[Federal Register Volume 81, Number 141 (Friday, July 22, 2016)]
[Rules and Regulations]
[Pages 47733-47736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17272]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 622

[Docket No. 160222132-6585-02]
RIN 0648-BF77


Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; 
Shrimp Fishery of the Gulf of Mexico; Amendment 17A

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

ACTION: Final rule.

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SUMMARY: NMFS issues regulations to implement Amendment 17A to the 
Fishery Management Plan for the Shrimp Fishery of the Gulf of Mexico 
(FMP), as prepared and submitted by the Gulf of Mexico (Gulf) Fishery 
Management Council (Council). This final rule extends the current Gulf 
commercial shrimp permit moratorium for 10 more years. The intent of 
this final rule and Amendment 17A is to protect federally managed Gulf 
shrimp stocks while promoting catch efficiency, economic efficiency, 
and stability in the fishery.

DATES: This rule is effective August 22, 2016.

ADDRESSES: Electronic copies of Amendment 17A, which includes an 
environmental assessment, a Regulatory Flexibility Act analysis, and a 
regulatory impact review, may be obtained from the Southeast Regional 
Office Web site at http://sero.nmfs.noaa.gov/sustainable_fisheries/gulf_fisheries/shrimp/2016/am17a/index.html.

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

SUPPLEMENTARY INFORMATION: The shrimp fishery in the Gulf is managed 
under the FMP. The FMP was prepared by the Council and implemented 
through regulations at 50 CFR part 622 under the authority of the 
Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-
Stevens Act).
    On April 5, 2016, NMFS published a notice of availability for 
Amendment 17A and requested public comment (81 FR 19547). On April 14, 
2016, NMFS published a proposed rule for Amendment 17A and requested 
public comment (81 FR 22042). The proposed rule and Amendment 17A 
outline the rationale for the actions contained in this final rule. A 
summary of the action implemented by Amendment 17A and this final rule 
is provided below.

Management Measure Contained in This Final Rule

    This final rule extends the Gulf shrimp Federal permit moratorium 
until October 26, 2026. Through Amendment 13 to the FMP, the Council 
established a 10-year moratorium on the issuance of new Federal 
commercial shrimp vessel permits (71 FR 56039, September 26, 2006). The 
moratorium on permits indirectly controls shrimping effort in Federal 
waters and thereby bycatch levels of juvenile red snapper and sea 
turtles. The final rule implementing the moratorium became effective 
October 26, 2006, and the moratorium permits became effective in March 
2007. Extending the moratorium for an additional 10 years until October 
26, 2026, is expected to maintain the biological, social, and economic 
benefits to the shrimp fishery achieved under

[[Page 47734]]

the moratorium permit over the past 10 years.

Comments and Responses

    NMFS received a total of 831 submissions from the public on 
Amendment 17A and the proposed rule. Of these submissions, 702 
expressed general support for an extension of the permit moratorium. 
Some comments within the submissions addressed issues beyond the scope 
of Amendment 17A or the proposed rule, such as prohibiting shrimp 
trawling to reduce the impact on sea turtles and other marine life and 
modifying the requirements for turtle excluder devices and observers. 
From the submissions, NMFS has identified six issues related to 
Amendment 17A and the proposed rule. These comments and NMFS' 
respective responses are summarized below.
    Comment 1: Extending the permit moratorium would protect and expand 
gains in the shrimp fishery by limiting potential exploitation. Gulf 
shrimp landings have only slightly declined during the past 10 years 
and catch per day has increased.
    Response: NMFS agrees that continuing the moratorium would 
constrain effort and protect economic gains from higher catch rates. 
Returning the fishery to open access could undo any positive effects of 
the moratorium.
    Removing the moratorium would allow an unlimited number of new 
entrants into the commercial shrimp fishery and could have negative 
effects if the fishery then became overcapitalized. Overcapitalization 
or effort increases could lead to increases in sea turtle and red 
snapper bycatch and could result in additional requirements to reduce 
bycatch.
    Before the moratorium was implemented, increasing fuel costs, 
decreasing shrimp prices, and increasing foreign shrimp imports were 
all contributing to the overcapitalization of the commercial shrimp 
fleet. Since implementation of the moratorium, the catch per unit 
effort for the offshore shrimp fishery increased and has remained 
relatively constant. Additional effort in the fishery could negate, or 
at least lessen, profitability for the Gulf shrimp fleet as a whole.
    Comment 2: There is no need for continuing the moratorium because 
of the decreasing number of valid permits over last 10 years.
    Response: NMFS disagrees that the moratorium should be allowed to 
expire. The Council determined, and NMFS agrees, that extending the 
moratorium for an additional 10 years will continue stability for the 
fishery. As explained in the response to Comment 1, continuing the 
moratorium would constrain effort and protect economic gains from 
higher catch rates. The moratorium also indirectly controls effort and, 
therefore, bycatch levels of juvenile red snapper and sea turtles. 
Returning to an open access fishery would promote a return to less 
stable economic conditions.
    Comment 3: Continuing the permit moratorium will help protect sea 
turtles and other marine life.
    Response: NMFS agrees. In 2014, NMFS issued a biological opinion on 
the continued authorization of the Southeast U.S. shrimp fisheries in 
Federal waters on threatened and endangered species (including sea 
turtles) and designated critical habitat, in accordance with the 
Endangered Species Act (ESA). The sea turtle effects analyses and 
incidental take statement in the opinion were based on the expectation 
that future total effort levels in the southeastern shrimp fisheries 
would remain at or below 2009 effort levels. An increase in shrimp 
effort greater than the 2009 level may require re-initiation of the 
Endangered Species Act consultation and further rulemaking to address 
any increased effects on sea turtles. Continuing the moratorium would 
cap effort and reduce the chance of exceeding the 2009 effort levels, 
thereby continuing to limit any adverse effects of the shrimp fishery 
on sea turtles and other marine life.
    Comment 4: Gulf shrimp permit holders who have lost their 
moratorium permit due to non-renewal should be allowed to re-apply for 
a shrimp permit.
    Response: NMFS disagrees. The purpose of the moratorium was to 
limit the number of permits available to fish for shrimp because the 
fishery was overcapitalized, as described in the response to Comment 1.
    The Federal Gulf shrimp moratorium permit is renewable for up to 1 
year from its date of expiration. NMFS sends a renewal letter and 
permit application to the permit holder 1 month prior to the permit's 
expiration date. After a year with no permit renewal, a permit is 
terminated and permanently removed from the permit pool. However, valid 
permits are fully transferable, which may allow someone who has lost a 
permit as a result of non-renewal to obtain a new permit.
    Comment 5: As a result of the moratorium, the current market price 
of permits is too high.
    Response: NMFS disagrees. Based on the best available information, 
the current average price of a moratorium permit is approximately 
$5,000, and this price has been relatively constant since the 
moratorium was put in place. Thus, permits are not any more costly than 
they were 10 years ago, and in fact are likely less costly in real 
(inflation-adjusted) terms. Moreover, as previously noted, average 
profitability in the fishery has improved in recent years. An 
economically efficient business desiring to enter the fishery would be 
expected to recoup this cost relatively quickly and, thus, NMFS does 
not consider the cost of obtaining a permit to be onerous for 
businesses wanting to enter the fishery.
    Comment 6: Permit holders who sub-lease shrimp moratorium permits 
should be required to forfeit the permits.
    Response: NMFS disagrees. Although shrimp moratorium permits are 
fully transferable and a permit may be transferred to a vessel that is 
leased, there is no mechanism to sub-lease a permit through NMFS. To 
the extent the commenter is stating that the permits should not be 
transferable, economic efficiency is promoted when resources are 
allowed to shift to their most valuable use. The full transferability 
of permits is expected to improve economic efficiency by allowing those 
who place the greatest economic value on these permits to buy them. Any 
restrictions on the transferability of permits would be expected to 
reduce economic efficiency in the fishery, contrary to the objectives 
of Amendment 17A and this final rule.

Classification

    The Regional Administrator, Southeast Region, NMFS has determined 
that this final rule is consistent with Amendment 17A, the FMP, the 
Magnuson-Stevens Act, and other applicable law.
    This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    The Magnuson-Stevens Act provides the statutory basis for this 
rule.
    The Chief Counsel for Regulation of the Department of Commerce 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA) during the proposed rule stage that this rule, if 
adopted, would not have a significant economic impact on a substantial 
number of small entities. NMFS did not receive any comments from SBA's 
Office of Advocacy or the public on the certification in the proposed 
rule. NMFS received two comments regarding the economic analysis of 
Amendment 17A and the proposed rule. One comment suggested that the 
current market price of moratorium permits is too high and the other 
comment stated that permit holders who sub-lease shrimp moratorium 
permits should be required

[[Page 47735]]

to forfeit the permits. NMFS disagrees with these comments as explained 
in the responses to comments 5 and 6, above. The factual basis for the 
certification was published in the proposed rule and is repeated below.
    The current moratorium on Gulf shrimp permits became effective on 
October 26, 2006 (71 FR 56039, September 26, 2006). This final rule 
extends the current moratorium on Federal Gulf shrimp permits until 
October 26, 2026. The purpose of this rule is to maintain the 
biological, social, and economic benefits to the Gulf shrimp fishery 
achieved under the current moratorium. The objectives of this rule are 
to protect federally managed Gulf shrimp stocks, and promote catch 
efficiency, economic efficiency, and stability in the Gulf shrimp 
fishery.
    This final rule is expected to directly regulate businesses that 
possess Federal Gulf shrimp moratorium permits. As of September 21, 
2015, there were 1,464 vessels with valid or renewable Gulf shrimp 
moratorium permits. Although some permits are thought to be held by 
businesses with the same or substantively the same individual owners, 
and thus would likely be considered affiliated, ownership data for Gulf 
shrimp permit holders is incomplete and thus it is not currently 
feasible to accurately determine whether businesses that have these 
permits are in fact affiliated. NMFS is currently making changes to its 
permit application forms so that such determinations can be accurately 
made for future regulatory actions in this fishery. As a result of the 
incomplete ownership data, for purposes of this analysis, NMFS assumes 
each vessel is independently owned by a single business, which will 
result in an overestimate of the actual number of businesses directly 
regulated by this final rule. Thus, NMFS estimates the number of 
businesses directly regulated by this final rule to be 1,464.
    Based on landings and economic data from 2013, which is the most 
current year for which complete economic data is available, all of 
these businesses are thought to be primarily engaged in shellfish 
harvesting activities (e.g., Gulf shrimp, South Atlantic shrimp, and 
Atlantic sea scallops fisheries). In 2013, the primary source of gross 
revenue for approximately 84 percent of these businesses was landings 
from one or more of these shellfish fisheries, while the other 16 
percent did not have commercial landings in any fishery. A certain 
percentage of businesses with Gulf shrimp permits are usually inactive 
in the Gulf shrimp fishery in a given year, because of economic 
conditions in that fishery, other fisheries, or other industries (e.g., 
oil and gas) in which these businesses, their owners, and their crew 
sometimes participate. Some businesses may have also been inactive due 
to issues associated with the Deepwater Horizon MC252 event in 2010, 
and subsequent payouts from British Petroleum (BP). NMFS only possesses 
data on such payouts and other transfer payments for a sample of the 
permitted businesses, and thus cannot confirm the extent to which such 
payouts contributed to the lack of commercial harvesting activity by 
all of the inactive businesses. Given the lack of data to the contrary 
and because these businesses possess Gulf shrimp moratorium permits, 
for the purpose of this analysis, these 1,464 businesses are assumed to 
be primarily engaged in commercial shellfish harvesting.
    From 2011 through 2013, the greatest average annual gross revenue 
earned by a single business was approximately $2.48 million. On 
average, a business with a Gulf shrimp moratorium permit had an annual 
gross revenue of approximately $247,000, annual net revenue from 
operations (commercial fishing activities) of approximately $6,300, and 
an annual economic profit of approximately $37,000. All monetary 
estimates are in 2001 dollars. Average annual economic profit was 
greater between 2011 and 2013 compared to the 2006 through 2009 time 
period, and greater than net revenue from operations, partly because of 
non-fishing related income, mostly in the form of payouts from BP 
(i.e., transfer payments) due to the Deepwater Horizon MC252 event in 
2010. Thus, although the average profit margin from 2011 through 2013 
was nearly 15 percent of gross revenue, the average margin from 
operations was only about 2.6 percent. Though relatively small, this 
margin from operations is still greater than what these businesses 
earned between 2006 and 2009 when net revenue from operations was 
generally negative, on average.
    On December 29, 2015, NMFS issued a final rule establishing a small 
business size standard of $11 million in annual gross receipts for all 
businesses primarily engaged in the commercial fishing industry (NAICS 
11411) for Regulatory Flexibility Act (RFA) compliance purposes only 
(80 FR 81194, December 29, 2015). The $11 million standard became 
effective on July 1, 2016, and is to be used in place of the SBA's 
current standards of $20.5 million, $5.5 million, and $7.5 million for 
the finfish (NAICS 114111), shellfish (NAICS 114112), and other marine 
fishing (NAICS 114119) sectors of the U.S. commercial fishing industry 
in all NMFS rules subject to the RFA after July 1, 2016. Id. at 81194.
    Pursuant to the RFA, and prior to July 1, 2016, a certification was 
developed for this regulatory action using SBA's size standards. NMFS 
has reviewed the analyses prepared for this regulatory action in light 
of the new size standard. All of the entities directly regulated by 
this regulatory action are shellfish commercial fishing businesses and 
were considered small under the SBA's size standards, and thus they all 
would continue to be considered small under the new standard. Thus, 
NMFS has determined that the new size standard does not affect analyses 
prepared for this regulatory action.
    Based on the information above, a reduction in profits for a 
substantial number of small entities is not expected. The Chief Counsel 
for Regulation of the Department of Commerce hereby reaffirms that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Because this final rule, if implemented, is 
not expected to have a significant economic impact on a substantial 
number of small entities, a final regulatory flexibility analysis is 
not required and none has been prepared.
    No duplicative, overlapping, or conflicting Federal rules have been 
identified. This final rule will not establish any new reporting or 
record-keeping requirements.

List of Subjects in 50 CFR Part 622

    Commercial, Fisheries, Fishing, Gulf, Permits, Shrimp.

    Dated: July 14, 2016.
Samuel D. Rauch III,
Deputy Assistant for Regulatory Programs, National Marine Fisheries 
Service.

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

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

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

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


0
2. In Sec.  622.50, revise the introductory text of paragraph (b) to 
read as follows:


Sec.  622.50  Permits, permit moratorium, and endorsements.

* * * * *
    (b) Moratorium on commercial vessel permits for Gulf shrimp. The 
provisions

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of this paragraph (b) are applicable through October 26, 2026.
* * * * *
[FR Doc. 2016-17272 Filed 7-21-16; 8:45 am]
BILLING CODE 3510-22-P