[Federal Register Volume 81, Number 250 (Thursday, December 29, 2016)]
[Notices]
[Pages 95966-95968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31624]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

RIN 0648-XF120


Magnuson-Stevens Act Provisions; Fisheries Off West Coast States; 
Pacific Coast Groundfish Fishery; Trawl Rationalization Program; 2017 
Cost Recovery

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

ACTION: Notice; 2017 cost recovery fee percentages and mothership (MS) 
pricing.

-----------------------------------------------------------------------

SUMMARY: This action provides participants in the Pacific coast 
groundfish trawl rationalization program with the 2017 fee percentages 
and ``MS pricing'' needed to calculate the required payments for trawl 
rationalization program cost recovery fees due in 2017. It also 
provides a redetermination of previous years' fees. For calendar year 
2017, NMFS announces the following fee percentages by sector: 3.0 
percent for the Shorebased Individual Fishing Quota (IFQ) Program, 0 
percent for the MS Coop Program, 0 percent for the Catcher/Processer 
(C/P) Coop Program. For 2017, the MS pricing to be used as a proxy by 
the C/P Coop Program is: $0.08/lb for Pacific whiting.

DATES: Effective January 1, 2017.

FOR FURTHER INFORMATION CONTACT: Christopher Biegel, Cost Recovery 
Program Coordinator, (503) 231-6291, fax (503) 872-2737, email 
[email protected].

SUPPLEMENTARY INFORMATION: The Magnuson[hyphen]Stevens Fishery 
Conservation and Management Act (MSA) requires NMFS to collect fees to 
recover the costs directly related to the management, data collection, 
and enforcement of a limited access privilege program (LAPP) (16 U.S.C. 
1854(d)(2)), also called ``cost recovery.'' The Pacific coast 
groundfish trawl rationalization program is a LAPP, implemented in 
2011, and consists of three sectors: The Shorebased IFQ Program, the MS 
Coop Program, and the C/P Coop Program. In accordance with the MSA, and 
based on a recommended structure and methodology developed in 
coordination with the Pacific Fishery Management Council, NMFS began 
collecting mandatory fees of up to three percent of the 
ex[hyphen]vessel value of groundfish from each sector (Shorebased IFQ 
Program, MS Coop Program, and C/P Coop Program) in 2014. NMFS collects 
the fees to recover the incremental costs of management, data 
collection, and enforcement of the trawl rationalization program. 
Additional background can be found in the cost recovery proposed and 
final rules, 78 FR 7371 (February 1, 2013) and 78 FR 75268 (December 
11, 2013), respectively. The details of cost recovery for the 
groundfish trawl rationalization program are in regulation at 50 CFR 
660.115 (trawl fishery cost recovery program), Sec.  660.140 
(Shorebased IFQ Program), Sec.  660.150 (MS Coop Program), and Sec.  
660.160 (C/P Coop Program).
    By December 31 of each year, NMFS must announce the next year's fee 
percentages, and the applicable MS pricing for the C/P Coop Program. 
NMFS calculated the 2017 fee percentages by sector using the best 
available information. In addition, NMFS revisited the methodology used 
to determine the direct program costs (DPC) attributable to each sector 
for fiscal years 2013, 2014, and 2015. NMFS' redetermination of the 
DPCs for those fiscal years resulted in a decrease in the DPCs used to 
determine the fee percentages for calendar years 2014, 2015, and 2016. 
For 2017, the fee percentages by sector, taking into account the 
redetermined DPCs and any adjustments, are:
     3.0 percent for the Shorebased IFQ Program,
     0 percent for the MS Coop Program,
     0 percent for the C/P Coop Program.
    To calculate the fee percentages, NMFS used the formula specified 
in regulation at Sec.  660.115(b)(1), where the fee percentage by 
sector equals the lower of three percent or DPC for that sector divided 
by total ex-vessel value (V) for that sector multiplied by 100 (Fee 
percentage = the lower of 3 percent or (DPC/V) x 100).
    ``DPC,'' as defined in the regulations at Sec.  660.115(b)(1)(i), 
are the actual incremental costs for the previous fiscal year directly 
related to the management, data collection, and enforcement of each 
sector (Shorebased IFQ Program, MS Coop Program, and C/P Coop Program). 
Actual incremental costs means those net costs that would not have been 
incurred but for the implementation of the trawl rationalization 
program, including both increased costs for new requirements of the 
program and reduced costs resulting from any program efficiencies. NMFS 
only included the cost of employees' time (salary and benefits) spent 
working on the program in calculating DPC rather than all incremental 
costs of management, data collection, and enforcement. NMFS is still 
evaluating how to incorporate additional costs and may, in coordination 
with the Pacific Fishery Management Council, do so in the future.
    ``V'', as specified at Sec.  660.115(b)(1)(ii), is the total ex-
vessel value, as defined at Sec.  660.111, for each sector from the 
previous calendar year. To calculate ``V'' for use in determining 2017 
fee percentages, NMFS used the ex-vessel value for 2015 as reported in 
Pacific Fisheries Information Network (PacFIN) from electronic fish 
tickets. The electronic fish ticket data in PacFIN is for the 
Shorebased IFQ Program. Therefore, the ex-vessel value for both the MS 
Coop Program and the C/P Coop Program is a proxy based on the 
Shorebased IFQ Program ex-vessel price and on the retained catch 
estimates (weight) from the observer data for the MS and C/P Coop 
Programs.
    Ex-vessel values and amounts landed each year fluctuate, and the 
amount NMFS collects each year in cost recovery fees also fluctuate 
accordingly. When the cost recovery fees collected by NMFS are greater 
or less than the actual net incremental costs incurred for a given 
year, the fee percentage for the following year will be adjusted as 
specified at Sec.  660.115(b)(1)(i).

Redetermination of Past DPCs

    On August 10, 2016, the U.S. Court of Appeals for the Ninth Circuit 
issued its opinion in Glacier Fish Co. LLC v. Pritzker, 832 F.3d 1113 
(9th Cir. 2016), a case involving a challenge to NMFS' authority to 
recover cost recovery fees from members of the C/P Coop Program and the 
reasonableness of NMFS' calculation of the C/P Coop Program's 2014 fee 
percentage. The court upheld NMFS' authority to recover cost recovery 
fees from members of the C/P Coop Program because the C/P coop permit 
is a limited access privilege and

[[Page 95967]]

Glacier Fish Co. and other C/P coop members are reasonably considered a 
``holder'' of that privilege. The court also concluded that NMFS' cost 
recovery regulations were consistent with statutory requirements. 
However, the court held that the calculation of the 2014 CP Coop 
Program fee was inconsistent with NMFS' cost recovery regulations and 
the court remanded to NMFS to re-determine the 2014 fee.
    In response, NMFS has reevaluated and modified the methodology used 
to determine the C/P Coop Program's DPC for the 2014 fee calculation. 
The redetermination of the C/P Coop Program's 2014 fee also took into 
consideration discussions with Glacier Fish Co. and other 
representatives of C/P Coop members with respect to what costs should 
be considered actual incremental costs. One key change to the C/P Coop 
program's 2014 fee is the elimination of all time that was originally 
coded as ``general'' time and split evenly among the three sectors. 
Additional costs that NMFS determined to be more appropriately 
categorized as non-incremental were also removed. NMFS also made some 
adjustments to ensure contractor and employee time was appropriately 
distributed among the sectors to reflect the actual incremental costs. 
Finally, NMFS elected to apply a similar revised methodology for all 
sectors for all years, resulting in a reduction in each sector's DPCs. 
However, the Shorebased IFQ Program DPC remained above the 3 percent 
cap.
    NMFS' internal process for categorizing and tracking employee time 
in the trawl rationalization program has been refined over the years. 
For example, the use of the ``general'' time coding option was phased 
out by the West Coast Region and, with the exception of limited use by 
the Northwest Fisheries Science Center, was no longer used as of fiscal 
year 2015. NMFS will continue its efforts to ensure that employee time 
is only tracked for time spent on tasks that would not have been 
incurred but for the implementation of the trawl rationalization 
program, taking into account reduced costs resulting from any program 
efficiencies. A comparison of the original DPCs and the recalculated 
DPCs is below.

------------------------------------------------------------------------
                                       Initial DPC      Redetermined DPC
                                        (excluding         (excluding
                                       adjustments)       adjustments)
------------------------------------------------------------------------
Shorebased IFQ Program:
    2014..........................      $1,877,752.00      $1,599,610.25
    2015..........................       2,028,859.04       1,936,907.83
    2016..........................       2,339,529.95       1,887,535.24
    2017..........................       2,021,490.55                N/A
MS Coop Program:
    2014..........................         274,936.05          77,659.47
    2015..........................         233,300.78         129,565.98
    2016..........................         291,144.05         185,814.34
    2017..........................         167,549.51                N/A
C/P Coop Program:
    2014..........................         176,460.05          12,931.29
    2015..........................         158,631.88          40,487.70
    2016..........................         184,267.26          45,080.17
    2017..........................          63,448.85                N/A
------------------------------------------------------------------------

    The DPC values used to determine the 2017 fee percentages reflect 
the redetermined DPCs and any adjustments for past over or under 
payment. The adjustments can be seen here:

----------------------------------------------------------------------------------------------------------------
                                                                                   2014
                                                        --------------------------------------------------------
                                                                DPC                Fees            Adjustment
----------------------------------------------------------------------------------------------------------------
IFQ....................................................      $1,599,610.25      $1,356,285.28                N/A
MS.....................................................          77,659.47         347,450.65       -$269,791.18
CP.....................................................          12,931.29         350,387.25        -337,455.96
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                         2015
                                     ---------------------------------------------------------------------------
                                             DPC          DPC w/adjustment         Fees            Adjustment
----------------------------------------------------------------------------------------------------------------
IFQ.................................      $1,936,907.83                N/A      $1,260,450.63                N/A
MS..................................         129,565.98       -$140,225.20          94,467.65       -$234,692.85
CP..................................          40,487.70        -296,968.26               0.00        -296,968.26
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                         2016
                                     ---------------------------------------------------------------------------
                                             DPC          DPC w/adjustment      Fees (est)      Adjustment (est)
----------------------------------------------------------------------------------------------------------------
IFQ.................................      $1,887,535.24                N/A      $1,561,574.00                N/A
MS..................................         185,814.34        -$48,878.51         379,731.00       -$428,609.51
CP..................................          45,080.17        -251,888.09               0.00        -251,888.09
----------------------------------------------------------------------------------------------------------------


[[Page 95968]]


------------------------------------------------------------------------
                                                    2017
                                   -------------------------------------
                                           DPC          DPC w/adjustment
------------------------------------------------------------------------
IFQ...............................      $2,021,490.55                N/A
MS................................         167,549.51       -$261,060.01
CP................................          63,448.85        -188,439.24
------------------------------------------------------------------------

    Based on total fees paid to date and estimated fees received in 
2016, the adjusted DPCs for 2017 are:

Shorebased IFQ Program: $2,021,490.55
MS Coop Program: -$261,060.01
C/P Coop Program: -$188,439.24

    And the fee calculations using the adjusted 2017 DPCs are:

Shorebased IFQ Program: 3.0 percent = the lower of 3 percent or 
($2,021,490.55/$41,605,012.42) x 100
MS Coop Program: -6.0 percent = the lower of 3 percent or -$261,060.01/
$4,373,922.34) x 100
C/P Coop Program: -1.7 percent = the lower of 3 percent or (-
$188,439.24/$11,120,803.07) x 100

    As a fee cannot be set using a negative percentage, the 2017 fee 
percentages for the MS Coop Program and the C/P Coop Program will be 
set at 0.0 percent.
    MS pricing is the average price per pound that the C/P Coop Program 
will use to determine their fee amount due (MS pricing multiplied by 
the value of the aggregate pounds of all groundfish species harvested 
by the vessel registered to a C/P-endorsed limited entry trawl permit, 
multiplied by the C/P fee percentage, equals the fee amount due). In 
past years, MS pricing was based on the average price per pound of 
Pacific whiting as reported in PacFIN from the Shorebased IFQ Program. 
In other words, data from the IFQ fishery was used as a proxy for the 
MS average price per pound to determine the ``MS pricing'' used in the 
calculation for the C/P sector's fee amount due. For 2017 MS pricing, 
NMFS used values derived from those reported on the MS Coop Program 
cost recovery form from calendar year 2015 as this was determined to be 
the best information available. NMFS has calculated the 2017 MS pricing 
to be used as a proxy by the C/P Coop Program as: $0.08/lb for Pacific 
whiting.
    Cost recovery fees are submitted to NMFS by Fish buyers via Pay.gov 
(https://www.pay.gov/paygov/). Fish buyers registered with Pay.gov can 
login in the upper left-hand corner of the screen. Fish buyers not 
registered with Pay.gov can go to the cost recovery forms directly from 
the Web site below. Click on the link to Pacific Coast Groundfish Cost 
Recovery for your sector (IFQ, MS, or C/P): https://www.pay.gov/public/search/global?searchString=pacific+cost+recovery&formToken=4e5bc6b4-6ba8-4db4-9850-e73756a06775.
    As stated in the preamble to the cost recovery proposed and final 
rules, in the spring of each year, NMFS will release an annual report 
documenting the details and data used for the above calculations. The 
report will include information such as the fee percentage calculation, 
program costs, and ex-vessel value by sector. Annual reports are 
available at: http://www.westcoast.fisheries.noaa.gov/fisheries/groundfish_catch_shares/rules_regulations/costrecovery.html.

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

    Dated: December 23, 2016.
Alan D. Risenhoover,
Director, Office of Sustainable Fisheries, National Marine Fisheries 
Service.
[FR Doc. 2016-31624 Filed 12-28-16; 8:45 am]
 BILLING CODE 3510-22-P