[Federal Register Volume 83, Number 184 (Friday, September 21, 2018)]
[Rules and Regulations]
[Pages 47819-47834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20410]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

15 CFR Part 902

50 CFR Parts 300 and 679

[Docket No. 161222999-8773-02]
RIN 0648-BG57


Fisheries of the Exclusive Economic Zone Off Alaska; Authorize 
Recreational Quota Entity To Participate in the Halibut IFQ Program

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

ACTION: Final rule.

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SUMMARY: NMFS issues regulations that authorize formation of a 
recreational quota entity (RQE) that could participate in the Pacific 
Halibut and Sablefish Individual Fishing Quota Program in International 
Pacific Halibut Commission Regulatory Areas 2C and 3A in the Gulf of 
Alaska. The RQE is authorized to purchase and hold a limited amount of 
commercial halibut quota share that will yield additional pounds of 
recreational fishing quota on an annual basis to augment the amount of 
halibut available for harvest in the charter halibut fishery. The RQE 
will provide a mechanism for a compensated reallocation of a portion of 
commercial halibut quota share to the charter halibut fishery. This 
final rule is necessary to promote social and economic flexibility in 
the charter halibut fishery, and is intended to promote the goals and 
objectives of the Northern Pacific Halibut Act of 1982, and other 
applicable laws.

DATES: This rule is effective on October 22, 2018.

ADDRESSES: Electronic copies of the Regulatory Impact/Initial 
Regulatory Flexibility Analysis/Environmental Assessment (collectively, 
Analysis) prepared for this action are available from http://www.regulations.gov or from the NMFS Alaska Region website at http://alaskafisheries.noaa.gov.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
final rule may be submitted to NMFS, Alaska Region, P.O. Box 21668, 
Juneau, AK 99082-1668, Attn: Ellen Sebastian, Records Officer, in 
person at NMFS, Alaska Region, 709 West 9th Street, Room 420A, Juneau, 
AK; by email to OIRA_Submission@omb.eop.gov; or by fax to 202-395-5806.

FOR FURTHER INFORMATION CONTACT: Kurt Iverson, 907-586-7228.

SUPPLEMENTARY INFORMATION: This final rule implements regulatory 
amendments to authorize an RQE to participate in the Pacific Halibut 
and Sablefish Individual Fishing Quota Program (IFQ Program) in 
International Pacific Halibut Commission (IPHC) Regulatory Areas 2C and 
3A in the Gulf of Alaska. NMFS published the proposed rule to authorize 
an RQE on October 3, 2017 (82 FR 46016). The comment period on the 
proposed rule ended on November 17, 2017. NMFS received 18 comment 
letters on the proposed rule. One of the comment letters was outside 
the scope of this action. Of the remaining 17 comment letters, NMFS 
identified and considered 19 unique, relevant comments. A summary of 
the comments and NMFS' responses is provided in the Comments and 
Responses section of this preamble.
    A detailed review of this rule and the rationale for these 
regulations is provided in the preamble to the proposed rule (82 FR 
46016, October 3, 2017). Electronic copies of the proposed rule and the 
Analysis may be obtained from www.regulations.gov or from the NMFS 
Alaska Region website at http://alaskafisheries.noaa.gov. All public 
comment letters submitted during the comment period may be obtained 
from www.regulations.gov.

Background

Authority for Action

    The IPHC and NMFS manage fishing for Pacific halibut (Hippoglossus 
stenolepis) through regulations established under authority of the 
Northern Pacific Halibut Act of 1982 (Halibut Act). The IPHC adopts 
regulations governing the Pacific halibut (halibut) fishery under the 
Convention between the United States and Canada for the Preservation of 
the Halibut Fishery of the North Pacific Ocean and Bering Sea 
(Convention), signed at Ottawa, Ontario, on March 2, 1953, as amended 
by a Protocol Amending the Convention (signed at Washington, DC, on 
March 29, 1979). For the United States, regulations developed by the

[[Page 47820]]

IPHC are subject to acceptance by the Secretary of State with 
concurrence from the Secretary of Commerce. After acceptance by the 
Secretary of State and the Secretary of Commerce, NMFS publishes the 
IPHC regulations in the Federal Register as annual management measures 
pursuant to 50 CFR 300.62. The interim final rule implementing IPHC 
regulations for the 2018 fishing season, including regulations 
affecting sport fishing for halibut and vessels in the charter fishery 
in IPHC Regulatory Areas 2C (Southeast Alaska) and 3A (Southcentral 
Alaska), was published March 20, 2018 (83 FR 12133).
    The Halibut Act, at sections 773c(a) and (b), provides the 
Secretary of Commerce with general responsibility to carry out the 
Convention and the Halibut Act. In adopting regulations that may be 
necessary to carry out the purposes and objectives of the Convention 
and the Halibut Act, the Secretary of Commerce is directed to consult 
with the Secretary of the department in which the U.S. Coast Guard is 
operating, which is currently the Department of Homeland Security.
    The Halibut Act, at section 773c(c), also provides the North 
Pacific Fishery Management Council (Council) with authority to develop 
regulations, including limited access regulations, that are in addition 
to, and not in conflict with, approved IPHC regulations. Regulations 
developed by the Council may be implemented by NMFS only after approval 
by the Secretary of Commerce. The Council has exercised this authority 
in the development of halibut fishery management measures, codified at 
50 CFR 300.65, 300.66, and 300.67. The Council also developed the IFQ 
Program for the commercial halibut and sablefish fisheries, codified at 
50 CFR part 679. Management of halibut in the IFQ Program is authorized 
under the Halibut Act.

Summary Background on Management of the Charter Halibut Fishery

    A comprehensive history of management of the guided sport fishery 
for halibut (also referred to herein as the ``charter fishery'') was 
presented in the proposed rule for this action published October 3, 
2017 (82 FR 46016). The proposed rule also provides essential 
background of the commercial halibut and sablefish IFQ Program and how 
the IFQ Program intersects with management of the charter fishery, 
primarily through the Catch Sharing Plan (CSP) that establishes 
allocations of halibut harvests between the commercial halibut IFQ and 
charter sectors.
    The proposed rule describes the history and development of annual 
management measures for the charter fishery. The proposed rule also 
provides a summary of the development of the Charter Halibut Limited 
Access Program (CHLAP) that established Charter Halibut Permits (CHPs), 
and provides details on the Guided Angler Fish (GAF) Program, which 
authorizes limited annual transfers of commercial halibut IFQ as GAF to 
qualified CHP holders. The proposed rule describes the Community Quota 
Entity Program (CQE) as well, where eligible communities can form non-
profit corporations to purchase catcher vessel quota shares (QS). The 
IFQ resulting from the QS may then be leased to community residents 
annually.
    As described in the proposed rule and in Section 2.3 of the 
Analysis, regulatory areas established by the IPHC are referred to as 
``IPHC Regulatory Areas.'' This preamble uses the terms ``Area 2C'' and 
``Area 3A'' to refer to IPHC Regulatory Areas 2C and 3A, respectively.

Summary of This Action

    This final rule will change halibut fishery management in Areas 2C 
(Southeast Alaska) and 3A (Central Gulf of Alaska). It will implement a 
regulatory amendment to allow a non-profit RQE to represent the charter 
sector in Areas 2C and 3A. Sport fishing for Pacific halibut in Areas 
2C and 3A is subject to distinct regulations, depending upon whether 
anglers are guided (charter) or unguided. To provide stability in the 
charter fishery and to help meet allocation objectives, the Council 
adopted and NMFS implemented the CHLAP in January 2010. The CHLAP 
limits the total number of charter vessel operators that may 
participate in the guided sport fishery in Areas 2C and 3A. To fish for 
halibut with charter anglers on board, an operator must have an 
original, valid CHP on board.
    Since 2014, harvests of charter halibut in Alaska have been subject 
to a CSP that allocates harvests between the commercial halibut IFQ 
fishery and the charter fishery. To keep the harvests of the charter 
fishery within its allocation, regulations are developed annually in a 
cooperative effort between the Council, NMFS, and IPHC.
    Regulations for charter anglers are generally more restrictive than 
regulations for unguided anglers, and have become more stringent as 
halibut abundance has dropped and charter catch limits have been 
reduced. Charter angling restrictions vary between Areas 2C and 3A. 
Typical restrictions include daily and annual limits on the number of 
fish retained, fish size limits, and closures on specific days of the 
week for charter halibut fishing.
    This final rule will allow the RQE to purchase commercial halibut 
QS from the commercial halibut sector. The harvest pounds associated 
with the QS will yield annual Recreational Fishing Quota that will 
supplement the amount of halibut allocated to the charter sector under 
the existing CSP. If the RQE obtains enough QS, some or all of the 
halibut size and bag limits could be relaxed for charter anglers, up to 
a point where charter anglers could potentially retain up to two fish 
of any size as a daily bag limit, which is the current daily limit for 
unguided halibut anglers.
    Quota share obtained by the RQE will be purchased on the open 
market, with prices and terms negotiated between the buyer (RQE) and 
sellers (commercial halibut QS holders). The regulations allow the RQE 
to hold QS indefinitely, and to transfer QS back to the commercial 
halibut sector. This preamble uses the term ``RQE Program'' to refer to 
the regulations that authorize the RQE and determine its activities and 
responsibilities. Additional detail on the specific provisions that 
apply to the RQE is provided in the section of this preamble titled 
``Provisions of Final Rule.''

Purpose and Need

    The preamble to the proposed rule (82 FR 46016, October 3, 2017) 
provided a detailed description of the purpose and need for this final 
rule. A brief summary is provided here. As stated above, the charter 
fishery is limited to harvesting its percentage of the Area 2C or 3A 
combined catch limit allocated under the CSP. Charter catch limits 
increase or decrease as total halibut abundance increases or decreases. 
When halibut abundance is relatively low, as it has been in recent 
years compared to abundance in the 1990s and 2000s, the charter 
allocations under the CSP are lower, resulting in more restrictive 
annual management measures.
    The only way that charter operators have been able to provide more 
opportunity to charter clients than the established management measures 
allow for in their area is through participation in the GAF Program by 
individual charter operators. Because of the current restrictions on 
charter harvests under the CSP and the limited flexibility for charter 
operators to provide additional harvest opportunities to their clients, 
charter operators have expressed their desire to find a market-based 
mechanism to increase their overall allocation of the halibut resource.

[[Page 47821]]

    Based on these concerns, in 2015, the Council initiated the 
analytic process to develop a ``market-based mechanism'' to allow a 
non-profit entity to purchase and hold a limited amount of commercial 
halibut QS on behalf of charter anglers. The intent of the Council was 
to provide additional harvest opportunity and less restrictive annual 
harvest measures for charter anglers in times of low halibut abundance, 
while complying with total halibut removals under the catch limits 
established by the IPHC under the CSP. In initiating this effort, the 
Council sought to balance the objectives of participants in the charter 
fishery without undermining the goals of the IFQ Program or creating 
significant adverse impacts to other halibut sectors. A complete 
history of the development of this action is described in the proposed 
rule (82 FR 46016, October 3, 2017) and Section 2.2 of the Analysis.

Recreational Quota Entity for Area 2C and Area 3A

    This final rule allows an RQE to be established as an eligible 
entity to purchase halibut QS in Area 2C and Area 3A, with limitations, 
for use by the charter fishery as a whole. This final rule designates 
the RQE as an eligible participant in the IFQ Program that can purchase 
Area 2C and 3A halibut QS for use by all charter halibut anglers in the 
respective area. Any halibut QS purchased by the RQE will be held by 
this entity for the common use of charter halibut anglers.
    Halibut QS held by the RQE will generate annual pounds of 
recreational fishing quota (RFQ), a type of annual harvest privilege 
similar to IFQ that has special requirements that pertain only to the 
RQE. RFQ will be calculated in the same manner as IFQ. Under this final 
rule, the specific amount of RFQ (in net pounds) is determined by the 
number of QS units held by the RQE as of October 1 of the preceding 
calendar year, the total number of halibut QS units issued in Area 2C 
or 3A as of January 15 of the year the IFQ or RFQ is issued, and the 
total amount of halibut allocated to the commercial IFQ fisheries in 
Areas 2C and 3A for that year.
    Although the amount of RFQ is calculated in the same way as IFQ, it 
is subject to different requirements. The additional pounds of RFQ for 
each regulatory area are combined with the charter catch limit 
determined under the CSP to calculate an adjusted charter catch limit 
for the year for Area 2C or 3A. Annual charter management measures for 
Areas 2C and 3A will be analyzed, recommended to the IPHC, and adopted 
for implementation based on the estimated adjusted charter catch 
limits. RFQ held by the RQE will be available for harvest by all 
charter anglers aboard registered charter vessels of any size, 
regardless of the QS category from which that RFQ originated. Under 
this rule, RFQ may not be transferred as GAF. Unless specified, 
regulations that refer only to IFQ permit holders do not apply to the 
RQE. Likewise, unless specified in this rule, regulations that refer 
only to IFQ do not apply to RFQ.
    This final rule does not change the underlying allocations to the 
commercial IFQ fishery and charter fishery specified in the CSP, and 
does not change the total QS pool. Therefore, the QS holders in the 
commercial IFQ fishery who do not transfer QS to the RQE will receive 
the same amount of IFQ pounds issued for their QS units, regardless of 
the amount of QS transferred to, and held by, the RQE.

Provisions of Final Rule

RQE Organizational Structure

    The Council recommended and NMFS implements the requirement that an 
RQE must be established as a qualified non[hyphen]profit entity 
registered under the laws of the State of Alaska and recognized as 
exempt from Federal income tax by the Internal Revenue Service (IRS) to 
purchase and hold halibut QS for use by the charter fishery. The QS 
held by an RQE could yield RFQ annually. This final rule allows a 
single non-profit entity to form to represent and manage separate QS 
holdings for Areas 2C and 3A. More detailed information on the 
structure of the RQE is provided in the preamble to the proposed rule 
(82 FR 46016, October 3, 2017) and in Section 4.8.1.1 of the Analysis.
    This final rule adds new definitions in Sec.  679.2 for 
``recreational fishing quota (RFQ)'' and ``recreational quota entity 
(RQE).''

Eligibility

    This final rule establishes requirements for the formation of a 
single RQE that would be eligible to purchase and hold commercial 
halibut QS for use by the guided halibut sector. The RQE must be a 
qualified non-profit entity registered under the laws of the State of 
Alaska and recognized as exempt from Federal income tax by the IRS. To 
qualify as exempt from Federal income tax, an organization must seek 
recognition of exemption from Federal income tax under section 501(a) 
of the Internal Revenue Code.
    To be approved as the entity eligible to purchase and hold halibut 
QS, the applicant wishing to become the RQE is required to demonstrate 
it is a non-profit entity registered under the laws of the State of 
Alaska by submitting to NMFS the articles of incorporation and 
management organization information, including bylaws and a list of key 
personnel including, but not limited to, the board of directors, 
officers, representatives, and managers.
    Articles of incorporation are public documents that must be filed 
with the state agency where the corporation becomes incorporated (e.g., 
with Alaska's Division of Corporations, Business, and Professional 
Licensing). The RQE must be incorporated within the State of Alaska 
consistent with incorporation requirements applicable to CQEs.
    In addition to demonstrating it is a non-profit corporation 
recognized by the State of Alaska, the applicant wishing to become the 
RQE is required to demonstrate it has been granted an exemption from 
Federal income tax by the IRS by submitting to NMFS the IRS 
acknowledgement of the entity's Federal tax exemption.
    NMFS requires the approved RQE to maintain its non-profit and tax-
exempt status, as described above. If the approved RQE entity does not 
meet this requirement, NMFS will not issue the RFQ that would otherwise 
be issued to the RQE based on its QS holdings. In addition, NMFS will 
provide the approved RQE entity with an opportunity to reinstate its 
non-profit and/or tax-exempt status. If the approved RQE entity does 
not demonstrate to NMFS that it is a qualified non[hyphen]profit entity 
registered under the laws of the State of Alaska and recognized as 
exempt from Federal income tax by the IRS by the established deadline, 
NMFS will issue an Initial Administrative Determination (IAD) to revoke 
the entity's status as the approved RQE and to require the entity to 
divest its QS holdings. The entity has the opportunity to appeal the 
IAD through the National Appeals Office under the provisions 
established at 15 CFR part 906. The applicant must complete the 
``Application for a Non-profit Corporation to be Designated as a 
Recreational Quota Entity (RQE)'' and submit it to NMFS Alaska Region 
for review and approval. The application form will be available on the 
NMFS Alaska Region website at https://alaskafisheries.noaa.gov after 
the effective date of this rule. NMFS will approve the first complete 
RQE application it receives. All other RQE applications will be 
disapproved. NMFS will notify the RQE when its application has been 
approved. Once approved,

[[Page 47822]]

NMFS will establish an account for QS and RFQ holdings when the RQE 
acquires QS. If NMFS disapproves an application, that determination may 
be appealed to the NMFS National Appeals Office under the provisions 
established at 15 CFR part 906. Detailed information on RQE eligibility 
is provided in the preamble to the proposed rule (82 FR 46016, October 
3, 2017) and in Section 4.8 of the Analysis.
    This rule adds a new paragraph to Sec.  679.41(n) to describe the 
application process and eligibility requirements for a prospective RQE.

Restrictions on Transfers

    This final rule authorizes two-way transfers of QS. QS acquired by 
the RQE may be transferred to an otherwise eligible participant in the 
commercial IFQ fishery. Because QS and the resulting IFQ used in the 
commercial IFQ fishery is subject to vessel categories and block 
designations on initially-issued QS--unlike the QS and resulting RFQ 
used by the RQE, which is exempt from such categories and 
designations--NMFS will track QS units, IFQ pounds, and vessel category 
and block designations that apply to ensure that original categories 
and designations for the commercial IFQ fishery are maintained during 
the transfer process. Detailed information on transfers of QS between 
the commercial and charter fishery is provided in the preamble to the 
proposed rule (82 FR 46016, October 3, 2017) and in Section 4.8 of the 
Analysis.
    NMFS modifies Sec.  679.42 to describe the QS transfer process for 
RQEs.

Annual Limit on Transfers to an RQE

    This final rule establishes area-specific annual limits on the 
amount of halibut QS that can transfer to an RQE. Under this final 
rule, the RQE may transfer up to the equivalent of 1 percent of the 
commercial QS units in Area 2C based on the 2015 pool of all QS 
categories (59,477,396 units). An annual transfer limit was set 
equivalent to 1.2 percent of the commercial QS pool in Area 3A based on 
the 2015 pool of all QS categories (184,893,008 units). For a more 
detailed description of the rationale for this provision, please see 
the preamble of the proposed rule (82 FR 46016, October 3, 2017). 
Annual transfer limits are discussed in further detail in Section 
4.8.1.2.2 of the Analysis.
    NMFS adds a new paragraph at Sec.  679.42(f)(8) to implement the 
annual transfer limits on QS for RQEs.

Limit on Total QS Holdings by the RQE

    This final rule places limits on the total amount of halibut QS 
that may be held by the RQE. For Area 2C, the RQE can hold up to 10 
percent of the 2015 commercial QS pool. This proportion is calculated 
based on the entire QS pool, including categories and blocks of QS 
units that the RQE is prohibited from purchasing (discussed in the next 
sections of this preamble). Ten percent of the 2015 commercial QS pool 
in Area 2C equates to 5,947,740 QS units.
    This final rule limits QS holdings for Area 3A to 12 percent of the 
2015 entire commercial QS pool, including categories and blocks of QS 
units that the RQE is prohibited from purchasing. Twelve percent of the 
2015 commercial QS pool in Area 3A equates to 22,187,161 units.
    As described in the proposed rule (82 FR 46016, October 3, 2017), 
this final rule specifies the limits on total QS holdings by the RQE in 
regulations so that they are clearly defined for fishery participants 
and will not fluctuate if there are future changes in the Area 2C or 3A 
QS pools. The limits on RQE holdings of QS are discussed in further 
detail in Section 4.8.1.2.3 of the Analysis.
    NMFS adds a new paragraph at Sec.  679.42(f)(8) to describe the QS 
holding limits for the RQE.

Limit on GAF Transfers as RQE Holdings Increase

    Part of this RQE Program limits the total amount of GAF that may be 
used annually by CHP holders. The GAF transfer restrictions are adopted 
so that in any year, the combined amount of RFQ and GAF transferred to 
CHP holders cannot exceed a poundage equal to the maximum amount of 
pounds that could be issued as RFQ in Area 2C or 3A. The limit on GAF 
transfers as RQE QS holdings increase is discussed in further detail in 
Section 4.8.1.2.4 of the Analysis.
    To implement these restrictions on IFQ transfers to GAF, NMFS adds 
a new paragraph at Sec.  300.65(c)(5)(ii)(D)(1)(iv).

Vessel Category Restrictions

    This rule also places limits on the amounts of QS the RQE could 
hold by vessel category. In Area 2C, the RQE is limited to holding an 
amount equal to 10 percent of D-category QS and an amount equal to 10 
percent of B-category QS, based on the Area 2C 2015 QS pools. 
Translated to QS units, this rule prohibits the RQE from holding more 
than 889,548 units of D-category QS, and more than 265,524 units of B-
category QS, in Area 2C (see Table 4-40 of the Analysis). In Area 3A, 
the RQE is prohibited from purchasing or holding D-category QS. The RQE 
may purchase any amount, up to the annual transfer and cumulative use 
limits of A-, B-, and C-category QS in Area 3A. The vessel category 
restrictions are discussed in more detail in Section 4.8.1.2.5 of the 
Analysis.
    NMFS adds a new paragraph at Sec.  679.42(f)(8) describing RQE use 
limits for specific vessel categories of QS.

Block Restrictions

    In addition to vessel category restrictions for RQE purchases of 
QS, this final rule places limits on the size of QS blocks that the RQE 
may purchase. The RQE is prohibited from purchasing (i.e., receiving by 
transfer) blocks of QS by category that equate to 1,500 pounds or less 
(based on 2015 pounds). For Area 2C, this means that the RQE cannot 
purchase blocked QS of 24,250 units or less. For Area 3A, the RQE is 
prohibited from purchasing blocked QS of 35,620 units or less. Block 
restrictions are discussed in more detail in Section 4.8.1.3 of the 
Analysis.
    NMFS adds a new paragraph at Sec.  679.42(g)(1)(iii) to establish 
restrictions on the type and amount of blocked QS that the RQE can hold 
and receive by transfer.

Revisions for the Calculation of the Charter Catch Limit and 
Establishment of Annual Management Measures

    This final rule also modifies several regulations to facilitate the 
proper accounting of RFQ. This section describes the process that will 
be used annually to calculate the amount of RFQ and establish annual 
management measures.
    On October 1 of each year, the RQE's QS holdings will be used as 
the basis for estimating the number of RFQ pounds to add to the charter 
allocation under the CSP for the following calendar year. This 
estimated combined allocation will be used to recommend the charter 
fishery management measures for the following year. The process and 
timeline for setting annual management measures remains unchanged. Once 
the IPHC annual management measures are approved, typically in late 
February or early March, NMFS will issue pounds of RFQ to the RQE based 
on the number of QS units held by the RQE on October 1 of the previous 
year. This RFQ will augment the charter catch limit established under 
the CSP. The regulations establish October 1 as the date for 
determining how many QS units will yield RFQ so that the Council's 
Charter Committee and the Council is able to estimate the pounds

[[Page 47823]]

of RFQ that the RQE receives in the following year. The Charter 
Committee will then be able to factor that amount into its 
recommendations for the following year's charter management measures.
    The RFQ will not be issued to the RQE in the upcoming fishing year 
for any QS that the RQE received by transfer after October 1. If the 
RQE transfers QS that it holds on October 1 to a recipient in the 
commercial IFQ fishery after that date, NMFS will not issue IFQ to the 
commercial recipient for that QS in the following calendar year. This 
approach is similar to the method used in the commercial fishery to 
allow the transfer of QS but not the IFQ once that IFQ has been used. 
In this case, NMFS considers that RFQ is effectively ``used'' if it is 
assigned to the charter allocation for the following calendar year. If 
the RQE receives QS by transfer after October 1, that QS will not 
result in the issuance of RFQ for the following calendar year. However, 
if the RQE subsequently transfers any QS received by transfer after 
October 1 that did not result in RFQ back to the commercial IFQ 
fishery, NMFS will issue IFQ to the commercial recipient for that QS.
    In late November of each year, NMFS will estimate the pounds of RFQ 
that will be available to the RQE in the upcoming year, based on the QS 
units held by the RQE on October 1, the QS:IFQ ratio of the current 
year, and the IPHC's preliminary estimate of the possible combined 
catch limits in Areas 2C and 3A.
    In December of each year, the Council will recommend a range of 
potential charter management measures for Areas 2C and 3A that are 
expected to limit charter harvests in an area to the estimated charter 
catch limit, plus the estimated supplemental pounds provided by the 
RFQ.
    In this final rule, NMFS is revising Sec.  679.40(c)(2) to clarify 
that NMFS will use the QS pool for the IFQ regulatory area, including 
Areas 2C and 3A, on record with the NMFS Alaska Region, on January 15 
of that year for the purpose of calculating the amount of IFQ and RFQ 
for that regulatory area for that year. The revision to move the date 
of record from January 31 to January 15 of each year ensures that IPHC 
will be able to determine the amount of IFQ and RFQ and that the total 
allocations are assigned to the respective commercial IFQ and charter 
fisheries when it adopts annual management measures at its annual 
meeting in late January.
    NMFS is also revising Sec.  300.65(c) to authorize the use of RFQ 
in the charter fishery, and to describe how and when QS holdings by the 
RQE are calculated and added to the charter catch limit under the CSP.

Redistribution of Excess RFQ

    This final rule establishes a temporary redistribution of RFQ from 
the RQE to the commercial IFQ fishery if the RQE holdings of QS provide 
a charter harvest opportunity greater than the unguided recreational 
management measures in either Area 2C or 3A. Under this final rule, 
NMFS will not issue annual RFQ in excess of the adjusted charter catch 
limit needed for charter anglers to obtain the unguided recreational 
management measures for that area. For more information on the charter 
catch limit, see the preamble of the proposed rule (82 FR 46016, 
October 3, 2017).
    The Council and the Analysis use the term ``reallocate'' to 
describe the temporary (1-year) redistribution of excess RFQ to the 
commercial IFQ fishery. NMFS notes that the term reallocate is often 
used in other regulations to describe a permanent transfer of harvest 
privileges from one group of participants to another. NMFS uses the 
term ``redistribute'' in this rule to clarify for fishery participants 
and the public that the distribution of excess RFQ to commercial IFQ 
fishery participants is in effect for one year, and is not a permanent 
reallocation.
    This rule implements the following process for the temporary 
redistribution of RFQ (as IFQ) to the commercial IFQ fishery, in the 
event that the RQE has QS holdings in excess of the amount needed to 
provide charter anglers with harvest opportunities equal to those for 
unguided recreational anglers. Each January, the IPHC will recommend 
charter fishery management measures for Areas 2C and 3A that are 
expected to limit charter harvest to the adjusted charter catch limit 
for each area (the sum of the annual guided sport catch limit under the 
CSP and the estimated amount of RFQ from the RQE's QS holdings on 
October 1 of the previous year).
    After the IPHC recommends charter fishery management measures, NMFS 
will determine if a redistribution of excess RFQ is necessary. If the 
IPHC has adopted charter fishery management measures that are 
equivalent to the unguided recreational management measures in either 
Area 2C or 3A (e.g., a daily bag limit of two halibut of any size), 
NMFS will determine the amount of RFQ that are needed to account for 
charter harvest in Area 2C and Area 3A under the recommended management 
measures and issue that amount as RFQ to supplement the charter fishery 
allocation under the CSP. The difference between the total amount of 
available RFQ and the amount needed for the charter fishery is excess 
RFQ. NMFS will redistribute the amount of excess RFQ using the process 
recommended by the Council.
    Under this final rule, 50 percent of any RFQ in excess of the 
amount needed to achieve the unguided recreational management measures 
in either Area 2C or 3A is redistributed as IFQ to all catcher vessel 
QS holders in the applicable area (Area 2C or Area 3A) who held not 
more than 32,333 QS units in Area 2C, and 47,469 QS units in Area 3A 
(i.e., the amount of QS that yielded 2,000 pounds of IFQ in 2015) in 
the year prior to the redistribution, and who also held that QS 
eligible for redistribution during the year that the redistribution 
occurs. This 50 percent is redistributed among qualified QS holders in 
proportion to their QS holdings.
    The Council's recommendation stated that 50 percent of excess RFQ 
should be redistributed ``equally'' to all qualified QS holders. NMFS 
will implement this provision by dividing the amount of IFQ available 
for redistribution to qualified QS holders by the total amount of QS 
units held by all qualified QS holders. For example, if there were 
50,000 pounds of excess RFQ to be redistributed as IFQ in Area 3A in 
calendar year 2025 among QS holders who held not more than 47,469 QS 
units in the year prior to the redistribution (2024), and in the year 
during which the redistribution occurs (2025), and the total sum of all 
QS held by those qualified QS holders is 500,000 units, then each of 
the qualified QS holders would receive an additional 1/10 of a pound of 
IFQ in 2025 for each QS unit they hold. NMFS does not issue IFQ in less 
than one pound increments; therefore, NMFS will round the amount of 
redistributed IFQ to the nearest pound for each qualified QS holder. 
Section 4.8.1.3 of the Analysis provides additional information on the 
method NMFS will use to redistribute excess RFQ.
    This final rule requires the QS holder to hold the QS in the year 
prior to the redistribution to meet the clear intent of the Council, as 
well as in the year that the redistribution occurs in order to ensure 
the proper administration of this provision. This requirement ensures 
that IFQ is issued to persons who hold the underlying QS eligible to 
receive the redistribution.
    Under this final rule, the remaining 50 percent of RFQ in excess of 
the amount needed to achieve the unguided sport management measures in 
either Area 2C or 3A will be redistributed equally among all CQEs that 
held

[[Page 47824]]

halibut QS in the applicable area (Area 2C or Area 3A) in the year 
prior to the redistribution as well as in the year that the 
redistribution occurs. If no CQE holds QS in the applicable area (Area 
2C or Area 3A) in the preceding year and in the year that the 
redistribution occurs, this 50 percent of the excess RFQ will not be 
redistributed in that area. In other words, the excess RFQ will be 
unfished or ``left in the water'' for conservation.
    Section 4.8.1.3 of the Analysis describes the options considered by 
the Council and NMFS in developing this portion of this final rule.
    NMFS adds regulations under Sec.  679.40(c) to describe how excess 
RFQ will be redistributed.

Cost Recovery Fees

    The Magnuson-Stevens Fishery Conservation and Management Act 
(Magnuson-Stevens Act) at section 304(d)(2)(A) requires that cost 
recovery fees be collected for the costs directly related to the 
management, data collection, and enforcement of any limited access 
privilege programs. This includes programs such as the commercial 
halibut IFQ Program, under which a dedicated allocation is provided to 
IFQ permit holders. Fees owed are a percentage, not to exceed 3 
percent, of the ex-vessel value of fish landed and debited from IFQ 
permits. Each year, NMFS sends fee statements to IFQ holders whose 
annual IFQ was landed; those holders must remit fees by January 31 of 
the following year. Under this rule, the RQE is responsible for all 
cost recovery fees on their annual RFQ.
    In years when the RQE holds QS and the RFQ is issued to augment the 
charter fishery's catch limit, the charter fishery will be effectively 
using all of this RFQ; therefore, the RQE will be required to pay cost 
recovery fees on all of its RFQ. Since all annual RFQ issued to the RQE 
will be considered ``used,'' NMFS will levy the fee calculated for the 
RQE's annual RFQ pounds that are issued, rather than estimating RFQ 
harvest at each point of charter landings. The fee will be calculated 
using the standard price calculated for Area 2C or 3A and the RFQ held 
by the RQE. This is similar to the method used to apply an ex-vessel 
value for GAF. The IFQ cost recovery fee will be levied on the RQE each 
year the RQE holds QS, and the resulting RFQ is issued to augment the 
catch limit in the charter fishery. All holdings acquired by the RQE on 
October 1 of the prior year are subject to the IFQ cost recovery fee.
    For purposes of cost recovery, the RQE is required to pay fees on 
all resulting pounds of RFQ, even if the charter fishery's harvest is 
under its catch limit in Area 2C or 3A for that year. In December of 
each year, NMFS will (1) determine the standard prices and the cost 
recovery fee percentage, (2) announce the standard prices and the cost 
recovery fee percentage in the Federal Register, and (3) issue the RQE 
a fee assessment. The RFQ fee assessment will be based on the number of 
RFQ pounds added to either the Area 2C or 3A charter catch limit based 
on QS holdings as of October 1 of the prior year multiplied by the 
standard price for Area 2C or Area 3A, and multiplied by the cost 
recovery fee percentage (approximately 3 percent in recent years). The 
cost recovery fee payment from the RQE to NMFS is due by January 31 of 
each year.
    Additional information about assessing cost recovery fees for an 
RQE is provided in Section 4.8.1.4.1 of the Analysis.
    NMFS is revising regulations throughout Sec.  679.45 to incorporate 
the RQE into the IFQ Program cost recovery fee estimation and 
collection process.

General Reporting

    Because all RFQ is considered landed or used by the RQE in the year 
for which it is issued and the standard prices are applied to pounds of 
RFQ, the RQE is not required to complete the recordkeeping and 
reporting requirements described for the IFQ Program at Sec.  679.5(1). 
The RQE is exempt from submitting the IFQ Prior Notice of Landing, 
Product Transfer, IFQ Landing, IFQ Transshipment Authorization, and IFQ 
Departure reports.

Annual Report

    This final rule requires the RQE to file an annual report with the 
Council by January 31 of each year that details the administrative 
activities and business operations of the RQE during the prior year for 
each year that it holds commercial QS. Although not specifically 
requested by the Council, the annual report also must be submitted to 
NMFS for reasons described below.
    The RQE is required to include the following general information in 
its annual report: (1) Any changes to the bylaws, board of directors, 
or other key management personnel of the RQE during the preceding year; 
(2) amounts and descriptions of annual administrative expenses; (3) 
amounts and descriptions of funds spent on conservation, research, and 
promotion of the halibut resource and a summary of the results; and (4) 
amounts and descriptions of all other expenses. Additionally, the RQE 
is required to submit the following information by regulatory area: (1) 
The total amount of halibut QS by vessel category and block held by the 
RQE at the start of the calendar year, on October 1, and at the end of 
the calendar year; (2) a list of all transfers (purchases, sales, and 
any other transfers) of halibut QS, including transaction prices if 
applicable; and (3) the number of CHPs and associated angler 
endorsements purchased and held by the RQE.
    Section 679.41(c)(10)(ii) requires a CQE to submit a timely and 
complete annual report to NMFS before a transfer of QS will be approved 
or IFQ will be issued. A similar requirement for the RQE annual report 
is added at new paragraph Sec.  679.41(c)(11)(i). If the RQE held QS in 
the previous year and has not submitted a timely and complete annual 
report by the January 31 deadline, NMFS will not approve a transfer of 
QS or issue RFQ until the report is submitted. To confirm receipt of 
the report, this rule requires that the RQE submit the annual report to 
both the Council and NMFS.
    NMFS is adding Sec. Sec.  679.5(v) and 679.41(c)(11)(i) to include 
the RQE annual report requirements.

Other Regulatory Changes

    NMFS revises the IFQ regulations at 50 CFR part 679 that refer to 
``an IFQ permit holder'' to also include the term ``RQE'' where 
applicable.
    NMFS revises regulations at 50 CFR part 679 that refer to the IFQ 
permit that also pertain to the RQE to include the term ``RFQ permit 
account.'' NMFS revised this language because the RQE will not be 
issued an IFQ fishing permit. Instead, NMFS will establish an RFQ 
permit account for the RQE that will be used to administer RFQ as 
described in this rule.
    NMFS revises regulations at 50 CFR part 679 that refer to IFQ to 
include the term ``RFQ'' when the regulations refer to IFQ and RFQ.
    The locations of these minor changes are shown in the table in the 
regulatory text at the end of this rule.

Appeals

    This rule changes several references within Sec. Sec.  679.41 and 
679.45 that describe the former procedure for appealing an IAD to the 
NMFS Alaska Office of Administrative Appeals. Those procedures are 
described at Sec.  679.43. NMFS has centralized the appeals process in 
the National Appeals Office, which operates out of NMFS' headquarters 
in Silver Spring, MD. The National Appeals Office is now charged with 
processing appeals that were filed

[[Page 47825]]

with the Office of Administrative Appeals, Alaska Region. The procedure 
for appealing an IAD through the National Appeals Office is at 15 CFR 
part 906 (79 FR 7056, February 6, 2014). This rule updates the 
regulations referring to appeals procedures for the IFQ Program to 
refer to 15 CFR part 906 instead of to 50 CFR 679.43.

Changes From Proposed to Final Rule

    NMFS made the following changes to the final rule from the proposed 
rule:
     Section 679.7(f)(3)(i)(C) confirms that fixed gear may not 
be used to retain RFQ halibut. The regulatory language is changed to 
conform with wording used in similar regulations in this sub-section. 
The phrase ``as defined in Sec.  679.2'' is removed as a reference to 
fixed gear, and to add clarity, ``halibut RFQ'' is replaced with ``RFQ 
halibut''.
     The proposed regulatory text at Sec.  679.41(g)(11)(ii), 
(iii), and (iv) is changed to clarify that the regulatory references 
for RQE eligibility in these three paragraphs refer to all the 
paragraphs and requirements that fall under (n)(1) of that section.
     The proposed regulatory text at Sec.  679.42(g)(1)(iii) is 
changed to more clearly reflect the Council's intent that the RQE is 
prohibited from receiving halibut QS blocks of 1,500 pounds or less in 
Areas 2C and 3A, based on 2015 pounds. The phrase ``is limited to 
receiving'' was replaced with ``may not receive;''
     Section 679.45(f)(4) is changed to clarify that the 
paragraph applies to IFQ permit holders and to the RQE. The phrase 
``the IFQ permit holder'' is replaced with ``the IFQ permit holder or 
RQE.''

Comments and Responses

    NMFS received 18 comment letters on the proposed rule. One of the 
comment letters was outside the scope of this action. Of the remaining 
17 comment letters, NMFS identified and considered 19 unique, relevant 
comments, which are summarized and responded to below. The commenters 
consisted of individuals, representatives of the charter sector, and 
representatives of the commercial fishing sector.
    Comment 1: Several commenters expressed support for the RQE Program 
and noted it would bring stability to the charter fishery and create 
long-term efficiency by allowing transfers of QS between commercial QS 
holders and the charter fishery and will help lessen restrictive 
harvest measures for guided anglers whose fishing opportunities are 
closely linked to the economics of the charter fishery.
    Response: NMFS acknowledges the comment.
    Comment 2: We support restricting the maximum number of shares 
transferred annually. We support fixing October 1 QS holdings as the 
basis for estimating the number of IFQ pounds for the following fishing 
year. We support NMFS assessing cost recovery fees for RFQ holdings.
    Response: NMFS acknowledges the comment, and notes that the 
provisions the commenter supports are contained in this final rule.
    Comment 3: Charter fishing is a main source of income for some 
Alaskans. Allowing charter catch limits to increase would bring fishing 
back to the sport fishing industry.
    Response: The principal objective of this final rule is to promote 
social and economic flexibility in the charter fishery by authorizing 
the development of an entity that is eligible to purchase and hold 
commercial halibut QS in Areas 2C and 3A, thereby providing additional 
harvest opportunities to charter anglers. This final rule is therefore 
intended to promote long-term efficiency in the use of the halibut 
resource by allowing transfers of QS between commercial QS holders and 
the charter fishery, through an RQE, under a ``willing buyer and 
willing seller'' approach.
    Comment 4: The RQE should remain as a non-profit organization and 
as a single entity. As a single entity, it should not be limited on how 
much QS it should be able to obtain. The charter fishery should 
maintain the daily catch limit of two fish per day with no size 
restrictions. There should be a cap on the number of charter boats.
    Response: This final rule establishes the RQE as a single, non-
profit entity to represent and manage the separate QS holdings for Area 
2C and Area 3A. The Council recommended, and NMFS has adopted, 
regulations that limit the amount of QS that the RQE can purchase and 
use. These regulations are adopted primarily to mitigate the 
potentially disruptive impacts on the QS market with the entry of the 
RQE, and to take into account the importance of commercial halibut IFQ 
on fishing communities.
    The current CHLAP program caps the number of charter operations in 
Areas 2C and 3A. Upon implementation of this final rule, three primary 
factors will determine whether charter anglers will be able to retain 
two fish per day of any size: (1) The abundance of halibut and the 
resulting catch limits established by IPHC and allocated under the CSP; 
(2) the number of anglers and the size of halibut that are projected to 
be retained from charter boats; and (3) the amount of QS that the RQE 
purchases and holds on October 1 of each year, and is made available to 
augment the charter allocation.
    Comment 5: The 11 vessels that NMFS considered large entities 
should give the RQE 2 percent of their quota.
    Response: The Council did not recommend and this final rule does 
not implement regulations to reallocate QS from specific QS holders to 
the RQE. The commenter's recommendation is outside of the scope of this 
action. The commenter notes that some of the QS holders are considered 
to be large entities. We assume that the commenter is referring to 
information provided in the initial regulatory flexibility analysis 
prepared in the proposed rule (82 FR 46016, October 3, 2017). In that 
analysis, NMFS estimates that the owners of 11 vessels that harvest 
halibut IFQ would be considered large entities because they showed 
revenues that exceeded a specific threshold in the most recent year for 
which we have records (2014). Additional information on the revenues of 
vessels active in the halibut IFQ fishery is provided in Section 5.6 of 
the Analysis.
    Comment 6: National Standard Guidelines that interpret specific 
provisions of the Magnuson-Stevens Act state that fishery management 
plans should prevent overfishing and consider the value of fishery 
resources to fishing communities.
    Response: NMFS notes that the National Standard Guidelines cited by 
the commenter do not apply to the halibut fishery because it is managed 
under the authority of the Halibut Act as described in the section of 
this preamble titled ``Authority for Action,'' and not the Magnuson-
Stevens Act. As described in the proposed rule (82 FR 46016, October 3, 
2017), creation of an RQE Program does not change conservation or 
management of the halibut resource in Areas 2C and 3A. The Analysis at 
Section 4.8.2 describes how the Council and NMFS considered the value 
of fishery resources to fishing communities. This action does not 
change the current process for establishing annual catch limits or the 
management measures that have been established to meet specific social 
and economic goals for the halibut IFQ fishery or the RQE Program.
    Comment 7: Halibut harvested by the commercial sector are weighed 
at the point of sale. It would be impossible to determine the pounds of 
halibut harvested by the charter fleet.
    Response: NMFS disagrees. The pounds of halibut harvested by the 
charter fleet are accounted for by the

[[Page 47826]]

Alaska Department of Fish and Game logbook program, which is a 
requirement for all guided angler operations in Alaska. All halibut 
caught and retained by charter anglers are required to be measured in a 
standardized fashion. From these measurements, IPHC length-weight 
conversion tables are used to establish the pounds of halibut harvested 
by the charter fleet. The logbook program provides the basis for 
determining the charter sector's harvests under the CSP and is used to 
develop annual management measures for guided anglers in IPHC Areas 2C 
and 3A. This method of catch accounting will not change when the RQE 
acquires halibut QS and the associated pounds of halibut from that QS 
is added to the charter sector allocation under the CSP.
    Comment 8: The last twenty years have led to overfishing and 
halibut are small.
    Response: According to the most recent stock assessment by IPHC, 
Pacific halibut are not considered to be subject to overfishing (see 
https://iphc.int). The stock assessment prepared by the IPHC indicates 
that halibut stocks in Areas 2C and 3A have declined over the last 
decade, and that over that period the average size-at-age of adult 
halibut has become smaller. However, the extent of the decline varies 
by geographic area, and the reasons behind it cannot be fully explained 
solely by commercial or charter fishing removals. NMFS also notes that 
this rule does not increase the combined halibut commercial and charter 
catch limits adopted by IPHC and implemented by NMFS.
    Comment 9: We oppose passage of the RQE Program. The charter sector 
does not share in the burden of conservation. In times of low 
abundance, all sectors should share in conserving resources. Stocks are 
beginning to rebuild after a long decline, and the RQE compromises 
years of rebuilding.
    Response: NMFS disagrees. As described in the preamble to the 
proposed rule (82 FR 46016, October 3, 2017), under the CSP both the 
commercial and charter sectors share the burden of conservation by 
having reduced catch limits in times of low abundance. The RQE Program 
allows, but does not require, persons in the commercial sector to 
choose to transfer their QS to the RQE; however, irrespective of those 
transfers, each sector will continue to be constrained by the combined 
catch limits established by the IPHC. This final rule also implements 
regulations that allow the transfer of QS back to the commercial sector 
from the RQE.
    Comment 10: Neither the Council nor NMFS have defined the ``need'' 
for an RQE. Demand for charter services has remained relatively 
constant in Areas 2C and 3A despite changes to guided angler bag 
limits.
    Response: In December 2014, the Council developed a purpose and 
need statement that can be found in Section 2.1 of the Analysis. 
Restrictions have increased for the guided angler sport sector. 
Allowing an RQE to hold a limited amount of commercial halibut QS on 
behalf of guided recreational halibut anglers under a ``willing seller 
and willing buyer'' approach may result in less restrictive annual 
harvest measures for guided recreational anglers in times of low 
halibut abundance, while complying with total halibut removals under 
the guided halibut catch limits determined by the IPHC.
    Comment 11: The RQE will further erode the owner-operated nature of 
the halibut fleet, undermining goals and principles of the halibut 
quota share program. The price of halibut quota is already a 
significant barrier to entry for young fishermen. The RQE creates an 
unbalanced advantage for the charter fleet to compete for halibut quota 
in an already fully-utilized fishery.
    Response: The Council considered its goals of an owner-operated 
fleet in the halibut IFQ Program when it developed its recommendation 
to authorize the RQE. This information, combined with public testimony, 
factored into the Council's recommendation and NMFS' regulations that 
place constraints on QS purchases by the RQE. Specifically, the Council 
recommended and this final rule implements provisions that limit RQEs 
from purchasing more than a specific amount of QS on an annual basis 
and in total. This final rule also limits the RQE from purchasing 
specific categories of QS that are typically purchased by new entrants 
to the halibut IFQ fishery. The preamble to the proposed rule and 
Section 4.8.1.2 of the Analysis provides additional information on QS 
transfer provisions and restrictions implemented by this final rule and 
how these provisions balance the interests of owner-operators, new 
entrants, and the charter fishery.
    Comment 12: Allowing additional halibut quota to be reallocated to 
the charter fleet exacerbates local depletion. The charter fleet 
competes directly with the non-charter resident sport anglers, and this 
proposal allows the charter sector to harvest most of the halibut near 
towns. It would be very difficult for a resident Alaskan angler fishing 
out of a small boat to catch halibut.
    Response: This final rule will not result in an increase in the 
total amount of halibut that may be harvested, and NMFS does not have 
information to suggest that the transfer of QS from commercial 
operators to the RQE will necessarily change harvesting locations or 
patterns. The location of charter fishing and commercial harvests 
varies widely. In areas where there is a significant overlap in both 
charter and commercial fishing operations, the localized effects from 
this action are expected to be minimal as fishing pressure shifts from 
the commercial sector to the charter section in the same area. Local 
resource abundance may be a factor in harvest rates, but its influence 
is intertwined with other significant influences, such as stock 
abundance, angler demand, and other factors.
    Comment 13: Scheduled Council actions to establish an annual CHP 
renewal process, to stop the transfer of non-transferable CHPs, and 
address latency capacity in the charter sector will address the charter 
sector's perceived need for an RQE.
    Response: The commenter refers to several actions that are 
currently under consideration by the Council. The potential effects of 
these management measures have not been fully analyzed, and the Council 
has not recommended these actions for implementation. At this time, 
NMFS does not have the information available to conclusively determine 
whether these actions under consideration would provide benefits to the 
charter fishery consistent with this final rule.
    Comment 14: Annual limits on RQE QS purchases are essential as are 
limits on RQE purchases of category D and (in Area 2C) B class quota, 
and the limit on the size of QS blocks the RQE may purchase. Unused QS 
should be returned to the commercial sector each season.
    Response: This final rule implements all the measures noted in the 
comment, and described in the proposed rule, that constrain the 
quantity and type of QS purchases that can be made by the RQE. Although 
these restrictions may impact the efficacy of the RQE Program, they are 
implemented primarily to mitigate the effects of the RQE upon QS 
markets, to prevent an accumulation of excessive shares by the RQE, and 
to take into consideration the importance of the commercial halibut 
fishery on fishing-dependent communities. The preamble to the proposed 
rule described the limitations on the use of QS that apply to RQEs (82 
FR 46016, October 3, 2017).
    Comment 15: This RQE action does not identify a mechanism for 
funding the RQE, and an RQE CHP acquisition limit is omitted. We 
recommend that

[[Page 47827]]

RQE CHP limits be at least 10 times higher than individual CHP limits.
    Response: This final rule does not prescribe the means by which 
persons or entities finance their purchases of QS. The Council and NMFS 
did not identify a management need for the RQE to identify the methods 
that may be used to purchase QS prior to NMFS considering approving the 
transfer of QS to the RQE. This final rule does implement annual 
reporting requirements by the RQE to the Council and NMFS as described 
in the section of this preamble titled ``Provisions of Final Rule.'' 
Among other things, the report requires that each year the RQE detail 
all QS transactions, including the amount paid for QS, and also for the 
activities and expenses of the RQE.
    The Council did not specify, and this final rule does not provide, 
limits on the acquisition of CHPs by the RQE; therefore, the RQE will 
be subject to regulations that apply to any other person, as defined at 
Sec.  300.61, for purposes of purchasing and holding CHPs. Section 
300.67(j) states that a person may not own, hold, or control more than 
five transferable CHPs in both regulatory areas combined, with limited 
exceptions. This provision applies to the RQE. Any purchases or sales 
of CHPs by the RQE are required to be reported in the RQE's annual 
report to the Council and NMFS.
    Comment 16: There are insufficient regulations in the proposed rule 
to limit how the RQE may profit by buying and selling QS. The RQE 
undermines the owner-operator characteristics of the fleet and forces 
individual commercial fishermen to compete against a subsidized entity 
in the quota share market. The RQE must be prohibited from trading QS 
on the market for profit. Not limiting RQE acquisition will have an 
impact to current IFQ Category C shares. The proposed minimum QS block 
that the RQE may purchase in Area 2C is too low of a minimum. This will 
create an incentive for IFQ holders to sweep up and sell small blocks 
to the RQE, limiting blocks available to new IFQ entrants.
    Response: This rule establishes that the RQE will be a non-profit 
entity, created for the purpose of adding social and economic 
flexibility to the charter fishery. To accomplish this, the RQE is 
authorized to purchase a limited amount of QS, which is to be used to 
provide additional harvest opportunity and less restrictive management 
measures in times of low abundance. This rule contains provisions for 
monitoring the RQE activities by requiring an annual report. Among 
other things, the RQE must document in the report all the buying, 
selling, and other transfers of QS during the relevant year, including 
the QS prices paid for or received by the RQE. The annual report must 
also contain descriptions and amounts of the RQE's expenses during the 
year. Although all QS transactions, whether between or among sectors, 
will occur under a ``willing seller and willing buyer'' scenario, NMFS 
has implemented several constraints on the amount and type of halibut 
QS that may be purchased by the RQE. This includes restrictions that 
prohibit purchases of QS blocks that equate to 1,500 pounds or less. 
These constraints will likely reduce the efficacy of the RQE Program by 
limiting the pool of QS that may be purchased by the RQE. However, the 
Council and NMFS have determined that these constraints are necessary 
to balance with other considerations, such as the RQE's effects on the 
availability of QS to commercial fishermen.
    Comment 17: There has not been sufficient analysis of the GAF's 
impacts to justify discontinuing this model of compensated 
reallocation.
    Response: NMFS is not discontinuing the GAF Program. The GAF 
Program has distinct advantages that are not available through the RQE. 
GAF are designed to work on an individual operator level by authorizing 
limited annual transfers of commercial halibut IFQ as GAF to qualified 
CHP holders. The GAF Program provides additional harvest opportunities 
for charter anglers by allowing them to retain halibut up to the limit 
for unguided anglers when charter management measures limit charter 
anglers to a more restrictive harvest limit. This program will remain 
in place for individual CHP holders to receive an IFQ transfer. In some 
cases, CHP holders also hold QS, and have the opportunity to use their 
QS either commercially or as a means to augment their charter fishing. 
The GAF Program is described in more detail in proposed rule for the 
CSP (78 FR 39122, June 28, 2013). Under this rule, RFQ could not be 
transferred as GAF.
    Comment 18: The incidental bycatch limits for the trawl fleet 
should be included in the RQE calculation. There should be a mechanism 
in the RQE action where the RQE could purchase bycatch from the trawl 
fleet.
    Response: The purpose of this final rule is to provide for the 
transfer of QS between commercial QS holders and the RQE, and not to 
establish alternative methods for establishing the amount of catch 
available for commercial and charter operators. The IPHC accounts for 
incidental bycatch by all vessels when determining total halibut 
removals and catch limits. This includes the halibut catch limits 
established for the commercial and charter sectors in Areas 2C and 3A.
    Comment 19: The Analysis failed to adequately show the effect this 
program would have on the stability of the commercial fishermen, 
processors, and consumers of the product. The action kept touching on 
possible funding sources that the RQE may use to purchase QS, but 
ignored the implications of not addressing funding issues which is 
against National Environmental Policy Act (NEPA) requirements.
    Response: The social and economic impacts of this action were 
analyzed in the regulatory impact review (RIR) (see ADDRESSES). Because 
both commercial and charter fisheries will still be restricted by the 
total catch limits set for each regulatory area based on halibut 
abundance, the total removals of halibut and relative timing of the 
commercial and charter fisheries are expected to remain the same. 
Possible funding sources for the RQE's purchase of QS are also 
discussed in the RIR.
    The environmental assessment (EA) provides a comprehensive 
discussion of this action to authorize an RQE to purchase and hold 
commercial halibut quota share for use by charter halibut anglers (see 
ADDRESSES). The EA analyzes the impacts of QS holdings and use under a 
wide range alternative QS use limits. After considering this analysis, 
NMFS prepared a Finding of No Significant Impact based on the EA 
analysis. Regardless of the funding mechanism used by the RQE, the EA 
considered the environmental impact of the transfer of QS from the 
commercial to the charter fishery consistent with the requirements 
under NEPA. NMFS disagrees that this rule violates NEPA requirements by 
not limiting or otherwise determining which funding sources might be 
appropriate for the RQE.

OMB Revisions to PRA References in 15 CFR 902.1(b)

    Section 3507(c)(B)(i) of the Paperwork Reduction Act (PRA) requires 
that agencies inventory and display a current control number assigned 
by the Director of the Office of Management and Budget (OMB), for each 
agency's 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.

[[Page 47828]]

Classification

    Regulations governing the U.S. fisheries for Pacific halibut are 
developed by the IPHC, the Pacific Fishery Management Council, the 
Council, and the Secretary of Commerce. Section 5 of the Halibut Act 
(16 U.S.C. 773c) allows the regional fishery management council having 
authority for a particular geographical area to develop regulations 
governing fishing for halibut in U.S. Convention waters as long as 
those regulations do not conflict with IPHC regulations. The Halibut 
Act, at sections 773c(a) and (b), provides the Secretary of Commerce 
with the general responsibility to carry out the Convention with the 
authority to, in consultation with the Secretary of the department in 
which the U.S. Coast Guard is operating, adopt such regulations as may 
be necessary to carry out the purposes and objectives of the Convention 
and the Halibut Act. This rule is consistent with the Halibut Act and 
other applicable laws.
    This rule has been determined to be not significant for the 
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 final regulatory flexibility 
analysis, 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 preambles to 
the proposed rule and this final rule serve as the small entity 
compliance guide. This action does not require any additional 
compliance from small entities that is not described in the preambles. 
Copies of the proposed rule and this final rule are available from the 
NMFS website at http://alaskafisheries.noaa.gov.

Final Regulatory Flexibility Act (FRFA)

    This FRFA incorporates the initial regulatory flexibility analysis 
(IRFA), a summary of the significant issues raised by the public 
comments, NMFS' responses to those comments, and a summary of the 
analyses completed to support this action. Section 604 of the 
Regulatory Flexibility Act (RFA) requires that, when an agency 
promulgates a final rule under section 553 of Title 5 of the U.S. Code, 
after being required by that section or any other law to publish a 
general notice of proposed rulemaking, the agency shall prepare a FRFA. 
Section 604 describes the required contents of a FRFA: (1) A statement 
of the need for, and objectives of, the rule; (2) a statement of the 
significant issues raised by the public comments in response to the 
initial regulatory flexibility analysis, a statement 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) the response of the 
agency to any comments filed by the Chief Counsel for Advocacy of the 
Small Business Administration (SBA) in response to the proposed rule, 
and a detailed statement of any change made to the proposed rule in the 
final rule as a result of the comments; (4) a description of 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; (5) 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 the requirement and 
the type of professional skills necessary for preparation of the report 
or record; and (6) 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.
    Descriptions of this action, its purpose, and the legal basis are 
contained in the preamble to the proposed rule (82 FR 46016, October 
10, 2017) and are not repeated here.
Summary of Significant Issues Raised During Public Comment
    NMFS published the proposed rule on October 10, 2017 (82 FR 46016). 
An IRFA was prepared and summarized in the ``Classification'' section 
of the preamble to the proposed rule. The comment period closed on 
November 17, 2017. NMFS received 18 letters of public comment on the 
proposed rule. None of the comments raised issues in response to the 
IRFA. One comment requested NMFS require the 11 large entities in the 
IFQ Program to redistribute 2 percent of their quota to the RQE. No 
changes were made to this final rule based on this comment. The Chief 
Counsel for Advocacy of the SBA did not file any comments on the 
proposed rule.
Number and Description of Small Entities Regulated by Action
    This final rule directly regulates three classes of small entities: 
QS holders, CQEs, and the newly implemented RQE. For RFA purposes only, 
NMFS established a small business size standard for businesses, 
including their affiliates, whose primary industry is commercial 
fishing (see 50 CFR 200.2). 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.
    For this action, the pool of small, directly regulated entities is 
limited to those entities that will be engaging in QS transfer (i.e., 
QS holders, including CQEs, and a future RQE). CQEs and the future RQE 
are considered small entities, or more specifically, a small 
organization as defined by the RFA. A small organization is ``any not-
for-profit enterprise which is independently owned and operated and is 
not dominant in its field.'' In addition, no CQE has more than $11 
million in annual gross receipts. The RQE that is authorized under this 
action is not be expected to hold halibut QS that would yield $11 
million in annual gross receipts. Commercial halibut QS holders are 
also considered to be directly regulated. Most of the QS holders in the 
halibut IFQ Program are small entities.
    NMFS considers commercial halibut fishing vessels as proxies for 
small entities because IFQ from more than one QS holder is often fished 
from the same vessel. NMFS estimates that 812 vessels across all IPHC 
regulatory areas landed halibut in 2014, which in the Analysis is the 
most recent year of complete data on the value of halibut landings by 
vessel. Of those, 11 vessels are considered large entities because they 
showed revenues that exceeded the $11 million threshold. The remaining 
801 vessels are considered directly regulated small entities for this 
rule. See Section 5.6 of the Analysis for more information.

Recordkeeping, Reporting, and Other Compliance Requirements

    The RFA requires a description of the projected reporting, 
recordkeeping, and other compliance requirements of this rule, 
including an estimate of the classes of small entities that will be 
subject to the requirement and the type of professional skills 
necessary for preparation of the report or record. This

[[Page 47829]]

rule requires new information collections from an RQE. Under this rule, 
a non-profit entity that wants to become an RQE will need to complete 
an application and submit it to NMFS for approval. This application 
requires submission of the entity's articles of incorporation, the 
corporate by-laws, and a list of key personnel, including the Board of 
Directors, officers, representatives, and managers. NMFS will approve 
the first complete RQE application it receives.
    If the RQE intends to receive or transfer halibut QS, it will use 
the ``Application for Transfer QS To or From an RQE'' available on the 
NMFS Alaska Region website at https://alaskafisheries.noaa.gov/. 
Additionally, the RQE is required to submit an annual report detailing 
its activities to NMFS and the Council. The RQE is also subject to cost 
recovery fees; therefore, it needs to comply with the existing cost 
recovery fee payment requirements for IFQ permit holders. These 
recordkeeping and reporting requirements are expected to be 
administrative in nature and not require additional professional 
expertise.
Description of Significant Alternatives That Minimize Adverse Impacts 
on Small Entities
    This rule minimizes the impact on small entities and still meets 
the objectives for this final rule. The impacts on small entities for 
this action are defined in the IRFA and are not repeated here. As noted 
in the IRFA, this final rule is expected to create a net benefit for 
the directly regulated small entities. The benefits of this action are 
expected to outweigh the reporting, recordkeeping, and other compliance 
costs described in the previous section. This action is not expected to 
have negative economic impacts on the small entities directly impacted 
by the action.
    The Council considered a status quo alternative (Alternative 1) in 
addition to this final rule, which is Alternative 2, the Council's 
preferred alternative. Alternative 1 would not have provided more 
benefits to the directly regulated small entities or reduced reporting, 
recordkeeping, or compliance costs more than the preferred alternative 
that is implemented by this final rule.

Collection-of-Information Requirements

    This final rule contains collection-of-information requirements 
subject to the PRA, which have been approved by OMB under Control 
Number 0648-0758 and will be merged with OMB Control Numbers 0648-0272 
and 0648-0711.
    Public reporting burden is estimated to average per response: 200 
hours for Application for a Non-profit Corporation to be Designated as 
a Recreational Quota Entity; 2 hours for Application for Transfer of QS 
To or From a Recreational Quota Entity; 40 hours for RQE Annual Report; 
1 minute for electronic submission of IFQ Permit Holder Fee Submission 
Form. These estimates include 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 these burden estimates or any other aspect 
of this data collection, including suggestions for reducing the burden, 
to NMFS (see ADDRESSES) and by email to OIRA_Submission@omb.eop.gov, or 
fax to 202-395-5806. Notwithstanding any other provision of the law, no 
person is required to respond to, and no person shall be subject to 
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. All currently approved 
NOAA collections of information may be viewed at http://www.cio.noaa.gov/services_programs/prasubs.html.

List of Subjects

15 CFR Part 902

    Reporting and recordkeeping requirements.

50 CFR Part 300

    Administrative practice and procedure, Antarctica, Canada, Exports, 
Fish, Fisheries, Fishing, Imports, Indians, Labeling, Marine resources, 
Reporting and recordkeeping requirements, Russian Federation, 
Transportation, Treaties, Wildlife.

50 CFR Part 679

    Alaska, Fisheries, Reporting and recordkeeping requirements.

    Dated: September 14, 2018.
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 parts 300 and 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.  [thinsp]902.1, in the table in paragraph (b), under the 
entry ``50 CFR'':
0
 a. Add an entry in alphanumeric order for ``679.5(v)''; and
0
b. Revise the entry for ``679.41(b), (c)(1) through (9), (d) through 
(f), (g)(1) through (4), (h) through (k), and (m)''.
    The addition and revision read as follows:


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

* * * * *
    (b) * * *

------------------------------------------------------------------------
                                                     Current OMB control
     CFR part or section where the information        No.  (all numbers
         collection requirement is located            begin with 0648-)
------------------------------------------------------------------------
 
                                * * * * *
50 CFR:
 
                                * * * * *
679.5(v)...........................................                -0272
 
                                * * * * *
679.41(b), (c)(1) through (9), (d) through (f),                    -0272
 (g)(1) through (4), (h) through (k), (m), and (n).
 
                                * * * * *
------------------------------------------------------------------------

* * * * *

Title 50--Wildlife and Fisheries

PART 300--INTERNATIONAL FISHERIES REGULATIONS

Subpart E--Pacific Halibut Fisheries

0
3. The authority citation for part 300, subpart E, continues to read as 
follows:

    Authority: 16 U.S.C. 773-773k.


0
4. In Sec.  300.65:
0
a. Add paragraph (c)(1)(iii);
0
b. Revise paragraph (c)(4)(i); and
0
c. Add paragraphs (c)(4)(iii) and (c)(5)(ii)(D)(1)(iv).
    The additions and revision read as follows:


Sec.  300.65  Catch sharing plan and domestic management measures in 
waters in and off Alaska.

* * * * *
    (c) * * *
    (1) * * *
    (iii) Authorizes the use of Commission regulatory areas 2C and 3A 
RFQ resulting from halibut QS held by the RQE as authorized in part 679 
to this title to supplement the annual guided sport catch limit in the 
corresponding

[[Page 47830]]

area, pursuant to paragraph (c)(4) of this section.
* * * * *
    (4) * * *
    (i) The Commission regulatory areas 2C and 3A annual guided sport 
catch limits are determined by subtracting wastage from, and adding any 
pounds of RFQ held by an RQE for that area to, the allocations in 
Tables 3 and 4 of this subpart, adopted by the Commission as annual 
management measures, and published in the Federal Register as required 
in Sec.  300.62.
* * * * *
    (iii) The amount of QS held by the RQE for Commission regulatory 
area 2C and 3A as of October 1 each year will be the basis for 
determining the amount of RFQ pounds that will be added to the annual 
guided sport catch limit for the corresponding area in the upcoming 
year.
    (5) * * *
    (ii) * * *
    (D) * * *
    (1) * * *
    (iv) In the applicable Commission regulatory area, either Area 2C 
or Area 3A, the sum of IFQ halibut equivalent pounds, as defined in 
Sec.  679.2 of this title, from the transfer of IFQ to GAF and the 
pounds of RFQ issued to the RQE during a calendar year does not exceed 
an amount that is greater than the amount derived from: 5,947,740 units 
of Area 2C QS, or 22,187,161 units of Area 3A QS.
* * * * *

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

0
5. 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; Pub. L. 111-281.


0
6. In Sec.  679.2, add definitions for ``Recreational Fishing Quota 
(RFQ)'' and ``Recreational Quota Entity (RQE)'' in alphabetical order 
to read as follows:


Sec.  679.2  Definitions.

* * * * *
    Recreational Fishing Quota (RFQ) means the pounds of halibut issued 
annually to a Recreational Quota Entity to supplement the annual guided 
sport catch limit under the catch sharing plan for IFQ regulatory areas 
2C and 3A pursuant to Sec.  300.65(c) of this title.
    Recreational Quota Entity (RQE) means a non-profit entity 
incorporated under the laws of the State of Alaska, recognized as 
exempt from Federal income tax by the Internal Revenue Service, and 
authorized by NMFS to participate in the Halibut IFQ Program to hold 
commercial halibut quota share to supplement the annual guided sport 
catch limit in IFQ regulatory areas 2C and 3A under the catch sharing 
plan pursuant to Sec.  300.65(c) of this title. NMFS will authorize 
only one RQE at a time.
* * * * *


0
7. In Sec.  679.4, add paragraph (d)(1)(iv) to read as follows:


Sec.  679.4  Permits.

* * * * *
    (d) * * *
    (1) * * *
    (iv) An RFQ permit account identifies the amount of RFQ authorized 
for use by charter vessel anglers in Area 2C or Area 3A. The number of 
pounds of RFQ allocated to the RFQ permit account will be added to the 
annual guided sport catch limit under the catch sharing plan (described 
at 50 CFR 300.65(c)) for the appropriate IFQ regulatory area, Area 2C 
or Area 3A.
* * * * *


0
8. In Sec.  679.5:
0
a. Revise paragraphs (l)(7)(ii)(A), (C), and (D); and
0
b. Add paragraphs (l)(9) and (v).
    The revisions and additions read as follows:


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

* * * * *
    (l) * * *
    (7) * * *
    (ii) * * *
    (A) Applicability. An IFQ permit holder who holds an IFQ permit 
against which a landing was made or an RQE that holds RFQ must submit 
to NMFS a complete IFQ Permit Holder Fee Submission Form provided by 
NMFS.
* * * * *
    (C) Completed application. NMFS will process an IFQ Permit Holder 
Fee Submission Form provided that a paper or electronic form is 
completed by the IFQ permit holder or an RQE that holds RFQ, with all 
applicable fields accurately filled in, and all required additional 
documentation is attached.
    (D) IFQ landing summary and estimated fee liability. NMFS will 
provide to an IFQ permit holder and an RQE that holds RFQ an IFQ 
Landing and Estimated Fee Liability page as required by Sec.  
679.45(a)(2). The IFQ permit holder must either accept the accuracy of 
the NMFS estimated fee liability associated with his or her IFQ 
landings for each IFQ permit, or calculate a revised IFQ fee liability 
in accordance with paragraph (l)(7)(ii)(E) of this section. The IFQ 
permit holder may calculate a revised fee liability for all or part of 
his or her IFQ landings.
* * * * *
    (9) Recreational Quota Entity Program annual report. An annual 
report on RQE activities must be submitted to NMFS by the RQE as 
required at Sec.  679.5(v).
* * * * *
    (v) Recreational Quota Entity Program Annual Report--(1) 
Applicability. The RQE must submit a timely and complete annual report 
on the RQE's administrative activities and business operation for each 
calendar year that it holds halibut recreational fishing quota (RFQ) 
and quota shares (QS). The RQE may combine annual reports on its 
holdings of halibut QS and RFQ for IFQ regulatory areas 2C and 3A into 
one report. The RQE must submit annual report data for the halibut QS 
and RFQ it held during the calendar year. The RQE is not required to 
submit an annual report for any calendar year in which it did not hold 
any halibut QS or RFQ.
    (2) Time limits and submittal. By January 31, the RQE must submit a 
complete annual report for the prior calendar year to the North Pacific 
Fishery Management Council, 605 West 4th Ave., Suite 306, Anchorage, AK 
99501-2252, and to NMFS-Alaska Regional Administrator, P.O. Box 21668, 
Juneau, AK 99802-1668.
    (3) Complete annual report. A complete annual report contains all 
general report requirements described in paragraphs (v)(4)(i) through 
(iv) of this section, and all information specific to IFQ regulatory 
areas 2C and 3A described in paragraphs (v)(5)(i) through (iii) of this 
section.
    (4) General report requirements. The RQE must annually report the 
following information:
    (i) Any changes to the bylaws, board of directors, or other key 
management personnel of the RQE from the preceding year;
    (ii) Amount and description of annual administrative expenses;
    (iii) Amount and description of funds spent on conservation and 
research, including a summary of the results of those expenditures; and
    (iv) Amount and description of all other expenses incurred by the 
RQE.
    (5) Information by IFQ regulatory area. For each IFQ regulatory 
area represented by the RQE, the RQE must annually report the following 
information:
    (i) The total amount of halibut QS by category and blocks held by 
the RQE at the start of the calendar year, on October 1, and at the end 
of the calendar year;

[[Page 47831]]

    (ii) A list of all transfers (purchases or sales) of halibut QS, 
including the transaction price; and
    (iii) A description of the number of charter halibut permits and 
number of angler endorsements purchased and held by the RQE.


0
9. In Sec.  679.7, add paragraph (f)(3)(i)(C) to read as follows:


Sec.  679.7  Prohibitions.

* * * * *
    (f) * * *
    (3) * * *
    (i) * * *
    (C) Use fixed gear to retain RFQ halibut.
* * * * *


0
10. In Sec.  679.40:
0
a. Revise paragraphs (b), (c) heading, and (c)(2);
0
b. Add paragraphs (c)(4) and (g)(2)(iii);
0
c. Revise paragraph (h)(3) introductory text; and
0
d. Add paragraph (h)(3)(iii).
    The revisions and additions read as follows:

Sec.  679.40  Sablefish and halibut QS.

* * * * *
    (b) Annual allocation of IFQ and RFQ. The Regional Administrator 
shall assign halibut or sablefish IFQs to each person, except the RQE, 
holding unrestricted QS halibut or sablefish, respectively, up to the 
limits prescribed in Sec.  679.42(e) and (f). Each assigned IFQ will be 
specific to an IFQ regulatory area and vessel category, and will 
represent the maximum amount of halibut or sablefish that may be 
harvested from the specified IFQ regulatory area and by the person to 
whom it is assigned during the specified fishing year, unless the IFQ 
assignment is changed by the Regional Administrator within the fishing 
year because of an approved transfer or because all or part of the IFQ 
is sanctioned for violating rules of this part. The Regional 
Administrator shall assign RFQ to the RQE pursuant to paragraph (c)(4) 
of this section.
    (c) Calculation of annual IFQ and RFQ allocations.* * *
    (2) QS amounts. For purposes of calculating IFQs and RFQ for any 
fishing year, the amount of a person's QS and the amount of the QS pool 
for any IFQ regulatory area will be the amounts on record with the 
Alaska Region, NMFS, on January 15 of that year.
* * * * *
    (4) RFQ allocation to RQE--(i) RQE QS amounts. For purposes of 
calculating RFQ for any fishing year, the amount of halibut QS held by 
the RQE for either IFQ regulatory area 2C or 3A for the corresponding 
IFQ regulatory area will be the amounts on record with the Alaska 
Region, NMFS on October 1 of the year prior.
    (ii) Calculation of RFQ. The annual allocation of RFQ halibut to an 
RQE (person r) in IFQ regulatory area 2C or 3A (area a) will be equal 
to the product of the annual commercial catch limit as defined in Sec.  
300.61 of this title, and the QS held by the RQE (specified in 
paragraph (c)(4)(i) of this section) divided by the QS pool for that 
area (specified in paragraph (c)(2) of this section). No overage or 
underage adjustments will be applied to the RQE's annual RFQ. Expressed 
algebraically, the annual RFQ halibut allocation formula is as follows:

RFQra = [fixed gear TACa x (QSra/QS 
poola)]

    (iii) Excess RFQ. NMFS will not issue the RQE any excess RFQ. 
Excess RFQ is the difference between the amount of RFQ based on the QS 
held by the RQE and the amount of RFQ needed to provide charter fishery 
management measures that are equivalent to unguided recreational 
fishery management measures. If the annual management measures 
published pursuant to Sec.  300.62 of this title specify charter 
fishery management measures that are equivalent to the unguided 
recreational management measures, NMFS will:
    (A) Calculate the annual allocation of halibut RFQ to the RQE as 
specified in paragraph (c)(4)(ii) of this section; and
    (B) Determine the amount of RFQ needed to supplement the annual 
guided sport catch limit from the CSP in Area 2C and Area 3A (described 
in Sec.  300.65(c) of this title) to account for charter fishery 
harvests under the charter fishery management measures specified in the 
annual management measures and issue that amount of RFQ to the RFQ 
permit account.
    (C) Calculate the amount of excess RFQ by subtracting the amount of 
RFQ issued as determined in paragraph (c)(4)(iii)(B) of this section 
from the annual calculation of RFQ halibut to the RQE as calculated in 
paragraph (c)(4)(iii)(A) of this section.
    (iv) Redistribution of excess RFQ. Excess pounds of RFQ will be 
redistributed as IFQ as follows:
    (A) 50 percent to all catcher vessel QS holders in the applicable 
area who held not more than 32,333 QS units in Area 2C, and 47,469 QS 
units in Area 3A in the current calendar year and in the calendar year 
prior to the redistribution, in proportion to their QS holdings; and
    (B) 50 percent divided equally among all CQEs that held halibut QS 
in the applicable IFQ regulatory area (Area 2C or Area 3A) in the 
current calendar year and in the calendar year prior to the 
redistribution. If no CQE held QS in the applicable IFQ regulatory area 
(Area 2C and Area 3A) in the current calendar year and in the calendar 
year prior to the redistribution, that RFQ will not be redistributed as 
IFQ and will not be available for use by any CQE, IFQ permit holder, or 
RQE in that calendar year.
* * * * *
    (g) * * *
    (2) * * *
    (iii) The fish will not be calculated as part of the recreational 
harvest of halibut and will not be debited against the RFQ permit 
account or the annual guided sport catch limit as defined in Sec.  
300.61 of this title.
    (h) * * *
    (3) Source of debit. NMFS will use the following sources (see 
paragraphs (h)(3)(i), (ii) and (iii) of this section) of information to 
debit a CDQ halibut, IFQ halibut, IFQ sablefish, or RFQ permit account:
* * * * *
    (iii) Landed RFQ. All annual RFQ halibut issued to an RQE will be 
considered landed in the year for which it is issued.


0
11. In Sec.  679.41:
0
a. Redesignate paragraph (c)(11) as paragraph (c)(12);
0
b. Add new paragraph (c)(11);
0
c. Revise paragraphs (d)(1) and (g)(1); and
0
d. Add paragraphs (g)(9) through (11) and (n).
    The additions and revisions read as follows:


Sec.  679.41  Transfer of quota shares and IFQ.

* * * * *
    (c) * * *
    (11) If the person applying to receive or transfer QS is an RQE, 
the following determinations are required:
    (i) The RQE applying to receive or transfer QS, has submitted the 
timely and complete annual report required by Sec.  679.5(v);
    (ii) The RQE applying to receive QS is eligible to hold QS on 
behalf of the charter halibut sector in IFQ regulatory area 2C or 3A; 
and
    (iii) The RQE applying to receive QS has received notification of 
approval of eligibility to receive QS on behalf of the charter halibut 
sector in IFQ regulatory area 2C or 3A as described in paragraph (d)(1) 
of this section.
* * * * *
    (d) * * *
    (1) Application for Eligibility. All persons applying to receive QS 
or IFQ

[[Page 47832]]

must submit an Application for Eligibility to Receive QS/IFQ 
(Application for Eligibility) containing accurate information to the 
Regional Administrator. An Application for Eligibility to Receive QS/
IFQ (Application for Eligibility) is not required for a CQE if a 
complete application to become a CQE, as described in paragraph (l)(3) 
of this section, has been approved by the Regional Administrator on 
behalf of an eligible community. An Application for Eligibility to 
Receive QS/IFQ (Application for Eligibility) is not required for the 
RQE if a complete application to become an RQE, as described in 
paragraph (n)(2) of this section, has been approved by the Regional 
Administrator. The Regional Administrator will not approve a transfer 
of IFQ or QS to a person until the Application for Eligibility for that 
person is approved by the Regional Administrator. The Regional 
Administrator will provide an Application for Eligibility form to any 
person on request.
* * * * *
    (g) * * *
    (1) Except as provided in paragraph (f), (g)(2), (l), or (n) of 
this section, only persons who are IFQ crew members, or who were 
initially issued QS assigned to vessel categories B, C, or D, and meet 
the eligibility requirements in this section, may receive by transfer 
QS assigned to vessel categories B, C, or D, or the IFQ resulting from 
it.
* * * * *
    (9) For transfers of QS to an RQE, the RQE may only receive halibut 
QS that is assigned to IFQ regulatory area 2C or 3A.
    (10) For transfers of QS from an RQE:
    (i) Quota category and block designations at time of purchase by an 
RQE are retained if QS is transferred to an eligible QS holder for use 
in the IFQ program.
    (ii) NMFS will not issue any IFQ from any QS transferred from an 
RQE to a QS holder for use in the IFQ program for a calendar year if 
that QS resulted in the issuance of RFQ to an RQE during that calendar 
year.
    (11)(i) To maintain eligibility as the RQE authorized by NMFS, the 
RQE must be a non-profit entity incorporated under the laws of the 
State of Alaska and recognized as exempt from Federal income tax by the 
Internal Revenue Service as required by paragraph (n)(1)(ii) of this 
section.
    (ii) If the Regional Administrator determines the RQE approved by 
NMFS does not meet the requirements specified in paragraph (n)(1) of 
this section, NMFS will notify the RQE of the Regional Administrator's 
determination and specify that the RQE has 60 days to meet the 
requirements in paragraph (n)(1) of this section to maintain 
eligibility as the RQE authorized by NMFS.
    (iii) If the RQE demonstrates to NMFS within 60 days of 
notification that it meets the requirements in paragraph (n)(1) of this 
section, NMFS will notify the RQE that it remains the authorized RQE.
    (iv) If the RQE does not demonstrate to NMFS within 60 days of 
notification that it meets the requirements in paragraph (n)(1) of this 
section, NMFS will issue an initial administrative determination (IAD):
    (A) Revoking authorization of the RQE;
    (B) Disallowing the RQE from receiving any QS by transfer;
    (C) Requiring the CQE to divest of any QS that it holds; and
    (D) Withholding the issuance of RFQ based on any QS that the RQE 
holds.
    (v) The RQE will have the opportunity to appeal the IAD through the 
National Appeals Office under the provisions established at 15 CFR part 
906.
* * * * *
    (n) Transfer of halibut QS to an RQE--(1) RQE organizational 
structure. (i) The RQE must be a single entity representing IFQ 
regulatory Areas 2C and 3A.
    (ii) The RQE must be a non-profit entity incorporated under the 
laws of the State of Alaska and recognized as exempt from Federal 
income tax by the Internal Revenue Service; and
    (iii) The RQE must submit an annual report to NMFS and the Council 
detailing RQE activities during the prior year according to Sec.  
679.5(v).
    (2) Application for Eligibility. Prior to initially receiving QS by 
transfer, a non-profit entity that intends to participate in the 
Halibut IFQ Program and purchase and hold halibut QS in Area 2C and 
Area 3A as the RQE must have approval from the Regional Administrator. 
To receive that approval, the non-profit entity seeking to become an 
RQE must submit a complete ``Application for a Non-profit Entity to be 
Designated as a Recreational Quota Entity (RQE)'' (available on the 
NMFS Alaska Region website at https://alaskafisheries.noaa.gov/). NMFS 
will approve only one entity as the RQE. A complete application to 
become an RQE must include:
    (i) The articles of incorporation under the laws of the State of 
Alaska for that non-profit entity;
    (ii) Acknowledgement from the Internal Revenue Service that the 
non-profit entity is exempt from Federal income tax under section 
501(a) of the Internal Revenue Code; and
    (iii) Management organization information, including:
    (A) The bylaws of the non-profit entity;
    (B) A list of key personnel of the managing organization including, 
but not limited to, the RQE board of directors, officers, 
representatives, and any managers;
    (C) A description of how the non-profit entity is qualified to 
manage QS on behalf of charter fishery participants and a demonstration 
that the non-profit entity has the management, technical expertise, and 
ability to manage QS and RFQ;
    (D) The name of the non-profit organization, taxpayer ID number, 
NMFS person number, permanent business mailing addresses, name of 
contact persons and additional contact information of the managing 
personnel for the non-profit entity, resumes of management personnel, 
name and notarized signature of applicant, and Notary Public signature 
and date when commission expires; and
    (iv) A statement describing the procedures that will be used to 
determine the acquisition of funds to purchase QS.
    (3) Address for submittal of application. Regional Administrator, 
NMFS, P.O. Box 21668, Juneau, AK 99802.
    (4) Approval. NMFS will approve the first complete application 
received. If an application is approved, NMFS will notify the RQE by 
mail, unless another mode of communication is requested on the 
application.
    (5) Disapproval. If an application is disapproved, that 
determination may be appealed under the provisions established at 15 
CFR part 906.

0
12. In Sec.  679.42:
0
a. Add paragraph (a)(2)(v);
0
b. Revise paragraph (f)(1) introductory text; and
0
c. Add paragraphs (f)(8) and (g)(1)(iii).
    The additions and revision read as follows:


Sec.  679.42  Limitations on use of QS and IFQ.

    (a) * * *
    (2) * * *
    (v) In IFQ regulatory areas 2C and 3A, RFQ held by an RQE may be 
harvested aboard charter vessels as defined at 50 CFR 300.61 of any 
size, regardless of the QS category from which that RFQ originated.
* * * * *
    (f) * * *
    (1) Unless the amount in excess of the following limits was 
received in the

[[Page 47833]]

initial allocation of halibut QS, no person other than a CQE 
representing the community of Adak, AK, individually or collectively, 
or an RQE, may use more than:
* * * * *
    (8)(i) Annual transfer limits. The RQE may not receive by transfer 
more than 594,774 units of Area 2C halibut QS and more than 2,218,716 
units of Area 3A halibut QS in a year.
    (ii) Cumulative use limits. The RQE may not hold more than 
5,947,740 units of Area 2C halibut QS and more than 22,187,161 units of 
Area 3A halibut QS.
    (iii) Vessel category restrictions. (A) The RQE may not hold more 
than 889,548 units of halibut QS in IFQ regulatory area 2C that is 
assigned to vessel category D.
    (B) The RQE may not hold halibut QS in IFQ regulatory area 3A that 
is assigned to vessel category D.
    (C) The RQE may not hold more than 265,524 units of halibut QS that 
is assigned to vessel category B in IFQ regulatory area 2C.
    (g) * * *
    (1) * * *
    (iii) The RQE may not receive:
    (A) Transfers of halibut QS blocks of less than or equal to 24,250 
quota share units in IFQ regulatory area 2C.
    (B) Transfers of halibut QS blocks of less than or equal to 35,620 
quota share units in IFQ regulatory area 3A.
* * * * *

0
13. In Sec.  679.45:
0
a. Revise paragraphs (a)(1), (a)(2)(i) introductory text, and 
(a)(2)(i)(A);
0
b. Add paragraphs (a)(2)(i)(B)(3) and (a)(2)(i)(D); and
0
c. Revise paragraphs (a)(3), (a)(4)(i), (b)(1), and (f)(2).
    The revisions and addition read as follows:


Sec.  679.45  IFQ cost recovery program.

    (a) * * *
    (1) Responsibility. An IFQ permit holder is responsible for cost 
recovery fees for landings of his or her IFQ halibut and sablefish, 
including any halibut landed as guided angler fish (GAF), as defined in 
Sec.  300.61 of this title, derived from his or her IFQ accounts. An 
RQE is responsible for cost recovery fees for all RFQ issued to the 
RQE. An IFQ permit holder or RQE must comply with the requirements of 
this section.
    (2) * * *
    (i) General. IFQ fee liability means a cost recovery liability 
based on either the value of all landed IFQ and GAF derived from the 
permit holder's IFQ permit(s), or the value of all RFQ issued to an 
RQE.
    (A) Each year, the Regional Administrator will issue each IFQ 
permit holder a summary of his or her IFQ equivalent pounds landed as 
IFQ and GAF and will issue an RQE a summary of its RFQ pounds issued as 
part of the IFQ Landing and Estimated Fee Liability page described at 
Sec.  679.5(l)(7)(ii)(D).
    (B) * * *
    (3) All RFQ issued to an RQE in IFQ regulatory area 2C or 3A will 
be assessed at the IFQ regulatory area 2C or 3A IFQ standard ex-vessel 
value.
* * * * *
    (D) An RQE may not challenge the standard ex-vessel value used to 
determine the fee liability for all RFQ issued to the RQE.
* * * * *
    (3) Fee collection. (i) An IFQ permit holder with IFQ and/or GAF 
landings is responsible for collecting his or her own fee during the 
calendar year in which the IFQ fish and/or GAF are landed.
    (ii) An RQE is responsible for collecting its own fees during the 
calendar year in which the RFQ is issued to the RQE.
    (4) * * *
    (i) Payment due date. An IFQ permit holder or RQE must submit its 
IFQ fee liability payment(s) to NMFS as instructed at paragraph 
(a)(4)(iii) of this section not later than January 31 of the year 
following the calendar year in which the IFQ or GAF landings were made 
or the RFQ was issued to the RQE.
* * * * *
    (b) * * *
    (1) General. (i) An IFQ permit holder must use either the IFQ 
actual ex-vessel value or the IFQ standard ex-vessel value when 
determining the IFQ fee liability based on ex-vessel value, except that 
landed GAF are assessed at the standard ex-vessel values derived by 
NMFS. An IFQ permit holder must base all fee liability calculations on 
the ex-vessel value that correlates to landed IFQ in IFQ equivalent 
pounds.
    (ii) An RQE must use the IFQ standard ex-vessel value derived by 
NMFS for all RFQ issued to the RQE.
* * * * *
    (f) * * *
    (2) After the expiration of the 30-day period, the Regional 
Administrator will evaluate any additional documentation submitted by 
an IFQ permit holder or RQE in support of its payment. If the Regional 
Administrator determines that the additional documentation does not 
meet the burden of proving the payment is correct, the Regional 
Administrator will send the IFQ permit holder or RQE an IAD indicating 
that the IFQ permit holder or RQE did not meet the burden of proof to 
change the IFQ fee liability as calculated by the Regional 
Administrator based upon the IFQ standard ex-vessel value. The IAD will 
set out the facts and indicate the deficiencies in the documentation 
submitted by the IFQ permit holder or RQE. An IFQ permit holder or RQE 
who receives an IAD may appeal the IAD, as described in paragraph (h) 
of this section.
* * * * *


Sec.  Sec.  679.41 and 679.45   [Amended]

0
 14. In the table below, for each section indicated in the ``Location'' 
column, remove the title indicated in the ``Remove'' column from 
wherever it appears in the section, and add the title indicated in the 
``Add'' column:

------------------------------------------------------------------------
          Location                   Remove                  Add
------------------------------------------------------------------------
Sec.   679.41(l)(3)           50 CFR 679.43.......  15 CFR part 906.
 introductory text, and
 (l)(3)(v)(E)(3).
Sec.   679.41(m)(5)(ii).....  Sec.   679.43.......  15 CFR part 906.
Sec.   679.45(b)(2).........  landed as GAF.......  landed as GAF or
                                                     issued as RFQ.
Sec.   679.45(b)(3)(ii).....  landed GAF..........  landed GAF and RFQ
                                                     issued to an RQE.
Sec.   679.45(b)(3)(v)        aggregated IFQ        aggregated by IFQ
 introductory text.            regulatory area 2C    regulatory area 2C
                               or 3A, to GAF         or 3A, to GAF
                               landings.             landings and RFQ
                                                     issued to an RQE.
Sec.   679.45(d)(2)(i)(A)     IFQ and GAF.........  IFQ, RFQ, and GAF.
 and (B).
Sec.   679.45(d)(2)(i)(C)...  include GAF costs...  include RQE and GAF
                                                     costs.
Sec.   679.45(d)(2)(ii).....  as commercial catch   as commercial catch,
                               or as GAF.            RFQ, or GAF.
Sec.   679.45(d)(4).........  IFQ and GAF.........  IFQ, RFQ, and GAF.
Sec.   679.45(d)(4).........  IFQ permit holder...  IFQ permit holder or
                                                     RQE.
Sec.   679.45(e)(1)           IFQ permit holder...  IFQ permit holder or
 introductory text.                                  RQE.

[[Page 47834]]

 
Sec.   679.45(e)(1)(i) and    IFQ permit holder...  IFQ permit holder or
 (ii).                                               RQE.
Sec.   679.45(e)(1)(i)......  the IFQ permit        the estimated fee
                               holder's estimated    liability.
                               fee liability.
Sec.   679.45(e)(2).........  IFQ fishing permit    IFQ fishing permit
                               held.                 or RFQ permit
                                                     account held.
Sec.   679.45(e)(2),          IFQ permit holder...  IFQ permit holder or
 (f)(1)(i) and (ii), and                             RQE.
 (f)(5).
Sec.   679.45(f)(1)           IFQ permit holder     IFQ permit holder or
 introductory text.            has.                  RQE has.
Sec.   679.45(f)(1)           by the IFQ permit     by the IFQ permit
 introductory text.            holder.               holder or RQE.
Sec.   679.45(f)(3).........  Sec.   679.43.......  15 CFR part 906.
Sec.   679.45(f)(4).........  the IFQ permit        the IFQ permit
                               holder.               holder or RQE.
Sec.   679.45(g)............  IFQ permit holder     IFQ permit holder or
                               unless the permit     RQE unless the IFQ
                               holder requests.      permit holder or
                                                     RQE requests.
Sec.   679.45(g)............  IFQ permit holder's.  IFQ permit holder's
                                                     or RQE's.
Sec.   679.45(h)............  Sec.   679.43.......  15 CFR part 906.
------------------------------------------------------------------------

[FR Doc. 2018-20410 Filed 9-20-18; 8:45 am]
 BILLING CODE 3510-22-P