[Federal Register Volume 81, Number 143 (Tuesday, July 26, 2016)]
[Proposed Rules]
[Pages 48728-48731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17518]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 622

[Docket No. 160613514-6514-01]
RIN 0648-BG12


Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; 
Reef Fish Fishery of the Gulf of Mexico; Red Grouper Management 
Measures

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

ACTION: Proposed rule; request for comments.

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SUMMARY: NMFS proposes to implement management measures described in a 
framework action to the Fishery Management Plan for the Reef Fish 
Resources of the Gulf of Mexico (FMP), as prepared by the Gulf of 
Mexico Fishery Management Council (Council). If implemented, this 
action would revise the commercial quota and annual catch limit (ACL) 
and the recreational annual catch target (ACT) and ACL for red grouper 
in the Gulf of Mexico (Gulf) exclusive economic zone. The purpose of 
this proposed rule is to adjust the allowable red grouper harvest to 
achieve optimum yield based upon an updated Gulf red grouper stock 
assessment.

DATES: Written comments must be received on or before August 25, 2016.

ADDRESSES: You may submit comments on the proposed rule, identified by 
``NOAA-NMFS-2016-0077'' by either of the following methods:
     Electronic Submission: Submit all electronic public 
comments via the Federal e-Rulemaking Portal. Go to 
www.regulations.gov/#!docketDetail;D=NOAA-NMFS-2016-0077, click the 
``Comment Now!'' icon, complete the required fields, and enter or 
attach your comments.
     Mail: Submit written comments to Richard Malinowski, 
Southeast Regional Office, NMFS, 263 13th Avenue South, St. Petersburg, 
FL 33701.
    Instructions: Comments sent by any other method, to any other 
address or individual, or received after the end of the comment period, 
may not be considered by NMFS. All comments received are a part of the 
public record and will generally be posted for public viewing on 
www.regulations.gov without change. All personal identifying 
information (e.g., name, address, etc.), confidential business 
information, or otherwise sensitive information submitted voluntarily 
by the sender will be publicly accessible. NMFS will accept anonymous 
comments (enter ``N/A'' in the required fields if you wish to remain 
anonymous).
    Electronic copies of the framework action, which includes an 
environmental assessment, a regulatory impact review, and a Regulatory 
Flexibility Act (RFA) analysis may be obtained from the Southeast 
Regional Office Web site at http://sero.nmfs.noaa.gov/sustainable_fisheries/gulf_fisheries/reef_fish/2016/red_grouper_allowable_harvest/index.html.

FOR FURTHER INFORMATION CONTACT: Richard Malinowski, Southeast Regional 
Office, NMFS, telephone: 727-824-5305, email: [email protected].

SUPPLEMENTARY INFORMATION: The Gulf reef fish fishery, which includes 
red grouper, is managed under the FMP. The FMP was prepared by the 
Council and is implemented through regulations at 50 CFR part 622 under 
the authority of the Magnuson-Stevens Fishery Conservation and 
Management Act (Magnuson-Stevens Act).

Background

    The Magnuson-Stevens Act requires NMFS and regional fishery 
management councils to achieve on a continuing basis the optimum yield 
from federally managed fish stocks. This mandate is intended to ensure 
that fishery resources are managed for the greatest overall benefit to 
the nation, particularly with respect to providing food production and 
recreational opportunities, while also protecting marine ecosystems.
    The 2015 Southeast Data Assessment Review (SEDAR 42) for Gulf red 
grouper determined that the stock is not overfished or undergoing 
overfishing based upon the assessment's terminal year of 2013. As a 
result of SEDAR 42, the Council's Science and Statistical Committee 
(SSC) recommended increasing the Gulf red grouper overfishing limit 
(OFL) and acceptable biological catch (ABC). The SSC provided two 
alternative OFL and ABC recommendations: (1) As a declining yield 
stream for the 2016 through 2020 fishing years; and (2) as a constant 
catch. The Council chose the constant catch OFL and ABC (14.16 million 
lb (6.42 million kg) and 13.92 million lb (6.31 million kg), 
respectively), but chose a more conservative approach in setting the 
ACLs and ACTs, basing these catch levels on the minimum ABC of 10.77 
million lb (4.89 million kg) from the declining yield stream. The 
Council's decision was based on testimony from the general public and 
commercial fishermen, who suggested the Council use caution when 
setting the catch levels. Thus, through this framework action, the 
Council is increasing the red grouper commercial and recreational ACTs 
and ACLs. The commercial ACT is codified as the commercial quota.

Management Measures Contained in This Proposed Rule

    The proposed rule would revise the commercial quota and ACL, and 
the recreational ACT and ACL for Gulf red grouper. All weights 
described in this proposed rule are in gutted weight.

Commercial and Recreational Catch Limits

    The current red grouper commercial quota and ACL, and recreational 
ACT and ACL were implemented through Amendment 32 to the FMP (77 FR 
6988, February 10, 2012). The current commercial quota is 5,720,000 lb 
(2,590,000 kg) and the commercial ACL is 6,030,000 lb (2,735,000 kg). 
The current recreational ACT is 1,730,000 lb (785,000 kg) and the 
recreational ACL is 1,900,000 lb (862,000 kg).
    This proposed rule would increase catch levels for both sectors. 
The commercial quota would be revised to 7,780,000 lb (3,528,949 kg) 
and the commercial ACL would be revised to 8,190,000 lb (3,714,922 kg). 
Additionally, the recreational ACT would be revised to 2,370,000 lb 
(1,075,014 kg) and the recreational ACL to 2,580,000 lb (1,170,268 kg).
    For Gulf red grouper, 76 percent of the stock ACL is allocated to 
the commercial sector and 24 percent of the ACL is allocated to the 
recreational sector. The commercial quota is set by applying a 5 
percent buffer to the commercial ACL to account for management 
uncertainty and the recreational ACT is set by applying a buffer to the 
recreational ACL of 8 percent to account for management uncertainty.
    The revised commercial quota in this proposed rule would provide 
the commercial sector additional harvest opportunities as a result of 
the increased commercial quota beginning in 2016. The increase in the 
recreational ACL is expected to allow the recreational sector to remain 
open for the entire fishing

[[Page 48729]]

year by avoiding the implementation of an in-season accountability 
measure.

Other Measures Contained in the Framework Action Not in This Proposed 
Rule

    In addition to the measures contained in this proposed rule, this 
framework action would also revise the Gulf red grouper OFL and ABC 
based upon the results of SEDAR 42.
    The stock OFL proposed in the framework action is 14,160,000 lb 
(6,422,868 kg), which is a 43 percent increase from the current stock 
OFL of 8,100,000 lb (3,674,098 kg). The ABC proposed in the framework 
action is a 35 percent increase to the current ABC. The current red 
grouper stock ABC is 7,930,000 lb (3,596,987 kg). The revised ABC would 
be 13,920,000 lb (6,314,006 kg).

Classification

    Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the 
Assistant Administrator has determined that this proposed rule is 
consistent with the framework action, the FMP, the Magnuson-Stevens 
Act, and other applicable law, subject to further consideration after 
public comment.
    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866.
    NMFS prepared an initial regulatory flexibility analysis (IRFA) for 
this rule, as required by section 603 of the RFA, 5 U.S.C. 603. The 
IRFA describes the economic impact that this proposed rule, if 
implemented, would have on small entities. A description of the 
proposed rule, why it is being considered, and the objectives of, and 
legal basis for this proposed rule are contained at the beginning of 
this section in the preamble and in the SUMMARY section of the 
preamble. A copy of the full analysis is available from NMFS (see 
ADDRESSES). A summary of the IRFA follows.
    The Magnuson-Stevens Act provides the statutory basis for this 
rule. No duplicative, overlapping, or conflicting Federal rules have 
been identified. In addition, no new reporting, record-keeping, or 
other compliance requirements are introduced by this proposed rule. 
Accordingly, this proposed rule does not implicate the Paperwork 
Reduction Act.
    This proposed rule, if implemented, would be expected to directly 
affect all commercial vessels that harvest red grouper under the FMP.
    Only recreational anglers, who may fish from shore, man-made 
structures, private, rental, or charter vessels, and headboats, are 
allowed a bag or possession limit of reef fish species in the Gulf. 
Captains or crew members on charter vessels or headboats (for-hire 
vessels) cannot harvest or possess red grouper or other reef fish under 
the recreational bag limits. Therefore, only recreational anglers would 
be directly affected by the proposed changes to the red grouper 
recreational ACL and ACT. Recreational anglers, however, are not 
considered to be small entities under the RFA, so the economic effects 
of this proposed rule on these anglers are outside the scope of the 
RFA.
    For-hire vessels sell fishing services to recreational anglers. The 
proposed changes to the recreational red grouper ACL and ACT would not 
directly alter the services sold by these vessels. Any change in demand 
for these fishing services and associated economic effects as a result 
of this proposed rule would be a consequence of a behavioral change by 
anglers, secondary to any direct effect on anglers and, therefore, an 
indirect effect of the proposed rule. Because the effects on for-hire 
vessels would be indirect, they fall outside the scope of the RFA.
    As of March 7, 2016, there were 852 valid or renewable Federal Gulf 
commercial reef fish permits. Each of these permits is associated with 
an individual vessel. To harvest red grouper, a vessel permit must be 
linked to an individual fishing quota (IFQ) account and possess 
sufficient allocation (pounds of fish) for this species. IFQ accounts 
can be opened and valid permits can be linked to IFQ accounts at any 
time during the year. Allocation is distributed at the beginning of 
each fishing year based on the shares held by each IFQ participant. 
Eligible vessels can also purchase red grouper allocation or shares 
from other IFQ participants. On average (2010 through 2014), 397 
vessels landed red grouper each year. Their average annual vessel-level 
revenue for 2010 through 2014 was approximately $99,000 (2015 dollars), 
of which $41,000 was from red grouper.
    The maximum annual revenue reported by a single one of these 
vessels in 2014 was approximately $1.5 million (2015 dollars).
    On December 29, 2015, the 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 RFA compliance purposes only (80 FR 81194, December 
29, 2015). Under this rule, a business primarily engaged in commercial 
fishing (NAICS code 11411) is classified as a small business if it is 
independently owned and operated, is not dominant in its field of 
operation (including its affiliates), and has combined annual receipts 
not in excess of $11 million for all its affiliated operations 
worldwide. The $11 million standard became effective on July 1, 2016, 
and is to be used in place of the U.S. Small Business Administration's 
(SBA) 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, an IRFA 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 commercial fishing businesses and were 
considered small under the SBA's size standards, and they all would 
continue to be considered small under the new NMFS standard. Thus, NMFS 
has determined that the new size standard does not affect analyses 
prepared for this regulatory action. No other small entities that would 
be directly affected by this proposed rule have been identified.
    Of the 852 commercial vessels eligible to fish for the species 
managed under the FMP, 397 of them are expected to be affected by this 
proposed rule (approximately 47 percent). Because all entities expected 
to be affected by this proposed rule are small entities, NMFS has 
determined that this proposed rule would affect a substantial number of 
small entities. Moreover, the issue of disproportionate effects on 
small versus large entities does not arise in the present case.
    Using the Council's preferred alternative, this proposed rule would 
set the commercial ACL for red grouper at a constant catch value of 
8,190,000 lb (3,714,922 kg). The commercial quota would be set at 95 
percent of the commercial ACL. This would represent a 2,060,000 lb 
(934,400 kg) (36 percent) increase in the commercial quota relative to 
the status quo. The increased quota would be expected to result in an 
increase in commercial red grouper harvests, although this increase 
would be constrained by industry capacity, individual harvesters' 
profit maximization strategies, and current Federal management 
restrictions. Economic benefits may accrue to the commercial sector as 
a result of the increased landings and availability of red grouper 
allocation; however, these

[[Page 48730]]

would be tempered by potential decreases in ex-vessel and IFQ 
allocation prices. It is not possible to quantify these economic 
effects with available data. For 2016, it is unlikely that the 
commercial fleet would be able to harvest the totality of the 
additional red grouper amounts made available by the increase in this 
proposed rule, because if implemented, this framework action would 
likely not be effective until early fall of 2016. In subsequent years, 
commercial fishermen may or may not be able to scale-up their 
operations to harvest the full quota. Price effects in both the ex-
vessel and allocation transfer markets would depend on the price 
elasticity of demand for red grouper and red grouper allocation, 
respectively. Assuming the price elasticity of demand (percentage 
change in quantity demanded divided by the percentage change in price) 
for red grouper in the ex-vessel market is greater than one (i.e., the 
percentage change in quantity demanded is greater than the percentage 
change in price), then an increase in landings would result in an 
increase in ex-vessel revenue and vice versa. Assuming the price 
elasticity of demand for red grouper allocation is greater than 1, IFQ 
shareholders would experience an overall increase in allocation 
transfer proceeds and vice versa. With respect to IFQ share value, if 
investors believe that the discounted future revenue stream associated 
with shares is greater under the new quota than under the current 
quota, then share prices would be expected to increase, otherwise they 
would remain the same or decrease. IFQ account holders that routinely 
purchase red grouper allocation would likely benefit from the wider 
availability and cheaper price of allocation. Again, these cost savings 
may be offset by changes in ex-vessel prices. Additionally, if the 
proposed rule is implemented in 2016, those that have already purchased 
annual allocation for use later in 2016 would incur supplementary costs 
because they would have likely overpaid for the allocation. Finally, 
the higher quota could result in increased congestion of fishing 
grounds, which in turn, could have a minor impact on harvesting costs.
    The following discussion describes the alternatives that were not 
selected as preferred by the Council.
    Four alternatives, including the preferred alternative discussed 
above, were considered for modifying the red grouper OFL, ABC, and 
commercial and recreational sector catch levels. The first alternative, 
the no action alternative, would not be expected to affect current 
commercial red grouper harvests. This alternative was not selected 
because the OFL and ABC would not be based on the best scientific 
information available and economic benefits derived from increased 
commercial and recreational harvests would be forgone, possibly 
preventing the achievement of OY.
    The second alternative would adopt the OFL and ABC schedule 
recommended by the SSC for 2016 through 2020. Using the current sector 
allocation, the commercial and recreational ACLs would be set at 76 
percent and 24 percent of the ABC, respectively. Under the second 
alternative, the commercial quota would be set at 95 percent of the 
commercial ACL and the recreational ACT would be set at 92 percent of 
the recreational ACL. This alternative would result in a 154 percent 
increase in the commercial quota in 2016, followed by successively 
lower quotas through 2020. In 2020 and subsequent fishing years, the 
red grouper commercial ACL and quota would be equivalent to the 
constant catch values specified in the preferred alternative. Economic 
effects to commercial vessels under this alternative would depend on 
the capacity of the fleet, individual harvesters' profit maximization 
strategies, current Federal management restrictions, and the effects of 
the quota increase on ex-vessel, IFQ allocation, and IFQ share prices. 
Given the very substantial size of the quota increases under this 
alternative, the 35-fathom (64-m) bottom longline closure during June 
through August each year, and the lack of issuance of new Eastern Gulf 
reef fish bottom longline endorsements, it is not likely that the 
commercial fleet would be able to harvest the entirety of its quota 
each year. Therefore, although positive direct economic benefits may 
result from additional red grouper harvests, increased availability of 
allocation, and potential increases in IFQ share value, they would be 
constrained by the industry's capacity and tempered by negative price 
effects. It is possible that negative price effects from increased 
allocation and landings could actually result in a decrease in 
allocation transfer proceeds and ex-vessel revenues, respectively. As 
for IFQ share prices, NMFS expects that they would fluctuate in the 
short-term as allocation and ex-vessel markets re-stabilize and 
investors speculate on future market and stock conditions, as well as 
Federal management measures. Finally, the higher commercial quotas 
could result in increased congestion of fishing grounds, which in turn 
could have a minor impact on harvesting costs. This alternative was not 
selected because the Council preferred to take a more conservative 
approach to setting the OFL, ABC, and commercial and recreational catch 
levels in order to account for scientific uncertainty in the stock 
assessment, specifically the below average red grouper recruitment in 
the Gulf, since 2005, and to reduce the chances of negative economic 
effects to commercial vessels from a large increase in the red grouper 
quota.
    The third alternative would implement the constant catch OFL and 
ABC recommended by the SSC. Using the current sector allocation, the 
commercial and recreational ACLs would be set at 76 percent and 24 
percent of the ABC, respectively. The commercial quota would be set at 
95 percent of the commercial ACL and the recreational ACT would be set 
at 92 percent of the recreational ACL. This would represent a 76 
percent increase in the commercial quota from the current quota. This 
alternative would result in a greater commercial quota compared to the 
preferred alternative, but a lesser quota compared to the second 
alternative through 2017. After 2017, the constant catch commercial ACL 
and quota under this alternative would be greater than both the 
preferred alternative and the second alternative. Once again, economic 
effects to commercial vessels under this alternative would depend on 
the capacity of the fleet, individual harvesters' profit maximization 
strategies, current Federal management restrictions, and the effects of 
the quota increase on ex-vessel and IFQ allocation and share prices. As 
was the case with the second alternative, given the very substantial 
size of the quota increase under this alternative, the 35-fathom (64-m) 
bottom longline closure during June through August each year, and the 
lack of issuance of new Eastern Gulf reef fish bottom longline 
endorsements, it is not likely that the commercial fleet would be able 
to harvest the entirety of its quota each year. Therefore, although 
positive direct economic benefits may result from additional red 
grouper harvests, increased availability of allocation, and potential 
increases in IFQ share value, they would be constrained by the 
industry's capacity and tempered by negative price effects. As 
discussed earlier, these negative price effects could actually outweigh 
the economic benefits of increased allocation and landings. 
Additionally, IFQ share prices would likely fluctuate in the short-
term. There would also be an increased potential for fishing congestion 
and, in turn, increased harvesting costs. Because the

[[Page 48731]]

commercial quota would be less than under the second alternative but 
greater than under the preferred alternative, it would be expected to 
fall somewhere in between those alternatives in terms of potential 
landings and likelihood of negative price effects for 2016 and 2017. In 
the long-term, this alternative would result in the greatest commercial 
quota and greatest potential landings. Because there is insufficient 
data to estimate the total expected change in landings and revenue, it 
is not possible to definitively state which alternative would be 
expected to result in the greatest economic benefits to the commercial 
sector. This alternative was not selected for the same reasons the 
Council did not select the second alternative.

List of Subjects in 50 CFR Part 622

    Annual catch limits, Annual catch targets, Fisheries, Fishing, 
Gulf, Recreational, Red grouper, Reef fish, Quotas.

    Dated: July 15, 2016.
Samuel D. Rauch III,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.

    For the reasons set out in the preamble, 50 CFR part 622 is 
proposed to be 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.  622.39, revise paragraph (a)(1)(iii)(C) to read as follows:


Sec.  622.39  Quotas.

* * * * *
    (a) * * *
    (1) * * *
    (iii) * * *
    (C) Red grouper--7,780,000 lb (3,528,949 kg).
* * * * *
0
3. In Sec.  622.41, revise the last sentence of paragraph (e)(1) and 
paragraph (e)(2)(iv) to read as follows:


Sec.  622.41  Annual catch limits (ACLs), annual catch targets (ACTs), 
and accountability measures (AMs).

* * * * *
    (e) * * *
    (1) * * * The applicable commercial ACL for red grouper, in gutted 
weight, is 8,190,000 lb (3,714,922 kg).
    (2) * * *
    (iv) The recreational ACL for red grouper, in gutted weight, is 
2,580,000 lb (1,170,268 kg). The recreational ACT for red grouper, in 
gutted weight, is 2,370,000 lb (1,075,014 kg).
* * * * *
[FR Doc. 2016-17518 Filed 7-25-16; 8:45 am]
 BILLING CODE 3510-22-P