[Federal Register Volume 79, Number 36 (Monday, February 24, 2014)]
[Rules and Regulations]
[Pages 9995-10011]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-03910]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

15 CFR Part 902

50 CFR Part 679

[Docket No. 120416009-4095-02]
RIN 0648-BB78


Fisheries of the Exclusive Economic Zone Off Alaska; Individual 
Fishing Quota Program

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

ACTION: Final rule.

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SUMMARY: NMFS adopts a final rule that modifies the vessel ownership 
requirement for an exemption from the owner-on-board requirement in the 
Individual Fishing Quota (IFQ) Program

[[Page 9996]]

for the fixed-gear commercial Pacific halibut and sablefish fisheries 
off Alaska. This rule imposes a 12-month vessel ownership requirement 
on initial individual recipients of quota share (QS) who wish an 
exemption from the owner-on-board requirement and who wish to use a 
hired master to harvest their IFQ. For the 12-month period prior to 
applying to use a hired master, an individual QS holder must own a 
minimum 20-percent interest in the vessel that the hired master will 
use to fish the IFQ on behalf of the individual QS holder. The rule 
temporarily suspends the 12-month vessel ownership requirement for an 
initial individual recipient of QS whose vessel has been totally lost, 
irreparably damaged, or so damaged that the vessel requires at least 60 
days for repairs. This action is intended to maintain a predominantly 
owner-operated fishery in the Pacific halibut and sablefish fisheries. 
This action is intended to promote the goals and objectives of the 
Magnuson-Stevens Fishery Conservation and Management Act, the Northern 
Pacific Halibut Act of 1982, the Fishery Management Plan for Groundfish 
of the Bering Sea and Aleutian Islands Management Area, the Fishery 
Management Plan for Groundfish of the Gulf of Alaska, and other 
applicable laws. This rule will go into effect 13 months after the 
publication of the rule in the Federal Register.

DATES: Effective March 23, 2015, except for Sec.  679.5(l)(7)(i), which 
will be effective on March 26, 2014.

ADDRESSES: An electronic copy of the Regulatory Impact Review/Initial 
Regulatory Flexibility Analysis (RIR/IRFA or Analysis) prepared for 
this action may be obtained from http://www.regulations.gov or from the 
Alaska Region Web site at https://alaskafisheries.noaa.gov/cm/analyses/
. An electronic copy of the RIR/IRFA dated November 9, 2005, prepared 
for the prior action on the same subject is also at https://alaskafisheries.noaa.gov/cm/analyses/. An electronic copy of the 
Proposed Rule (77 FR 65843, October 31, 2012) may be obtained from 
http://www.regulations.gov or from the Alaska Region Web site at 
https://alaskafisheries.noaa.gov/regs/summary.htm.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection of information requirements contained in this 
final rule may be submitted by mail to NMFS, Alaska Region, P.O. Box 
21668, Juneau, AK 99802-1668, Attn: Ellen Sebastian, Records Officer; 
in person at NMFS, Alaska Region, 709 West 9th Street, Room 420A, 
Juneau, AK; or by email to [email protected] or fax to (202) 
395-7285.

FOR FURTHER INFORMATION CONTACT: Mary Alice McKeen, 907-586-7228.

SUPPLEMENTARY INFORMATION: This rule amends the vessel ownership 
requirement for initial individual recipients of QS in the IFQ Program 
who wish to hire a master to harvest their IFQ rather than be on board 
the vessel themselves for the harvest of their IFQ. IFQ Program 
regulations are located primarily at 50 CFR 679.40 to 679.45. This rule 
also modifies regulations at Sec.  679.5 that specify reporting 
requirements for Registered Buyers who receive and purchase landings of 
halibut and sablefish. This modification corrects an unintended error 
in a final rule recently promulgated by NMFS.
    Under the current regulations of the IFQ Program, initial 
recipients of catcher vessel QS may receive an exemption from the 
owner-on-board provision, and may hire a master to harvest their annual 
IFQ, if those initial recipients own a minimum 20-percent interest in 
the vessel that the hired master will use (Sec.  679.42(i)(1)). This 
rule adds a 12-month vessel ownership requirement for initial 
individual recipients of catcher vessel QS. This rule provides that for 
the 12-month period prior to applying to use a hired master, an 
individual QS holder must own a minimum 20-percent interest in the 
vessel that the hired master will use to harvest the IFQ. This rule 
temporarily suspends the 12-month vessel ownership requirement for an 
individual QS holder who loses a vessel. This rule does not apply to 
individual QS holders in Southeast Alaska (halibut QS for IFQ 
regulatory Area 2C and sablefish QS for the IFQ regulatory area east of 
140[deg] long.) because they may not hire a master to harvest their 
IFQ.
    NMFS published a proposed rule with the 12-month vessel ownership 
provision in the Federal Register on October 31, 2012 (77 FR 65843). 
The 30-day comment period on the proposed rule ended on November 30, 
2012. NMFS received six comment letters by November 30, 2012, and one 
comment letter on December 5, 2012. NMFS considered these 7 comment 
letters, which contained 22 unique comments. These comments are 
summarized and responded to in the ``Comments and Responses'' section 
of this preamble. In response to public comments on the proposed rule 
and further review by NMFS, NMFS changed the regulatory text between 
the proposed rule and this final rule. These changes are described in 
the ``Changes From the Proposed Rule'' section of this preamble.

Background

    The International Pacific Halibut Commission (IPHC) and NMFS manage 
fishing for Pacific halibut through regulations established under the 
authority of the Northern Pacific Halibut Act of 1982 (Halibut Act). 
The IPHC promulgates regulations governing the halibut fishery under 
the Convention between the United States and Canada for the 
Preservation of the Halibut Fishery of the Northern Pacific Ocean and 
Bering Sea. The IPHC regulations are subject to approval by the 
Secretary of State with concurrence of the Secretary of Commerce.
    Under the Halibut Act, the North Pacific Fishery Management Council 
(Council) may recommend that the Secretary of Commerce adopt additional 
management regulations for the halibut fishery in Alaska waters that 
are not in conflict with regulations adopted by the IPHC (16 U.S.C. 
773c(c)). The Council exercised this authority through development of 
the IFQ Program and continues to exercise this authority when it 
recommends changes to the IFQ Program.
    NMFS manages sablefish as a groundfish species under the Fishery 
Management Plan for Groundfish of the Gulf of Alaska (GOA groundfish 
FMP) and the Fishery Management Plan for Groundfish of the Bering Sea 
and Aleutian Islands Management Area (BSAI groundfish FMP). The fishery 
management plans are prepared by the Council under the Magnuson-Stevens 
Act (16 U.S.C. 1801 et seq.) and are implemented by regulations at 50 
CFR part 679. After consulting with the Council, NMFS establishes an 
annual total allowable catch (TAC) for each groundfish species, 
including sablefish, in the Gulf of Alaska and BSAI. NMFS establishes 
TACs and other groundfish harvest specifications 2 years in advance. 
For an example, see the Groundfish Harvest Specifications for 2013 and 
2014 for BSAI (78 FR 13813, March 1, 2013).

Individual Fishing Quota (IFQ) Program

    In 1995, NMFS implemented the IFQ Program under the authority of 
the Magnuson-Stevens Act and the Halibut Act (58 FR 59375, November 9, 
1993). The IFQ Program applies to the fixed-gear commercial halibut and 
sablefish fisheries in the Exclusive Economic Zone off Alaska. Under 
the IFQ Program, NMFS initially awarded quota share (QS) to applicants 
that owned or

[[Page 9997]]

leased vessels from which halibut or sablefish landings occurred in 
1988 to 1990 (50 CFR 679.40). A person that received QS as an initial 
recipient was either an (1) individual or natural person or (2) a non-
individual entity or legal person, such as a corporation, partnership, 
or association.
    NMFS initially issued QS in Category A, B, C, and D. Once issued, 
the category of QS limits how the QS holder can use the QS. Category A 
QS is catcher/processor QS. Category A QS authorizes the QS holder to 
harvest and process the pounds specified on the IFQ permit from a 
vessel of any length. Category A QS has no owner-on-board requirement. 
Category B, C, and D QS is catcher vessel QS. Category B, C, and D QS 
authorizes the QS holder to catch or harvest the pounds specified on 
the QS holder's IFQ permit from vessels within specific categories of 
vessel length (see Sec.  679.42(a)(5) for additional detail). This rule 
applies only to catcher vessel QS: Category B, C, and D QS. When this 
preamble refers to QS, it means catcher vessel QS--Category B, C and, D 
QS--unless otherwise indicated.
    Each year, in accordance with the Halibut Act and the Magnuson-
Stevens Act, NMFS establishes a halibut catch limit and sablefish TAC. 
NMFS divides among QS holders the portion of the halibut catch limit 
and sablefish TAC that is allocated to the fixed gear fishery (Sec.  
679.40). NMFS translates each QS holder's units into a number of 
halibut or sablefish pounds that the QS holder may harvest. This number 
of pounds is the Individual Fishing Quota or IFQ belonging to the QS 
holder. With a few exceptions not relevant to this rule, NMFS sends 
every QS holder an annual IFQ permit. The IFQ permit authorizes the IFQ 
permit holder to harvest a specified number of halibut or sablefish 
pounds in a particular year. The IFQ may only be harvested in the 
regulatory area designated on the IFQ permit. If the IFQ permit is for 
a catcher vessel, the IFQ permit specifies the maximum length of the 
catcher vessel from which the IFQ may be fished.

Owner-on-Board Requirement in the IFQ Program

    The owner-on-board requirement is a central feature of the IFQ 
Program. The IFQ regulations require individuals who hold catcher 
vessel QS to be on board the vessel at all times during an IFQ fishing 
trip and to be present during the landing at the end of the trip (Sec.  
679.42(c)). The purpose of the owner-on-board requirement is to 
maintain the predominantly owner-operator character of the IFQ 
fisheries and to ensure that catcher vessel QS remains largely in the 
hands of active fishermen.
    In designing the IFQ Program, however, the Council exempted initial 
individual recipients of catcher vessel QS from the owner-on-board 
requirement, as long as the initial individual recipients owned the 
vessels from which their IFQ was fished (Sec.  679.42(i)). The 
exemption from the owner-on-board requirement did not, however, apply 
to individuals who received QS for Southeast Alaska: halibut QS for IFQ 
regulatory Area 2C and sablefish QS for the IFQ regulatory area east of 
140[deg] long. (Sec.  679.42(i)(3)).
    The Council also exempted non-individual entities that were initial 
recipients of QS from the owner-on-board requirement, as long as they 
owned the vessel from which the IFQ was fished (Sec.  679.42(j)). 
Unlike individuals, non-individual entities do not have the option of 
being ``on the boat'' while their IFQ is fished. That is because non-
individual entities are legal entities only. A corporation cannot get 
on a vessel. If non-individual entities are to harvest their IFQ at 
all, they must use a hired master or hired skipper. Thus, non-
individual entities must own the vessel that the hired master will use 
simply as a condition of being able to harvest their QS and associated 
IFQ at all.
    For all initial recipients of QS--individuals and non-individuals--
the Council recommended, and NMFS adopted, a regulation in 1999 that 
specified a minimum percentage of ownership that an initial recipient 
must have to show that they ``owned'' a vessel that a hired master will 
use (64 FR 24960, May 10, 1999). Under current regulations, an initial 
recipient must own a minimum 20-percent ownership interest in the 
vessel that a hired master will use on behalf of an initial recipient. 
But current regulations do not specify a duration--for how long--an 
initial recipient must have that 20-percent vessel ownership interest.

Acquiring QS by Transfer in the IFQ Program

    The IFQ Program has two ways to acquire QS: (1) By initial issuance 
and (2) by transfer. Only initial recipients of QS are exempt from the 
owner-on-board requirement by owning the vessel that their hired master 
will use. Under current regulation, an initial recipient may be exempt 
from the owner-on-board requirement for all QS that an initial 
recipient holds: Whether the initial recipient acquired the QS by 
initial issuance or by transfer. NMFS has proposed a regulation that 
would prevent an initial recipient from using a hired master to harvest 
QS that an initial recipient acquired by transfer after February 12, 
2010, with a limited exception for small amounts of QS (78 FR 24707, 
April 26, 2013). The IFQ Program restricts who may acquire QS by 
transfer. If an individual wishes to acquire QS by transfer, the 
individual must be an initial recipient of QS or an individual who has 
150 days experience in a harvesting crew in a commercial fishery in the 
United States (Sec.  679.2, Sec.  679.42(g)).
    Except for Community Quota Entities, which are discussed in Comment 
10, if a non-individual entity, such as a corporation or a partnership, 
wishes to acquire QS by transfer, the non-individual entity must have 
been an initial recipient of QS. Furthermore, if a non-individual 
entity undergoes a change, and a change includes the addition of any 
shareholder to a cooperation or any partner to a partnership, the non-
individual entity cannot acquire additional QS by transfer and loses 
the ability to use a hired master for all of its QS (Sec.  679.42(j)). 
The result of the restrictions in current regulations is that new 
entrants into the IFQ fisheries--persons who did not receive QS at the 
inception of the IFQ Program--must be individuals with substantial crew 
experience in a domestic commercial fishery.
    By limiting the exemption from the owner-on-board requirement to 
initial recipients and by requiring that new QS holders have crew 
experience, the Council anticipated that all QS would eventually be 
held by active fishermen who would be subject to the owner-on-board 
requirement. The Council anticipated that initial recipients who were 
individuals would retire from the fishery and transfer their QS. The 
Council took this action because it concluded that initial individual 
recipients of QS were hiring masters instead of retiring from the 
fishery.

Rationale for This Final Rule

    This rule results from a long-standing commitment by the Council to 
enforce a feature of the IFQ Program that has been present since the 
beginning of the IFQ Program, namely that if an individual QS holder 
wishes an exemption from the owner-on-board requirement, the QS holder 
must have an ownership interest in the vessel that the hired master 
will use. The Council concluded that the current IFQ regulations did 
not prevent initial individual recipients of QS from circumventing the 
intention of the vessel ownership requirement and from hiring masters 
to harvest their IFQ from vessels in which individual QS holders

[[Page 9998]]

had an ownership interest only for the duration of an IFQ trip.
    This rule specifies the duration of vessel ownership interest that 
an individual QS holder must have if the QS holder wishes an exemption 
from the owner-on-board requirement. An initial individual recipient of 
QS must own a minimum 20-percent ownership interest in the vessel that 
the hired master will use to fish the IFQ for the 12-month period prior 
to when the individual QS holder applies to use a hired master. If an 
individual QS holder experiences a vessel loss, this rule suspends the 
12-month vessel ownership requirement until December 31 of the year 
following the vessel loss. This rule suspends the vessel ownership 
requirement in three situations of vessel loss: A total, physical loss 
of a vessel; a vessel that has been irreparably damaged; and a 
temporary loss or temporary disablement of a vessel, meaning an 
accident that materially and adversely affects the vessel's 
seaworthiness or fitness for service and requires at least 60 days of 
repairs.
    The preamble to the proposed rule contains further explanation of 
the need for this action, previous actions on the same subject, and the 
rationale for this rule (77 FR 65843, October 31, 2012). NMFS' 
responses to comments also provide additional detail on this action.

Terminology

    This preamble refers to ``the individual QS holder'' as the 
individual who is subject to the owner-on-board requirement and who may 
be exempt from the owner-on-board requirement by owning the vessel that 
the hired master will use. To apply for a hired master permit, the QS 
holder must have received an IFQ permit. However, this preamble 
generally uses the term individual QS holder rather than individual IFQ 
permit holder.
    This preamble uses the terms ``hired skipper'' and ``hired master'' 
interchangeably as is common practice by participants in the IFQ 
fishery. The Analysis for this action uses the term ``hired skipper.'' 
The proposed rule and final rule text use the term ``hired master.'' A 
hired skipper or hired master is the person who is named on a hired 
master permit. The hired master permit enables the hired master to 
harvest the halibut or sablefish on the IFQ permit that NMFS has issued 
to the QS holder. The QS holder applies for the hired master permit, 
designates the individual who will be the hired master, and designates 
the vessel that the hired master will use.
    This preamble uses the term ``vessel loss'' to refer to the three 
types of vessel loss described in the preceding section.

Changes From the Proposed Rule

    This section explains the 16 changes in the regulatory text from 
the proposed rule to the final rule. Changes 14 and 15 were made in 
response to public comments. The other changes make minor 
clarifications in the text of the final rule and correct an unintended 
error in a final rule recently promulgated by NMFS. This section also 
clarifies a statement in the preamble to the proposed rule regarding 
the submission of United States Coast Guard Form 2692 to report a 
marine casualty.
    The changes from the proposed rule text in the final rule text are 
as follows.
    1. The final rule clarifies the role of additional written 
documentation in Sec.  679.42(i)(1)(i) and (ii). The final rule 
clarifies that if an individual QS holder wishes an exemption from the 
owner-on-board requirement, the formal ownership documents for the 
vessel that the hired master will use must list the individual QS 
holder as an owner of the vessel. If these formal documents do not show 
the individual QS holder as owning the required 20-percent ownership 
for 12 months, the individual QS holder may prove that fact with 
additional written documentation. The proposed rule at Sec.  
679.42(i)(1)(i) stated that for a documented vessel, the individual QS 
holder must have ``continuously owned a minimum 20-percent interest in 
the vessel for the previous 12 months as shown by the U.S. Abstract of 
Title issued by the U.S. Coast Guard, and any other documentation that 
shows the individual as an owner indicating percentage ownership.'' The 
proposed rule at Sec.  679.42(i)(1)(ii) stated that for an undocumented 
vessel, which means a vessel that is not federally documented, the 
individual QS holder must have ``continuously owned a minimum 20-
percent interest in the vessel for the previous 12 months as shown by a 
State of Alaska license or registration, and any other documentation 
that shows the individual as an owner indicating percentage of 
ownership.'' This language does not clearly state what must be on the 
Abstract of Title or State license and what may be on other written 
documentation.
    The preamble to the proposed rule clearly stated that the 
individual QS holder must be an owner on the documents of record 
showing vessel ownership--the Abstract of Title for federally 
documented vessels and the State license for State-documented vessels--
and that the individual QS holder could submit additional written 
documentation only if those documents did not show the required 20-
percent ownership interest for the 12-month ownership period: ``If the 
U.S. Abstract of Title or State of Alaska documents do not prove the 
required percentage interest and duration, the QS holder would be 
required to submit additional written documentation to NMFS 
establishing the required percentage of ownership interest and 
duration'' (77 FR 65847, October 31, 2012).
    Accordingly, NMFS clarifies the final rule in Sec.  679.42(i)(1)(i) 
and (ii) and conforms it to the preamble to the proposed rule and the 
current regulation. The final rule provides that an individual QS 
holder may claim an exemption from the owner-on-board requirement if 
the individual QS holder is an owner of a documented vessel ``as shown 
by the U.S. Abstract of Title issued by the U.S. Coast Guard that lists 
the individual [QS holder] as an owner and, if necessary to show 20-
percent ownership for 12 months, additional written documentation.'' 
With a non-documented vessel, an individual QS holder may claim an 
exemption from the owner-on-board requirement if the individual QS 
holder is an owner of the vessel ``as shown by a State of Alaska 
license or registration that lists the individual [QS holder] as an 
owner and, if necessary to show 20-percent ownership for 12 months, 
additional written documentation.''
    2. The final rule revises the proposed regulatory text at Sec.  
679.42(i)(1)(i), Sec.  679.42(i)(1)(ii), and Sec.  679.42(i)(1)(v) by 
replacing ``for the previous 12 months'' with ``during the 12-month 
period previous to the application by the individual [QS holder] for a 
hired master permit.'' This change more precisely defines the 12-month 
period.
    3. The final rule revises proposed regulatory text at Sec.  
679.42(i)(1)(iv)(B) by replacing the phrase ``individual entity'' with 
``individual'' because ``individual entity'' is not a recognized term 
and is a confusing term.
    4. The final rule clarifies that the 12-month vessel ownership 
requirement applies to all individual QS holders who seek exemption 
from the owner-on-board requirement based on ownership of a vessel from 
which their IFQ will be fished. Under current regulation, Sec.  
679.42(i)(1) establishes the general requirement that an individual QS 
holder can be exempt from the owner-on-board requirement by owning 20 
percent of the vessel that the hired master will use. Under current 
regulation, Sec.  679.42(i)(4) states that the exemption in Sec.  
679.42(i)(1) is available

[[Page 9999]]

to an individual that meets the 20-percent vessel ownership requirement 
by owning an interest in the non-individual entity, such as a 
corporation, that owns the vessel that the hired master will use. For 
example, under Sec.  679.42(i)(4), if a corporation is the sole owner 
of a vessel, and an individual QS holder owns 20 percent of the 
corporation (typically by owning 20 percent of the shares in a 
corporation), the individual QS holder meets the 20-percent vessel 
ownership requirement and may hire a master to fish IFQ from that 
vessel.
    The proposed rule modified the 20-percent vessel ownership 
requirement in Sec.  679.42(i)(1) by adding a time requirement to it: 
The individual QS holder is exempt from the owner-on-board requirement 
if the individual owns 20 percent of the vessel for the 12-month period 
prior to when the individual applies for a hired master permit. The 
proposed rule did not explicitly modify Sec.  679.42(i)(4) to apply the 
12-month vessel ownership requirement when an individual QS holder 
claims an exemption from the owner-on-board requirement by owning an 
interest in the entity that owns the vessel.
    The final rule corrects that omission and revises Sec.  
679.42(i)(4). The final rule revises Sec.  679.42(i)(4) by applying the 
12-month ownership requirement to individual QS holders who claim an 
exemption from the owner-on-board requirement by owning an interest in 
the corporation or other entity that owns the vessel. Under the final 
rule, those QS holders must show a 20-percent ownership interest in the 
vessel ``during the 12-month period previous to the application by the 
individual for a hired master permit.'' Every part of the rationale in 
the proposed rule applies with equal force to individual QS holders who 
claim an exemption from the owner-on-board requirement by owning 20 
percent of a vessel in their own name and individual QS holders who 
claim an exemption by owning an interest in the corporation or 
partnership that owns the vessel.
    5. The final rule changes Sec.  679.42(i)(4) to clarify the 
provision. The last sentence in Sec.  679.42(i)(4) currently states, 
``For purposes of this paragraph, interest in a vessel is determined as 
the percentage ownership of a corporation, partnership, association or 
other non-individual entity by that individual multiplied by the 
percentage of ownership of the vessel by the corporation, partnership, 
or other non-individual entity.'' The final rule revises this sentence 
in Sec.  679.42(i)(4) to more clearly state whose interest in the 
vessel must be determined, namely the interest of the individual QS 
holder, and how to calculate that interest, ``For purposes of this 
paragraph, an individual's interest in a vessel is determined by the 
percentage ownership by the individual of a corporation, partnership, 
association or other non-individual entity that has an ownership 
interest in the vessel multiplied by the percentage of ownership of the 
vessel by the corporation, partnership, or other non-individual 
entity.'' For example, under the existing regulation and this final 
rule, if an individual owns 50 percent of a corporation, and the 
corporation has a 50 percent ownership interest in the vessel, the 
individual's ownership interest in the vessel is .50 multiplied by .50, 
which means the individual has a .25 or 25 percent ownership interest 
in the vessel.
    6. The final rule clarifies the proposed rule at Sec.  679.42(i)(6) 
and (7) to state that, in the event of vessel loss and vessel 
disablement, the QS holder does not have to meet the 12-month vessel 
ownership requirement but still must meet the 20-percent vessel 
ownership interest requirement.
    The Council clearly stated its intent on this point at its October 
and November 2007 meetings. The Council motions at both meetings 
explicitly state that, in the event of a total vessel loss or a vessel 
needing significant repairs, the QS holder is exempt from the 12-month 
vessel ownership requirement, but not the 20-percent vessel ownership 
requirement (Council Minutes, NPFMC Web site, http://www.alaskafisheries.noaa.gov/npfmc). The Analysis states that, in the 
event of total vessel loss or temporary vessel loss due to repairs, the 
QS holder would be exempt from the 12-month vessel ownership 
requirement, but not the 20-percent requirement. The proposed rule 
explicitly stated in the preamble: ``The exemption for loss of or 
damage to a vessel applies to the 12-month ownership requirement only, 
and not the 20-percent ownership requirement. If a QS holder's vessel 
is damaged and undergoing repairs that will take at least 60 days, the 
QS holder may acquire temporary interest in another vessel in order to 
hire a master, but that temporary interest must constitute a minimum of 
20-percent ownership of the vessel.'' (77 FR 65847, October 31, 2012).
    The text of the proposed rule stated that in the event of total 
loss or temporary disablement of a vessel, the owner of the vessel 
``may remain exempt'' from the owner-on-board requirement but did not 
specify completely the terms of the QS holder's continuing exemption. 
The Council motions, the Analysis, and the preamble to the proposed 
rule all clearly state that, in the event that the individual QS holder 
suffers a total or temporary loss of a vessel, the QS holder's 
exemption from the owner-on-board requirement is still conditioned on 
the QS holder owning a 20-percent interest in the vessel that will fish 
the QS holder's IFQ. The final rule corrects the proposed rule on this 
point.
    7. The final rule revises the proposed regulatory text at Sec.  
679.42(i)(6) and Sec.  679.42(i)(7) by replacing ``owner,'' ``owner of 
such vessel,'' and ``owner of lost vessel'' with ``individual.'' NMFS 
makes this change because the rule applies to individuals who are 
initial recipients of QS and because the existing regulatory text uses 
``individual.''
    8. The final rule reorganizes the proposed regulatory text in Sec.  
679.4(i)(6) and (i)(7) by adding the phrase ``provided the individual 
meets the following requirements,'' and then numbering all the 
requirements that the individual QS holder must meet, because the 
proposed rule included only two of four requirements in the numbered 
list.
    9. The final rule revises the opening phrase in the proposed 
regulatory text at Sec.  679.42(i)(6) from ``[i]n the event of the 
total loss of a vessel'' to ``[i]n the event of the total loss or 
irreparable damage to a vessel,'' because the rule applies to 
situations of a total loss of a vessel and irreparable damage to a 
vessel. For the same reason, the final rule makes a similar change 
later in Sec.  679.42(i)(6), namely from ``[t]he lost vessel must be'' 
in 679.42(i)(6)(i) to ``[t]he lost vessel or irreparably damaged vessel 
is'' in Sec.  679.42(i)(6)(ii).
    10. The final rule revises the first sentence of Sec.  679.42(i)(6) 
and (i)(7) by substituting the phrase ``the year following the year in 
which'' for the phrase ``the year following the year that which'' so 
that the final rule text states, ``the individual may remain exempt 
[from the owner-on-board requirement] under paragraph (i)(1) of this 
section until December 31 of the year following the year in which the 
vessel was [lost, damaged, or disabled].'' This change eliminates the 
grammatically incorrect phrase ``the year that which'' and makes clear 
the ending date of the exemption.
    11. The final rule revises the proposed regulatory text in Sec.  
679.42(i)(6) and (i)(7) from that the lost or disabled vessel must have 
been used to harvest halibut IFQ or sablefish IFQ ``by the owner'' to 
that the vessel must have been used to harvest halibut IFQ or sablefish 
IFQ ``of the individual.'' NMFS makes this

[[Page 10000]]

change because the lost or disabled vessel must have harvested IFQ 
belonging to the individual QS holder but the IFQ did not have to be 
harvested by the individual QS holder.
    12. The final rule changes the references in the proposed 
regulatory text at Sec.  679.42(i)(7) from ``damaged'' vessel to 
``disabled'' vessel to distinguish the disabled vessel in Sec.  
679.42(i)(7) from the irreparably damaged vessel in Sec.  679.42(i)(6).
    13. The final rule revises the proposed regulatory text in Sec.  
679.42(i)(7) from the requirement that ``necessary repairs require at 
least 60 days to be completed'' to the more precise requirement that 
``[t]he repairs from the accident require at least 60 days to be 
completed.''
    14. The final rule eliminates the phrase ``or negligence'' from the 
proposed rule at Sec.  679.42(i)(6). The proposed rule at Sec.  
679.42(i)(6) temporarily suspended the 12-month vessel ownership 
requirement for a QS holder who suffered a total loss of a vessel as 
long as the QS holder showed that the total loss was caused by ``an act 
of God, an act of war, a collision, an act or omission of a party other 
than the owner or agent of the vessel, or any other event not caused by 
the willful misconduct or negligence of the owner or agent.''
    The ``or negligence'' phrase was the subject of a public comment 
noted in Comment 11. The commenter noted that the proposed rule limited 
the ability of a QS holder to use a hired master on a replacement 
vessel if the QS holder lost their prior vessel due to an act of 
negligence by the vessel owner or the vessel owner's agent. The 
commenter identified vessel groundings as an event that could cause a 
vessel loss. The commenter stated that most vessel groundings are the 
result of some level of negligence, that a common cause for grounding 
is that a skipper or a crew member falls asleep during wheel watches 
and that it would be difficult for NMFS to determine negligence.
    NMFS agrees with the comment. NMFS concludes that the proposed rule 
mistakenly required NMFS to determine if a QS holder lost a vessel due 
to negligence and to deny suspension of the 12-month vessel ownership 
requirement on that basis. Except for the negligence language, the 
proposed rule incorporated the standard in the American Fisheries Act 
(AFA) for determining the cause of a total vessel loss and for limiting 
the use of a replacement vessel. The AFA did not require NMFS to 
determine whether negligence was the cause of any loss or damage to an 
AFA vessel. The standard in the AFA in 2007, when the Council 
considered this action, was that in the event of a total or 
constructive loss of an AFA vessel, the owner of the vessel could 
replace the vessel if the loss was caused by any of the causes that 
were specifically enumerated, namely ``an act of God, an act of war, a 
collision, an act or omission of a party other than the owner or agent 
of the vessel,'' or if the cause of the vessel loss fell within a 
remaining catchall category, ``any other event not caused by the 
willful misconduct of the owner or agent'' (section 208(g) of the AFA, 
https://alaskafisheries.noaa.gov/sustainablefisheries/afa/afa.pdf).
    The Analysis for this action contains no indication that the 
Council intended that NMFS determine whether a total vessel loss was 
due to negligence--a determination that could be difficult and time-
consuming--and deny the suspension of the 12-month ownership 
requirement on that basis. The preamble to the proposed rule did not 
state that NMFS should determine whether a total vessel loss was due to 
negligence and deny the suspension of the 12-month ownership 
requirement on that basis. NMFS concludes that the proposed rule text 
did not comport with Council intent and erroneously contained the 
negligence limitation. The final rule retains the AFA standard at Sec.  
679.42(i)(6)(i), modified for the IFQ context, namely to use a hired 
master on a replacement vessel, the individual QS holder must show that 
the ``loss or irreparable damage to the vessel was caused by an act of 
God, an act of war, a collision, an act or omission of a party other 
than the individual [QS holder] or agent of the individual [QS holder], 
or any other event not caused by the willful misconduct of the 
individual [QS holder] or agent of the individual [QS holder].''
    15. The final rule eliminates the changes in the proposed rule to 
Sec.  679.42(j). Section 679.42(j) is the current regulation that 
governs the use of IFQ by corporations, partnerships, associations, or 
other non-individual entities that hold QS. The proposed rule added the 
12-month ownership requirement to Sec.  679.42(j). The application of 
the proposed rule to QS holders that are non-individual entities was 
the subject of the public comment described in Comment 17. In response 
to this comment, NMFS reexamined the record of this action. NMFS 
concluded that the Council did not intend to impose the 12-month vessel 
ownership requirement on non-individual QS holders, such as 
corporations, partnerships, or associations. NMFS therefore eliminates 
the changes to Sec.  679.42(j) in the final rule.
    The Analysis for this action states unequivocally that the action 
approved by the Council imposed the 12-month ownership requirement only 
on individual QS holders. Section 5 of the Analysis states: ``For 
clarity, QS and QS holders who must hire skippers are not subject to 
this action or considered in this analysis. Persons who `must' hire 
skippers are all non-individual QS holders.'' Non-individual QS holders 
means corporations, partnerships, associations, and other legal 
entities that hold QS. Non-individual QS holders were ``not subject to 
this action or considered in this analysis.''
    Individual QS holders were subject to the Council's action and were 
considered in the Analysis of this action. Individual QS holders means 
natural persons that hold QS. Individual QS holders who initially 
received Quota Share may, but not must, hire a skipper to harvest their 
annual IFQ. The Analysis showed that from 1995 to 2010, the number of 
individual QS holders declined through attrition but the remaining 
individual QS holders were increasing their use of hired masters 
(Analysis, Table 3, Table 4, Table 7; see ADDRESSES).
    The proposed rule cited this evidence to describe the problem that 
the rule was designed to solve, ``Over the course of the IFQ Program, 
the number of initial QS holders who may hire a master has declined 
through attrition, while the reliance on hired masters by those QS 
holders has increased. While this may appear contradictory, it 
demonstrates that initial recipients who used to be active in the 
fishery are retired from active participation and instead are hiring 
skippers to fish their IFQ permits.'' (77 FR 65846, October 31, 2012). 
This problem statement only applies, and only could apply, to 
individual QS holders because it is only individual QS holders, who 
could have retired from active participation and begun hiring skippers 
to fish their IFQ permits. Non-individual QS holders never were, and 
never could have been, active in the fishery by fishing their own IFQ 
permits. Thus, the record of this action does not support applying the 
proposed rule to QS held by non-individual entities. NMFS also 
clarifies a statement in the preamble to the proposed rule with regard 
to Form 2692 and a QS holder's claim that a vessel is temporarily 
disabled. Form 2692 is a United States Coast Guard (USCG) form. The 
current title of Form 2692 is ``Report of Marine Casualty.'' The former 
title of Form 2692 was ``Report of Marine Accident, Injury or Death.''

[[Page 10001]]

The preamble to the proposed rule stated: ``If USCG Form 2692 is not 
required to be completed for a vessel at the time of an incident that 
caused the 60-day duration of repair, then the vessel owner would be 
required to provide additional documentation to NMFS demonstrating that 
the vessel meets the requirements of this exception'' (77 FR 65847, 
October 31, 2012).
    The preamble implies that Form 2692 may not be required in 
situations where a QS holder claims that he or she cannot meet the 12-
month vessel ownership requirement because the QS holder's vessel is 
temporarily disabled. This is not the case. To prove a claim of 
temporary vessel disablement under Sec.  679.42(i)(7), the individual 
QS holder must show that the vessel is disabled ``from repairs required 
by an accident that materially and adversely affected the vessel's 
seaworthiness or fitness for service.'' Under USCG regulations at 46 
CFR 4.05-1, if a vessel is involved in ``an occurrence materially and 
adversely affecting the vessel's seaworthiness or fitness for service 
or route,'' a vessel operator or other person in charge of the vessel 
must report the incident to the USCG. The USCG form for reporting 
marine accidents is Form 2692: http://marineinvestigations.us. Thus, 
although it is true that a vessel operator does not have to report all 
accidents to the USCG, a vessel operator or other person in charge of a 
vessel does have to report to the USCG on Form 2692 all accidents that 
constitute a ``temporary vessel disablement'' under this rule. To prove 
a claim of temporary vessel disablement, the individual QS holder must 
submit to NMFS a copy of Form 2692 that has been submitted to the USCG 
concerning the accident.
    NMFS notes that if an individual submits to NMFS a copy of Form 
2692 that has been submitted to the USCG, that form alone does not show 
that the individual QS holder meets the requirements in the rule to 
show that a vessel is temporarily disabled. The individual QS holder 
must also submit documentation that the accident will require, or has 
required, at least 60 days of repairs.
    16. The final rule modifies regulations at Sec.  679.5(l)(7)(i) to 
correct reporting requirements for Registered Buyers who receive and 
purchase landings of sablefish or halibut or Community Development 
Quota (CDQ) halibut. The regulations at Sec.  679.5(l)(7)(i) require 
Registered Buyers to annually submit an IFQ Buyer Report to NMFS. The 
information submitted on IFQ Buyer Reports is used to calculate and 
assess fees to recover the costs of managing and enforcing the IFQ 
Program from fishery participants (Sec.  679.43). NMFS also uses 
information submitted on IFQ Buyer Reports to calculate and assess 
observer deployment fees for the North Pacific Groundfish Observer 
Program (Sec.  679.55). These reporting requirements were promulgated 
in a 2012 observer program final rule (77 FR 70062, November 21, 2012). 
NMFS inadvertently revised these reporting requirements in a final rule 
to implement a halibut catch sharing plan for guided sport and 
commercial fisheries in Alaska (78 FR 75844, December 12, 2013). The 
halibut catch sharing plan final rule incorrectly removed the 
requirement for Registered Buyers of landings of CDQ halibut to submit 
an IFQ Buyer Report. The halibut catch sharing plan final rule also 
incorrectly revised regulations specifying the information that must be 
included on an IFQ Buyer Report and the methods for submitting the 
report to NMFS. This final rule revises Sec.  679.5(l)(7)(i) to correct 
these inadvertent errors.

Comments and Responses

    NMFS received 7 letters that contained 22 comments on the proposed 
rule.
    Comment 1. One commenter supports the proposed rule. The commenter 
supports the Council's goal of preserving the historical character of 
the commercial Pacific halibut and sablefish fisheries as owner/
operator fisheries and believes the proposed rule is an effective way 
to promote that goal.
    Response. NMFS notes this support.
    Comment 2. The commenter asserts that the Federal system of fishery 
management is a fraud and does not benefit the public who are the real 
owners of these fish.
    Response. This comment does not specifically address the proposed 
rule. The issue of the overall validity of Federal management of marine 
resources is outside the scope of this action. The commenter raises no 
relevant issues or concerns that were not addressed in the preamble to 
the proposed rule or the Analysis prepared for this action.
    Comment 3. The proposed rule accomplishes little in light of recent 
Council action that limits the exemption that initial individual 
recipients have from the owner-on-board requirement for QS that they 
acquire after February 12, 2010. This other Council action violates the 
American with Disabilities Act.
    Response. The commenter is correct that the Council has 
recommended, and NMFS has recently proposed, a rule that largely 
eliminates the exemption from the owner-on-board requirement for QS 
that initial individual QS recipients acquire by transfer after 
February 12, 2010 (78 FR 24707, April 26, 2013). NMFS will consider 
comments that it receives on that proposed rule when it responds to 
comments on that proposed rule.
    NMFS agrees that this other proposed rule, if adopted, would 
prevent initial individual QS recipients from expanding the amount of 
QS that is subject to an exemption from the owner-on-board requirement. 
This other proposed rule, however, does not obviate the need for this 
rule. First, the other action is a proposed, not a final, rule. Second, 
the other action does not affect in any way QS that initial individual 
recipients of QS acquired on or before February 12, 2010, either by 
initial issuance or transfer. Without the rule that is the subject of 
this action, for all QS acquired on or before February 12, 2010, an 
initial individual recipient of QS could still use a hired master to 
harvest that QS from a vessel in which the QS holder had only a 
temporary ownership interest. With the rule that is the subject of this 
action, except for situations of total or temporary vessel loss, an 
initial individual QS holder who wishes an exemption from the owner-on-
board requirement for any QS that the individual holds must maintain a 
minimum 20-percent ownership interest in the vessel that the hired 
master will use for the 12-month period before the individual applies 
to use a hired master. The effect of this rule is separate and distinct 
from the action that was the subject of this comment.
    Comment 4. The proposed rule does very little to promote the 
movement of QS from the first-generation fishing families to Community 
Quota Entities or second-generation fishermen.
    Response. The rule gives initial individual recipients of QS a 
choice among three responses to this rule: (1) The individual QS holder 
harvests his or her IFQ by being on board the vessel; (2) the 
individual QS holder harvests his or her IFQ through a hired master and 
maintains a 20-percent ownership interest in the vessel for the 12 
months before hiring the master; or (3) the individual QS holder 
transfers his or her QS. Any of these actions by individual QS holders 
represents an improvement over the status quo and furthers an objective 
of the Council in taking this action.
    To the extent that individual QS holders choose the first 
alternative, and harvest their IFQ by being on board the vessel, this 
furthers the Council's objective of compliance with the owner-

[[Page 10002]]

on-board requirement in the IFQ fisheries. To the extent that 
individual QS holders choose the second alternative, and maintain the 
required vessel ownership interest, this promotes the Council's 
objective that QS holders have a meaningful interest in the vessel from 
which their IFQ is fished as a condition for using a hired master. To 
the extent that individual QS holders choose the third alternative, and 
transfer QS, this increases the opportunity for Community Quota 
Entities (CQEs) and individuals with substantial crew experience to 
acquire QS because CQEs and individuals with substantial crew 
experience meet the requirements in regulation to receive QS by 
transfer. NMFS notes that if a CQE acquires QS, the QS will be fished 
by a resident of a small, rural community that the CQE represents. NMFS 
examines CQEs further in Comment 10.
    Comment 5. The proposed rule is like requiring a homeowner to own a 
new home for 12 months before moving into it.
    Response. Under this rule, an initial individual recipient of QS 
may fish his or her IFQ from any vessel, including a vessel in which 
the individual has no ownership interest, as long as the individual is 
on board the vessel for the entire trip and landing. Thus, for the 
first 12 months that an individual owns a 20-percent interest in a 
vessel, the individual can fish his or her IFQ from that vessel, as 
long as the individual is on board the vessel. If the individual QS 
holder does not want to harvest IFQ from a vessel he or she has owned 
for 12 months, and does not want to be on board a new vessel, the 
individual has a transferable asset, namely QS, an asset that the 
individual received as an initial recipient and that the individual may 
transfer for value.
    Comment 6. The proposed rule makes it difficult for QS holders to 
acquire a new vessel by purchase or by construction because the QS 
holder cannot use that new vessel to fish his or her IFQ for 12 months. 
The proposed rule makes it difficult to obtain financing for a new 
vessel because the QS holder cannot use that new vessel to fish his or 
her IFQ for 12 months.
    Response. An initial individual recipient of QS may fish his or her 
IFQ from any vessel for any reason, as long as the individual QS holder 
is on board the vessel during the trip and landing. If the ability to 
use a vessel immediately to fish IFQ is a key to financing purchase of 
a new vessel, the individual QS holder can use a new vessel immediately 
by being on board the vessel during the harvest of the IFQ.
    If the individual is unwilling or unable to be on board the vessel, 
this suggests that the individual has ceased active participation in 
the fishery. When an individual is no longer an active participant in 
the IFQ fishery, the Council intended that person would transfer his or 
her QS and, in that way, allow future generations to participate in the 
commercial harvest of Pacific halibut and sablefish in Alaska. If the 
proposed rule causes QS holders who are no longer active fishermen to 
divest themselves of QS, that is what the Council intended.
    Comment 7. The proposed rule is an attempt to cause well-meaning 
fishing families to sell out.
    Response. NMFS disagrees. As noted, the proposed rule gives initial 
individual recipients of QS a choice: (1) Harvest their IFQ by being on 
board the vessel; (2) harvest their IFQ through a hired master and 
maintain a 20-percent ownership interest in the vessel for the 12 
months prior to using the hired master; (3) transfer their QS. If the 
QS holder chooses to transfer QS, the QS holder can transfer it to a 
family member, as long as the family member is eligible to receive QS 
by transfer. To receive QS by transfer, an individual either must have 
initially received QS or must have 150 days experience working as part 
of a harvesting crew in any U.S. commercial fishery, a requirement that 
favors fishing families. The QS holder may transfer their QS to a 
family member on terms that the QS holder chooses: as a gift, at a 
discounted price, or at full-market value.
    Comment 8. The proposed rule discriminates against initial 
recipients. The proposed rule does not apply to second generation QS 
holders.
    Response. The commenter is correct that the proposed rule only 
applies to first-generation QS holders, or initial individual 
recipients of QS, because initial individual recipients are exempt from 
the owner-on-board requirement by owning the vessel from which their 
IFQ will be harvested. This rule tightens the vessel ownership 
exemption by requiring that initial individual recipients own the 
vessel for 12 months prior to using a hired master. Individuals who are 
second-generation QS holders are never exempt from the owner-on-board 
requirement based on vessel ownership. Therefore, the proposed rule 
does not, and actually could not, apply to them.
    Comment 9. The proposed rule is an attempt to prevent QS holders 
from marketing quota to different vessels.
    Response. NMFS agrees that the rule seeks to prevent individuals 
from marketing their QS to different vessels if, by that, the commenter 
means that a QS holder will use hired masters to harvest IFQ on a 
number of different vessels in which the QS holder has only a short-
term ownership interest, such as an ownership interest for only the 
duration of the IFQ trip. If an individual QS holder has a substantial, 
long-term interest in a vessel, which the Council specified as a 20-
percent ownership interest for 12 months, the proposed rule allows the 
QS holder to ``market'' his or her QS to that vessel.
    Comment 10. The proposed rule does not apply to Community 
Development Quota (CDQ) groups or Community Quota Entities (CQEs). CDQ 
groups and CQEs have an unfair financial advantage over other QS 
holders because CDQ groups and CQEs are tax-exempt.
    Response. The CDQ Program was established in 1992 (57 FR 54936, 
November 23, 1992). The CDQ groups are six non-profit corporations that 
represent one or more communities in western Alaska. CDQ groups do not 
receive QS. CDQ groups do receive an annual allocation of Pacific 
halibut, sablefish, and other species in the BSAI. CDQ groups use the 
revenue derived from the harvest of their fisheries allocations to fund 
economic development activities and provide employment opportunities 
for the communities they represent (77 FR 6492, February 8, 2012).
    CQEs are non-profit corporations that may acquire halibut QS by 
transfer. CQEs represent one or more small, rural communities that are 
located adjacent to the coast of the Gulf of Alaska. Since NMFS began 
issuing QS in 1995, the amount of QS and the number of resident QS 
holders has declined substantially in these communities. The purpose of 
CQEs is to minimize the adverse, economic impact of the IFQ Program on 
these communities and to provide the opportunity for the sustained 
participation of these communities in the IFQ fisheries. NMFS adopted 
the CQE rule in 2004 (69 FR 23681, April 30, 2004). If a CQE acquires 
QS, it must harvest its IFQ through a resident of the community that 
the CQE represents (50 CFR 679.41(c)(10)). Twenty-nine CQEs have formed 
representing 30 communities. Only two CQEs hold any QS. For additional 
detail on CQE holdings, see https://alaskafisheries.noaa.gov/ram/.
    The commenter is correct that this rule does not apply to CDQ 
groups and CQEs. This rule applies to individual QS holders to prevent 
these QS holders from using hired masters to harvest their QS based on 
short-term ownership of vessels that the hired masters are using. CDQ 
groups and CQEs are non-profit

[[Page 10003]]

corporations. CDQ groups must use hired masters to harvest fish on 
their behalf. CQEs must lease their IFQ to community residents. Neither 
entity is causing the problem that this rule seeks to solve.
    The commenter is also correct that CDQ groups and CQEs are non-
profit corporations that are tax-exempt according to the provisions in 
Federal and State laws. The question of tax exemption for non-profit 
corporations is beyond the scope of this rule.
    NMFS notes that this rule applies to individual QS holders who 
received QS as initial recipients and who may transfer that QS on 
financial terms of their choosing. CDQ groups do not receive a 
transferable asset; they can harvest their allocation every year but 
they cannot sell or transfer the allocation. CQEs do hold QS and may 
transfer it, subject to restrictions. But CQEs only acquire QS by 
purchase.
    Comment 11. The proposed rule at Sec.  679.42(i)(6) limits the 
ability of a QS holder to use a hired master if the QS holder lost 
their prior vessel due to any act of negligence by the vessel owner or 
the vessel owner's agent. Most vessel groundings are the result of some 
level of negligence. A common cause for grounding is that a skipper or 
a crew member falls asleep during wheel watches. It would be difficult 
for NMFS to determine negligence.
    Response. NMFS agrees with the action requested by this comment and 
eliminates the negligence limitation in Sec.  679.42(i)(6) in the final 
rule. NMFS concludes that the rule, as proposed, did not comport with 
Council intent. NMFS explains the basis for this conclusion in the 
section, ``Changes From the Proposed Rule.''
    Comment 12. The proposed rule will encourage vessel owners to 
continue fishing in smaller, unsafe vessels because the cost of having 
a new vessel without any revenue for 12 months could be prohibitive.
    Response. NMFS does not believe that the rule will result in a less 
safe IFQ fleet. First, all vessels are subject to safety regulations. 
Second, a primary benefit of the IFQ program is to promote safety by 
decreasing the race for fish. A QS holder has a specific amount of 
halibut or sablefish that the QS holder is authorized to harvest 
throughout the season and therefore does not need to fish in poor 
weather. Third, the commenter does not provide evidence that the status 
quo is leading QS holders to invest in newer, safer, or larger IFQ 
vessels. The problem that led to this rule was that the Council 
concluded that some QS holders were claiming exemption from the owner-
on-board requirement by acquiring an ownership interest in a vessel for 
only the duration of the IFQ trip. It does not seem likely that short-
term ownership of a vessel would motivate a QS holder to invest in 
improvements to the vessel or to invest in a new vessel. In fact, the 
opposite seems more likely, namely that if a QS holder can only be 
exempt from the owner-on-board requirement by owning an interest in a 
vessel for 12 months, then the QS holder may be more interested in 
upgrading the vessel.
    Most importantly, the rule does not prevent a QS holder from owning 
a newer, bigger, or safer vessel and immediately using that vessel to 
harvest his or her IFQ. An individual QS holder can immediately use a 
new vessel to harvest his or her IFQ, and immediately get revenue from 
the new vessel, as long as the individual QS holder is on board the 
vessel for the IFQ trip and landing.
    Comment 13. The proposed rule is based on a false assumption that a 
vessel lease cannot be a long-term arrangement--extending for 12 months 
or more--that shows as meaningful a commitment to the fishery as a 20-
percent ownership of a vessel.
    Response. From the inception of the IFQ Program, an individual QS 
holder had to either fish his or her own IFQ permit by being on board 
the vessel or use a hired master who fished from a vessel that the QS 
holder owned. A vessel leased by the QS holder has never been a 
sufficient basis for the QS holder to use a hired master in the IFQ 
Program.
    NMFS acknowledges it is possible that a QS holder could lease a 
vessel and that the vessel owner and the QS holder would agree that the 
QS holder would pay expenses that a vessel owner normally would. The 
commenter does not provide any evidence that this is a common practice 
and any rationale why a QS holder would want to lease a vessel and take 
on expenses, such as repairs, that contribute to the long-term life of 
the vessel beyond the lease period. However, if a QS holder has leased 
a vessel on financial terms that more closely resemble a 20-percent 
ownership interest for 12 months, the final rule gives the QS holder 13 
months to choose whether to be on board the vessel during the IFQ 
harvest, convert the lease to an ownership interest, or transfer the 
QS.
    Comment 14. Under the proposed rule, a QS holder might have an 
ownership interest in a vessel that was a paper transaction only.
    Response. The commenter is correct that this rule only requires 
that an individual QS holder prove the required 12-month period of 
vessel ownership as reflected in the formal records of the title to the 
vessel. The QS holder does not have to submit details to NMFS of the 
financial transactions that led to the ownership interest. The Council, 
however, believes that imposing a 12-month period of vessel ownership, 
coupled with the requirement that the QS holder prove ownership by 
standardized documentation, decreases the likelihood that QS holders 
will have an ownership interest on ``paper only.''
    The Council took this action because it believed that some 
individual QS holders owned a 20-percent interest in the vessel only 
for the duration of a trip as a way to claim an exemption from the 
owner-on-board requirement. The Council concluded that if the QS holder 
had to own a 20-percent interest for 12 months, the QS holder would 
more likely have an actual, meaningful ownership interest in the 
vessel. This rule increases the likelihood that a QS holder would be 
interested in the condition of the vessel for at least a 12-month 
period, not merely for the duration of the IFQ trip.
    The Council also recommended, and NMFS adopted, a regulation that 
QS holders who wish an exemption from the owner-on-board requirement 
must submit formal documents showing a minimum 20-percent ownership 
interest in the vessel from which their IFQ would be fished: an United 
States Coast Guard Abstract of Title for federally-documented vessels, 
a State of Alaska vessel license or registration for State-documented 
vessels (72 FR 44795, August 9, 2007). This means that the QS holder's 
claimed ownership interest in the vessel cannot be proven merely by a 
verbal agreement or informal written agreement between the QS holder 
and other owner(s) of the vessel. The QS holder's interest must be 
reflected in formal vessel ownership documents maintained by the 
Federal or State government.
    Comment 15. If a QS holder experienced an engine failure near the 
end of the season, and the repairs would only take 30 days, the QS 
holder would lose the rest of the fishery for that year.
    Response. The commenter is correct that if an individual QS 
holder's vessel has an accident that will take less than 60 days to 
repair, then the individual QS holder may not hire a master to fish his 
or her IFQ on a vessel that the individual QS holder has not owned for 
12 months. As the commenter implies, the QS holder can harvest his or 
her IFQ any time during the year and this scenario is only a potential 
problem if the engine failure occurred near the end of the season. In 
that situation, the individual QS holder could finish out

[[Page 10004]]

the season with any vessel as long as the individual QS holder was on 
board the vessel during the harvest of the QS holder's IFQ.
    Comment 16. The proposed rule underestimates the documentation and 
time required to prove ownership of a vessel by other types of 
documentation.
    Response. Under the current regulation, a QS holder must prove a 
minimum 20-percent ownership of a vessel by standard documents that a 
vessel owner should have fairly easily available: an Abstract of Title 
for a federally documented vessel and a State of Alaska vessel license 
or registration for a State-licensed vessel. If those documents show a 
minimum of 20-percent ownership for the past 12 months, the QS holder 
need not submit other types of documentation. If, for any reason, the 
standard documents do not show that the QS holder has a 20-percent 
ownership interest for at least 12 months, the QS holder must submit 
additional documentation.
    The need to submit other types of documentation seems most likely 
to occur when an individual QS holder owns a vessel with other persons. 
NMFS hopes, and expects, that most QS holders would have formalized 
their ownership arrangements with other persons in documents that exist 
independently from the application by the QS holder to use a hired 
master. Proving vessel ownership should not require creating documents 
but merely retrieving them.
    But since retrieving documents takes time, and that time should be 
included in the estimate of compliance time, NMFS agrees that the time 
estimate in the proposed rule was too low. The time estimate in the 
proposed rule was an estimate of an average of 30 minutes to fill out 
the form, ``Application for IFQ/CDQ Hired Master Permit.'' NMFS agrees 
that the average time to fill out the form would likely be more than 30 
minutes. NMFS revises its estimate to the average time to fill out the 
Application for IFQ/CDQ Hired Master Permit from 30 minutes to 60 
minutes.
    Comment 17. Corporate owners of vessels do not have the ability to 
be on board the vessel and thus have no alternative to fishing their 
IFQ from a vessel that they have owned for the 12 months prior to the 
harvest. Corporate owners could not upgrade to a new vessel and use it 
immediately to fish their IFQ. Corporate owners would have to maintain 
a 20-percent interest in a second vessel in case they experienced a 
problem with their first vessel that was not covered by this rule.
    Response. NMFS agrees with this comment. NMFS withdraws the changes 
in the proposed rule to Sec.  679.42(j), which is the regulation that 
governs the use of QS held by corporations and other non-individual 
entities. NMFS concludes that the Council did not intend to apply the 
12-month vessel ownership requirement to the use of QS by non-
individual entities. NMFS explains the basis for this conclusion in the 
section, ``Changes From the Proposed Rule.''
    Comment 18. The proposed rule makes it harder for new entrants, 
such as IFQ crewmembers, to get into the fishery. Under the current 
rules, new entrants to the halibut and sablefish fishery can buy a 
vessel, convey a 20-percent interest to an initial recipient, and make 
money immediately by harvesting IFQ under a hired skipper permit. A new 
entrant into the IFQ fisheries cannot afford to purchase a vessel and 
own the vessel for 12 months, but not get any money from the use of the 
vessel to harvest IFQs for 12 months.
    Response. NMFS disagrees that the overall effect of the rule will 
make it harder for new entrants, such as IFQ crew members, to enter the 
fishery. First, the Analysis for this action does not show that the 
status quo management is promoting new entrants into the IFQ fisheries. 
In the 12-year period of 1998 to 2010, the annual fishable IFQ halibut 
pounds held by initial individual recipients decreased only slightly 
from 43 percent to 40 percent of the total IFQ halibut pool. Over the 
same period, the annual fishable IFQ sablefish pounds held by initial 
individual recipients decreased only slightly from 28 percent to 22 
percent of the total IFQ sablefish pool (Analysis, Table 6; see 
ADDRESSES). Under current regulations, new entrants are acquiring QS at 
a very slow rate.
    Second, the final rule still allows QS holders to form agreements 
with individuals seeking entry into the IFQ fisheries. The commenter 
states that the status quo promotes the entry of new persons into the 
IFQ fisheries by allowing new entrants to purchase vessels. The 
commenter is correct that under the status quo, a person who owns a 
vessel may agree with an individual QS holder to fish their IFQ 
immediately, without the QS holder being on board the vessel, as long 
as the QS holder acquires a 20-percent interest in the vessel for the 
duration of the IFQ trip. The commenter is also correct that after the 
final rule goes into effect, individual QS holders will not be able to 
receive an exemption from the owner-on-board requirement, unless they 
maintain an ownership interest in the vessel for the 12 months before 
they want the exemption.
    After the final rule goes into effect, an individual seeking entry 
into the IFQ fishery by buying a vessel first, rather than buying QS 
first, will still be able to offer a QS holder the immediate use of a 
vessel to harvest IFQ, but only if the QS holder is on board the vessel 
for the harvest. The rule will not put any individual seeking entry 
into the IFQ fishery at a competitive disadvantage: No vessel owner 
will be able to offer an individual QS holder an immediate exemption 
from the owner-on-board requirement. Except for vessel loss situations, 
all individual QS holders will have to wait 12 months to claim an 
exemption from the owner-on-board requirement.
    When faced with the choice between (1) being on board the vessel 
for the harvest of their QS, (2) maintaining a 20-percent ownership 
interest in a vessel for 12 months, or (3) transferring their QS, some 
QS holders will choose to be on board the vessel. Some QS holders will 
choose to maintain a 20-percent interest in a vessel for 12 months as a 
way of preserving their eligibility for an exemption from the owner-on-
board requirement. This will result in an increased demand by QS 
holders for longer-term ownership agreements with individuals who are 
seeking entry into the IFQ fisheries and who own vessels suitable for 
fishing IFQ. Some QS holders will choose the third alternative and 
transfer their QS. This will result in the increased availability of QS 
to persons seeking entry into the IFQ fisheries.
    Comment 19. The proposed rule is an attempt by Alaskans to make 
non-Alaskans sell out.
    Response. The 12-month vessel ownership requirement in this rule 
applies to all initial individual recipients of QS who wish to use a 
hired master to harvest their IFQ. The proposed rule applies equally to 
residents and non-residents of Alaska and does not discriminate based 
on residency.
    Comment 20. The proposed rule would drive down prices for used 
vessels and weaken construction of new vessels.
    Response. With regard to the claim that the proposed rule would 
drive down the price of used vessels, the commenter does not clearly 
explain why he believes this would happen and why it would be bad if it 
did happen. It seems that the commenter is asserting that the proposed 
rule will cause a decrease in demand for vessels to harvest IFQ, and 
therefore a decrease in the price of used vessels, because QS

[[Page 10005]]

holders will collectively use fewer vessels to harvest their IFQ 
allotments.
    NMFS does not believe that this is a problem with the proposed rule 
for four reasons. First, it is not NMFS's responsibility to manage the 
IFQ fisheries to maintain any particular price level for IFQ vessels. 
When vessel prices decrease, this helps people who want to buy vessels 
and enter the fishery. When vessel prices increase, this helps people 
who want to sell their vessels. It is NMFS's responsibility to 
establish the rules for the issuance, use, and transfer of QS through 
the Council process in the Halibut Act and the Magnuson-Stevens Act. 
Within those rules, the market establishes the price of QS and the 
market establishes the price of vessels that harvest QS.
    Second, the rule established by this regulation is that QS holders 
cannot use a hired master by ``owning'' a 20-percent interest in a 
vessel for the duration of a trip, ``owning'' a 20-percent interest in 
another vessel for the duration of a trip, ``owning'' a 20-percent 
interest in another vessel for the duration of a trip, and so forth. 
Under this rule, a QS holder must now own one vessel for 12 months 
before the QS holder can use a hired master to fish QS from that 
vessel. If this rule decreases the total number of vessels that harvest 
IFQ allotments, that means that QS holders were using hired masters on 
several vessels during a fishing year, which is the practice that the 
Council action and this rule seeks to stop.
    Third, this rule may result in some QS holders transferring their 
QS. To the extent that this occurs, the rule will result in more QS on 
the market and could increase the number of vessels harvesting IFQ.
    Finally, NMFS does not anticipate that this rule will have a 
significant effect on IFQ vessel prices upward or downward. The market 
determines the price of vessels that harvest IFQ as a result of the 
overall demand for these vessels and the overall supply of these 
vessels. This rule affects, at most, vessels that harvest 40 percent of 
the halibut QS pool and 32 percent of the sablefish QS pool, the 
percent of the QS pool held by initial individual recipients. The 
restrictions in this rule thus will not affect the demand for vessels 
that harvest 60 percent of the halibut QS pool and 68 percent of the 
sablefish QS pool. The restrictions in this rule do not affect other 
factors that determine price of vessels and the supply of vessels, such 
as the price of halibut, the price of sablefish, the amount of the TAC 
for each species, the extent to which IFQ vessels can harvest other 
species, the availability and terms of financing, and general economic 
conditions.
    As for the assertion that the proposed rule will weaken the 
construction of new vessels, the commenter offers no evidence that the 
status quo is leading to the construction of new vessels to participate 
in the IFQ fisheries. Under the final rule, an individual QS holder can 
arrange for construction of a vessel and use the vessel to fish IFQ as 
long as the individual QS holder is on board the vessel during the 
harvest of the IFQ.
    For NMFS's response to other comments involving new vessels, 
upgrading vessels and new entrants into the IFQ fisheries, see NMFS's 
response to Comments 6, 12, and 18.
    Comment 21. The problem--short-term ownership of vessels so the QS 
holders do not have to be on board the vessel--has never been 
quantified. The ``problem'' is a personal issue brought forth by two 
Alaskans with strong political ties.
    Response. NMFS disagrees that the 12-month vessel ownership 
requirement in this rule is the result of personal issues rather than 
policy judgments. In recommending the 12-month ownership requirement, 
the Council was responding to genuine, longstanding policy concerns and 
data supporting those concerns. As described in the preamble to the 
proposed rule, from the beginning of the IFQ Program, the Council has 
sought to enforce an important feature of the program, namely if a QS 
holder wishes to harvest his or her IFQ through a hired master, the QS 
must have an ownership interest in the vessel which the hired master 
will use. The preamble also describes the actions that the Council has 
recommended, and that NMFS has adopted, to ensure that if a QS holder 
takes advantage of the exemption from the owner-on-board requirement, 
the QS holder's ownership interest in the vessel is actual and 
meaningful (77 FR 65843, October 31, 2012). This rule establishes the 
benchmark for a meaningful and actual ownership interest in a vessel, 
namely the QS holder maintains a continuous 20-percent ownership 
interest in the vessel for 12 months prior to when the QS holder wishes 
to use the hired master.
    The preamble to the proposed rule described the data supporting the 
Council's concerns: ``Over the course of the IFQ Program, the number of 
initial QS holders who may hire a master has declined through 
attrition, while the reliance on hired masters by those QS holders has 
increased. While this may appear contradictory, it demonstrates that 
initial recipients who used to be active in the fishery are retired 
from active participation and instead are hiring skippers to fish their 
IFQ permits'' (77 FR 65846, October 31, 2012). The Analysis for this 
action shows that for the IFQ halibut fishery, from 1998 to 2010, the 
number of individual QS holders that had landings and could hire 
masters declined from 1,005 individual QS holders to 696 individual QS 
holders, a decline of approximately 30 percent, but the number of 
individual QS holders that had landings and did hire masters increased 
from 110 to 216, an increase of approximately 100 percent (Analysis, 
Table 3; see ADDRESSES). For the IFQ sablefish fishery, from 1998 to 
2010, the number of individual QS holders that had landings and could 
hire masters declined from 232 to 151, a decline of 35 percent, but the 
number of individual QS holders that had landings and did hire masters 
increased from 46 to 92, an increase of 100 percent. (Analysis, Table 
4; see ADDRESSES). This data shows that the number of individual QS 
holders is declining but the remaining individual QS holders are 
increasingly using hired masters.
    Comment 22. The alleged problem--sham ownership of vessels fishing 
IFQ without the QS holder on board the vessel--will solve itself 
because all initial recipients will eventually die.
    Response. NMFS agrees that in the long run this problem will be 
resolved because all initial individual recipients of QS will 
eventually leave the fishery because of voluntary retirement or death 
and eventually all QS will be held by individuals who are subject to 
the owner-on-board requirement. However, initial individual recipients 
of QS still hold a considerable amount of QS. As of 2010, initial 
individual recipients held 40 percent of the halibut QS pool and 32 
percent the sablefish QS pool (Analysis, Table 3, Table 4; see 
ADDRESSES).
    Under current regulation, these QS holders must have a 20-percent 
ownership interest in the vessel that a hired master uses to fish their 
IFQ, but these QS holders may only own a 20-percent interest in the 
vessel for the duration of a trip. The Council recommended this rule to 
require that, if initial recipients of QS wish to continue to hire 
masters to fish their QS, they must maintain a longer-term ownership 
interest--namely 12 months--in the vessel that the hired master will 
use to fish their IFQ.
OMB Revisions to Paperwork Reduction Act References in 15 CFR 902.1(b)
    Section 3507(c)(B)(i) of the PRA requires that agencies inventory 
and display a current control number

[[Page 10006]]

assigned by the Director, OMB, for each agency information collection. 
Section 902.1(b) identifies the location of NOAA regulations for which 
OMB approval numbers have been issued. Because this final rule revises 
and adds data elements within a collection-of-information for 
recordkeeping and reporting requirements, 15 CFR 902.1(b) is revised to 
reference correctly the sections resulting from this final rule. In 
addition, corrections and omissions from previous rules are added.
Classification
    Pursuant to sections 304(b)(1)(A) and 305(d) of the Magnuson-
Stevens Act, the NMFS Assistant Administrator has determined that this 
final rule is consistent with the Halibut Act, the GOA groundfish FMP, 
the BSAI groundfish FMP, the national standards and other provisions of 
the Magnuson-Stevens Act, and other applicable laws.
    Pursuant to the Administrative Procedure Act, 5 U.S.C. 553(b)(B), 
the Assistant Administrator of Fisheries finds good cause to waive 
prior notice and opportunity for public comment otherwise required by 
the section for the revisions to registered buyer reporting 
requirements found at Sec.  679.5(l)(7)(i) that are implemented by this 
final rule. NOAA finds that prior notice and opportunity for public 
comment are unnecessary because the revisions to Sec.  679.5(l)(7)(i) 
do not substantively change the recordkeeping and reporting 
requirements specified in that section. The revisions correct an 
inadvertent error made by a final rule recently promulgated by NOAA as 
described in the ``Changes from Proposed to Final Rule'' section of the 
preamble above. Prior notice and comment are also unnecessary because 
the public had an opportunity to comment on the registered buyer 
reporting requirements during the observer program rule-making. Prior 
notice and comment are also contrary to the public interest because 
immediate publication reduces potential public confusion associated 
with the catch-sharing plan rule's inadvertent error in registered 
buyer reporting requirements. Because prior notice and opportunity for 
public comment are not required by 5 U.S.C. 553(b)(B), or any other 
law, for the regulatory revision at Sec.  679.5(l)(7)(i), the 
analytical requirements of the Regulatory Flexibility Act, 5. U.S.C. 
601 et. seq. are inapplicable.

Regulatory Impact Review

    The Council and NMFS conducted a Regulatory Impact Review (RIR) 
pursuant to Executive Order 12866. NMFS published a summary of the RIR 
in the preamble to the proposed rule (77 FR 65843, October 31, 2012). 
The RIR assessed the costs and benefits of Alternative 1 and 
Alternative 2. Alternative 1 was no action or the status quo. 
Alternative 2 was imposition of the 12-month vessel ownership 
requirement on initial individual QS holders as a condition of their 
using a hired master and an exemption from the 12-month vessel 
ownership requirement in situations of permanent vessel loss or 
temporary vessel disablement. The Council concluded that Alternative 2 
is likely to result in net benefits to the nation and recommended 
Alternative 2. NMFS published the RIR with the Initial Regulatory 
Flexibility Analysis (IRFA) and in this rule refers to the RIR/IRFA as 
the Analysis. A copy of the Analysis is available from NMFS (see 
ADDRESSES). The NMFS Assistant Administrator has determined that this 
rule is not significant for purposes of Executive Order 12866.

Small Entity Compliance Guide

    Section 212 of the Small Business Regulatory Enforcement Fairness 
Act of 1996 states that, for each rule or group of related rules for 
which an agency is required to prepare a FRFA, the agency shall publish 
one or more guides to assist small entities in complying with the rule, 
and shall designate such publications as ``small entity compliance 
guides.'' The agency shall explain the actions a small entity is 
required to take to comply with a rule or group of rules. This section 
shall be the Small Entity Compliance Guide for this rule.
    This rule modifies Sec.  679.42(i) of part 679, Title 50. The full 
text of 50 CFR 679.42 and all IFQ regulations is available at http://www.ecfr.gov.
    This rule applies to individuals who were initial recipients of 
catcher vessel QS, namely QS in Category B, C, or D, with one 
geographical exception. This rule does not apply to catcher vessel QS 
that initial individual recipients received in what is commonly known 
as Southeast Alaska: it does not apply to QS issued for halibut in IFQ 
regulatory area 2C and sablefish in the IFQ regulatory area east of 
140[deg] long. This rule does not apply to initial recipients of QS 
that were non-individual entities, such as corporations, partnerships, 
or associations. This rule does not apply to initial recipients of 
catcher processor QS, which is Category A QS.
    To harvest halibut or sablefish in a fishing year, an initial 
individual recipient of QS in Category B, C, or D receives an annual 
IFQ permit. The QS holder/IFQ permit holder must be present on board 
the vessel at all times during the fishing trip and during the landing 
which occurs pursuant to the authority of the IFQ permit, except if IFQ 
regulations authorize a hired master to harvest and land IFQ species 
without the QS holder being on board the vessel. If a QS holder wishes 
to use a hired master to harvest his or her IFQ, the QS holder must 
apply for, and receive, a hired master permit that will authorize the 
hired master to harvest the IFQ belonging to the QS holder. The 
Application for IFQ/CDQ Hired Master Permit and all other IFQ 
applications are on the NMFS Alaska Region Web site at https://alaskafisheries.noaa.gov/ram/ifq.htm.
    Under this rule, an individual QS holder may use a hired master to 
harvest his or her IFQ, if the QS holder was an initial individual 
recipient of QS and if the QS holder continuously owned a minimum 20-
percent ownership interest in the vessel that the hired vessel will use 
to harvest the IFQ for 12 months prior to the QS holder's application 
for a hired master permit.
    An individual QS holder may claim an ownership interest in a 
documented or non-documented vessel. A documented vessel means a vessel 
documented with the United States Coast Guard in accord with Federal 
requirements. A non-documented vessel means a vessel that is not 
federally documented but is documented with the State of Alaska.
    If the hired master will use a documented vessel to harvest the IFQ 
belonging to the QS holder, the QS holder must submit, with the 
application for a hired master permit, documentation showing that the 
QS holder has owned a minimum 20-percent ownership interest in the 
vessel for the 12 months before the application. For a documented 
vessel, the QS holder must submit an Abstract of Title showing that the 
QS holder is an owner of the vessel. If the Abstract of Title does not 
show that the QS holder owns at least a 20-percent ownership interest 
in the vessel or does not show that the QS holder has owned a 20-
percent ownership interest for 12 months prior to the application, the 
QS holder must submit additional written documentation to prove either 
the 20-percent vessel ownership interest or the 12-month ownership 
period.
    If the hired master will use a non-documented vessel to harvest the 
IFQ belonging to the individual QS holder, the individual QS holder 
must submit, with the application for a hired master permit, a State of 
Alaska vessel license or vessel registration that lists the QS holder 
as an owner of the vessel. If the State of Alaska vessel license or 
vessel

[[Page 10007]]

registration does not show that the QS holder owns at least a 20-
percent ownership interest in the vessel that the hired master will use 
for the 12-month period prior to the application by the QS holder for a 
hired master permit, the QS holder must submit additional 
documentation.

Suspension of 12-Month Vessel Ownership Requirement if QS Holder 
Experiences a Total Physical Loss of a Vessel or Irreparable Damage to 
a Vessel

    This rule provides a temporary suspension of the 12-month vessel 
ownership requirement if an individual QS holder experiences a total, 
physical loss of a vessel or irreparable damage to a vessel and the 
vessel has been used to harvest IFQ belonging to the QS holder. If an 
individual QS holder experiences a total loss of a vessel, either 
because the vessel is physically lost or irreparably damaged, and 
wishes an exemption from the owner-on-board requirement on that basis, 
the individual QS holder must completely fill out the sections of the 
Application for IFQ/CDQ Hired Master Permit that pertain to the total 
loss of a vessel or irreparable damage to a vessel. Through the 
Application, and the materials submitted with it, the individual QS 
holder must show that he or she meets the following requirements:
    1. The total loss or the irreparable damage to the vessel was 
caused by an act of God, an act of war, a collision, an act or omission 
of a party other than the owner or agent of the vessel, or any other 
event not caused by the willful misconduct of the individual QS holder 
or agent of the individual QS holder;
    2. The vessel that was lost or irreparably damaged was a commercial 
fishing vessel that had been previously used to harvest halibut IFQ or 
sablefish IFQ of the individual QS holder who is applying for a hired 
master permit;
    3. The individual QS holder submits to NMFS a copy of the USCG Form 
2692 that has been submitted to the United States Coast Guard. Form 
2692 is ``Report of Marine Casualty.'' An operator of a commercial 
vessel operating in the navigable waters of the United States is 
required to file Form 2692 any time that a vessel is involved in an 
unintended grounding; a loss of life; an injury that requires 
professional medical treatment; an occurrence causing property damage 
in excess of $25,000; an occurrence materially and adversely affecting 
the vessel's seaworthiness or fitness for service or route; and other 
situations as specified in 46 CFR 4.05-1. Form 2692 and instructions to 
fill it out are at http://marineinvestigations.us;
    4. The individual QS holder is applying to use a hired master on a 
vessel in which the individual QS holder has a minimum 20-percent 
ownership interest as of the date of the application by the individual 
QS holder for a hired master permit.
    If the applicant meets the requirements for issuance of a hired 
master permit based on total loss or irreparable damage to a vessel, 
the individual QS holder may use a hired master until December 31 of 
the year following the total loss or irreparable damage.

Suspension of 12-Month Vessel Ownership Requirement if Temporary 
Disablement of a Vessel

    If an individual QS holder experiences a temporary disablement of a 
vessel, and wishes an exemption from the owner-on-board requirement, 
the individual QS holder must completely fill out the sections of the 
Application for IFQ/CDQ Hired Master Permit that pertain to the 
temporary disablement of a vessel. Through the application, and 
materials submitted with it, the individual QS holder must show that he 
or she meets the following requirements:
    1. The temporary disablement of the vessel results from repairs 
required by an accident that materially and adversely affected the 
vessel's seaworthiness or fitness for service;
    2. The repairs from the accident require at least 60 days to be 
completed;
    3. The disabled vessel is a commercial fishing vessel that was 
previously used to harvest halibut IFQ or sablefish IFQ of the 
individual QS holder who is applying for a hired master permit;
    4. The individual QS holder submits to NMFS a copy of the USCG Form 
2692 that has been submitted to the United States Coast Guard. Form 
2692 is ``Report of Marine Casualty.'' An operator of a commercial 
vessel operating in the navigable waters of the United States is 
required to file Form 2692 any time that a vessel is involved in an 
occurrence that materially and adversely affecting the vessel's 
seaworthiness or fitness for service, as specified in 46 CFR 4.05-1. 
Form 2692 and instructions to fill it out are available at http://marineinvestigations.us;
    5. The individual QS holder is applying to use a hired master on a 
vessel in which the individual QS holder has a minimum 20-percent 
ownership interest as of the date of the application by the individual 
QS holder for a hired master permit.
    An applicant will need to submit documentation to show that the 
repairs required by the accident require at least 60 days to be 
completed. That documentation will typically be an estimate or 
statement from the business entity that will conduct the repairs.
    If the applicant meets the requirements for a hired master permit 
based on temporary disablement of a vessel, the individual QS holder 
may use a hired master until December 31 of the year following the 
temporary disablement of the vessel.

Review of Application for a Hired Master Permit

    NMFS will review all applications for a hired master permit. If 
NMFS concludes that the applicant meets the requirements for a hired 
master permit, NMFS will approve the Application for IFQ/CDQ Hired 
Master Permit and issue a hired master permit to the individual 
specified on the application.
    If NMFS concludes that it cannot approve the application based on 
the application and the materials submitted with the application, NMFS 
will provide the applicant with an opportunity to submit additional 
information or submit a revised application. NMFS will review any 
additional submissions by the applicant. If NMFS still concludes that 
the applicant does not meet the requirements of a hired master permit, 
NMFS will provide the applicant with an Initial Administrative 
Determination (IAD). The IAD will explain the basis for the denial of 
the application and will explain how the applicant may appeal the 
denial of the application.

Final Regulatory Flexibility Analysis (FRFA)

    The Regulatory Flexibility Act (RFA) contains the requirements for 
the FRFA in section 604(a)(1) through (5) of the RFA. The FRFA must 
contain:
    1. A succinct statement of the need for, and objectives of, the 
rule;
    2. A summary of the significant issues raised by the public 
comments in response to the initial regulatory flexibility analysis, a 
summary of the assessment of the agency of such issues, and a statement 
of any changes made in the proposed rule as a result of such comments;
    3. A description and an estimate of the number of small entities to 
which the rule will apply, or an explanation of why no such estimate is 
available;
    4. A description of the projected reporting, recordkeeping, and 
other compliance requirements of the rule, including an estimate of the 
classes of small entities which will be subject to

[[Page 10008]]

the requirement and the type of professional skills necessary for 
preparation of the report or record; and
    5. A description of the steps the agency has taken to minimize the 
significant economic impact on small entities consistent with the 
stated objectives of applicable statutes, including a statement of the 
factual, policy, and legal reasons for selecting the alternative 
adopted in the final rule and why each one of the other significant 
alternatives to the rule considered by the agency which affect the 
impact on small entities was rejected.
    NMFS prepared an Initial Review Flexibility Analysis (IRFA) that 
addressed the requirements described in section 603(b)(1) through (5) 
of the RFA. This FRFA incorporates the IRFA and the summary of the IRFA 
in the proposed rule (77 FR 65843, October 31, 2012). NMFS published 
the IRFA with the Regulatory Impact Review on January 5, 2012. The RIR/
IRFA or Analysis is available at the NMFS Alaska Region Web site: 
http://alaskafisheries.noaa.gov.

A Succinct Statement of the Need for, and Objectives of, the Rule

    The objective of this rule is to amend halibut and sablefish IFQ 
regulations to implement Council intent for initial individual 
recipients of QS who wish to exercise the hired skipper privilege. The 
need for, and objectives of, this rule are further explained in the 
preamble to the proposed rule in the sections, ``The Need for Action'' 
and ``The Proposed Action.'' (77 FR 65843, October 31, 2012).

Summary of Significant Issues Raised During Public Comment

    NMFS did not receive any public comments that were explicitly 
directed to the Analysis (RIR/IRFA). But several comments objected to 
the proposed rule on the grounds that, short of a QS holder 
experiencing the a total or temporary loss of a vessel, the proposed 
rule would prevent a QS holder from using a hired master to fish their 
IFQ, unless the hired master was using a vessel that the QS holder had 
owned for 12 months. One comment on the proposed rule stated that the 
proposed rule would have a special impact on non-individual QS holders, 
namely QS holders that are corporations, partnerships, associations, or 
any other type of non-individual entity, because these QS holders do 
not have the option of fishing their QS themselves rather than using a 
hired master.
    The comments on the proposed rule were not accurate with respect to 
individual QS holders because under the proposed rule, individual QS 
holders can use any vessel to harvest their IFQ as long as they are on 
board the vessel. The comments were accurate with respect to QS held by 
non-individual entities because, under the proposed rule, a non-
individual entity such as a corporation or a partnership does not have 
the option of getting on the vessel and fishing their QS themselves.
    These comments implicitly raised an issue with the Analysis because 
Section 5 of the Analysis explicitly stated that the Council action 
imposed the 12-month ownership requirement on individual QS holders and 
did not impose the 12-month ownership requirement on non-individual QS 
holders, such as corporations, partnerships, or associations. Section 5 
of the Analysis also stated that the Analysis did not analyze the 
effect of imposing the 12-month ownership requirement on non-individual 
entities. The Analysis also described the regulated entities as 
individuals only, namely the 1,307 individual holders of catcher vessel 
QS eligible to hire skippers in 2010 that may hire skippers (Analysis, 
Table 2; see ADDRESSES). The Classification Section in the proposed 
rule described the regulated entities as individual QS holders only (77 
FR 65843, October 31, 2012). As a result of these public comments, NMFS 
realized that it was an error for the proposed rule to apply the 12-
month ownership requirement to non-individual entities. NMFS therefore 
eliminated those provisions in the final rule. NMFS provides further 
explanation of this change in the section of this preamble, ``Changes 
From the Proposed Rule.''

Number and Description of Small Entities Regulated by the Final Rule

    The Small Business Administration (SBA) has established size 
criteria for all major industry sectors in the United States, including 
fish harvesting and fish processing businesses. On June 20, 2013, the 
SBA issued a final rule revising the small business size standards for 
several industries effective July 22, 2013. (78 FR 37398, June 20, 
2013). The rule increased the size standard for Finfish Fishing from $ 
4.0 to 19.0 million, Shellfish Fishing from $ 4.0 to 5.0 million, and 
Other Marine Fishing from $4.0 to 7.0 million. Id. at 37400 (Table 1).
    Pursuant to the Regulatory Flexibility Act, and prior to SBA's June 
20 final rule, a final regulatory flexibility analysis was developed 
for this action using SBA's former size standards. NMFS has reviewed 
the analyses prepared for this action in light of the new size 
standards and determined that the new size standards do not affect the 
analyses prepared for this action. Under the former, lower, size 
standards, all entities subject to this action were considered small 
entities; thus they all would continue to be considered small under the 
new standards.
    The ``universe'' of entities to be considered in a FRFA generally 
includes only those small entities that can reasonably be expected to 
the directly regulated by the action. This action directly regulates 
individuals who were initial recipients of catcher vessel QS and who 
still hold catcher vessel QS. In 2010, there were a total of 1,307 
initial individual recipients of catcher vessel QS: 1,056 halibut QS 
holders and 251 sablefish QS holders (Analysis, Table 2; see 
ADDRESSES). Under current regulations, these individual QS holders may 
use a hired master to harvest their IFQ if the individual QS holder 
owns a 20-percent interest in the vessel that the hired master uses to 
harvest the IFQ. This rule adds a 12-month ownership period to the 
vessel ownership provision. Under the final rule, an initial individual 
QS holder may use a hired master to harvest their IFQ if the individual 
QS holder owns a 20-percent ownership interest in the vessel for the 12 
months prior to the application by the QS holder to use a hired master.
    Although, under the current regulation, all initial individual QS 
holders may hire masters based on vessel ownership, not all individual 
QS holders do hire masters. The Analysis contained data on how many 
individual QS holders had landings and did hire masters in 2010. 
Looking at halibut QS holders first, 665 individual QS holders had 
landings under an IFQ permit; 216 of these individual QS holders, or 32 
percent, used hired masters (Analysis, Table 3; see ADDRESSES). Turning 
to sablefish QS holders, 151 individual QS holders had landings under 
an IFQ permit; 92 of these individual QS holders, or 61 percent, used 
hired masters (Analysis, Table 4; see ADDRESSES).
    The final rule also directly regulates hired masters. Under the 
current regulation, an individual may receive a hired master permit to 
harvest and land IFQ upon proof that the QS holder/IFQ permit holder 
owns a minimum 20-percent interest in the vessel that the hired master 
will use. Under the final rule, an individual may receive a hired 
master permit to harvest and land IFQ upon proof that the hired master 
will use a vessel in which the IFQ permit holder has owned a 20-percent 
interest

[[Page 10009]]

for the 12 months prior to the application by the IFQ permit holder for 
the hired master permit. In 2010, the number of individuals with hired 
master permits in the halibut IFQ fishery was 217; the number of 
individuals with hired master permits in the sablefish IFQ fishery was 
127 (Analysis, Table 7; see ADDRESSES).
    It is unknown to what extent this rule will result in individual QS 
holders choosing not to use hired masters in the future. It is unknown 
because that will depend on how individual QS holders respond to this 
rule: how many QS holders will choose to harvest their IFQ themselves 
rather than use a hired skipper; how many will meet the 12-month 
ownership requirement and continue to use a hired skipper; and how many 
will transfer their QS, which will likely make QS available to a number 
of hired skippers because hired skippers are likely to meet the 
requirements to receive QS by transfer.
    Only individuals may receive QS by transfer and the individual 
either must be an initial recipient of QS or must have participated for 
150 days in a harvesting crew in a U.S. commercial fishery. In 2010, 
approximately 60 percent of halibut IFQ hired skippers also owned their 
own QS; 70 percent of sablefish IFQ hired skippers also owned their own 
QS (Analysis, Table 8; see ADDRESSES). NMFS does not know how many of 
these hired skippers received QS as initial recipients. However, almost 
all persons who have a hired skipper permit are likely to have, or can 
get, 150 days of participating in a harvest crew in a U.S. commercial 
fishery by fishing pursuant to their hired skipper permit. If this rule 
results in the transfer of QS, the persons holding hired skipper 
permits are therefore likely to be eligible to acquire that QS by 
transfer.

Recordkeeping and Reporting Requirements

    To use a hired master, an individual QS holder must submit a 
complete Application for IFQ/CDQ Hired Master Permit. To complete this 
application, an individual QS holder must submit documentation that he 
or she owns a minimum 20-percent ownership interest in the vessel that 
the hired master will use for the period of 12 months prior to the 
application by the QS holder to use the hired master. If the QS holder 
claims ownership of a documented vessel, the QS holder must submit an 
Abstract of Title that shows the QS as an owner. If the Abstract of 
Title does not show that the QS holder has a minimum 20-percent vessel 
ownership interest for the 12-month period prior to the application for 
a hired master, the QS holder must submit additional written 
documentation. If the QS holder claims ownership of a non-documented 
vessel, the QS holder must submit a State of Alaska license or 
registration showing the QS holder is an owner of the vessel. As with 
the Abstract of Title, if the State document does not show that the QS 
holder has a minimum 20-percent vessel ownership interest for the 12-
month period prior to the application for a hired master permit, then 
the QS holder must submit additional written documentation.
    Under the final rule, if the individual QS holder wishes to use a 
hired master and receive an exemption from the 12-month vessel 
ownership requirement, then the QS holder must show that the QS 
holder's vessel has been lost, irreparably damaged, or temporarily 
disabled by an accident that materially and adversely affects the 
vessel's seaworthiness or fitness for service. To receive this 
exemption, the QS holder must provide to NMFS a copy of USCG Form 2692 
that has been submitted to the USCG. Under 46 CFR 4.05, a vessel owner 
is already under an obligation to submit Form 2692 to the USCG when a 
vessel is lost, irreparably damaged, or suffers an accident that 
materially and adversely affects the vessel's seaworthiness or fitness 
for service. If the QS holder is seeking an exemption from the 12-month 
vessel ownership based on temporary disablement of the vessel, the QS 
holder must also submit documentation that the vessel needs repairs 
that require 60 days or more.
    The skills necessary to comply with the recordkeeping and reporting 
requirements for small entities regulated by this rule are the ability 
to read, write, and understand English; the ability to retrieve and 
submit vessel ownership documents; and the ability to submit other 
documents necessary to complete an application for a hired master 
permit, including Form 2692 in the event of vessel loss or temporary 
vessel disablement. No professional skills are necessary to comply with 
these recordkeeping and reporting requirements.

Description of Significant Alternatives to the Proposed Action That 
Minimize Adverse Impacts on Small Entities

    The Council and NMFS analyzed the alternative of no action and the 
action contained in the proposed and final rules. The ``no-action'' 
alternative would not achieve the objective of the proposed rule 
because it would allow individual QS holders to use a hired master to 
harvest their IFQ based on ownership of a vessel only for the duration 
of the IFQ trip. NMFS is not aware of any alternatives that would 
accomplish the objectives of this action while minimizing the adverse 
economic impact on small entities.
    In adopting the preferred alternative, the Council chose 12 months 
as the appropriate length of time that an individual QS holder had to 
own a vessel before the individual QS holder could hire a master to 
fish IFQ from that vessel. In 2005, when the Council first recommended 
the 12-month ownership requirement, it considered different periods of 
time during which a QS holder would have to own the vessel in advance 
of using a hired master: 6 months, 12 months, 24 months, and the year 
of application for a hired master period plus the previous calendar 
year. (RIR/IRFA, November 9, 2005, see ADDRESSES) The Council chose one 
year (12 months) because that time period typically includes an entire 
fishing season and most QS holders make operating decisions, including 
a decision to hire a skipper, on a year-to-year basis. NMFS affirms 
that reasoning for this action.

Collection of Information Requirements

    This final rule contains a collection-of-information requirement 
subject to the Paperwork Reduction Act (PRA) and which has been 
approved by the Office of Management and Budget (OMB) under OMB Control 
Number 0648-0272. Public reporting burden for Application for IFQ/CDQ 
Hired Master Permit is estimated to average 60 minutes 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. The time-to-complete the 
application was changed from 30 minutes per response to 60 minutes per 
response due to a public comment on the proposed rule.
    This final rule also corrects an error in regulatory text in a 
previous final rule pertaining to the IFQ Value and Volume Report that 
does not affect the burden or cost of completing the form. Public 
reporting burden includes the time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the collection of information. 
Send comments regarding this burden estimate or any other aspect of 
this data collection, including suggestions for reducing the burden, to 
NMFS (see ADDRESSES) and by email to [email protected], or 
fax to 202-395-7285.
    Notwithstanding any other provision of the law, no person is 
required to

[[Page 10010]]

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 that collection of information displays a currently 
valid OMB control number.

List of Subjects

15 CFR Part 902

    Reporting and recordkeeping requirements.

50 CFR Part 679

    Alaska, Fisheries, Reporting and recordkeeping requirements.

    Dated: February 18, 2014.
Samuel D. Rauch III,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.

    For the reasons set out in the preamble, NMFS amends 15 CFR part 
902 and 50 CFR part 679 as follows:

Title 15--Commerce and Foreign Trade

PART 902--NOAA INFORMATION COLLECTION REQUIREMENTS UNDER THE 
PAPERWORK REDUCTION ACT: OMB CONTROL NUMBERS

0
1. The authority citation for part 902 continues to read as follows:

    Authority:  44 U.S.C. 3501 et seq.


0
2. In Sec.  902.1, in the table in paragraph (b), under the entry ``50 
CFR'';
0
a. Remove entries for ``679.7(a)(7)(vii) through (ix), 
679.7(n)(1)(x)''; ``679.7(f)''; ``679.7(f)(8)(ii)''; ``679.7(k)''; 
``679.7(n)(4)(ii)''; ``679.20(a)(8)(ii)''; ``679.21(f) and (g)''; 
679.21(h)''; ``679.27(j)(5)''; ``679.28(b), (c), (d), (e), (g), and 
(j)''; ``679.28(k)''; ``679.30''; ``679.32(c)(1) and (2)''; 
``679.32(f)''; ``679.42''; ``679.42(a)(1)(i) through (ii), (b) through 
(e), (g), (h)(1), (h)(1)(i), (h)(2), and (h)(2)(i)''; 
``679.42(a)(2)(iii), (h)(1)(ii), and (h)(2)(ii)''; ``679.61(c), (d), 
(e), and (f)''; ``679.65(a), (c), and (d)''; and ``679.65(b) through 
(e)'';
0
b. Add entries in alphanumeric order for ``679.7(a)(7)(i)''; 
``679.7(a)(7)(vii) through (ix)''; ``679.7(b)(6) and (7) and (c)(3) and 
(c)(4)''; ``679.7(f)(1) through (f)(7) and (f)(9) through (16)''; 
``679.7(f)(8)''; ``679.7(k)''; ``679.7(n)(1)''; ``679.7(n)(2) and 
(n)(4) through (8)''; ``679.7(n)(3)''; ``679.21(f) and (g)''; 
``679.28(b) through (e) and (i)'' ``679.28(j) and (k)''; ``679.31(c)''; 
``679.32(c)(1) through (3)''; ``679.42(a) through (j)''; ``679.42(k)''; 
``679.61(a) through (f)''; and ``679.65''.
    The additions read as follows:


Sec.  902.1  OMB control numbers assigned pursuant to the Paperwork 
Reduction Act.

* * * * *
    (b) * * *

------------------------------------------------------------------------
  CFR part or section where  the information collection     Current OMB
                 requirement is located                    control No.*
------------------------------------------------------------------------
 
                                * * * * *
50 CFR:
 
                                * * * * *
  679.7(a)(7)(i)........................................           -0206
  679.7(a)(7)(vii) through (ix).........................           -0334
 
                                * * * * *
  679.7(b)(6) and (7) and (c)(3) and (c)(4).............          -0206,
                                                                   -0334
 
                                * * * * *
  679.7(f)(1) through (f)(7) and (f)(9) through (16)....          -0269,
                                                                   -0272
  679.7(f)(8)...........................................          -0206,
                                                                   -0334
 
                                * * * * *
  679.7(k)..............................................          -0393,
                                                                   -0330
 
                                * * * * *
  679.7(n)(1)...........................................           -0334
  679.7(n)(2) and (n)(4) through (8)....................           -0545
  679.7(n)(3)...........................................           -0445
 
                                * * * * *
  679.21(f) and (g).....................................          -0393,
                                                                   -0401
 
                                * * * * *
  679.28(b) through (e) and (i).........................           -0330
  679.28(j) and (k).....................................           -0515
 
                                * * * * *
  679.31(c).............................................           -0269
  679.32(c)(1) through (3)..............................           -0269
 
                                * * * * *
  679.42(a) through (j).................................          -0272,
                                                                   -0665
  679.42(k).............................................           -0445
 
                                * * * * *
  679.61(a) through (f).................................          -0393,
                                                                   -0401
 
                                * * * * *
  679.65................................................           -0633
 
                                * * * * *
------------------------------------------------------------------------
* All numbers begin with 0648-.

Title 50--Wildlife and Fisheries

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

0
3. The authority citation for part 679 continues to read as follows:

    Authority:  16 U.S.C. 773 et seq.; 1801 et seq.; 3631 et seq.; 
Pub. L. 108-447.


0
4. In Sec.  679.5, revise paragraph (l)(7)(i) to read as follows:


Sec.  679.5  Recordkeeping and reporting (R&R).

* * * * *
    (l) * * *
    (7) * * *
    (i) IFQ Registered Buyer Ex-vessel Volume and Value Report (IFQ 
Buyer Report)--(A) Applicability. An IFQ Registered Buyer that operates 
as a shoreside processor and receives and purchases IFQ landings of 
sablefish or halibut or CDQ landings of halibut must submit annually to 
NMFS a complete IFQ Buyer Report as described in this paragraph (l) and 
as provided by NMFS for each reporting period, as described at Sec.  
679.5(1)(7)(i)(E), in which the Registered Buyer receives IFQ fish or 
CDQ halibut.
    (B) Due date. A complete IFQ Buyer Report must be postmarked or 
received by the Regional Administrator not later than October 15 
following the reporting period in which the IFQ Registered Buyer 
receives the IFQ fish or CDQ halibut.
    (C) Information required. A complete IFQ Buyer Report must include 
the following information as instructed on the report form at http://alaskafisheries.noaa.gov/ram:
    (1) IFQ Registered Buyer identification.
    (2) Pounds purchased and values paid. (i) The monthly total 
weights, represented in IFQ equivalent pounds by IFQ species or CDQ 
halibut, that were landed at the landing port location and purchased by 
the IFQ Registered Buyer;
    (ii) The monthly total gross ex-vessel value, in U.S. dollars, of 
IFQ pounds, by IFQ species or CDQ halibut, that were landed at the 
landing port location and purchased by the IFQ Registered Buyer;
    (3) Value paid for price adjustments--(i) Retro-payments. The 
monthly total U.S. dollar amount of any retro-payments (correlated by 
IFQ species or CDQ halibut, landing month(s), and month of payment) 
made in the current year to IFQ, or to CDQ halibut permit holders for 
landings made during the previous calendar year;
    (ii) Electronic submittal. Certification, including the NMFS ID and 
password of the IFQ Registered Buyer; or
    (iii) Non-electronic submittal. Certification, including the 
printed name and signature of the individual submitting the IFQ Buyer 
Report on behalf of the Registered Buyer, and date of signature.
    (D) Submittal. If applicable, the Registered Buyer must complete an 
IFQ Buyer Report and submit by mail or

[[Page 10011]]

FAX to NMFS at the address provided on the form, or electronically to 
NMFS online at http://alaskafisheries.noaa.gov/ram.
    (E) Reporting period. The reporting period of the IFQ Buyer Report 
shall extend from October 1 through September 30 of the following year, 
inclusive.
* * * * *

0
5. In Sec.  679.42,
0
a. Revise paragraphs (i)(1)(i), (i)(1)(ii), and (i)(4); and
0
b. Add paragraphs (i)(1)(iv), (i)(1)(v), (i)(6) and (i)(7) to read as 
follows:


Sec.  679.42  Limitations on use of QS and IFQ.

* * * * *
    (i) * * *
    (1) * * *
    (i) For a documented vessel, during the 12-month period previous to 
the application by the individual for a hired master permit, 
continuously owned a minimum 20-percent interest in the vessel as shown 
by the U.S. Abstract of Title issued by the U.S. Coast Guard that lists 
the individual as an owner and, if necessary to show 20-percent 
ownership for 12 months, additional written documentation; or
    (ii) For an undocumented vessel, during the 12-month period 
previous to the application by the individual for a hired master 
permit, continuously owned a minimum 20-percent interest in the vessel 
as shown by a State of Alaska license or registration that lists the 
individual as an owner and, if necessary to show the 20-percent 
ownership for 12 months, additional written documentation; and
* * * * *
    (iv) NMFS review of application for exemption--(A) Initial 
evaluation. The Regional Administrator will evaluate an application for 
a hired master submitted in accordance with paragraphs (i)(1), (i)(6), 
and (i)(7) of this section. An applicant who fails to submit the 
information specified in the application for a hired master will be 
provided a reasonable opportunity to submit the specified information 
or submit a revised application.
    (B) Initial administrative determinations (IAD). The Regional 
Administrator will prepare and send an IAD to an individual submitting 
an application for a hired master submitted in accordance with 
paragraphs (i)(1), (i)(6), and (i)(7) of this section if the Regional 
Administrator determines that the information required to be submitted 
to NMFS is deficient or if the applicant fails to submit the required 
information. The IAD will indicate the deficiencies with the 
information submitted. An applicant who receives an IAD may appeal 
under the appeals procedures set out at Sec.  679.43.
    (v) Upon request by the Regional Administrator or an authorized 
officer, a person must submit additional written documentation 
necessary to establish the required minimum 20-percent interest in the 
vessel during the 12-month period previous to the application by the 
individual for a hired master permit.
* * * * *
    (4) The exemption provided in paragraph (i)(1) of this section may 
be exercised by an individual on a vessel owned by a corporation, 
partnership, association or other non-individual entity in which the 
individual is a shareholder, partner, or member, provided that during 
the 12-month period previous to the application by the individual for a 
hired master permit, the individual continuously maintained a minimum 
20-percent ownership interest in the vessel owned by the corporation, 
partnership, association or other non-individual entity. For purposes 
of this paragraph, an individual's interest in a vessel is determined 
by the percentage ownership by the individual of a corporation, 
partnership, association or other non-individual entity that has an 
ownership interest in the vessel multiplied by the percentage of 
ownership of the vessel by the corporation, partnership, or other non-
individual entity.
* * * * *
    (6) In the event of the total loss or irreparable damage to a 
vessel owned by an individual who qualifies for the exemption in 
paragraph (i)(1) of this section, the individual may remain exempt 
under paragraph (i)(1) of this section until December 31 of the year 
following the year in which the vessel was lost or damaged, provided 
that the individual meets the following requirements:
    (i) The loss or irreparable damage to the vessel was caused by an 
act of God, an act of war, a collision, an act or omission of a party 
other than the individual or agent of the individual, or any other 
event not caused by the willful misconduct of the individual or agent 
of the individual.
    (ii) The lost or irreparably damaged vessel is a commercial fishing 
vessel that was previously used to harvest halibut IFQ or sablefish IFQ 
of the individual who qualifies for the exemption in paragraph (i)(1) 
of this section;
    (iii) As part of the application for exemption, the individual 
submits to NMFS a copy of the USCG Form 2692 submitted to the USCG as 
specified in 46 CFR 4.05; and
    (iv) The individual is applying to use a hired master on a vessel 
in which the individual has a minimum 20-percent ownership interest as 
of the date of the application by the individual for a hired master 
permit.
    (7) In the event of temporary disablement of a vessel owned by an 
individual who qualifies for the exemption in paragraph (i)(1) of this 
section, the individual may remain exempt under paragraph (i)(1) of 
this section until December 31 of the year following the year in which 
the vessel was disabled, provided that the individual meets the 
following requirements:
    (i) The temporary disablement of the vessel results from repairs 
required by an accident that materially and adversely affected the 
vessel's seaworthiness or fitness for service, such as from sinking, 
grounding, or fire;
    (ii) The repairs from the accident require at least 60 days to be 
completed;
    (iii) The disabled vessel is a commercial fishing vessel that was 
previously used to harvest halibut IFQ or sablefish IFQ of the 
individual who qualifies for the exemption in paragraph (i)(1) of this 
section;
    (iv) The individual submits to NMFS a copy of the USCG Form 2692 
submitted to the USCG as specified in 46 CFR 4.05; and
    (v) The individual is applying to use a hired master on a vessel in 
which the individual has a minimum 20-percent ownership interest as of 
the date of the application by the individual for a hired master 
permit.
* * * * *
[FR Doc. 2014-03910 Filed 2-21-14; 8:45 am]
BILLING CODE 3510-22-P