcher-
processors--vessels that both trawl and process fish. In January 2011, 
NMFS and the Council set up a new management program called the trawl

[[Page 7379]]

rationalization program. This program significantly changes how two of 
these groups work. Shore-based trawlers now fish under their own set of 
individual species quotas by vessel. In prior years, there were 
different rules for shore-based trawlers depending on their target 
catch. Nonwhiting trawlers fished under common trip limits while 
whiting trawlers fished under a common quota without trip limits. In 
prior years, the mothership fishery consisted of independent at-sea 
processors each receiving catch from several trawlers. Now the 
mothership fishery works as a coop where catcher-vessels and 
motherships work together collectively. The catcher-processor fleet 
continues as a single coop, but now has a permit to do so.
    Cost recovery for the trawl rationalization program requires the 
fish sellers to pay the fee and all parties making the first ex-vessel 
purchase of groundfish (i.e., the fish buyers) to collect the fee, 
account for, and forward the fee revenue to NMFS (Note: In the C/P Coop 
Program, a cooperative of vessels that both harvest and process whiting 
at-sea, the fish seller and the fish buyer are the same entity).
    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 fulltime, 
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.
    This rule directly affects vessel owners and first receivers who 
are responsible for the submission of electronic fish tickets, the 
catcher vessels and processors associated with the mothership coop, and 
the catcher-processors that are members of the catcher-processor coop. 
Each account holder, mothership catcher vessel, mothership processor, 
and catcher-processor must apply to participate in the trawl 
rationalization program. As part of the application process, applicants 
were asked if they considered themselves a ``small'' business. NMFS 
makes the following conclusions based on these responses. For the few 
non-respondents, NMFS relied on other information to assess their size. 
The Shorebased IFQ Program affects 144 vessel account holders (fish 
sellers) and 51 first receivers (fish buyers). There are 117 ``small'' 
vessel account holders and 30 ``small'' first receivers. The mothership 
sector involves 36 MS/CV-endorsed permits (fish sellers) and 6 MS 
permits (fish buyers). (Note that one of the MS/CV-endorsed permits has 
two endorsements). Twenty-one MS/CV-endorsed permits and two MS permits 
are considered small businesses. There are 10 C/P permits (fish buyer 
and seller). Of these, eight indicated they were large businesses and 
NMFS assumes the other two are also large businesses based on knowledge 
of operations off Alaska. The sum total of these permits and vessel 
accounts is 247, with 170 considered small.
    The impacts on both small and large entities are the fees being 
collected--up to three percent of ex-vessel revenues or the mothership 
and catch processor equivalents discussed above. Because cost recovery 
is mandatory under the MSA, the ``no action'' alternative is not a 
viable alternative. All of the other alternatives would have the same 
expected effects among each other because the MSA requires fees of up 
to three percent of the ex-vessel value to be collected. Implementation 
costs were reduced by adapting the existing buyback fee collection 
processes and by adjusting these processes to each sector.
    Other than raising the costs of operation, the total effects of 
this program are hard to assess. This program is for the long term 
while the fishery has yet to adjust in the short term to the program 
because of the prohibition on QS trading. While the cost recovery fees 
may be affordable for the average fisherman, for other fishermen the 
cost recovery fee may not be affordable given the other costs they 
incur. Many fishermen, particularly shorebased fishermen, have voiced 
concerns that paying for costs of state landing taxes, the buyback 
fees, the costs of observers, and cost recovery fees will be 
challenging. The Northwest Fisheries Science Center (NWFSC) has 
recently developed estimates of net accounting profits by trawl permits 
involved in the shoreside fishery including those that operate in at 
sea fisheries but excluding catcher-processors and mothership catcher 
vessels that do not also deliver to shoreplants. In the calculation of 
accounting net revenue, costs include trawl buyback fees and landings 
taxes. Economic net revenue also considers the opportunity costs 
incurred by vessel owners who serve as captain but do not pay 
themselves for their captain services, and the opportunity cost of 
capital. NWFSC estimates that the average limited entry groundfish 
trawl fleet member earned accounting net revenue of $115,983 and 
economic net revenue of $77,381 during 2008 from operations in all 
fisheries. During 2008, the average limited entry groundfish trawl 
survey respondent earned $585,048 from all revenue sources and $339,504 
from operations in the West Coast groundfish fishery. The 127 vessels 
in the West Coast limited entry groundfish trawl survey population 
during 2008 earned accounting net revenue of $14,729,841 and economic 
net revenue of $9,827,387 from operations in all fisheries.
    While NMFS has not yet calculated the actual fee percent for the 
upcoming year, preliminary estimates show that NMFS expects the 
Shorebased IFQ Program to be subject to the maximum three percent fee. 
The MS and C/P Coop Program are expected to cost NMFS less money for 
management, data collection, and enforcement and, therefore, be subject 
to less than the three percent fee. Using a fee rate of three percent 
and 2011 revenues, for the Shorebased IFQ Program, NMFS would collect 
approximately $1.62 million ($54 million x 0.03). For the MS Coop 
Program, NMFS would collect approximately $360,000 (($12 million x 
0.03). For the C/P Coop Program, NMFS would collect approximately 
$510,000 (($17 million x 0.03). Using this example, NMFS would recover 
approximately $2.5 million by implementing cost recovery.
    Fishermen have been paying state landing taxes for years. The 
buyback fees, on the other hand, are associated with a reduction of the 
fleet that has significantly increased the amount of fish that the post 
buyback fishermen were able to harvest under the trip limit regime 
(prior to trawl rationalization) or received as QS that fishermen now 
receive under trawl rationalization. (Buyback history was equally 
divided among all shorebased groundfish permits.) Fishermen are now 
petitioning Congress for a reduction in the interest rate associated 
with the $36 million buyback loan. While the costs of

[[Page 7380]]

observers may be high, NMFS and the Council are looking at the 
feasibility of electronic monitoring to lower administrative and 
fishermen costs. The costs of paying the cost recovery fees can be 
reduced by developing a lower cost administrative system or by 
increased revenues as fishermen develop techniques to reduce bycatch so 
they can increase their target catch. The effects of all factors on 
current and future individual and industry profits are hard to assess, 
particularly as QS trading is not allowed until 2014. When QS trading 
is initiated, it is expected that the number of participants in the 
Shorebased IFQ Program will be reduced. A reduction in the number of 
participants may lower administrative costs while raising average 
revenues per participant.
    We do not believe that this rule will have a significant impact 
when comparing small versus large businesses in terms of 
disproportionality and profitability given available information. 
Nonetheless, NMFS has prepared this IRFA. Through the rulemaking 
process associated with this action, we are requesting comments on this 
conclusion.
    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 Groundfish FMP 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 FMP 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 FMP 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 (MMPA), incidental take of these 
species from the groundfish fishery must be addressed under MMPA 
section 101(a)(5)(E). West coast pot fisheries for sablefish are 
considered Category II fisheries under the MMPA's List of Fisheries, 
indicating occasional interactions. All other west coast groundfish 
fisheries, including the trawl fishery, are considered Category III 
fisheries under the MMPA, indicating a remote likelihood of or no known 
serious injuries or mortalities to marine mammals. On February 27, 
2012, NMFS published notice that the incidental taking of Steller sea 
lions in the West Coast groundfish fisheries is 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 contains a collection-of-information requirement 
subject to review and approval by OMB under the Paperwork Reduction Act 
(PRA). This requirement has been submitted to OMB for approval. Public 
reporting burden for the cost recovery form is estimated to average 1 
hour 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. 
Public reporting burden for a failure to pay report is estimated to 
average 4 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. Public reporting burden for the annual 
report for the at-sea sector is estimated to average 1 hour 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.
    Public comment is sought regarding: Whether this proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information shall 
have practical utility; the accuracy of the burden estimate; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways to minimize the burden of the collection of 
information, including through the use of automated collection 
techniques or other forms of information technology. Send comments on 
these or any other aspects of the collection of information to NMFS, 
Northwest Region at the ADDRESSES above, and email to [email protected], or fax to (202) 395-7285.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless

[[Page 7381]]

that collection of information displays a currently valid OMB Control 
Number.
    This proposed rule was developed after meaningful collaboration, 
through the Council process, with the tribal representative on the 
Council. The proposed regulations have no direct effect on the tribes; 
these proposed regulations were deemed by the Council as ``necessary or 
appropriate'' to implement the FMP as amended.

List of Subjects in 50 CFR Part 660

    Fisheries, Fishing, and Indian fisheries.

    Dated: January 25, 2013.
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 Chapter VI is 
proposed to be amended as follows:
50 CFR Chapter VI

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.  660.11, add the definition for ``fiscal year'' and ``fund'' 
in alphabetical order to read as follows:


Sec.  660.11  General definitions.

* * * * *
    Fiscal year means the year beginning at 0001 local time on October 
1 and ending at 2400 local time on September 30 of the following year.
* * * * *
    Fund means, for the purposes of subparts C through G of this part, 
the U.S. Treasury's Limited Access System Administration Fund (LASAF) 
established by the Magnuson-Stevens Act, 16 U.S.C. 1855(h)(5)(B), 
specifically the LASAF subaccounts associated with the PCGFMP cost 
recovery programs.
* * * * *
0
3. In Sec.  660.25, add paragraph (b)(4)(i)(G) to read as follows:


Sec.  660.25  Permits.

* * * * *
    (b) * * *
    (4) * * *
    (i) * * *
    (G) An MS permit or a limited entry permit with a C/P endorsement 
will not be renewed, if it was the permit owner that failed to pay, 
until payment of all cost recovery program fees required pursuant to 
Sec.  660.115 has been made. The IAD, appeals, and final decision 
process for the cost recovery program is specified at Sec.  
660.115(d)(3)(ii).
* * * * *
0
4. In Sec.  660.111, add the definitions for ``ex-vessel value,'' 
``fish buyer,'' ``fish seller,'' and ``net ex-vessel value'' in 
alphabetical order to read as follows:


Sec.  660.111  Trawl fishery--definitions.

* * * * *
    Ex-vessel value means, for the purposes of the cost recovery 
program specified at Sec.  660.115, all compensation (based on an arm's 
length transaction between a buyer and seller) that a fish buyer pays 
to a fish seller in exchange for groundfish species (as defined in 
Sec.  660.11), and includes the value of all in-kind compensation and 
all other goods or services exchanged in lieu of cash. Ex-vessel value 
shall be determined before any deductions are made for transferred or 
leased allocation, or for any goods for services.
    (1) For the Shorebased IFQ Program, the value of all groundfish 
species (as defined in Sec.  660.11) from IFQ landings.
    (2) For the MS Coop Program, the value of all groundfish species 
(as defined in Sec.  660.11) delivered by a catcher vessel to an MS-
permitted vessel.
    (3) For the C/P Coop Program, the value as determined by the 
aggregate pounds of all groundfish species (as defined in Sec.  660.11) 
harvested by the vessel registered to a C/P-endorsed limited entry 
trawl permit, multiplied by the MS Coop Program average price per pound 
as announced pursuant to Sec.  660.115(b)(2).
* * * * *
    Fish buyer means, for the purposes of the cost recovery program 
specified at Sec.  660.115,
    (1) For the Shorebased IFQ Program, the IFQ first receiver as 
defined in Sec.  660.111.
    (2) For the MS Coop Program, the owner of a vessel registered to an 
MS permit, the operator of a vessel registered to an MS permit, and the 
owner of the MS permit registered to that vessel. All three parties 
shall be jointly and severally responsible for fulfilling the 
obligations of a fish buyer.
    (3) For the C/P Coop Program, the owner of a vessel registered to a 
C/P-endorsed limited entry trawl permit, the operator of a vessel 
registered to a C/P-endorsed limited entry trawl permit, and the owner 
of the C/P-endorsed limited entry trawl permit registered to that 
vessel. All three parties shall be jointly and severally responsible 
for fulfilling the obligations of a fish buyer.
    Fish seller means the party who harvests and first sells or 
otherwise delivers groundfish species (as defined in Sec.  660.11) to a 
fish buyer.
* * * * *
    Net ex-vessel value means, for the purposes of the cost recovery 
program specified at Sec.  660.115, the ex-vessel value minus the cost 
recovery fee.
* * * * *
0
5. In Sec.  660.112, add paragraph (a)(6) to read as follows:


Sec.  660.112  Trawl fishery--prohibitions.

* * * * *
    (a) * * *
    (6) Cost recovery program. (i) Fail to fully pay or collect any fee 
due under the cost recovery program specified at Sec.  660.115 and/or 
otherwise avoid, decrease, interfere with, hinder, or delay any such 
payment or collection.
    (ii) Convert, or otherwise use any paid or collected fee for any 
purpose other than the purposes specified in this subpart.
    (iii) Fail to deposit on time the full amount of all fee revenue 
collected under the cost recovery program specified at Sec.  660.115 
into a deposit account, or fail to timely disburse the full amount of 
all deposit principal to the Fund.
    (iv) Fail to maintain records as required by Sec.  660.113 and/or 
fail to make reports to NMFS as required under Sec.  660.113.
    (v) Fail to advise NMFS of any fish buyer's failure to collect any 
fee due and payable under the cost recovery program specified at Sec.  
660.115.
    (vi) Refuse to allow NMFS employees, agents, or contractors to 
review and audit all records and other information required to be 
maintained as set forth in Sec.  660.113, and/or Sec.  660.115.
    (vii) Make any false statement to NMFS, including any NMFS 
employee, agent or contractor, concerning a matter related to the cost 
recovery program described in this subpart.
    (viii) Obstruct, prevent, or delay, or attempt to obstruct, 
prevent, or delay, any audit or investigation NMFS employees, agents, 
or contractors conduct, or attempt to conduct, in connection with any 
of the matters in the cost recovery program described in this subpart.
* * * * *
0
6. In Sec.  660.113, add paragraphs (b)(5), (c)(5), and (d)(5) to read 
as follows:


Sec.  660.113  Trawl fishery--recordkeeping and reporting.

* * * * *
    (b) * * *
    (5) Cost recovery program. In addition to the requirements at 
paragraph (a) of this section, the fish buyer, as defined at Sec.  
660.111 for the Shorebased IFQ

[[Page 7382]]

Program, is required to comply with the following recordkeeping and 
reporting requirements:
    (i) Reporting. The fish buyer must submit a cost recovery form at 
the time cost recovery fees are paid to NMFS as specified at Sec.  
660.115. The cost recovery form requires providing information that 
includes, but is not limited to, fee collector's name, address, phone 
number, state buyer code, month and year of landings, weight of 
landings, ex-vessel value, and fee collected.
    (ii) Recordkeeping. The fish buyer must maintain the following 
records:
    (A) For all deliveries of groundfish that the fish buyer buys from 
each fish seller:
    (1) The date of delivery,
    (2) The fish seller's identity,
    (3) The weight of each species of groundfish delivered,
    (4) Information sufficient to specifically identify the fishing 
vessel which delivered the groundfish,
    (5) The ex-vessel value of each species of groundfish,
    (6) The net ex-vessel value of each species of groundfish,
    (7) The identity of the payee to whom the net ex-vessel value is 
paid, if different than the fish seller,
    (8) The date the net ex-vessel value was paid,
    (9) The total fee amount collected as a result of all groundfish.
    (B) For all fee collection deposits to and disbursements from the 
deposit account:
    (1) The date of each deposit in to the deposit account required at 
Sec.  660.115(d)(1)(ii)(A),
    (2) The total amount deposited in to the deposit account,
    (3) The date of each disbursement,
    (4) The total amount disbursed,
    (5) The dates and amounts of disbursements to the fish buyer, or 
other parties, of interest earned on deposits.
* * * * *
    (c) * * *
    (5) Cost recovery program. In addition to the requirements at 
paragraph (a) of this section, the fish buyer, as defined at Sec.  
660.111 for the MS Coop Program, is required to comply with the 
following recordkeeping and reporting requirements:
    (i) Reporting. (A) The fish buyer must submit a cost recovery form 
at the time cost recovery fees are paid to NMFS as specified at Sec.  
660.115. The cost recovery form requires providing information that 
includes, but is not limited to, fee collector's name, address, phone 
number, USCG vessel documentation number, month and year of deliveries, 
weight of deliveries, ex-vessel value, and fee collected.
    (B) Annual report. By March 31 each year, each fish buyer must 
submit to NMFS a report containing the following information from the 
preceding calendar year for all groundfish each fish buyer purchases 
from fish sellers:
    (1) Total weight bought,
    (2) Total ex-vessel value paid,
    (3) Total fee amounts collected,
    (4) Total fee collection amounts deposited by month,
    (5) Dates and amounts of monthly disbursements to the Fund.
    (ii) Recordkeeping. The fish buyer must maintain the following 
records:
    (A) For all deliveries of groundfish that the fish buyer buys from 
each fish seller:
    (1) The date of delivery,
    (2) The fish seller's identity,
    (3) The weight of each species of groundfish delivered,
    (4) Information sufficient to specifically identify the fishing 
vessel which delivered the groundfish,
    (5) The ex-vessel value of each species of groundfish,
    (6) The net ex-vessel value of each species of groundfish,
    (7) The identity of the payee to whom the net ex-vessel value is 
paid, if different than the fish seller,
    (8) The date the net ex-vessel value was paid,
    (9) The total fee amount collected as a result of all groundfish.
    (B) For all fee collection deposits to and disbursements from the 
deposit account:
    (1) The date of each deposit in to the deposit account required at 
Sec.  660.115(d)(1)(ii)(A),
    (2) The total amount deposited in to the deposit account,
    (3) The date of each disbursement,
    (4) The total amount disbursed,
    (5) The dates and amounts of disbursements to the fish buyer, or 
other parties, of interest earned on deposits.
* * * * *
    (d) * * *
    (5) Cost recovery program. In addition to the requirements at 
paragraph (a) of this section, the fish buyer, as defined at Sec.  
660.111 for the C/P Coop Program, is required to comply with the 
following recordkeeping and reporting requirements:
    (i) Reporting. (A) The fish buyer must submit a cost recovery form 
at the time cost recovery fees are paid to NMFS as specified at Sec.  
660.115. The cost recovery form requires providing information that 
includes, but is not limited to, fee collector's name, address, phone 
number, USCG vessel documentation number, month and year of deliveries, 
weight of deliveries, ex-vessel value, and fee collected.
    (B) Annual report. By March 31 each year, each fish buyer must 
submit to NMFS a report containing the following information from the 
preceding calendar year for all groundfish:
    (1) Total weight,
    (2) Total ex-vessel value paid (based on MS pricing),
    (3) Total fee amount collected,
    (4) Date and amount of the disbursement to the Fund.
    (ii) Recordkeeping. The fish buyer must maintain the following 
records:
    (A) For all groundfish:
    (1) The date of harvest,
    (2) The weight of each species of groundfish harvested,
    (3) Information sufficient to specifically identify the fishing 
vessel which harvested the groundfish,
    (4) The ex-vessel value of each species of groundfish,
    (5) The net ex-vessel value of each species of groundfish,
    (6) The total fee amount collected as a result of all groundfish.
    (B) For all disbursements to NMFS:
    (1) The date of each disbursement,
    (2) The total amount disbursed.
0
7. Section 660.115 is added to read as follows:


Sec.  660.115  Trawl fishery--cost recovery program.

    (a) General. The cost recovery program collects mandatory fees of 
up to three percent of the ex-vessel value of fish harvested by sector 
under the trawl rationalization program in accordance with the 
Magnuson-Stevens Act. NMFS collects the fees to recover the actual 
costs directly related to the management, data collection, and 
enforcement of the trawl rationalization program. In addition to the 
requirements of this section, the following groundfish regulations also 
apply:
    (1) Regulations set out in the following sections of subpart C: 
Sec.  660.11 Definitions and Sec.  660.25 Permits.
    (2) Regulations set out in the following sections of subpart D: 
Sec.  660.111 Definitions, Sec.  660.112 Trawl fishery prohibitions, 
Sec.  660.113 Trawl fishery recordkeeping and reporting, Sec.  660.140 
Shorebased IFQ Program, Sec.  660.150 MS Coop Program, and Sec.  
660.160 C/P Coop Program.
    (b) Fee percentage by sector. The annual fee percentage by sector 
is calculated as described in paragraph (b)(1) of this section. NMFS 
will establish the fee percentage each year and will announce the fee 
percentage by sector in accordance with paragraph (b)(2) of this 
section. The fee percentage must not exceed three percent of the ex-
vessel value of fish harvested by sector

[[Page 7383]]

under the trawl rationalization program pursuant to the Magnuson-
Stevens Act at 16 U.S.C. 1854(d)(2)(B).
    (1) Calculation. In the last quarter of each calendar year, NMFS 
will calculate the fee percentage by sector based on information from 
the previous fiscal year (defined at Sec.  660.11). The fee percentage 
will be rounded to the nearest 0.1 percent and must not exceed three 
percent for each sector (Shorebased IFQ Program, MS Coop Program, and 
C/P Coop Program). NMFS will use the following equation to annually 
determine the fee percentage by sector: Fee percentage = the lower of 
3% or (DPC/V) x 100, where:
    (i) ``DPC,'' or direct program costs, are the actual incremental 
costs for the previous fiscal year directly related to the management, 
data collection, and enforcement of each sector (Shorebased IFQ 
Program, MS Coop Program, and C/P Coop Program). Actual incremental 
costs means those net costs that would not have been incurred but for 
the implementation of the trawl rationalization program, including 
additional costs for new requirements of the program and reduced trawl 
sector related costs resulting from efficiencies as a result of the 
program. If the amount of fees collected by NMFS is greater or less 
than the actual net incremental costs incurred, the DPC will be 
adjusted accordingly for calculation of the fee percentage in the 
following year.
    (ii) ``V'' is, for each applicable sector, the total ex-vessel 
value, as defined at Sec.  660.111, from the previous fiscal year 
attributable to that sector of the trawl rationalization program 
(Shorebased IFQ Program, MS Coop Program, and C/P Coop Program).
    (2) Notification of the fee percentage and MS average pricing. 
During the last quarter of each calendar year, NMFS will announce the 
following through a Federal Register notice:
    (i) The fee percentage to be applied by fish buyers and fish 
sellers, for each sector, that will be in effect for the upcoming 
calendar year, and
    (ii) The average MS price per pound from the previous fiscal year 
as reported for the MS Coop Program to be used in the C/P Coop Program 
to calculate the fee amount for the upcoming calendar year as specified 
in paragraph (c) of this section.
    (iii) Information on how to pay in to the Fund subaccount as 
specified at paragraph (d) of this section.
    (c) Fee amount. The fee amount is the ex-vessel value, as defined 
at Sec.  660.111, for each sector multiplied by the fee percentage for 
that sector as announced in accordance with paragraph (b)(2) of this 
section.
    (d) Fee payment and collection--(1) Fee payment and collection in 
the Shorebased IFQ Program and MS Coop Program. Payment of fees at the 
fee percentage rate announced in paragraph (b)(2) of this section 
begins January 1 and continues without interruption through December 31 
each year.
    (i) Between the fish seller and fish buyer. Except as described 
below, the full fee is due and payable at the time of fish landing/
delivery. Each fish buyer must collect the fee at the time of fish 
landing/delivery by deducting the fee from the ex-vessel value before 
paying the net ex-vessel value to the fish seller. Each fish seller 
must pay the fee at the time of fish landing/delivery by receiving from 
the fish buyer the net ex-vessel value, as defined at Sec.  660.111.
    (A) In the event of any post-delivery payment for fish, the fish 
seller must pay, and the fish buyer must collect, at the time the 
amount of such post-landing/delivery payment, the fee that would 
otherwise have been due and payable at the time of initial fish 
landing/delivery.
    (B) When the fish buyer and fish seller are the same entity, that 
entity must comply with the requirements for both the fish seller and 
the fish buyer as specified in this section.
    (ii) Between the fish buyer and NMFS--(A) Deposit accounts. Each 
fish buyer shall maintain a segregated account at a federally insured 
financial institution for the sole purpose of depositing collected fee 
revenue from the cost recovery program specified in this section and 
disbursing the deposit principal directly to NMFS in accordance with 
paragraph (d)(1)(ii)(C) of this section.
    (B) Fee collection deposits. Each fish buyer, no less frequently 
than at the end of each month, shall deposit, in the deposit account 
established under paragraph (d)(1)(ii)(A) of this section, all fees 
collected, not previously deposited, that the fish buyer collects 
through a date not more than two calendar days before the date of 
deposit. The deposit principal may not be pledged, assigned, or used 
for any purpose other than aggregating collected fee revenue for 
disbursement to the Fund in accordance with paragraph (d)(1)(ii)(C) of 
this section. The fish buyer is entitled, at any time, to withdraw 
deposit interest, if any, but never deposit principal, from the deposit 
account for the fish buyer's own use and purposes.
    (C) Deposit principal disbursement. Not later than the 14th 
calendar day after the last calendar day of each month, or more 
frequently if the amount in the account exceeds the account limit for 
insurance purposes, the fish buyer shall disburse to NMFS the full 
deposit principal then in the deposit account. The fish buyer shall 
disburse deposit principal by electronic payment to the Fund subaccount 
to which the deposit principal relates. NMFS will announce information 
about how to make an electronic payment to the Fund subaccount in the 
notification on fee percentage specified in paragraph (b)(2) of this 
section. Each disbursement must be accompanied by a cost recovery form 
provided by NMFS. Recordkeeping and reporting requirements are 
specified in paragraph (d)(4) of this section and at Sec.  
660.113(b)(5) for the Shorebased IFQ Program and Sec.  660.113(c)(5) 
for the MS Coop Program. The cost recovery form will be available on 
the pay.gov Web site.
    (2) Fee payment and collection in the C/P Coop Program. Payment of 
fees for the calendar year at the fee percentage rate announced in 
paragraph (b)(2) of this section is due in the last quarter of the 
calendar year and no later than December 31 each year. The fish buyer 
is responsible for fee payment to NMFS. The fish seller and the fish 
buyer, as defined at Sec.  660.111, are considered the same entity in 
the C/P Coop Program. The fish buyer shall disburse to NMFS the full 
fee amount for the calendar year by electronic payment to the Fund 
subaccount. NMFS will announce information about how to make an 
electronic payment to the Fund subaccount in the notification on fee 
percentage specified in paragraph (b)(2) of this section. Each 
disbursement must be accompanied by a cost recovery form provided by 
NMFS. Recordkeeping and reporting requirements are specified in 
paragraph (d)(4) of this section and at Sec.  660.113(d)(5) for the C/P 
Coop Program. The cost recovery form will be available on the pay.gov 
Web site.
    (3) Failure to pay or collect--(i) Responsibility to notify NMFS. 
(A) If a fish buyer fails to collect the fee in the amount and manner 
required by this section, the fish seller shall then advise the fish 
buyer of the fish seller's fee payment obligation and of the fish 
buyer's cost recovery fee collection obligation. If the fish buyer 
still fails to properly collect the fee, the fish seller, within the 
next 7 calendar days, shall forward the fee to NMFS. The fish seller at 
the same time shall also advise NMFS in writing at the address in 
paragraph (d)(3)(i)(C) of this section of the full particulars, 
including:
    (1) The fish buyer's and fish seller's name, address, and telephone 
number,
    (2) The name of the fishing vessel from which the fish seller made 
fish delivery and the date of doing so,

[[Page 7384]]

    (3) The weight and ex-vessel value of each species of fish that the 
fish seller delivered, and
    (4) The fish buyer's reason, if known, for refusing to collect the 
fee in accordance with this subpart;
    (B) Notifications must be mailed or faxed to: National Marine 
Fisheries Service, Northwest Region, Office of Management and 
Information, ATTN: Cost Recovery Notification, 7600 Sand Point Way NE., 
Seattle, WA 98115; Fax: 206-526-6426; or delivered to National Marine 
Fisheries Service at the same address.
    (ii) IAD, appeals, and final decision. If NMFS determines the fish 
buyer or other responsible party has not submitted a complete cost 
recovery form and corresponding payment by the due date specified in 
paragraphs (d)(1) and (d)(2) of this section, NMFS will at any time 
thereafter notify the fish buyer or other responsible party in writing 
via an initial administrative determination (IAD) letter.
    (A) IAD. In the IAD, NMFS will state the discrepancy and provide 
the person 30 calendar days to either pay the specified amount due or 
appeal the IAD in writing.
    (B) Appeals. If the fish buyer appeals an IAD, the appeal must be 
postmarked, faxed, or hand delivered to NMFS no later than 30 calendar 
days after the date on the IAD. If the last day of the time period is a 
Saturday, Sunday, or Federal holiday, the time period will extend to 
the close of business on the next business day. The appeal must be in 
writing, must allege credible facts or circumstances, and must include 
any relevant information or documentation to support the appeal. 
Appeals must be mailed, faxed, or hand-delivered to: National Marine 
Fisheries Service, Northwest Region, Office of Management and 
Information, ATTN: Cost Recovery Appeals, 7600 Sand Point Way NE., 
Seattle, WA 98115; Fax: 206-526-6426; or delivered to National Marine 
Fisheries Service at the same address.
    (C) Final decision--(1) Final decision on appeal. For the appeal of 
an IAD, the Regional Administrator shall appoint an appeals officer. 
After determining there is sufficient information and that all 
procedural requirements have been met, the appeals officer will review 
the record and issue a recommendation on the appeal to the Regional 
Administrator, which shall be advisory only. The recommendation must be 
based solely on the record. Upon receiving the findings and 
recommendation, the Regional Administrator, acting on behalf of the 
Secretary of Commerce, will issue a written decision on the appeal 
which is the final decision of the Secretary of Commerce.
    (2) Final decision if there is no appeal. If the fish buyer does 
not appeal the IAD within 30 calendar days, NMFS will notify the fish 
buyer or other responsible party in writing via a final decision 
letter. The final decision will be from the Regional Administrator 
acting on behalf of the Secretary of Commerce.
    (3) If the final decision determines that the fish buyer is out of 
compliance, the final decision will require payment within 30 calendar 
days. If such payment is not received within 30 calendar days of 
issuance of the final decision, NMFS will refer the matter to the 
appropriate authorities for purposes of collection. As of the date of 
the final decision if the fish buyer is out of compliance, NMFS will 
not approve a permit renewal for an MS permit or a C/P-endorsed limited 
entry trawl permit until all cost recovery fees due have been paid as 
specified at Sec.  660.25(b)(4)(i)(G); or reissue an IFQ first receiver 
site license until all cost recovery fees due have been paid, as 
specified at Sec.  660.140(f)(4).
    (4) Recordkeeping, reporting, and audits--(i) Recordkeeping. Each 
fish buyer and fish seller shall retain records in accordance with 
Sec.  660.113(a). In addition, fish buyers shall retain records in 
accordance with the following paragraphs: Sec.  660.113(b)(5) for the 
Shorebased IFQ Program, Sec.  660.113(c)(5) for the MS Coop Program, 
and Sec.  660.113(d)(5) for the C/P Coop Program.
    (ii) Reporting, including annual report. Each fish buyer shall 
submit reports in accordance with the following paragraphs: Sec.  
660.113(b)(5) for the Shorebased IFQ Program, Sec.  660.113(c)(5) for 
the MS Coop Program, and Sec.  660.113(d)(5) for the C/P Coop Program. 
The fish buyer must submit a cost recovery form along with fee payment 
to NMFS. By March 31 each year, fish buyers in the MS and C/P Coop 
Programs must submit an annual report to NMFS containing information 
from the preceding calendar year as specified at Sec.  660.113(c)(5) 
and Sec.  660.113(d)(5) for the MS and C/P Coop Programs, respectively.
    (iii) Audits. NMFS or its agents may audit, in whatever manner NMFS 
determines reasonably necessary for the duly diligent administration of 
the cost recovery program, the financial records of fish buyers and 
fish sellers in order to ensure proper fee payment, collection, 
deposit, disbursement, accounting, recordkeeping, and reporting. Fish 
buyers and fish sellers must respond to any inquiry by NMFS or a NMFS 
agent within 20 calendar days of the date of issuance of the inquiry, 
unless an extension is granted by NMFS. Fish buyers and fish sellers 
shall make all relevant records available to NMFS or NMFS' agents at 
reasonable times and places and promptly provide all requested 
information reasonably related to these records. NMFS may employ a 
third party agent to conduct the audits. The NMFS auditor may review 
and request copies of additional data provided by the submitter, 
including but not limited to, previously audited or reviewed financial 
statements, worksheets, tax returns, invoices, receipts, and other 
original documents substantiating the data submitted.
0
8. In Sec.  660.140,
0
a. Revise paragraphs (a)(2), (e)(8), (f)(4), and (f)(6);
0
b. Add paragraphs (b)(1)(x), (b)(2)(ix), and (f)(10) to read as 
follows:


Sec.  660.140  Shorebased IFQ Program.

* * * * *
    (a) * * *
    (2) Regulations set out in the following sections of subpart D: 
Sec.  660.111 Trawl fishery definitions, Sec.  660.112 Trawl fishery 
prohibitions, Sec.  660.113 Trawl fishery recordkeeping and reporting, 
Sec.  660.115 Trawl fishery cost recovery program, Sec.  660.120 Trawl 
fishery crossover provisions, Sec.  660.130 Trawl fishery management 
measures, and Sec.  660.131 Pacific whiting fishery management 
measures.
* * * * *
    (b) * * *
    (1) * * *
    (x) Fish sellers must pay cost recovery program fees, as specified 
at Sec.  660.115.
    (2) * * *
    (ix) Collect and remit to NMFS cost recovery program fees, as 
specified at Sec.  660.115.
* * * * *
    (e) * * *
    (8) Cost recovery. The fish seller, as defined at Sec.  660.111, is 
subject to the cost recovery program specified at Sec.  660.115.
* * * * *
    (f) * * *
    (4) Initial administrative determination. For all complete 
applications, NMFS will issue an IAD that either approves or 
disapproves the application. If approved, the IAD will include a first 
receiver site license. If disapproved, the IAD will provide the reasons 
for this determination. NMFS will not reissue a first receiver site 
license until the required cost recovery program fees, as specified at 
Sec.  660.115,

[[Page 7385]]

have been paid. The IAD, appeals, and final decision process for the 
cost recovery program is specified at Sec.  660.115(d)(3)(ii).
* * * * *
    (6) Reissuance in subsequent years. Existing license holders must 
reapply annually. If the existing license holder fails to reapply, the 
first receiver's site license will expire as specified in paragraph 
(f)(5) of this section. The IFQ first receiver will not be authorized 
to receive IFQ species from a vessel if their first receiver site 
license has expired. NMFS will not reissue a first receiver site 
license until all required cost recovery program fees, as specified at 
Sec.  660.115, associated with that license have been paid.
* * * * *
    (10) Cost recovery. The first receiver site license holder is 
considered the fish buyer as defined at Sec.  660.111, and must comply 
with the cost recovery program specified at Sec.  660.115.
* * * * *
0
9. In Sec.  660.150,
0
a. Remove paragraph (d)(5);
0
b. Revise paragraphs (a)(4), (b)(1)(ii)(A), and (f)(6);
0
c. Add paragraphs (b)(1)(ii)(D), (b)(2)(ii)(C), and (g)(7) to read as 
follows:


Sec.  660.150  Mothership (MS) Coop Program.

* * * * *
    (a) * * *
    (4) Regulations set out in the following sections of subpart D: 
Sec.  660.111 Trawl fishery definitions, Sec.  660.112 Trawl fishery 
prohibitions, Sec.  660.113 Trawl fishery recordkeeping and reporting, 
Sec.  660.115 Trawl fishery cost recovery program, Sec.  660.120 Trawl 
fishery crossover provisions, Sec.  660.130 Trawl fishery management 
measures, and Sec.  660.131 Pacific whiting fishery management 
measures.
* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (A) Recordkeeping and reporting. Maintain a valid declaration as 
specified at Sec.  660.13(d); maintain records as specified at Sec.  
660.113(a); and maintain and submit all records and reports specified 
at Sec.  660.113(c) including, economic data, scale tests records, 
cease fishing reports, and cost recovery.
* * * * *
    (D) Cost recovery program. Collect and remit to NMFS cost recovery 
program fees as specified at Sec.  660.115.
* * * * *
    (2) * * *
    (ii) * * *
    (C) Cost recovery program. Vessel must pay cost recovery program 
fees, as specified at Sec.  660.115.
* * * * *
    (f) * * *
    (6) Cost recovery. The owner of a vessel registered to an MS 
permit, the operator of a vessel registered to an MS permit, and the 
owner of the MS permit registered to that vessel, are considered to be 
the fish buyer as defined at Sec.  660.111, and must comply with the 
cost recovery program specified at Sec.  660.115.
* * * * *
    (g) * * *
    (7) Cost recovery. The fish seller, as defined at Sec.  660.111, is 
subject to the cost recovery program specified at Sec.  660.115.
* * * * *
0
10. In Sec.  660.160,
0
a. Remove paragraphs (d)(5) and (e)(6);
0
b. Revise paragraphs (a)(4) and (b)(1)(ii)(A); and
0
c. Add paragraphs (b)(1)(ii)(D), and (e)(5) to read as follows:


Sec.  660.160  Catcher/processor (C/P) Coop Program.

* * * * *
    (a) * * *
    (4) Regulations set out in the following sections of subpart D: 
Sec.  660.111 Trawl fishery definitions, Sec.  660.112 Trawl fishery 
prohibitions, Sec.  660.113 Trawl fishery recordkeeping and reporting, 
Sec.  660.115 Trawl fishery cost recovery program, Sec.  660.120 Trawl 
fishery crossover provisions, Sec.  660.130 Trawl fishery management 
measures, and Sec.  660.131 Pacific whiting fishery management 
measures.
* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (A) Recordkeeping and reporting. Maintain a valid declaration as 
specified at Sec.  660.13(d); maintain records as specified at Sec.  
660.113(a); and maintain and submit all records and reports specified 
at Sec.  660.113(d) including, economic data, scale tests records, 
cease fishing reports, and cost recovery.
* * * * *
    (D) Cost recovery program. Collect and remit to NMFS cost recovery 
program fees, as specified at Sec.  660.115.
* * * * *
    (e) * * *
    (5) Cost recovery. The owner of a vessel registered to a C/P-
endorsed limited entry trawl permit, the operator of a vessel 
registered to a C/P-endorsed limited entry trawl permit, and the owner 
of the C/P-endorsed limited entry trawl permit registered to that 
vessel, are considered both the fish buyer and the fish seller as 
defined at Sec.  660.111, and must comply with the cost recovery 
program specified at Sec.  660.115.
* * * * *
[FR Doc. 2013-02005 Filed 1-31-13; 8:45 am]
BILLING CODE 3510-22-P