Fisheries of the Exclusive Economic Zone Off Alaska: Pacific Halibut and Sablefish Individual Fishing Quota Program, 43679-43692 [2014-17658]

Agencies

• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration

[Federal Register Volume 79, Number 144 (Monday, July 28, 2014)]
[Rules and Regulations]
[Pages 43679-43692]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-17658]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 679

[Docket No. 120926497-4576-02]
RIN 0648-BC62


Fisheries of the Exclusive Economic Zone Off Alaska: Pacific 
Halibut and Sablefish Individual Fishing Quota Program

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

ACTION: Final rule.

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SUMMARY: NMFS publishes regulations to amend the hired master 
provisions of the Individual Fishing Quota Program (IFQ Program) for 
the fixed-gear commercial Pacific halibut and sablefish fisheries in 
the Bering Sea and Aleutian Islands (BSAI) and the Gulf of Alaska 
(GOA). The IFQ Program allows initial recipients of catcher vessel 
halibut and sablefish quota share (QS) to hire a vessel master to 
harvest an annual allocation of individual fishing quota

[[Page 43680]]

(IFQ) derived from the QS. This rule prohibits an initial QS recipient 
from using a hired master to harvest IFQ derived from catcher vessel QS 
received by transfer after February 12, 2010, with a limited exception 
for small amounts of QS. This final rule is necessary to maintain 
progress toward a predominantly owner-onboard fishery. In addition, 
this action is intended to promote the goals and objectives of the 
Magnuson-Stevens Fishery Conservation and Management Act, the Northern 
Pacific Halibut Act of 1982, the Fishery Management Plan for Groundfish 
of the BSAI, the Fishery Management Plan for Groundfish of the GOA, and 
other applicable laws.

DATES: Effective December 1, 2014.

ADDRESSES: Electronic copies of this rule, the Regulatory Impact Review 
(RIR), the Initial Regulatory Flexibility Analysis (IRFA), and the 
proposed rule prepared for this regulatory amendment are available from 
https://www.regulations.gov or from the NMFS Alaska Region Web site at 
https://alaskafisheries.noaa.gov. The Final Supplemental Environmental 
Impact Statement/Environmental Impact Statement for the individual 
Fishing Quota Management Alternative for Fixed Gear Sablefish and 
Halibut Fisheries (IFQ Program FSEIS) is available from the NMFS Alaska 
Region Web site at https://alaskafisheries.noaa.gov.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirement contained in this 
final rule may be submitted by mail to NMFS, Alaska Region, P.O. Box 
21668, Juneau, AK 99802-1668, Attn: Ellen Sebastian, Records Officer; 
in person at NMFS, Alaska Region, 709 West 9th Street, Room 420A, 
Juneau, AK; or by email to OIRA_Submission@omb.eop.gov or fax to (202) 
395-7285.

FOR FURTHER INFORMATION CONTACT: Peggy Murphy, (907) 586-7228.

SUPPLEMENTARY INFORMATION: This final rule amends the hired master 
regulations for management of the IFQ Program for the fixed-gear 
commercial fisheries for Pacific halibut and sablefish in waters off 
Alaska. NMFS published a proposed rule for this action in the Federal 
Register on April 26, 2013 (78 FR 24707). The 30-day comment period on 
the proposed rule ended May 28, 2013. NMFS received 15 comment letters 
on the proposed rule from 15 unique persons. A summary of these 
comments and NMFS' responses are provided in the ``Comments and 
Responses'' section of this preamble.
    A detailed review of this action is provided in the proposed rule 
and a brief summary is provided here.

Background

    The IFQ Program is a limited access system for managing the fixed-
gear halibut (Hippoglossus stenolepis) and sablefish (Anoplopoma 
fimbria) fisheries off Alaska. The IFQ Program was recommended by the 
North Pacific Fishery Management Council (Council) in 1992 and 
implementing rules were published by NMFS on November 9, 1993 (58 FR 
59375). Fishing under the program began on March 15, 1995.
    The IFQ Program for the halibut fishery is implemented by Federal 
regulations at 50 CFR part 300, subpart E, and 50 CFR part 679 under 
the authority of the Northern Pacific Halibut Act of 1982 (Halibut 
Act). Section 773(c) of the Halibut Act authorizes the Council to 
develop regulations that are in addition to, and not in conflict with, 
approved International Pacific Halibut Commission (IPHC) regulations. 
Such regulations may be implemented by NMFS only after approval by the 
Secretary of Commerce.
    The IFQ Program for the sablefish fishery is implemented by the 
Fishery Management Plan for Groundfish of the Gulf of Alaska (GOA FMP), 
the Fishery Management Plan for Groundfish of the Bering Sea and 
Aleutian Islands Management Area (BSAI FMP), and Federal regulations at 
50 CFR part 679 under the authority of the Magnuson-Stevens Fishery 
Conservation and Management Act (Magnuson-Stevens Act) (16 U.S.C. 1801 
et seq.). Regulations implementing the FMPs and general regulations 
governing the IFQ Program appear at 50 CFR part 679.
    The IFQ Program was intended primarily to reduce excessive fishing 
capacity in the commercial halibut and sablefish fixed-gear fisheries. 
The Council and NMFS designed the IFQ Program to maintain the social 
and economic character of the fixed-gear fisheries and the coastal 
communities where many of these fisheries are based. Access to the 
halibut and sablefish fisheries is limited to those persons holding QS. 
The QS holder is the person authorized to exercise the harvesting 
privilege in specific regulatory areas. NMFS initially issued QS to 
qualified applicants (initial recipients) who owned or leased a vessel 
that made fixed-gear landings of halibut or sablefish during the 
qualifying period from 1984 to 1990 for halibut, and from 1985 to 1990 
for sablefish. A person who received QS as an initial recipient was 
either (1) an individual or natural person, or (2) a non-individual 
entity or person, such as a corporation, partnership, or association. 
Initial recipients received QS allocations based on their harvest 
during the qualifying period, the area of the harvest, and the type of 
vessel used to land the harvest. Quota shares are individual harvesting 
privileges that are given effect on an annual basis through the 
issuance of IFQ permits. An annual IFQ permit authorizes the permit 
holder to harvest a specified amount of IFQ halibut or sablefish in a 
regulatory area.
    All QS are categorized according to the size of the vessel 
(category B, C, or D, individually and collectively referred to as 
``catcher vessel QS'') from which IFQ halibut and sablefish may be 
fished and whether that IFQ halibut or sablefish may be processed on 
board the vessel (category A). The vessel categories were designed to 
ensure that the IFQ Program did not radically change the structure of 
the fleet in place at the time the IFQ Program was implemented. A 
description of the specific vessel size categories is provided in 
regulation at 50 CFR part 679 and is not repeated here.
    Quota share is transferrable from one person to another. The 
Council recommended and NMFS implemented limits on the transfer (sale 
and purchase) and use of QS to limit consolidation and maintain 
diversity of the IFQ fleet. For example, the IFQ Program only allows 
persons who were originally issued catcher vessel QS (category B, C, 
and D halibut QS and category B and C sablefish QS), or persons who 
qualify as IFQ crew members, to hold and transfer catcher vessel QS.
    As the IFQ Program developed, the Council recommended, and NMFS 
implemented, provisions such as QS use caps, vessel use caps, and 
blocks of QS to limit QS acquisitions. These provisions were intended 
to maintain a diverse owner-onboard fleet and to prevent excessive 
consolidation of QS. Further discussion of these program elements can 
be found in the proposed rule published on April 26, 2013 (78 FR 
24707). The block provision has direct application in this final rule. 
All initially issued QS that yielded relatively small amounts of IFQ 
annually was ``blocked'' or issued as an inseparable unit. Quota share 
blocks preserve small amounts of QS in blocked units that are available 
at a relatively low cost to promote purchase of QS by crew members and 
new entrants to the IFQ fisheries. The block program also includes a 
``sweep-up'' (consolidation) provision designed to minimize the number 
of very small blocks of QS that yield such small

[[Page 43681]]

amounts of IFQ that they are economically disadvantageous to harvest. 
The consolidation provision allows small individual QS blocks to be 
permanently consolidated into larger QS blocks as long as the resulting 
QS block does not exceed consolidation limits specified in regulation.
    The IFQ Program also requires IFQ holders to be on board the 
catcher vessel during harvest and offloading to promote a predominantly 
``owner-onboard'' fishery with a narrow exemption for vessel category A 
QS holders and initial recipients of QS category B, C, and D QS. Vessel 
category A QS (catcher/processor QS) are not subject to the owner-
onboard requirement. A primarily owner-onboard catcher vessel fleet was 
an initial fundamental objective of the IFQ Program.
    The requirement that individual holders of catcher vessel QS 
(vessel categories B, C, or D) be on board the vessel during all IFQ 
fishing ensures that QS remain largely in the hands of active 
fishermen. However, the IFQ Program allows all initial recipients of 
QS, including individuals and non-individual entities, to hire masters 
to fish the IFQ derived from their QS. This exception was allowed 
because some individual fishermen had conducted their fishing 
businesses by hiring masters to skipper their fishing vessels prior to 
the implementation of the IFQ Program. The IFQ Program continues to 
allow initial recipients of catcher vessel QS to employ hired masters 
to fish their IFQ, but only if the initial recipient maintains a 
minimum 20% ownership interest in the vessel on which the IFQ halibut 
and sablefish are harvested. By limiting this exception to initial 
recipients, the Council anticipated that individual and non-individual 
initial recipients would eventually be replaced by new entrants. The 
Council anticipated that eventually catcher vessel QS would be 
transferred to new entrants required to be on board the vessel during 
IFQ fishing, resulting in an entirely owner-onboard fishery. An owner-
onboard fishery is consistent with the Council's goal to promote 
stewardship by providing active fishermen with a vested interest in the 
long-term productivity of the halibut and sablefish resources. The 
owner-onboard requirement also supports the Council's goal to provide 
entry-level opportunities for new fishermen as initial recipients of 
catcher vessel QS leave the fishery.

Rationale for and Effects of This Final Rule

    In February 2010, the Council became aware that some QS initial 
recipients were increasingly using hired masters rather than continuing 
to be personally on board their vessels when fishing with QS. Increased 
use of hired masters was attributed to initial recipients purchasing 
increasing amounts of QS, and the IFQ derived from that QS was being 
fished by hired masters. The Council was concerned that initial 
recipients were consolidating QS to be fished by hired masters and were 
reducing opportunities for new entrants to the fishery. The Council 
determined that the transition to a predominately owner-onboard fishery 
has been unreasonably delayed because the ability to hire a master 
applies to the QS holder and not the QS itself. This allows initial 
recipients to hire masters to harvest IFQ derived not only from their 
initially issued QS, but also IFQ derived from any QS received by 
transfer after initial issuance. As a result, QS have become 
consolidated among fewer initial recipients of QS that use hired 
masters. Quota share are remaining in the hands of initial recipients 
who hire masters to fish the resulting IFQ instead of being 
transferred, which delays the progress toward the Program objective of 
an owner-onboard fishery and decreases opportunities for new entrants 
to the IFQ fishery.
    At subsequent meetings, the Council examined IFQ Program data 
detailing the use of hired masters, changes in QS holdings of initial 
recipients, QS transfers, and the rate of new entry into the fishery. 
As discussed in detail in the proposed rule for this action, (78 FR 
24707, April 26, 2013), the use of hired masters has increased 
significantly above levels that existed at the start of the IFQ 
Program. This is demonstrated by significant increases in the numbers 
of individual initial recipients who hire masters in the halibut and 
sablefish IFQ fisheries and the number of landings made in these 
fisheries by hired masters. Data analysis also shows that QS are being 
consolidated among fewer individual and non-individual initial 
recipients who hire masters to fish the resulting IFQ. In addition, 
some initial recipients that had not previously hired a master are now 
doing so, and some that had previously hired a master have increased 
the amount of QS they hold for use by a hired master or are using 
masters for a higher percentage of their landings. Finally, the rates 
at which initial recipients of halibut and sablefish QS are divesting 
themselves of QS and exiting the fishery have declined over the last 5 
years.
    After receiving public testimony and reviewing the analysis at its 
April 2011 meeting, the Council determined that it is likely that 
several factors are inhibiting new entrants from acquiring QS and 
slowing progress toward a predominantly owner-onboard fishery. These 
factors include the increased use of hired masters, increased holdings 
of QS by initial recipients who may use a hired master to harvest the 
resulting IFQ, and decreased numbers of initial QS recipients divesting 
their QS holdings. The Council determined that evolution to an owner-
onboard program is occurring at a slower pace than was originally 
envisioned and is therefore inhibiting achievement of the Council's 
goals for the IFQ Program. The Council determined that the absence of a 
limitation on the use of hired masters could further delay this 
progress. To address this problem, the Council recommended, and this 
final rule implements, regulations that prohibit the use of a hired 
master to fish IFQ halibut or sablefish derived from catcher vessel 
category B, C, or D QS received by transfer after February 12, 2010, 
with some exceptions described later in this final rule.
    The Council was concerned that QS purchases occurring before 
implementation of this final rule would hinder rather than support 
progress toward an owner-onboard catcher vessel fleet. Therefore, the 
Council chose February 12, 2010, as the date after which holders of QS 
received by transfer would not be able to hire a master to harvest the 
resulting IFQ because that is the date that the Council announced its 
interest in addressing this issue and adopted its problem statement for 
this action. The Council concluded that this date would reduce an 
initial recipient's incentive to purchase additional QS to be fished by 
hired masters prior to implementation of this final rule. The Council 
determined that the elapsed time between its recommendation and the 
implementation of this final rule would provide a sufficient grace 
period for initial QS recipients to make any necessary changes to their 
business plans.
    The Council considered and rejected several alternative dates, such 
as the effective date of the final rule, because dates after February 
12, 2010, could allow initial recipients to further consolidate their 
holdings of QS and exacerbate the problems the Council was addressing 
with this action. Additional acquisition of QS for harvest by hired 
masters obstructs the objective

[[Page 43682]]

of the Council for a predominantly owner-onboard catcher vessel fleet. 
Instead, the Council wanted to prevent further increases in the amount 
of IFQ harvested by hired masters.
    NMFS and the Council recognized that additional QS may be 
consolidated into blocks by both individual and non-individual initial 
recipients until this action takes effect. Tracking a new block of QS 
is administratively burdensome because NMFS cannot differentiate what 
portion of that QS block should be attributed to QS with the hired 
master privilege as opposed to that without the hired master privilege. 
To avoid the administrative burden of reversing these consolidations, 
this final rule affects catcher vessel QS transferred to an initial 
recipient and consolidated into a QS block after February 12, 2010, as 
follows:
     If catcher vessel QS are consolidated into a QS block 
between February 12, 2010, and the effective date of this final rule 
(see DATES), the IFQ resulting from that consolidated QS block can be 
fished by a hired master, and
     If catcher vessel QS are consolidated into a QS block 
after the effective date of this final rule (see DATES), the IFQ 
resulting from that consolidated QS block cannot be fished by a hired 
master, and the QS holder is required to be on board the vessel 
harvesting the IFQ derived from those QS.
    Under this final rule, initial QS recipients have options for using 
QS received by transfer after February 12, 2010. As noted above, QS 
that is consolidated into blocks before the effective date of this rule 
may be fished by a hired master. Moreover, initial recipients who 
received catcher vessel QS after February 12, 2010, may sell those QS 
to other halibut and sablefish IFQ fishery participants, or to new 
entrants into the fishery. Other than selling the QS, the options and 
associated impacts differ between individual and non-individual initial 
recipients. An individual initial recipient who receives catcher vessel 
QS after February 12, 2010, may fish the IFQ derived from that QS as an 
owner-onboard. A non-individual initial recipient that received catcher 
vessel QS by transfer after February 12, 2010, may fish the resulting 
IFQ using a hired master, but only until the effective date of this 
final rule. After the effective date, a non-individual initial 
recipient will be prohibited from fishing QS received by transfer after 
February 12, 2010, using a hired master, but may, as noted above, sell 
those QS. Alternatively, a non-individual initial recipient may 
continue to hold that QS, but the resulting IFQ cannot be used because 
a non-individual entity must hire a master to harvest the IFQ.
    The Council recognized that this rule may reduce the economic 
incentive for initial recipients to increase their QS holdings above 
the amount they held as of February 12, 2010. This supports the IFQ 
program objective of a predominantly owner-onboard catcher vessel 
fishery by (1) preventing further increase in the use of hired masters 
while minimizing disruption to operations of small businesses that have 
historically used hired masters, and (2) discouraging further 
consolidation of QS among initial recipients for harvest by hired 
masters. The Council did not expect this action to disrupt existing 
hired master arrangements because persons who currently qualify for the 
hired master exemption can continue to use a hired master for catcher 
vessel QS held on or before February 12, 2010.
    This final rule will not apply under the following circumstances in 
the IFQ Program:
     Category A (catcher/processor) QS are excluded from this 
action because this vessel category of QS is not subject to owner-
operator requirements.
     Individual (persons who, for example, are not corporations 
or partnerships) initial recipients in IPHC Area 2C (halibut) and the 
Southeast region (sablefish) are excluded from this action because 
existing regulations at Sec.  679.42(i)(3) prohibit individuals who are 
initial recipients from using hired masters to harvest their IFQ 
halibut or sablefish in these areas.
     Allocations of halibut and sablefish issued to Community 
Development Quota (CDQ) groups are excluded from this action. CDQ 
groups are not subject to owner-operator requirements.

Summary of Regulations Implemented by This Final Rule

    Three regulatory amendments are necessary to implement the 
Council's recommendation for final action. The first two amendments add 
regulations at Sec.  679.42(i)(8) and (j)(10) to specify that a hired 
master cannot be used to fish IFQ halibut or sablefish derived from 
catcher vessel QS that was received by transfer after February 12, 
2010, unless the QS was consolidated into a block prior to the 
effective date of this final rule. The third amendment adds regulations 
under Sec.  679.41(c)(11) specifying that NMFS will not approve a 
transfer of catcher vessel QS to a corporation, partnership, 
association, or other non-individual entity at any time. These 
regulatory changes are consistent with the Council's intent to 
discourage further acquisition of catcher vessel QS by initial 
recipients for harvest by hired masters.
    Under this final rule, IFQ derived from catcher vessel QS received 
by transfer after February 12, 2010, cannot be harvested by a hired 
master. Because a non-individual entity must hire a master to harvest 
its IFQ, the change to Sec.  679.41(c)(11) prevents non-individual 
entities, such as corporations, from receiving additional catcher 
vessel QS by transfer after the effective date, with one exception. 
That exception, found at Sec.  679.41(g)(3), provides that an 
individual initial catcher vessel QS recipient may transfer initially 
issued QS to a corporation that is solely owned by the same individual. 
Otherwise, individuals may not transfer QS received after initial 
issuance into a solely-owned corporation. NMFS makes no changes to this 
existing exception. This exception allows individuals to transfer 
initially received QS to a solely-owned corporation for tax purposes, 
limiting liability, or for other business purposes.
    To implement this final rule, NMFS will redesignate catcher vessel 
QS as ``eligible to be fished by a hired master'' if the QS was (1) 
held by an initial recipient on or before February 12, 2010, or (2) 
received by transfer and consolidated into a QS block held by an 
initial recipient prior to the effective date of this final rule. All 
other catcher vessel QS that does not meet these requirements will be 
designated ``not eligible to be fished by a hired master'', including 
(1) individual initial recipient QS designated for areas 2C (halibut) 
and Southeast (sablefish), (2) individual and non-individual QS not 
held by an initial recipient, (3) unblocked QS transferred to an 
initial recipient after February 12, 2010, and (4) blocked QS 
transferred to an initial recipient after the effective date of this 
final rule. Following the redesignation of QS, two types of annual IFQ 
permits will be issued by NMFS. Quota share designated as eligible to 
be fished by a hired master will yield IFQ that can be harvested by a 
hired master. Quota share designated as not eligible to be fished by a 
hired master will yield IFQ that cannot be harvested by a hired master. 
NMFS will redesignate QS and issue the new types of IFQ permits prior 
to the beginning of the IFQ fishing year following the date this final 
rule becomes effective and each year thereafter as transfers require.

Comments and Responses

    NMFS received 15 comment letters during the public comment period 
for the proposed rule. Of the 15 comment letters received, one letter 
was from a

[[Page 43683]]

representative of a fishing industry organization, one letter was from 
a non-profit organization, and the remaining letters were from 
individual IFQ fishery participants and members of the public. One 
letter recommended broad changes to fisheries management that are 
outside the scope of this action. The remaining 14 letters contained 24 
unique comments. A summary of the comments and NMFS' responses follow.
    Comment 1: Three commenters supported the proposed rule because the 
original intent of the IFQ Program was to maintain the owner-onboard 
character of the fixed-gear fleet and promote an equitable transition 
to an owner-onboard fishery through the use of vessel size categories, 
vessel IFQ use caps, and the hired master exemption only for initial 
recipients of QS.
    Response: NMFS acknowledges the commenters' support of the proposed 
rule.

Fairness and Consistency With Applicable Law

    Comment 2: NMFS states that the proposed rule will further the 
owner-onboard IFQ fishery. However, the purpose of the original IFQ 
Program was to resolve problems that stemmed from the ``open access'' 
regulatory regime, not to promote an owner-onboard halibut and 
sablefish IFQ fishery.
    Response. The Council and NMFS identified 10 objectives for the 
original IFQ Program. Section 2.3 of the IFQ Program FSEIS identifies 
and describes these objectives (see ADDRESSES). NMFS agrees that one 
objective of the IFQ Program was to address the conservation and 
management problems associated with the ``open access'' management 
regime. The Council also identified an objective to maintain the 
existing business relationships among vessel owners, crews, and 
processors and ensure that those directly involved in the halibut and 
sablefish IFQ fishery benefit from the IFQ program by further ensuring 
that fishery is dominated by owner-onboard operations. However, the 
Council recognized the tension between many of its objectives, and 
therefore selected a set of program elements that provided a reasonable 
balance of competing objectives.
    With respect to the objectives discussed above, the balance that 
the Council struck in the IFQ Program: (1) Established the owner-
onboard requirement to further the objective of owner-onboard 
fisheries; and (2) exempted initial recipients of QS, many of whom 
actively participated in harvesting activities on board their vessels 
and some of whom employed hired masters, from the owner-onboard 
requirement. The purposes of the exemption were to further the 
objective of maintaining existing business relationships and to avoid 
sudden disruption of business operations to those fishermen who had 
hired masters to fish for them. Because initial recipients could not 
transfer their exemption from the owner-onboard requirement, the 
Council and NMFS expected that in the future all catcher vessel QS 
would be held by individuals that had to be on board their vessels for 
the harvest of their IFQ. NMFS stated in the final rule to implement 
the IFQ Program that eventually, as the individuals and firms that 
received initial allocations were replaced by new QS holders, all 
catcher vessel QS would be transferred to individuals in keeping with 
the Council's basic objective of requiring QS holders to be on board 
the vessels during fishing operations (58 FR 59375, November 9, 1993).
    Contrary to the commenter's assertion, the record of the IFQ 
Program development confirms that an objective of the IFQ Program was 
for owners of catcher vessel QS to be on board in the IFQ fishery. For 
example, the Council noted in Section 2.3.6 of the IFQ Program FSEIS 
(see ADDRESSES) that it desired that QS remain in the hands of active 
fishermen who would use them. That Analysis also explained that other 
restrictions on who may control or use catcher vessel QS and IFQ are 
intended to assure that those directly involved in the fishery benefit 
from the IFQ Program and that the fisheries continue to be dominated by 
owner-onboard operations. The Council intended that active harvesters, 
and not investment speculators, remain as the ``stock holders'' in the 
fishery under limited access IFQ management (57 FR 57130, December 3, 
1992). In the final rule implementing the IFQ Program, NMFS noted in 
response to comment that the Council's basic policy is to require 
catcher vessel QS holders to be on board during fishing operations and 
sign required landing reports. The Council provided for an exception to 
this policy in its motion language and FMP amendment text for persons 
who receive initial catcher vessel QS except for holders of catcher 
vessel QS usable in Southeast Alaska and holders of catcher/processor 
QS. The Council noted that eventually, as the individuals and firms 
that received initial allocations are replaced by new ones, all catcher 
vessel QS would be transferred to individuals in keeping with the 
Council's basic objective of requiring QS holders to be on board the 
vessel during fishing operations (58 FR 59375, November 9, 1993).
    Comment 3: NMFS states that a purpose of the proposed rule is to 
prevent consolidation of the ownership of QS by preventing initial 
recipients from acquiring additional QS that is not subject to the 
owner-onboard requirement. A fundamental purpose of the IFQ Program was 
to encourage consolidation because the fishery was overcapitalized. To 
say that a goal of the IFQ Program was to prevent consolidation is to 
ignore the history and intended purpose of the program.
    Response: The commenter is correct that one problem the IFQ Program 
addressed was excess harvesting capacity in the IFQ fisheries (58 FR 
59375, November 9, 1993). However, the Council and NMFS were concerned 
that the IFQ Program might result in too much consolidation in the 
ownership of QS. In addition to the objectives identified in response 
to Comment 2, the Council identified the objective in Section 2.3 of 
the IFQ Program FSEIS (see ADDRESSES) to limit the concentration of QS 
ownership and IFQ usage that was expected to occur over time. Also, 
Section 2.3.3 of the IFQ Program FSEIS notes that the IFQ Program 
contained many features to prevent undue consolidation, including 
ownership caps on QS. The impetus for this final action to further 
restrict the owner-onboard exemption for initial QS recipients results 
from the Council's determination that allowing those initial recipients 
of QS who hire masters to acquire additional QS up to the ownership 
caps could impede the development of owner-onboard IFQ fisheries. 
Section 5.2 of the RIR/IRFA for this final action (see ADDRESSES) 
recognizes that individual initial recipients may increase their QS 
holdings, for which they may hire masters, up to the use cap. It is 
this capacity to increase the use of hired masters, instead of a more 
timely transition to an owner-onboard fleet, which concerns the 
Council.
    Comment 4: The proposed action violates the Administrative 
Procedure Act (APA) because NMFS did not publish a timely notice of 
proposed rulemaking in the Federal Register regarding the applicability 
of the February 12, 2010, date. Therefore, it would be unlawful to 
prohibit persons who purchased QS between February 12, 2010, and the 
date of publication of the proposed rule from hiring a master to fish 
that QS unless those persons had actual notice of the Council's action. 
Moreover, the rule has an effective date of February 12, 2010, which 
precedes publication of the final rule. Because the

[[Page 43684]]

rule has an effective date preceding the final rule's publication, the 
rule violates the APA's requirement that rules take effect not less 
than 30 days after the final rule's publication.
    Response: The APA does not require NMFS to have published a notice 
of the Council's action in the Federal Register prior to the notice of 
proposed rulemaking. NMFS published the notice of proposed rulemaking 
for this action on April 26, 2013 (78 FR 24707), with comments invited 
through May 28, 2013. This final rule will become effective 30 days 
following publication in the Federal Register (see DATES) consistent 
with the APA, and will apply to all persons participating in the 
sablefish and halibut IFQ fisheries.
    The administrative record for this rule adequately describes the 
rationale for curtailing the hired master exemption for QS acquired 
after February 12, 2010:
     The supporting analysis notes that the Council 
acknowledged that a number of QS units were in the process of being 
transferred by NMFS, and more QS would continue to be transferred while 
the Council continued to work on the regulatory amendment;
     The supporting analysis states that the rule will only 
curtail further transfer of QS for use by hired masters, rather than 
eliminate the hired master provision altogether as had been suggested 
by stakeholders in previous program reviews;
     Under the Council's preferred alternative, QS transferred 
after February 12, 2010, would no longer be eligible to be used by 
hired masters in order to counter a trend of the increased use of hired 
masters;
     The objective of the Council's preferred alternative is to 
cap the potential use of hired masters by eligible initial QS 
recipients to levels in existence as of February 12, 2010, the date 
that the Council began developing this regulatory amendment to curtail 
the trend of increasing use of hired masters in the sablefish and 
halibut IFQ fisheries. The Council selected this date to discourage 
persons from rushing to acquire even more QS, thereby exacerbating the 
very problem the Council was trying to address with this action.
    Comment 5: The proposed rule is arbitrary and capricious by taking 
away the privilege of initial recipients to hire masters to fish QS 
acquired after February 12, 2010. The commenter emphasizes that the 
original IFQ rule allowed initial recipients of QS to acquire 
additional QS by transfer and allowed initial recipients to be exempt 
from the owner-onboard requirement with respect to all QS that they 
acquired by transfer.
    Response: The commenter is correct that the final rule to implement 
the IFQ Program included an exemption from the owner-onboard 
requirement for initial recipients of catcher vessel QS outside of 
Southeast Alaska. The commenter is also correct that the IFQ Program 
final rule expressly extended the exemption from the owner-onboard 
requirement to QS that initial recipients acquired by transfer after 
implementation of the IFQ Program. The commenter is also correct that 
this final rule amends the exemption such that QS acquired after 
February 12, 2010, are no longer exempt from the owner-onboard 
requirement. However, the regulatory amendment implemented in this 
final rule is not arbitrary and capricious. The purpose of this action 
is to promote the development of an owner-onboard IFQ fishery, which 
has been an objective of the IFQ Program since its inception. See 
NMFS's Response to Comment 2.
    The RIR/IRFA for this final action demonstrates that the Council 
and NMFS evaluated a substantial amount of data on the IFQ Program (see 
ADDRESSES). Tables 9-11 and 17-20 in the RIR/IRFA include the number of 
individual halibut and sablefish QS holders from 1995 to 2009, the 
number of non-individual QS holders over those years, and their use of 
hired masters to fish their IFQ. Tables 21-22 in the RIR/IRFA include 
the number of IFQ halibut and sablefish pounds held by persons who may 
hire masters. In addition, Tables 33-40 in the RIR/IRFA include 
information on annual prices for QS and transfer rates for QS.
    Data from Tables 9 and 11 in the RIR/IRFA show that, although the 
number of initial recipients holding QS has decreased, the number of 
individual initial recipients who hire masters in the halibut fishery 
increased from 110 in 1998 to 210 in 2009 (a 91 percent increase), 
while in the sablefish fishery the number increased from 46 to 91 (a 98 
percent increase). Table 16 in the RIR/IRFA shows the percentage of 
halibut IFQ landed by hired masters increased from 7.9 percent of the 
total IFQ landings in 1998 to 19.3 percent in 2009. Similarly, the 
percentage of sablefish IFQ landed by hired masters increased from 7.7 
percent of the total IFQ landings in 1998 to 15.0 percent in 2009.
    The Council and NMFS also recognized that without a change in 
regulations, initial recipients of QS could continue to increase their 
holdings of QS that are exempt from the owner-onboard requirement up to 
the QS ownership use caps in current regulation. This potential for 
increased consolidation of QS for harvest by hired masters was the crux 
of the problem the Council faced. The Council and NMFS have clearly 
explained their rationale for preventing initial recipients from 
acquiring more QS that would be exempt from the owner-onboard 
requirement. As noted in the responses to comments above, the Council 
has supported the objective of an owner-onboard fishery since the 
inception of the IFQ Program. This final rule furthers that objective 
by preventing initial recipients from acquiring more QS that can be 
fished without the QS holder being on board the vessel during the 
harvest of the IFQ. (see Response to Comment 2.)
    The Council acknowledged that the use of hired masters is an 
existing practice in some halibut and sablefish business models and 
arrangements for both individual and non-individual initial recipients 
of QS. The Council considered and rejected an alternative to eliminate 
the hired master exemption from the IFQ Program. However, the Council 
determined, and NMFS agrees, that eliminating the hired master 
exemption would not sufficiently accommodate the existing business 
plans of hired masters or initial recipients that use a hired master to 
harvest IFQ (see Section 6 of the RIR/IRFA). Therefore, this action 
balances the interests of initial recipients of halibut and sablefish 
QS with the interests of new entrants to the fisheries, as well as 
furthering the Council's IFQ Program objective to move more 
expeditiously towards an owner-onboard catcher vessel IFQ fishery (see 
Section 5.2 of the RIR/IRFA).
    Comment 6: It is arbitrary and capricious for NMFS to take action 
to increase the speed of transition to owner-onboard fisheries in the 
IFQ fisheries. First, the Council and NMFS did not establish a 
timetable for the transition when the original IFQ Program was 
established. Second, NMFS provides no evidence the proposed action will 
achieve the stated objectives to encourage new entrants to the fishery 
and hasten the transition to an owner-onboard fleet.
    Response: Although the Council and NMFS did not originally 
establish a timetable for the complete transition to an owner-onboard 
IFQ fishery, the lack of a timetable does not prevent the Council and 
NMFS from taking action now to hasten progress toward the objective of 
an owner-onboard IFQ fishery. NMFS must examine the relevant data and 
articulate a satisfactory explanation for its action.

[[Page 43685]]

As noted in response to Comment 5, the Council examined relevant data 
from the IFQ Program and concluded that, among the competing objectives 
of maintaining business relationships and promoting an owner-onboard 
fishery, it needed to modify the exemption of initial recipients from 
the owner-onboard requirement to improve progress toward the objective 
of a predominantly owner-onboard fishery and prevent further 
acquisition of QS by fishermen who would hire masters to fish the IFQ 
derived from that QS. Thus, the administrative record reflects a 
rational basis for increasing the pace of the transition to owner-
onboard fishery. In short, the Council and NMFS have evaluated the IFQ 
Program as it has developed and have modified the program in light of 
experience with that program.
    NMFS disagrees with the commenter's assertion that it has not 
provided evidence that this action will achieve the stated objectives 
to encourage new entrants to the fishery and hasten the transition to 
an owner-onboard fleet. The Council determined, and NMFS agrees, that 
QS consolidation among initial recipients and increased use of hired 
masters likely has reduced the opportunity for new entrants to purchase 
QS and enter the fishery. As discussed in Section 5.2 of the RIR/IRFA, 
this action is likely to encourage new entrants to the fishery in two 
ways. First, the action has the effect of placing an upper limit on the 
amount of IFQ that may be fished by a hired master. This likely will 
result in initial recipients transferring more QS than they would have 
if initial recipients were to retain the ability to hire a master for 
IFQ derived from QS received by transfer after February 12, 2010. It is 
difficult to predict with precision the impacts of this action on QS 
transfers or QS availability for new entrants because the response of 
each QS holder will be different. Some QS holders may be unable or 
choose not to purchase additional QS, some may choose to purchase more 
QS and be on board the vessel to harvest the IFQ, while others may 
finance QS purchases by crew or other eligible QS recipients who must 
be on board the vessel when the IFQ is harvested. However, it is likely 
that additional QS will be placed on the market and available for 
purchase by new entrants to the fishery and active fishermen who will 
be on board the vessel to harvest IFQ.
    Second, this action reduces the incentive for initial QS recipients 
who use hired masters to purchase additional QS, which could alleviate 
some of this upward pressure on QS price and provide more opportunities 
for new entrants and active fishermen--including fishermen currently 
employed as hired masters--to purchase QS.
    Comment 7: The proposed action violates section 504(a) the 
Rehabilitation Act of 1973, 29 U.S.C. 794(a), because it has a 
discriminatory impact on disabled persons. The comment is from a trade 
association that states that it has members who are initial recipients 
of QS that have acquired QS after February 12, 2010, or that wish to 
acquire additional QS, and who, because of a disability, cannot be on 
board a vessel during the harvest of this additional QS. The commenter 
claims that the rule has a discriminatory impact on disabled persons in 
violation of the Rehabilitation Act. The commenter observes that many 
individual initial recipients of QS can no longer serve on board a 
vessel due to disability, adding that the rule prevents these 
individuals from increasing their QS holdings and using a hired 
skipper. The commenter proposes that a reasonable accommodation for 
this rule would exempt initial individual QS holders who have 
disabilities, thus allowing these individuals to continue hiring 
masters to fish their QS indefinitely.
    Response: The Rehabilitation Act provides that no disabled person, 
by reason of the disability, shall be excluded from the participation 
in, be denied the benefits of, or be subjected to discrimination under 
any program conducted by any Executive agency. 29 U.S.C. 794(a). To 
prove a government violation of the Rehabilitation Act, an applicant to 
a government program must show that he or she is an individual with a 
disability as defined under the Act; that apart from the disability, 
the individual is otherwise qualified to receive the program benefit; 
that the individual is denied the benefit solely by reason of the 
disability; and that the program receives federal financial assistance. 
See Toney v. U.S. Healthcare, Inc., 840 F.Supp. 357 (E.D. Pa. 1993), 
aff'd. 37 F.3d 1489 (3d. Cir. 1994). If the above is shown, then the 
government must provide a reasonable accommodation to the disabled 
individual, thus allowing the individual to participate in the program. 
However, if providing the accommodation would undermine a fundamental 
purpose or goal of the program, there is no Rehabilitation Act 
violation and no accommodation need be provided. See Southwestern 
Community College v. Davis, 442 U.S. 397, 410, 413 (1979) (the 
Rehabilitation Act does not require fundamental, major or substantial 
program modifications).
    The Department of Commerce (Department) published regulations 
implementing the Rehabilitation Act and prohibiting discrimination in 
its programs on the basis of handicap. 15 CFR part 8c. The regulations 
provide that handicapped individuals qualified for a Department program 
will not be excluded from the program on the basis of the handicap. 15 
CFR 8c.30. The Rehabilitation Act and the Department regulations apply 
to the IFQ Program. 15 CFR 8c.2. The regulations protect an 
``individual with handicaps,'' which is defined as a person who has a 
physical or mental impairment that substantially limits one or more 
major life activities, has a record of impairment, or is regarded as 
being impaired by the Department. 15 CFR 8c.3. Although the regulations 
protect an individual who is disabled and qualified for the program, 
such a person must demonstrate that he or she can achieve the purpose 
of the program ``[w]ithout modifications in the program or activity 
that the agency can demonstrate would result in a fundamental 
alteration in its nature''. 15 CFR 8c.3.
    NMFS has determined that the final rule is consistent with the 
Rehabilitation Act and Department regulations. Notwithstanding that 
some QS holders may be able to show they are qualified individuals with 
handicaps who, as a result of their disabilities, will be unable to be 
physically on board their vessels while fishing QS acquired after 
February 12, 2010, these persons would, under the regulations, have to 
show that they could meet or achieve the purposes of the IFQ Program 
without modifications in the program or activity that would result in a 
fundamental alteration in its nature. In this case, the record of the 
IFQ Program FEIS amply demonstrates that a fundamental objective of the 
IFQ Program was an owner-onboard IFQ fishery; that is, one of the 
program's fundamental purposes is that QS owners be on board vessels 
while fishing their QS. Further extending the exemption from the owner-
onboard requirement would fundamentally alter that purpose. Therefore, 
neither the Rehabilitation Act nor Department regulations require that 
NMFS alter the owner-onboard provision to accommodate handicapped QS 
holders in this instance.
    Comment 8: The proposed action is a prohibited retroactive 
application of law. Further, the Magnuson-Stevens Act does not 
expressly authorize the Council or NMFS to issue a retroactive rule; 
therefore, NMFS is prohibited from issuing this retroactive rule. 
Initial recipients of QS had entered into contracts for the transfer of 
QS that were

[[Page 43686]]

binding before the Council adopted the retroactive date of February 12, 
2010, in March of 2011. These legal contracts would be improperly 
changed by the proposed rule without NMFS having the express statutory 
authority to take such retroactive actions.
    Response: A rule has impermissible retroactive effects when it 
changes the past legal consequences of past conduct without express 
statutory authority for such a rule. In contrast, a rule does not have 
impermissible retroactive effect merely because it applies to conduct 
preceding the rule's promulgation or upsets expectations based in prior 
law. NMFS has determined that this rule does not have an impermissible 
retroactive effect as that term has been defined in relevant 
jurisprudence. This rule does not change the past legal consequences of 
past conduct. The rule will not cancel or invalidate QS transfers 
occurring on or after February 12, 2010, or make those transfers 
illegal. While the rule may impact persons who contracted for QS on or 
after February 12, 2010, and upset investment expectations with respect 
to hiring masters to fish that QS, the rule does not invalidate those 
QS transfers.
    Furthermore, this rule does not penalize the use of a hired master 
to harvest QS acquired on or after February 12, 2010, and before the 
effective date, nor does this rule invalidate, alter, or penalize the 
past use of QS and hired masters. The rule's effect is prospective; it 
affects and limits future hired master use, not past use. Moreover, 
even if the commenter were correct that the rule has retroactive 
effect, the Magnuson-Stevens Act expressly authorizes the Council and 
NMFS to revoke, limit, or modify QS at any time. 16 U.S.C. 1853a(b).
    The Council evaluated alternative dates to February 12, 2010, in 
consideration of those initial QS recipients who may have been unaware 
of the Council's action in February 2010 and who acquired QS after that 
date for harvest by hired masters. However, the Council recognized that 
any date it selected would affect some persons who may have been 
unaware of the Council's action. The Council determined, and NMFS 
agrees, that it could not address every one of these circumstances by 
choosing a different date without compromising the intent of this 
action (see Section 5.2 of the RIR/IRFA).
    Comment 9: The proposed regulatory amendments are arbitrary and 
capricious because they treat similarly situated persons differently. 
The proposed action would treat corporations holding catcher vessel QS 
differently than the corporations that participate in the halibut and 
sablefish fisheries through the Community Quota Entity (CQE) and 
Community Development Quota (CDQ) programs.
    Response: As discussed in the final rule implementing the IFQ 
Program (58 FR 59375, November 9, 1993) and in the proposed rule for 
this action (78 FR 24707, April 26, 2013), the IFQ Program was 
developed to meet multiple objectives for different types of 
participants in the halibut and sablefish IFQ fisheries. As discussed 
in the response to Comment 6, the Council and NMFS have articulated a 
legitimate fishery objective for this action. Furthermore, as explained 
below, there are reasons supporting any differences in the way fishery 
participants, including corporations, may be treated.
    The Council and NMFS have articulated legitimate objectives for the 
CDQ and CQE halibut and sablefish fisheries that are consistent with 
the overall goals of the IFQ Program. The CDQ Program was proposed and 
implemented in conjunction with the IFQ Program to help develop 
commercial fisheries in communities on the Bering Sea coast by allowing 
them exclusive access to specified amounts of halibut and sablefish in 
the Bering Sea and Aleutian Islands (57 FR 57141, December 3, 1992). 
The CDQ Program provides a long-term asset to use for the community's 
benefit. The CQE Program modified the IFQ Program to provide additional 
opportunities for residents of fishery dependent communities to 
participate in halibut and sablefish fisheries by allowing eligible 
Gulf of Alaska communities to establish non-profit entities to purchase 
and hold QS for use by community residents (69 FR 23681, April 30, 
2004). CQE Program QS cannot be sold unless it improves the community's 
ability to enhance or expand its participation in the CQE Program. 
Thus, the CQE Program is for community benefit as well as individual 
benefit. The CDQ and CQE Programs are intended to insure that some 
level of QS access remains for community residents in the long term. In 
contrast, non-individual, for-profit, corporations could leave the 
community, sell their QS, or otherwise act in their own best interest, 
rather than in the best interest of the community.
    Section 5.2 of the RIR/IRFA describes that the CDQ and CQE programs 
are premised on the concept of allowing harvest privileges to be held 
by a community entity and then leased to individual residents of the 
community. These programs do not include a vessel ownership requirement 
or owner-onboard provision because these are unnecessary for programs 
in which harvest privileges are non-transferable (CDQ program) or may 
be used only by the community fishery participants (CQE program) and 
are intended for long-term use by eligible communities. The concept of 
absentee ownership does not apply in the CDQ and CQE programs because 
QS are held by the community entity and tied to that community. These 
community-based programs are intended as stepping stones to individual 
ownership of QS, which, once acquired by individuals, will be subject 
to the owner-onboard requirement.
    Comment 10: The proposed rule violates the fair and equitable test 
required by National Standard 4 of the Magnuson-Stevens Act and the 
Halibut Act. It is unfair to initial QS recipients who chose to 
purchase QS after February 12, 2010, and shows bias among the IFQ 
Program participants. Additionally, the proposed rule would impose 
significant disadvantages and hardships without offsetting the positive 
benefits of the existing IFQ Program.
    Response: This action is consistent with National Standard 4 of the 
Magnuson-Stevens Act at 16 U.S.C. 1851(a)(4) and similar standards set 
forth in the Halibut Act at 16 U.S.C. 773c(c). National Standard 4 of 
the Magnuson-Stevens Act provides that conservation and management 
measures shall not discriminate between residents of different states. 
This action does not discriminate between residents of different 
states. Further, if it becomes necessary to allocate or assign fishing 
privileges among U.S. fishermen, such allocation shall be (1) fair and 
equitable to all such fishermen; (2) reasonably calculated to promote 
conservation; and (3) carried out in such a manner that no particular 
individual, corporation, or other entity acquires an excessive share of 
such privileges.
    The Halibut Act at 16 U.S.C. 773c(c) states that if it becomes 
necessary to allocate or assign halibut fishing privileges among 
various U.S. fishermen, such allocation shall be fair and equitable to 
all such fishermen, based upon the rights and obligations in Federal 
law, reasonably calculated to promote conservation, and carried out in 
such a manner that no particular individual, corporation, or other 
entity acquires an excessive share of halibut fishing privileges. The 
``fair and equitable'' requirement in the Halibut Act is substantially 
the same as the ``fair and equitable'' requirement found in National 
Standard 4 of the Magnuson-Stevens Act, the only difference being the 
addition of the word ``halibut'' before ``fishing privileges.'' Because 
of this similarity, the National Standard 4

[[Page 43687]]

guidelines promulgated by NMFS and found at 50 CFR 600.325 help to 
illustrate why this action meets the statutory requirement.
    NMFS has determined that this action is not subject to the 
statutory provisions regarding the fair and equitable allocation of 
fishing privileges because it is not a direct and deliberate 
distribution of the opportunity to participate in the fishery among 
identifiable discrete user groups or individuals. Any management 
measure can have incidental allocative effects, but only those measures 
that result in direct distributions of fishing privileges will be 
judged against the allocation requirements of National Standard 4. (50 
CFR 600.325(c)(1)). This action limits the use of hired masters to 
harvest a fishing privilege, which in this case is the QS that has been 
allocated or assigned to IFQ halibut and sablefish fishermen. Any 
distributional effect of this rule on IFQ fishermen and hired masters 
is an incidental allocative effect.
    Even though this action does not result in the direct distribution 
of fishing privileges, this action is fair and equitable. As described 
in the response to Comment 6, the Council and NMFS have articulated a 
legitimate objective for this action--decreasing the use of hired 
masters by QS holders over time in order to hasten progress toward a 
predominantly owner-onboard catcher vessel halibut and sablefish IFQ 
fishery. Further, the guidelines to National Standard 4 (50 CFR 
600.325(c)(3)(i)(A)) acknowledge that inherent in an allocation is the 
advantaging of one group to the detriment of another. The motive for 
any particular allocation should be justified in terms of fishery 
management objectives; otherwise, the disadvantaged user groups or 
individuals will suffer without cause. The fishery management objective 
of a predominantly owner-onboard catcher vessel fishery has been 
articulated by the Council and NMFS starting with the 1995 
implementation of the IFQ Program and continuing through this final 
rule. As summarized in Section 1 of the RIR/IRFA and in Comment 2, the 
owner-onboard requirement is designed such that QS remains largely in 
the hands of active fishermen rather than absentee owners or investment 
speculators in order to maintain the social and economic character of 
the fixed-gear fisheries and the coastal communities where many of 
these fisheries are based. As previously noted, the Council and NMFS 
determined this action was necessary to prevent initial recipients of 
QS from continuing to acquire additional QS for harvest by hired 
masters, thereby prolonging the transition to an owner-onboard fishery.
    The guidelines to National Standard 4 state that an allocation may 
impose a hardship on one group if it is outweighed by the total 
benefits received by another group or groups. ``An allocation need not 
preserve the status quo in the fishery to qualify as `fair and 
equitable,' if a restructuring of fishing privileges would maximize 
overall benefits'' (50 CFR 600.325(c)(3)(i)(B)). The Council and NMFS 
found that the total benefits to the IFQ halibut and sablefish fishery 
resulting from this action will be increased relative to the status quo 
as this action should result in additional QS placed on the market for 
purchase by new entrants (see Section 5.2 of the RIR/IRFA).
    Comment 11: The proposed rule will likely prevent achievement of 
optimum yield and violate National Standard 1 of the Magnuson-Stevens 
Act because initial recipients of QS will be prevented from 
transferring QS to address IFQ Program harvest limitations resulting 
from vessel use caps and allocations by geographic area.
    Response: National Standard 1 of the Magnuson-Stevens Act at 16 
U.S.C. 1851(a)(1) states that conservation and management measures 
shall prevent overfishing while achieving, on a continuing basis, the 
optimum yield from each fishery for the United States fishing industry. 
The term ``optimum'', with respect to the yield from a fishery, means 
in pertinent part the amount of fish which will provide the greatest 
overall benefit to the Nation, particularly with respect to food 
production and recreational opportunities, and taking into account the 
protection of marine ecosystems; is prescribed as such on the basis of 
the maximum sustainable yield from the fishery, as reduced by any 
relevant economic, social, or ecological factor; and in the case of an 
overfished fishery, provides for rebuilding to a level consistent with 
producing the maximum sustainable yield in such fishery. 16 U.S.C. 
3(33). As described in the National Standard 1 guidelines promulgated 
by NMFS at 50 CFR 600.310(e)(3)(i)(B)(ii), optimum yield is the long-
term average amount of desired yield from a stock, stock complex, or 
fishery. The determination of optimum yield should consider overall 
benefit to the nation, and any relevant economic, social, or ecological 
factors.
    The Council considered the effects of this action on total harvest 
of halibut and sablefish IFQ and determined that it would not impede 
harvest of the total allowable catch. The Council determined, and NMFS 
agrees, that harvesting activities will not significantly change under 
this action. Section 5.2 of the RIR/IRFA notes that while it is unknown 
what portion of halibut and sablefish IFQ pounds would not be harvested 
by hired masters under this action, those IFQ pounds may be harvested 
and landed by (1) the current individual QS holder; (2) another 
individual initial recipient upon transfer of the QS; (3) a crew member 
upon transfer of the QS; or (4) a new entrant QS holder upon transfer 
of the QS. The Council recognized that this action will reduce the use 
of hired masters and prevent initial recipients of QS from acquiring 
additional QS for harvest by hired masters. As a result the action will 
have distributional effects on both QS holders who use hired masters 
and persons who work as hired masters. Given the number of options for 
initial QS recipients to maintain active and viable businesses in the 
halibut and sablefish fisheries, however, NMFS does not anticipate that 
this action will prevent participants from fully harvesting IFQ or the 
halibut and sablefish fisheries from achieving optimum yield.
    Comment 12: The proposed rule is arbitrary and capricious because 
there is no analysis of the economic impact of the proposed rule on the 
initial recipients of QS that are directly affected by the proposal, as 
well as other fishery participants.
    Response: Prior to recommending this action, the Council reviewed 
the RIR/IRFA, which used the best available information to analyze the 
impacts of the action on affected IFQ fishery participants. The RIR/
IRFA included a significant amount of information to help the Council 
determine the likely economic impacts of the action, including 
discussions of (1) the kinds of business models and relationships that 
have developed around the use of the hired master provision; (2) 
changes in the way IFQ is harvested by all types of QS holders over 
time relative to the program goal of progress towards an owner-onboard 
fleet; (3) IFQ Program elements and factors outside the program that 
provide incentives or disincentives for QS holders to retire from the 
fishery; (4) changes in QS held over time by different types of QS 
holders; and (5) transfers of catcher vessel QS after February 12, 
2010.
    As noted in Section 5.2 of the RIR/IRFA, it is not possible to 
quantify the economic impacts or predict the outcomes of this action 
with certainty because the response of each QS holder to the action 
will be different. The Council acknowledged that this action

[[Page 43688]]

could have negative economic impacts on some IFQ fishery participants, 
particularly for QS holders who use hired masters and persons who work 
as hired masters. The RIR/IRFA notes that while this action will 
require some businesses to change their business models, a number of 
options remain for initial recipients to maintain active and viable 
businesses in the halibut and sablefish fisheries without significant 
disruptions to existing business models. As described in the response 
to Comment 6, after reviewing the RIR/IRFA and receiving public 
testimony, the Council determined, and NMFS agrees, that this action is 
necessary to balance the interests of initial recipients of halibut and 
sablefish QS against the interests of new entrants to the fisheries and 
meet the original goals of the IFQ program to move towards an owner-
onboard catcher vessel fishery.
    Comment 13: Small businesses, corporations, partnerships, and 
limited liability companies should be exempt from the proposed rule 
because they are not individuals and cannot meet the owner-onboard 
requirement. It is unfair to treat non-individual QS holders 
differently than individual QS holders.
    Response: As discussed in the response to Comment 6, the fishery 
management objective of a predominantly owner-onboard catcher vessel 
fishery has been articulated by the Council and NMFS since the 
inception of the IFQ Program in 1995. The Program requires catcher 
vessel QS holders to be on board the vessel when the resulting IFQ is 
harvested in order to promote an owner-onboard catcher vessel fishery, 
with a narrow exception for initial QS recipients. This requirement is 
intended to ensure that catcher vessel QS are held by professional, 
active fishermen, rather than absentee owners or investment 
speculators. The preamble to the proposed rule describes that by 
limiting this exception to initial recipients, the Council anticipated 
that individual initial recipients would eventually retire from fishing 
and that non-individual initial recipients would dissolve or change 
composition over time. Eventually, QS would be transferred to other 
qualified individuals and the IFQ fisheries would become almost 
entirely owner-operated.
    As discussed in Section 5.2 of the RIR/IRFA, the Council considered 
the impacts of this action on affected participants, including small 
businesses, partnerships, corporations, and other non-individual QS 
holders. Based on the information in the RIR/IRFA and provided in 
public testimony, the Council and NMFS considered the effect of this 
action on non-individual initial recipients who must hire a master and 
individual initial recipients whose business model is to hire a master. 
As noted in Comment 10, NMFS has considered the distributional effect 
of this rule on IFQ fishermen and hired masters.
    Comment 14: Several commenters opposed the owner-onboard objective 
for the IFQ Program. One commenter asserted that a person may be an 
active fisherman in the IFQ fishery without being on board the vessel. 
Instead, for example, persons can actively manage IFQ fishing 
operations from shore. Other commenters proposed that it would be more 
appropriate to rescind the hired master privilege for QS holders who 
have no ownership interest in a vessel.
    Response: As described in the response to Comment 6, the fishery 
management objective of promoting a predominantly owner-onboard catcher 
vessel fishery has been articulated by the Council and NMFS since the 
inception of the IFQ Program in 1995. Revisions to the IFQ Program, 
such as those suggested in these comments, would substantially change 
policy adopted by the Council and approved by the Secretary of Commerce 
and outside the scope of this action.
    Comment 15: The Council and NMFS fail to account for the fact that 
a significant number of QS units are held by corporations that must 
hire masters, many of whom hold and fish their own QS. Thus, when 
examining the total number of masters hired by corporations, the agency 
should remove from consideration those who independently hold their own 
QS.
    Response: NMFS agrees that corporate or non-individual QS holders 
must hire masters to harvest their IFQ. The RIR/IRFA acknowledges that 
some of these hired masters hold QS/IFQ, some are part owners of the 
vessels on which they were hired to fish the non-individual's QS/IFQ, 
and some are shareholders or partners of shareholders of the owners of 
the non-individual QS holding entity that hires them. The RIR/IRFA 
considered whether to adjust the data on non-individual QS holders that 
hire masters that hold their own QS but, it wasn't feasible. Section 
5.1 of the RIR/IRFA explains that ownership could only be examined to 
the ``first level of affiliation'' (i.e., principal corporate owners) 
because ownership relationships are often complex, spanning multiple 
levels of investment and ownership for any person and vessel NMFS does 
not collect the detailed data. As a result, vessel and entity ownership 
and hired master QS holdings are likely underestimated. The data 
underrepresent the number of hired masters that are second 
(shareholder), third (partner of shareholder), or lower level owners of 
the business that hired them, or of vessels on which they fished. 
Specifically, more hired skippers than can be documented are actually 
fishing their own IFQ because they are already part of the non-
individual QS holders.
    The Council and NMFS considered the information included in Section 
5.1 of the RIR/IRFA. This information shows changes of QS holdings from 
2000 through 2010, by type of QS holder, including individual initial 
recipients, hired masters who hold QS, and persons other than initial 
recipients who received their QS through purchase or other transfers. 
The Council and NMFS considered QS holdings by hired masters when 
determining that this action was needed to improve progress toward the 
objective of a predominantly owner-onboard catcher vessel halibut and 
sablefish IFQ fishery by preventing further increases in the amount of 
IFQ fished by hired masters.
    Comment 16: The action would displace crew who want to become hired 
masters, hired masters who may have made investments in some amount of 
QS and vessel ownership, and hired masters who do not want to take on 
the financial responsibility and risk of owning QS and vessels. The 
action will result in more consolidation of QS, fewer vessels engaged 
in the fishery, loss of crew member and hired master jobs, and damage 
to the established fishery infrastructure. Contrary to the intent of 
the action, it would decrease involvement of second-generation 
participants in the IFQ fishery.
    Response: After the effective date of this final rule (see DATES), 
initial recipients of QS may still hire masters to harvest IFQ derived 
from QS held on or before February 12, 2010. Thus, opportunities for 
crew members and new entrants to gain experience by being a hired 
master continue under this rule. Hired masters who currently 
participate in the IFQ fishery will not be removed from the IFQ 
fishery, but will be allowed to fish IFQ derived from QS that were (1) 
held by an initial recipient on or before February 12, 2010, or (2) 
transferred into a QS block between February 12, 2010, and the 
effective date of this rule. The Council and NMFS acknowledge that this 
action will require some QS holders and IFQ fishery participants to 
change their business models. NMFS anticipates that QS consolidation by 
initial recipients will decline and result in more opportunities for 
new entrants, hired masters, and crew members to purchase

[[Page 43689]]

QS and participate in the IFQ Program. Data are not available to 
analyze the specific effects of this rule on these participants, but as 
discussed in the response to Comment 6, the Council and NMFS anticipate 
that this action will provide more opportunities for active fishermen 
and new entrants to purchase QS.
    Comment 17: The proposed action is not needed because (1) the use 
of hired masters will eventually phase out as initial QS recipients 
leave the fishery, and (2) the IFQ Program already has a number of QS, 
IFQ, and vessel use caps that control consolidation.
    Response: Section 5.1 of the RIR/IRFA notes that without this 
action, the use of hired masters to harvest catcher vessel IFQ will 
eventually be phased out as initial QS recipients retire from the 
fishery and are replaced by new entrants who are required by current 
regulations to be on board their vessels when the IFQ is harvested. 
Until that occurs, however, the Council was concerned that an 
increasing percentage of annual IFQ will be harvested by hired masters. 
Section 5.2 of the RIR/IRFA examined QS consolidation among individual 
and non-individual initial recipients and found that over the past 10 
years the number of initial recipients has decreased while the average 
QS holding of those QS holders have increased. Thus, QS has 
consolidated among fewer QS holders who hire masters to fish their QS. 
As discussed in the response to Comments 5 and 6, this is contrary to 
the Council's objective for a predominantly owner-onboard catcher 
vessel IFQ fishery.
    NMFS agrees that IFQ regulations at Sec.  679.42(e), (f), and (g) 
include provisions for QS use caps, vessel use caps, and a block 
program to limit QS acquisitions and maintain a diverse owner-onboard 
fleet. However, as described in the response to Comments 5 and 6, the 
Council determined, and NMFS agrees, that the apparent QS consolidation 
among initial recipients and increased use of hired masters has delayed 
progress toward an owner-onboard fishery and likely has reduced the 
opportunity for new entrants to purchase QS and enter the fishery.

Economic Impacts

    Comment 18: The proposed action adds another variable to the 
complicated IFQ Program by increasing the risks to lenders in the IFQ 
fishery and creating uncertainty about entry into the IFQ Program.
    Response: NMFS does not anticipate this action will increase the 
risk to lenders for QS purchases. Currently, all persons who purchase 
catcher vessel QS and who are not initial recipients of QS may not hire 
masters and must be on board the vessels used to harvest the resulting 
IFQ. This action will prevent further increases in the portion of 
catcher vessel QS yielding IFQ that may be harvested by a hired master.
    Section 5.1 of the RIR/IRFA discusses the bond, loan, and grant 
programs that may be used by new entrants in the IFQ fishery to 
purchase QS, equipment, and vessels, depending on their individual 
circumstances. The RIR/IRFA notes that due to the increased price of QS 
and other market realities, it has proven difficult for new entrants to 
obtain financing. However, as described above, NMFS does not anticipate 
that this action will increase the risk to lenders in the IFQ fishery 
or affect the ability of new entrants to use available financing 
programs.
    Comment 19: The proposed restriction will have a number of negative 
economic impacts on QS holders. It would affect choices to buy and sell 
halibut and sablefish QS, reduce the value of QS, and impact investment 
choices and retirement and estate planning. The proposed action also 
would limit competition and result in financial impacts that could lead 
to a loss of investment in the IFQ fishing fleet.
    Response: Section 5.2 of the RIR/IRFA indicated that this action is 
not likely to have a significant effect on QS supply or price. As 
discussed in the response to Comment 6, this action could alleviate 
some of the upward pressure on QS price by creating a more level 
playing field for QS purchases among initial recipients, active 
fishermen who hold QS but who were not initial recipients, crew 
members, and potential new entrants. Additionally, initial recipients 
of catcher vessel QS may continue to hire a master to harvest IFQ 
derived from QS held on or before February 12, 2010; therefore, NMFS 
does not anticipate the value of this QS is likely to decline and 
negatively impact investment choices and retirement and estate 
planning.
    As noted in Section 5.2 of the RIR/IRFA and in the response to 
Comment 12, it is not possible to quantify the economic impacts or 
predict the outcomes of this action with certainty. The Council 
recommended this action based on the best available information in the 
RIR/IRFA on the use of hired masters, changes in QS holdings of initial 
recipients, QS transfers, and the rate of new entry into the fishery. 
Given the opportunities for initial recipients to continue to use hired 
masters for catcher vessel QS held before February 12, 2010, NMFS does 
not expect this action to significantly disrupt existing business 
operations. In addition, NMFS anticipates increased opportunities for 
new entrants to the catcher vessel fishery and, therefore, increased 
competition and potential for investment in the IFQ fishery.
    Comment 20: Fishermen and investors should not be further 
restricted at this time when severe total allowable catch reductions 
are probable. The increase in costs of supplies such as bait, fuel, 
food, repairs, insurance, and the additional costs of vessel monitoring 
systems and human observers, combined with drops in fishery catch 
limits have created an even greater need for partnerships and expense 
sharing among fishermen than has transpired over time with the use of 
hired masters.
    Response: NMFS acknowledges the cost and benefits of combining 
business plans to offset the expenses of supplies and monitoring. While 
this approach may be more desirable at lower IFQ fishery catch limits, 
the potential increase in the use of hired masters conflicts with the 
Council's objective for an owner-onboard catcher vessel fishery. As 
discussed in the response to Comments 5 and 6, the Council considered 
data from the RIR/IRFA evaluating impacts of this action on affected 
fishery participants. The Council determined, and NMFS agrees, that 
this action is necessary to meet the IFQ Program objective for a 
predominantly owner-onboard catcher vessel halibut and sablefish IFQ 
fishery.

Other Issues

    Comment 21: The rule will be ineffective because an initial 
recipient of QS can place his or her QS in the name of another 
individual, place a lien on the QS, and then draw up an agreement to 
resolve the lien. In effect, the initial recipient would stay on shore 
while the IFQ is fished to satisfy the lien agreement.
    Response: The transaction described in the comment would require 
the parties to apply to NMFS for a QS transfer. Under this final rule, 
catcher vessel QS that was transferred to another person after February 
12, 2010, will require that the QS recipient be on board the vessel 
when the IFQ derived from the QS is fished, unless the QS are 
consolidated into a block before the effective date of this final rule 
(see DATES).
    Comment 22: The proposed rule indicates that category A QS and 
Community Development Quota (CDQ) allocations are not eligible to be 
fished by a hired master. This is incorrect; hired masters may be used 
to harvest

[[Page 43690]]

category A IFQ and CDQ allocations under the IFQ Program. The proposed 
rule should have stated that category A QS and CDQ allocations are 
excluded from the proposed action.
    Response: NMFS agrees. Page 24710 of the preamble to the proposed 
rule for this action correctly indicated that category A (catcher/
processor) QS and CDQ allocations would be excluded from this action 
(78 FR 24707, April 26, 2013). However, a subsequent paragraph 
incorrectly stated that to implement the proposed action, NMFS would 
designate category A QS and CDQ allocations as not eligible to be 
fished by a hired master. NMFS has corrected this statement in the 
``Rationale for and Effects of This Final Rule'' section in this final 
rule to clarify that this action does not affect category A QS and the 
halibut and sablefish allocation to CDQ groups.
    Comment 23: The proposed action would create a new and separate 
category of QS in the IFQ Program with additional unknown 
administrative and enforcement burdens. NMFS must acknowledge the 
burden that will cause.
    Response: The commenter is correct that NMFS will implement this 
action by redesignating catcher vessel QS as ``eligible to be fished by 
a hired master'' if the QS was (1) held by an initial recipient on or 
before February 12, 2010, or (2) received by transfer and consolidated 
into a QS block held by an initial recipient prior to the effective 
date of this final rule (see DATES). All other catcher vessel QS that 
does not meet these requirements will be designated ``not eligible to 
be fished by a hired master''.
    Following the redesignation of catcher vessel QS, NMFS will issue 
two types of annual IFQ permits. Quota share designated as eligible to 
be fished by a hired master will yield IFQ that may be harvested by a 
hired master. Quota share designated as not eligible to be fished by a 
hired master will yield IFQ that may not be harvested by a hired 
master. NMFS will redesignate QS and issue the new types of IFQ permits 
prior to the beginning of the IFQ fishing year following the effective 
date of this final rule. If QS designated as eligible to be fished by a 
hired master is subsequently transferred, it will be redesignated as 
not eligible to be fished by a hired master. The designation task will 
not delay timely IFQ issuance by NMFS' Restricted Access Management 
Division. This change in QS and IFQ designation will not affect the 
recordkeeping and reporting burden for IFQ fishery participants. NMFS 
does not anticipate any appreciable additional burden on enforcement. 
As described in the proposed rule preamble and in section 5.2 of the 
RIR/IRFA, implementing the action at the beginning of the IFQ fishing 
season is necessary to avoid a large administrative and enforcement 
burden for NMFS and affected participants.
    Comment 24: The proposed regulation revokes a non-individual QS 
holder's eligibility to receive catcher vessel QS by transfer. This 
transfer eligibility is as valuable as QS, and our business will cease 
to function without it.
    Response: NMFS agrees that the regulation implemented by this rule 
at Sec.  679.41(c)(11) will prohibit a non-individual QS holder from 
receiving catcher vessel QS by transfer after the effective date of 
this rule (see DATES). As described in the response to Comment 13, the 
Council and NMFS considered the impacts of this action on affected 
participants, including small businesses, partnerships, corporations, 
and other non-individual QS holders. As discussed in the response to 
Comment 19, given the opportunities for initial recipients to continue 
to use hired masters for catcher vessel QS held before February 12, 
2010, NMFS does not expect this action to significantly disrupt 
existing business operations.

Changes From the Proposed Rule to the Final Rule

    NMFS made one minor change from the proposed rule to the final rule 
to accommodate revisions to Sec.  679.42(i) that were approved under 
separate rulemaking prior to publication of this final rule. On 
February 20, 2014 (78 FR 9995), NMFS published a final rule adding 
Sec.  679.42(i)(6) and (7) to the regulations. These regulatory 
additions revise vessel ownership requirements in the IFQ Program that 
apply to initial individual recipients of catcher vessel QS who want an 
exemption from the owner-onboard requirement. To accommodate the 
addition of Sec.  679.42(i)(6) and (7) to the regulations under a 
separate rule, this final rule implements a regulation at Sec.  
679.42(i)(8) to prohibit an individual initial QS recipient from using 
a hired master to harvest IFQ derived from catcher vessel QS that they 
receive by transfer after February 12, 2010. NMFS did not change the 
text of the regulation implemented by this final rule at Sec.  
679.42(i)(8) from the text that was proposed at Sec.  679.42(i)(6) on 
April 26, 2013 (78 FR 24707).

Classification

    The Administrator, Alaska Region, NMFS, determined that this final 
rule is necessary for the conservation and management of the IFQ 
halibut and sablefish fisheries off Alaska and that it is consistent 
with the Magnuson-Stevens Act, Halibut Act, and other applicable laws.

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 (FRFA), the agency shall publish one or more guides to assist 
small entities in complying with the rule, and shall designate such 
publications as ``small entity compliance guides.'' The agency shall 
also explain the actions a small entity is required to take to comply 
with a rule or group of rules. The preamble 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 preamble. Copies of this final rule are available 
from the NMFS Alaska Region Web site at https://alaskafisheries.noaa.gov.

Executive Order 12866

    This rule has been determined to be not significant for purposes of 
Executive Order 12866.

Final Regulatory Flexibility Analysis

    This FRFA incorporates the Initial Regulatory Flexibility Analysis 
(IRFA), a summary of the significant issues raised by the public 
comments in response to the IRFA, NMFS' responses to the comments, and 
a summary of the analyses completed to support the action. The IRFA was 
summarized in the ``Classification'' section of the preamble to the 
proposed rule. NMFS published the proposed rule on April 26, 2013 (78 
FR 24707), with comments invited through May 28, 2013. NMFS received 
three comments on general economic impacts of the action on affected 
fishery participants (See Response to Comments 18-20). NMFS received 
two comments that addressed the impacts of this action on small 
entities. These comments and NMFS' responses are summarized in Comments 
10 and 11 in the preamble to this final rule. The description of this 
action, its purpose, and its legal basis are described in the preamble 
to the proposed rule and are not repeated here.
    The FRFA describes the impacts on small entities; these impacts are 
defined in the IRFA and proposed rule for this action and not repeated 
here. Analytical requirements for the FRFA are described in the 
Regulatory Flexibility Act,

[[Page 43691]]

sections 604(a)(1) through (5), and summarized below.
    The FRFA must contain:
    1. A succinct statement of the need for, and objectives of, the 
rule;
    2. A summary of the significant issues raised by the public 
comments in response to the initial regulatory flexibility analysis, a 
summary of the assessment of the agency of such issues, and a statement 
of any changes made in the proposed rule as a result of such comments;
    3. A description and an estimate of the number of small entities to 
which the rule will apply, or an explanation of why no such estimate is 
available;
    4. A description of the projected reporting, recordkeeping, and 
other compliance requirements of the rule, including an estimate of the 
classes of small entities which will be subject to the requirement and 
the type of professional skills necessary for preparation of the report 
or record; and
    5. A description of the steps the agency has taken to minimize the 
significant economic impact on small entities consistent with the 
stated objectives of applicable statutes, including a statement of the 
factual, policy, and legal reasons for selecting the alternative 
adopted in the final rule and why each one of the other significant 
alternatives to the rule considered by the agency which affect the 
impact on small entities was rejected.
    The ``universe'' of entities to be considered in a FRFA generally 
includes only those small entities that can reasonably be expected to 
be directly regulated by the final rule. If the effects of the rule 
fall primarily on a distinct segment of the industry, or portion 
thereof (e.g., user group, gear type, geographic area), that segment 
would be considered the universe for purposes of this analysis.
    In preparing a FRFA, an agency may provide either a quantifiable or 
numerical description of the effects of a rule (and alternatives to the 
rule), or more general descriptive statements, if quantification is not 
practicable or reliable.

Need for and Objectives of This Final Rule

    This final rule is necessary to amend regulations to prohibit the 
use of hired masters with initial recipient QS transferred after 
February 12, 2010. The objective of this action is to discourage any 
further consolidation of initial recipient QS for harvest by hired 
masters and meet the intent of the Council for an owner-onboard catcher 
vessel fishery.

Number and Description of Small Entities Regulated By the Final Rule

    The entities directly regulated by this action are individuals and 
non-individuals initially issued catcher vessel QS in the halibut and 
sablefish fisheries. There are a maximum of 1,447 entities holding 
halibut QS and sablefish QS that are eligible to hire masters. However, 
the actual number of such entities that may be directly regulated is 
expected to be much smaller because many of these participants fish 
their own IFQ without a hired master, and most have not and will not 
acquire additional QS.
    The Small Business Administration has established size criteria for 
all major industry sectors in the United States, including fish 
harvesting and fish processing businesses. On June 20, 2013, the SBA 
issued a final rule revising the small business size standards for 
several industries effective July 22, 2013. (78 FR 37398, June 20, 
2013). The rule increased the size standard for Finfish Fishing from 
$4.0 to 19.0 million, Shellfish Fishing from $4.0 to 5.0 million, and 
Other Marine Fishing from $4.0 to 7.0 million. Id. at 37400 (Table 1).
    Pursuant to the Regulatory Flexibility Act, and prior to SBA's June 
20 final rule, a final regulatory flexibility analysis was developed 
for this action using SBA's former size standards. NMFS has reviewed 
the analyses prepared for this action in light of the new size 
standards and determined that the new size standards do not affect the 
analyses prepared for this action. Under the former, lower, size 
standards, all entities subject to this action were considered small 
entities; thus they all would continue to be considered small under the 
new standards.
    Small entities regulated by this action may be divided into two 
mutually exclusive groups to estimate their size relative to the $19 
million threshold. There are operations that harvest both halibut and 
groundfish (sablefish is considered a groundfish species, while halibut 
is not) for which gross revenue data exist. There are also operations 
that harvest halibut, but not groundfish, for which gross receipts data 
exist. The analysis for this action estimates that in 2009 the total 
gross revenues for fixed-gear catcher vessels by entity, from all 
sources off Alaska, were not more than $4 million in gross revenues, 
which has been the case since 2003. The average gross revenue for the 
small fixed-gear catcher vessels has been about $500,000. Thus, all of 
the entities that harvest both halibut and groundfish are under the 
threshold. This includes all of the entities that harvest any 
sablefish. Since the IFQ Program limits the amount of annual IFQ that 
any single vessel may use to harvest halibut and sablefish and the 
maximum number of QS units an entity may use, NMFS believes that few 
vessels that harvest halibut, but not groundfish, would exceed the $19 
million threshold, either. Based upon gross receipts data for the 
halibut fishery, and more general information concerning the probable 
economic activity of vessels in this IFQ fishery, no entity (or at most 
a de minimis number) directly regulated by these restrictions could 
have been used to land fish worth more than $19.0 million in combined 
gross receipts in 2010. Therefore, all halibut and sablefish vessels 
have been assumed to be ``small entities'' for purposes of this FRFA. 
This simplifying assumption may overestimate the number of small 
entities, since it does not take into account vessel affiliations, 
owing to an absence of reliable data on the existence and nature of 
these relationships in the halibut and sablefish IFQ fisheries.

Recordkeeping and Reporting

    No additional recordkeeping and reporting by directly regulated 
entities will be required by this action. NMFS will issue permit 
holders an annual permit that distinguishes their QS holding as 
eligible or not eligible to use a hired master.

Description of Significant Alternatives to the Final Rule

    A FRFA requires a description of any significant alternatives to 
the preferred alternative that accomplish the stated objectives, are 
consistent with applicable statutes and that would minimize any 
significant economic impact of the rule on small entities. The range of 
potential actions included Alternative 1, the status quo, and 
Alternative 2, the preferred alternative. A detailed description of 
these alternatives is provided in Section 4.0 of the analysis for this 
action (see ADDRESSES).
    The status quo alternative would have maintained the current 
regulations that allow all initial recipients of catcher vessel QS to 
hire masters to harvest their IFQ permits for any catcher vessel QS 
they hold. Current regulations enable initial QS recipients to continue 
to acquire QS up to IFQ Program use caps and harvest accumulated IFQ 
with a hired master. This has resulted in increased amounts of IFQ 
being consolidated by initial recipients and harvested by hired 
masters, which is contrary to the Council's goals and objectives for 
the IFQ Program.

[[Page 43692]]

    Under the preferred alternative, initial QS recipients will not be 
allowed to use hired masters to harvest IFQ derived from catcher vessel 
QS that they received by transfer after February 12, 2010, with a 
limited exception for small amounts of QS. The Council considered 
alternative dates after which the use of hired masters would be 
prohibited. Although those alternative dates could have allowed more 
small entities to use hired masters, or to use hired masters for more 
of the QS they now hold or could acquire before another date, the use 
of hired masters is not necessary to harvest halibut and sablefish IFQ 
derived from QS held by individuals.
    The preferred alternative may change fishing opportunities for 
hired masters in the IFQ fishery. There is potential that the demand 
for hired masters will decline once initial recipients are no longer 
allowed to use hired masters to harvest IFQ pounds. The alternative 
does not limit the ability of small entities to receive QS by transfer 
and fish the resulting IFQ as owner-onboard. Changes resulting from 
this alternative will have distributional effects on initial recipients 
and hired masters, but will not affect production from the fisheries. 
The preferred alternative may increase net benefits to the nation to 
the extent that the Council's objectives for an owner-onboard fishery 
are more fully realized through this action.
    The Council also considered and rejected an alternative to 
eliminate the hired master exemption from the IFQ Program, but 
determined that it did not sufficiently accommodate the existing 
business plans of initial catcher vessel QS recipients that use hired 
masters to harvest IFQ or their hired masters. The Council did not 
identify any other significant alternatives that would have been 
substantially less burdensome and would have achieved the Council's 
objectives for the action. The Council chose to recommend, and this 
final rule implements, the preferred alternative because it best meets 
the goals and objectives of the IFQ Program and minimizes the potential 
negative impacts to directly regulated small entities. Based on the 
best scientific information, none of the alternatives to the preferred 
alternative appear to have the potential to accomplish the stated 
objectives of the Magnuson-Stevens Act and other applicable statutes 
(as reflected in this action), while minimizing any significant adverse 
economic impact on small entities beyond those achieved under this 
action.

Collection-of-Information Requirement

    This rule contains a collection-of-information requirement subject 
to the Paperwork Reduction Act (PRA) and which has been approved by the 
Office of Management and Budget (OMB) under control number 0648-0272. 
The IFQ Program requirements are mentioned in this final rule; however, 
the public reporting burden for this collection-of-information is not 
directly affected by this final rule. The public reporting burden 
includes the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information. Send comments regarding this 
burden estimate, or any other aspect of this data collection, including 
suggestions for reducing the burden, to NMFS (see ADDRESSES) and by 
email to OIRA_Submission@omb.eop.gov, or fax to (202) 395-7285.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB control number.

List of Subjects in 50 CFR Part 679

    Alaska, Fisheries, Reporting and recordkeeping requirements.

    Dated: July 23, 2014.
Samuel D. Rauch III,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.

    For the reasons set out in the preamble, 50 CFR part 679 is amended 
as follows:

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

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

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


0
2. In Sec.  679.41, add paragraph (c)(11) to read as follows:


Sec.  679.41  Transfer of quota shares and IFQ.

* * * * *
    (c) * * *
    (11) The person applying to receive QS assigned to vessel category 
B, C, or D is not a corporation, partnership, association, or other 
non-individual entity, except as specified in paragraph (g)(3) of this 
section.
* * * * *

0
3. In Sec.  679.42, add and reserve paragraphs (i)(6) and (i)(7), and 
add paragraphs (i)(8) and (j)(10) to read as follows:


Sec.  679.42  Limitations on use of QS and IFQ.

* * * * *
    (i) * * *
    (8) Paragraphs (i)(1) and (i)(4) of this section do not apply to 
any QS assigned to vessel category B, C, or D received by transfer by 
any person described in paragraph (i)(1) after February 12, 2010, 
except a hired master may be used to harvest IFQ derived from QS blocks 
that were consolidated under Sec.  679.41(e)(2) or (e)(3) after 
February 12, 2010, and before December 1, 2014.
    (j) * * *
    (10) Paragraphs (j)(1) and (j)(9) of this section do not apply to 
any QS assigned to vessel category B, C, or D received by transfer 
after February 12, 2010, by an entity described in paragraph (j)(1) 
except a hired master may be used to harvest IFQ derived from QS that 
were consolidated under Sec.  679.41(e)(2) or (e)(3) after February 12, 
2010, and before December 1, 2014.
* * * * *
[FR Doc. 2014-17658 Filed 7-25-14; 8:45 am]
BILLING CODE 3510-22-P