Magnuson-Stevens Act Provisions; Fishing Capacity Reduction Program; Pacific Coast Groundfish Fishery; California, Washington, and Oregon Fisheries for Coastal Dungeness Crab and Pink Shrimp; Industry Fee System for Fishing Capacity Reduction Loan, 17949-17955 [05-7063]

Agencies

• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration

[Federal Register Volume 70, Number 67 (Friday, April 8, 2005)]
[Proposed Rules]
[Pages 17949-17955]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-7063]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 600

[Docket No. 041029298-5084-02; I.D. 052004A]
RIN 0648-AS38


Magnuson-Stevens Act Provisions; Fishing Capacity Reduction 
Program; Pacific Coast Groundfish Fishery; California, Washington, and 
Oregon Fisheries for Coastal Dungeness Crab and Pink Shrimp; Industry 
Fee System for Fishing Capacity Reduction Loan

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

ACTION: Proposed rule.

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SUMMARY: NMFS re-proposes regulations to implement an industry fee 
system for repaying a $35,662,471 Federal loan. The loan financed most 
of the cost of a fishing capacity reduction program in the Pacific 
Coast groundfish fishery. The industry fee system imposes fees on the 
value of future groundfish landed in the trawl portion (excluding 
whiting catcher-processors) of the Pacific Coast groundfish fishery. It 
also imposes fees on coastal Dungeness crab and pink shrimp landed in 
the California, Washington, and Oregon fisheries for coastal Dungeness 
crab and pink shrimp. This action's intent is to implement the industry 
fee system.

DATES: Written comments on this proposed rule must be received by May 
9, 2005.

ADDRESSES: You may submit comments by any of the following methods:
     E-mail: 0648-AS38@noaa.gov. Include in the subject line 
the following identifier: Pacific Coast Groundfish Buyback RIN 0648-
AS38. E-mail comments, with or without attachments, are limited to 5 
megabytes.
     Federal e-Rulemaking Portal: https://www.regulations.gov.
     Mail: Michael L. Grable, Chief, Financial Services 
Division, National Marine Fisheries Service, 1315 East-West Highway, 
Silver Spring, MD 20910-3282.
     Fax: (301) 713-1306.
    Comments involving the burden-hour estimates or other aspects of 
the collection-of-information requirements contained in this proposed 
rule should be submitted in writing to Michael L. Grable, at the above 
address, and to David Rostker, Office of Management and Budget (OMB), 
by e-mail at David--Rostker@omb.eop.gov or by fax to 202-395-7285.
    Copies of the Environmental Assessment, Regulatory Impact Review 
(EA/RIR) and Initial Regulatory Flexibility Analysis (IRFA) for the fee 
collection system may be obtained from Michael L. Grable, at the above 
address.

FOR FURTHER INFORMATION CONTACT: Michael L. Grable, (301) 713-2390.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 312(b)-(e) of the Magnuson-Stevens Fishery Conservation and 
Management Act (16 U.S.C. 1861a(b) through (e)) (Magnuson-Stevens Act) 
generally authorized fishing capacity reduction programs. In 
particular, section 312(d) of the Magnuson-Stevens Act authorized 
industry fee systems for repaying fishing capacity reduction loans 
which finance program costs.
    Subpart L of 50 CFR part 600 contains the framework regulations 
(framework regulations) generally implementing sections 312(b)-(e) of 
the Magnuson-Stevens Act.
    Sections 1111 and 1112 of the Merchant Marine Act, 1936 (46 App. 
U.S.C. 1279f and 1279g), generally authorized fishing capacity 
reduction loans.
    Section 212 of Division B, Title II, of Public Law 108-7 (section 
212) specifically authorized a $46 million program (groundfish program) 
for that portion of the limited entry trawl fishery under the Pacific 
Coast Groundfish Fishery Management Plan whose permits, excluding those 
registered to whiting catcher-processors, were endorsed for trawl gear 
operation (reduction fishery). Section 212 also authorized a fee system 
for repaying the reduction loan partially financing the groundfish 
program's cost. The fee system includes both the reduction fishery and 
the fisheries for California, Washington, and Oregon coastal Dungeness 
crab and pink shrimp (fee-share fisheries). Section 501(c) of Division 
N, Title V, of Public Law 108-7 (section 501(c)) appropriated $10 
million to partially fund the groundfish program's cost. Public Law 
107-206 authorized a reduction loan with a ceiling of $36 million to 
finance the groundfish program's cost.
    Section 212 required NMFS to implement the groundfish program by a 
public notice in the Federal Register. NMFS published the groundfish 
program's initial public notice on May 28, 2003 (68 FR 31653) and final 
notice on July 18, 2003 (68 FR 42613). Background information on the 
groundfish program are published in these notices.

[[Page 17950]]

    The groundfish program's maximum cost was $46 million, of which $10 
million was funded by an appropriation and $36 million by a reduction 
loan. Voluntary participants in the groundfish program relinquished, 
among other things, their fishing permits in the reduction fishery, 
their fishing permits or licenses in the fee- share fisheries, their 
fish catch histories in both the reduction and fee-share fisheries, and 
their vessels' worldwide fishing privileges. These relinquishments were 
in return for reduction payments whose amounts the participants' 
reduction bids determined.
    On July 18, 2003, NMFS invited reduction bids from the reduction 
fishery's permit holders. The bidding period opened on August 4, 2003, 
and closed on August 29, 2003. NMFS scored each bid's amount against 
the bidder's past ex-vessel revenues and, in a reverse auction, 
accepted the bids whose amounts were the lowest percentages of the 
revenues. This created reduction contracts whose performance was 
subject only to a successful referendum about the fee system required 
to repay the reduction loan.
    Bid offers totaled $59,786,471. NMFS accepted bids totaling 
$45,662,471. The next lowest scoring bid would have exceeded the 
groundfish program's maximum cost. The accepted bids involved 91 
fishing vessels as well as 239 fishing permits and licenses (91 in the 
reduction fishery, 121 in the fee-share fisheries, and 27 other Federal 
permits).
    In accordance with the section 212 formula, NMFS allocated portions 
of the $35,662,471 reduction loan amount to the reduction fishery and 
to each of the six fee share fisheries, as follows:
    1. Reduction fishery, $28,428,719; and
    2. Fee-share fisheries:
    a. California coastal Dungeness crab fishery, $2,334,334;
    b. California pink shrimp fishery, $674,202;
    c. Oregon coastal Dungeness crab fishery, $1,367,545;
    d. Oregon pink shrimp fishery, $2,228,845;
    e. Washington coastal Dungeness crab fishery, $369,426; and
    f. Washington pink shrimp fishery, $259,400.
    Each of these portions became reduction loan subamounts repayable 
by fees from each of the seven subamount fisheries involved.
    NMFS next held a referendum on the fee system. The reduction 
contracts would have become void unless the majority of votes cast in 
the referendum approved the fee system. On September 30, 2003, NMFS 
mailed ballots to referendum voters in the reduction fishery and in 
each of the six fee-share fisheries. The voting period opened on 
October 15, 2003, and closed on October 29, 2003. NMFS received 1,105 
responsive votes. In accordance with the section 212 formula, NMFS 
weighted the votes from each of the seven fisheries. Over 85 percent of 
the weighted votes approved the fee system. This successful referendum 
result removed the only condition precedent to reduction contract 
performance.
    On November 4, 2003, NMFS published another Federal Register 
document (68 FR 62435) advising the public that NMFS would, beginning 
on December 4, 2003, tender the groundfish program's reduction payments 
to the 91 accepted bidders. On December 4, 2003, NMFS required all 
accepted bidders to permanently stop all further fishing with the 
reduction vessels and permits. Subsequently, NMFS:
    1. Disbursed $45,662,471 in reduction payments to 91 accepted 
bidders;
    2. Revoked the relinquished Federal permits;
    3. Advised California, Oregon, and Washington about the 
relinquished state permits or licenses;
    4. Arranged with the National Vessel Documentation Center for 
revocation of the reduction vessels' fishery trade endorsements; and
    5. Notified the U.S. Maritime Administration to restrict placement 
of the reduction vessels under foreign registry or their operation 
under the authority of foreign countries.
    On November 16, 2004, NMFS published a Federal Register document 
(69 FR 67100) proposing regulations to implement an industry fee system 
for repaying the reduction loan (proposed fee regulations).
    Due to the extensive changes requested by the public on the 
original proposed fee regulations, NMFS modified and is now re-
proposing the fee system.

II. Summary of Comments and Responses

    Comment 1: One comment stated that the term ``reduction fishery'' 
as defined in the proposed fee regulations may be ambiguous. This 
comment noted that the reduction fishery fleet may fish, under both a 
limited entry trip limit and an open access trip limit, for all 
groundfish species. The comment asked if the fee applies to all 
reduction fishery landings regardless of whether the landed fish were 
caught under the limited entry trip limit or the open access trip 
limit.
    Response: The fee applies to all groundfish species in the 
reduction fishery regardless of the nature of the trip limits under 
which the species were caught.
    Under the proposed fee regulations' definition of ``reduction 
fishery'', the reduction fishery species are ``all species in... the 
limited entry trawl fishery under the Federal Pacific Coast Groundfish 
Fishery Management Plan that is conducted under permits, excluding 
those registered to whiting catcher-processors, which are endorsed for 
trawl gear operation.''
    The fee must be paid for all species which are:
    1. Reduction fishery species;
    2. Caught under permits which are endorsed for trawl gear operation 
(except permits registered to whiting catcher-processors); and,
    3. Caught by limited access permit holders, regardless of whether 
species are caught under limited access or open access permits.
    Comment 2: One comment concerned the proposed fee regulations' 
failure to exercise a section 212 option under which the States of 
California, Oregon, and Washington would have ``collected'' the fees. 
The proposed fee regulations partly based this on some of the states' 
authority to ``collect'' these fees expiring in a few years while fee 
collection itself will continue for 30 years. The commenter believed 
this was insufficient justification for not exercising this option 
because state statutory provisions are commonly extended beyond their 
``sunset'' period if the provisions are still being used.
    Response: NMFS continues to believe that exercising the statutory 
option for the states to ``collect'' the fees is not feasible. NMFS 
reached this conclusion because, among other reasons:
    1. The state systems sometimes:
    a. Assess and collect fees based on pounds rather than on dollars,
    b. Do not assess or collect fees at the point of fish sale, and/or
    c. Involve quarterly fee disbursements;
    2. One state's legislation regarding this option authorizes 
participation of a state agency different from the one administering 
the existing state system (and might require amendment);
    3. One state's legislation regarding this option expires in less 
than two years;
    4. All states indicated that the funding and staffing required for 
this option during the reduction loan's 30-year term would be 
problematic for them; and
    5. The states' collection systems are dissimilar and, without 
significant modification, might not promote

[[Page 17951]]

 efficient and uniform groundfish program fee collection.
    Comment 3: One comment stated that interest should not have accrued 
on reduction loan principal between the time of the loan's disbursement 
and the industry fee system's implementation because the fish sellers 
had no opportunity to pay the fee during this interim. The commenter 
stated that NMFS' Financial Services Division had verbally advised him 
that the interest would not accrue during this interim period.
    Response: The Financial Services Division neither advised nor had 
the authority to advise this commenter that the interest would not 
accrue during this interim period.
    Comment 4: One comment suggested that NMFS use the state vessel 
identification number as the identifier to track vessels delivering fee 
fish to ensure the proper fees are being collected.
    Response: NMFS does not now propose any particular means of 
identifying or tracking vessels delivering fee fish. NMFS will use 
whatever available vessel identifiers best allow, in the circumstances 
involved, NMFS to match fish sellers with fish buyers and, where 
necessary, audit fee payments, collection, deposits, and disbursements.
    Comment 5: One comment requested NMFS to annually notify all fish 
sellers and fish buyers of the fee rate applicable to the reduction 
fishery and to each of the fee-share fisheries during the succeeding 
year.
    Response: NMFS does not believe annual notifications are necessary. 
Instead, in accordance with the framework regulations' section 
600.1013(d), NMFS will, at least 30 days before the effective date of 
any fee or of any fee rate change, publish a Federal Register document 
establishing the date from and after which the fee or fee rate change 
is effective. NMFS will at the same time and by U.S. mail also 
individually notify each affected fish seller and fish buyer of whom 
NMFS has notice.
    Comment 6: One comment questioned the requirement for each fish 
buyer to maintain a segregated account for the sole purpose of 
depositing and disbursing collected fee revenue.
    Response: Because the groundfish program will involve many smaller 
fish buyers and because the amount of fees each collects will often be 
relatively smaller than in other fishing capacity reduction programs, 
NMFS has modified the proposed rule to remove the requirement to 
maintain a segregated account, as long as they maintain separate 
subaccounts for these fees within operating accounts which may also be 
used for other purposes. The subaccounts must include provision to 
separately account for fees collected as a result of fish bought from 
the reduction fishery and/or from each of the fee-share fisheries. NMFS 
now proposes to require all groundfish program fish buyers to establish 
and maintain accounting policies which will allow NMFS, where 
necessary, to accurately audit their fee collection, deposit, and 
disbursement activities.
    Comment 7: One comment stated that the requirement for collected 
fee revenue to be deposited weekly would be burdensome and instead 
suggested monthly deposits as an alternative.
    Response: Because the fee amounts which groundfish program fish 
buyers collect will often be relatively smaller than in other fishing 
capacity reduction programs, NMFS agrees with this comment and now 
proposes monthly, rather than weekly, fee deposits.
    Comment 8: One comment requested that fish buyers be permitted to 
disburse collected fees to NMFS up to 14 days after the end of each 
month rather than being required to do so on the last business day of 
each month.
    Response: Because so many smaller fee collections will be involved, 
NMFS agrees with this comment and now proposes to permit disbursement 
up to 14 days after the end of each month rather than on the last 
business day of each month. Moreover, to further reduce the fee 
disbursement burden on small fish buyers, NMFS now also proposes not to 
require any disbursement to NMFS of deposited fees until either the 
deposited fees total at least $100 or the 14\th\ day after the end of 
the calendar year in which the fees were deposited, whichever comes 
first.
    Comment 9: One comment stated that annual reporting is not needed, 
since monthly settlement sheets are required that provide the same 
information.
    Response: NMFS agrees with this comment and now proposes to 
dispense with annual reporting. NMFS, however, will monitor this and if 
subsequent experience demonstrates a need to revise this requirement, 
NMFS shall do so.
    Comment 10: To prevent delays in NMFS' internal mail system, one 
comment requested that NMFS establish a separate post office box for 
receiving fee deposits and reports.
    Response: This is unnecessary because the proposed fee regulations 
require fish buyers to send collected fees and reports to a special 
lockbox which NMFS will establish for this sole purpose. A separate 
lockbox will prevent these remittances from being intermixed with any 
other materials.

III. Proposed Regulations

    NMFS has completed the groundfish program except for the 
implementation of a fee system, which this action proposes to 
implement.
    The terms defined in section 600.1000 of the framework regulations 
apply to the groundfish program except for the definitions for 
``borrower'' and ``fee fish.'' The definition for these two terms have 
been refined to account for fee share fisheries. The proposed refined 
definitions are found in section 600.1102. If this rule is adopted, the 
new definitions would, for purposes of the groundfish program, 
supersede the definition for these terms found in section 600.1000.
    Section 600.1013 of the framework regulations govern the payment 
and collection of fees under a fee system for any program.
    Under section 600.1013, the first ex-vessel buyers (fish buyers) of 
post-reduction fish subject to a fee system (fee fish) must withhold 
the fee from the trip proceeds which the fish buyers would otherwise 
have paid to the parties (fish sellers) who harvested and first sold 
the fee fish to the fish buyers. Fish buyers calculate the fee to be 
collected by multiplying the applicable fee rate times the fee fish's 
full delivery value. Delivery value is the fee fish's full fair market 
value, including all in-kind compensation or other goods or services 
exchanged in lieu of cash.
    Fish buyers collect the fee when they withhold it from trip 
proceeds, and fish sellers pay the fee when the fish buyers withhold 
it. Fee payment and fee collection is mandatory, and there are 
substantial penalties for failing to pay and collect fees in accordance 
with the applicable regulations.
    The framework regulations' section 600.1014 governs fish buyers' 
depositing and disbursing to NMFS the fees which they have collected 
for any program as well as their keeping records of, and reporting 
about, collected fees. Paragraph (j) of section 600.1014 also provides 
that regulations implementing specific program may vary the section 
600.1014 provisions if NMFS believes this is necessary to accommodate 
the circumstances of, and practices in, a specific reduction fishery.
    Under section 600.1014(a)-(d), fish buyers must, no less frequently 
than at the end of each business week, deposit collected fees in 
segregated and Federally insured accounts until, no less frequently 
than on the last business day of each month, they disburse all 
collected fees in the accounts to a

[[Page 17952]]

lockbox which NMFS has specified for this purpose. Settlement sheets 
must accompany these disbursements. Fish buyers must maintain specified 
fee collection records for at least three years and send NMFS annual 
reports of fee collection and disbursement activities.
    After evaluating comments received in response to the proposed fee 
regulations, however, NMFS now proposes in the instance of the 
groundfish program to depart from some of the section 600.1014 
provisions, chiefly:
    1. Segregated bank accounts will not be required for depositing 
collected fees;
    2. Collected fee deposits will be monthly rather than weekly;
    3. Fish buyers may disburse deposited fees up to 14 days after the 
end of each month rather than having to do so on the last business day 
of each month;
    4. Fish buyers do not have to disburse deposited fees at all until 
either their total reaches $100 or the 14\th\ day after the end of each 
calendar year, whichever comes first; and
    5. Fish buyers do not have to submit annual fee collection, 
deposit, and disbursement reports.
    Accordingly, the proposed fee regulations now restate, for the 
groundfish program, the entirety of the framework regulations' at 
section 600.1014(a)-(d). NMFS also proposes that section 600.1014(e) of 
the framework regulations no longer applies to the groundfish program. 
Additionally, NMFS proposes that sections 600.1014(f)-(j) will continue 
to apply, in their entirety, to the groundfish program.
    All parties interested in this proposed action should carefully 
read the following framework regulations sections, whose detailed 
provisions, as this action proposes to modify them, apply to the fee 
system for repaying the groundfish program's reduction loan:
    1. Sec.  600.1012;
    2. Sec.  600.1013;
    3. Sec.  600.1014;
    4. Sec.  600.1015;
    5. Sec.  600.1016; and
    6. Applicable portions of Sec.  600.1017.
    Section 212 provides an option for NMFS to enter into agreements 
with California, Washington, and Oregon regarding groundfish program 
fees in the fee-share fisheries. While this would not involve actual 
fee collection (because both section 312(d) of the Magnuson-Stevens Act 
and the framework regulations require fish buyers to collect the fee), 
it would allow fish buyers to use existing state systems for post-
collection fee administration.
    After all three states enacted legislation which would have allowed 
them to function in this capacity, NMFS evaluated the feasibility of 
exercising the section 212 option. As previously noted, however, NMFS 
concluded that exercising this option was not feasible. NMFS reached 
this conclusion because, among other reasons:
    1. The state systems sometimes:
    a. Assess and collect fees based on pounds rather than on dollars,
    b. Do not assess or collect fees at the point of fish sale, and/or
    c. Involve quarterly fee disbursements;
    2. One state's legislation regarding this option authorizes 
participation of a state agency different from the one administering 
the existing state system (and might require amendment);
    3. One state's legislation regarding this option expires in less 
than two years;
    4. All states indicated that the funding and staffing required for 
this option during the reduction loan's 30-year term would be 
problematic for them; and
    5. The states' collection systems are dissimilar and, without 
significant modification, might not promote efficient and uniform 
groundfish program fee collection.
    Accordingly, NMFS decided that the section 212 option is not 
feasible at this time and will not propose to exercise this option.
    NMFS intends to enter into landing and permit data sharing 
agreements with the States of California, Oregon, and Washington in 
order for NMFS to receive landing and permit information. This will 
allow NMFS to ensure full groundfish program fee payment, collection, 
deposit, and disbursement under the framework rule provisions.
    NMFS proposes, in accordance with the framework regulations' 
section 600.1013(d), to establish the initial fee applicable to the 
reduction fishery and to each fee-share fishery. After NMFS has adopted 
a final rule, NMFS will separately mail notification to each individual 
fish seller and fish buyer affected of whom NMFS then has notice. Until 
implementation of the final rule, fish sellers and fish buyers do not 
have to either pay or collect the groundfish program fee. Upon 
implementation of the final rule, the initial fee rate for the 
reduction fishery and for each of the fee-share fisheries would be:
    1. Reduction fishery, 5 percent; and
    2. Fee share fisheries:
    a. California coastal Dungeness crab, 1.24 percent,
    b. California pink shrimp, 5 percent,
    c. Oregon coastal Dungeness crab, 0.55 percent,
    d. Oregon pink shrimp, 3.75 percent,
    e. Washington coastal Dungeness crab, 0.16 percent, and
    f. Washington pink shrimp, 1.50 percent.
    The rates are percentages of delivery value. See section 600.1000 
of the framework regulations for the definition of ``delivery value'' 
and for the definition of other terms relevant to the proposed fee 
regulation.
    Each disbursement of the $35,662,471 principal amount of the 
reduction loan began accruing interest as of the date of each such 
disbursement. The interest rate is a fixed 6.97 percent, and will not 
change during the term of the reduction loan.

Classification

    The Assistant Administrator for Fisheries, NMFS, determined that 
this proposed rule is consistent with the Magnuson-Stevens Fishery 
Conservation and Management Act and other applicable laws.
    In compliance with the National Environmental Policy Act, NMFS 
prepared an EA for the final notice implementing the groundfish 
program. The EA discussed the impact of the groundfish program on the 
natural and human environment and resulted in a finding of no 
significant impact. The EA considered the implementation of this fee 
collection system, among other alternatives. Therefore, this proposed 
action has received a categorical exclusion from additional analysis. 
NMFS will provide a copy of the EA upon request (see ADDRESSES).
    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866. NMFS prepared an RIR for the final 
notice implementing the groundfish program. NMFS will provide a copy of 
the RIR upon request (see ADDRESSES).
    NMFS prepared an IRFA as required by section 603 of the Regulatory 
Flexibility Act, that describes the impact this proposed rule, if 
adopted, would have on small entities. NMFS will provide a copy of the 
IRFA upon request (see ADDRESSES). A summary of the IRFA follows:

1. Description of Reasons for Action and Statement of Objective and 
Legal Basis

    Section 212 authorized a $46 million fishing capacity reduction 
program for reduction fishery. Section 212 also authorized a fee system 
for repaying the reduction loan partially financing the groundfish 
program's cost. The fee system includes both the reduction fishery and 
the fee share fisheries.
    Section 501(c) appropriated $10 million to partially fund the 
groundfish program's cost. Public Law 107-206

[[Page 17953]]

 authorized a reduction loan for financing up to $36 million of the 
groundfish program's cost. Pursuant to section 212, NMFS implemented 
the groundfish program, except for a fee system, on July 18, 2003 (68 
FR 42613). This action now proposes a fee system for the groundfish 
program.

2. Description of Small Entities to Which the Rule Applies

    The Small Business Administration (SBA) has defined any fish 
harvesting businesses that is independently owned and operated, not 
dominant in its field of operation, and with annual receipts of $3.5 
million or less, as a small entity. In addition, processors with 500 or 
fewer employees involved in related industries such as canned and cured 
fish and seafood or prepared fresh fish and seafood are also considered 
small entities. According to the SBA's definition of a small entity, 
virtually all of the groundfish program's approximate 1,800 fish 
sellers are small entities. This includes 172 fish sellers in the 
reduction fishery and over 1,600 fish sellers in the six fee-share 
fisheries. Most of the groundfish program's fish buyers also are small 
entities.

3. Description of Recordkeeping and Compliance Costs

    Please see collection-of-information requirements listed hereafter.

4. Duplication or Conflict with Other Federal Rules

    This rule does not duplicate or conflict with any Federal rules.

5. Description of Significant Alternatives Considered

    NMFS considered three alternatives to the proposed action. The 
first alternative was the status quo. Under this alternative, there 
would be no fee system and the fish sellers and fish buyers would not 
have to pay and collect a fee. This alternative was, however, contrary 
to the groundfish program's statutory authority and was rejected.
    The second alternative was the statutorily mandated industry fee 
system without state involvement. Under this alternative, the fish 
buyers of fee fish would withhold the fee from the trip proceeds. Fish 
buyers would calculate the fee to be collected by multiplying the 
applicable fee rate times the fee fish's full delivery value. This is 
the preferred alternative because the groundfish program's statutory 
authority mandates fee payment and collection.
    The third alternative was the statutorily mandated industry fee 
system with state involvement. This alternative is the same as 
described in the second alternative except that the States of 
California, Oregon, and Washington would, in conjunction with their own 
state tax and fee systems, assume some of the fish buyers' fee deposit 
and disbursement responsibilities. This alternative would have reduced 
compliance costs to individual businesses, both fish buyers and 
sellers. However, this alternative was not chosen because some states:
    1. Assess and collect the state taxes and fees based on pounds 
rather than on dollars,
    2. Do not assess or collect their taxes or fees at the point of 
fish sale, and
    3. Involve quarterly fee disbursements.
    In addition, one state's legislative authority to participate in 
this alternative collection authorizes participation of a state agency 
different than the one administering the existing state system and 
another state's legislative authority to participate in this 
alternative expires in less than two years (even though fee collection 
continues for 30 years).
    Furthermore, all states indicated that state funding and staffing 
under this alternative for the reduction loan's 30-year term would be 
problematic for them.
    Finally, the states' collection systems are dissimilar and, without 
significant modification, might not promote efficient and uniform 
groundfish program fee collection.

6. Steps the Agency Has Taken to Mitigate Negative Effects of the 
Action

    NMFS has changed aspects of the framework regulations' fee deposit 
and disbursement requirements to reduce the impact on small entity fish 
buyers. NMFS proposes to require monthly fee deposits as opposed to the 
weekly deposits previously required. NMFS also will allow a 14 day 
grace period from the end of each month for fish buyers to disburse 
deposit fee principal to NMFS. If the deposit fee principal totals less 
than $100, the fish buyers need not disburse the deposit fee principal 
until it totals $100 or more, or until the 14\th\ day after the end of 
the calendar year in which the fees were deposited, whichever comes 
first. Furthermore, NMFS proposes to eliminate annual reporting 
requirements.
    This proposed rule contains collection-of-information requirements 
subject to the Paperwork Reduction Act (PRA). OMB has approved these 
information collections under OMB control number 0648-0376. NMFS 
estimates that the public reporting burden for these requirements will 
average:
    Two hours for submitting a monthly fish buyer settlement sheet; and
    Two hours for making a fish buyer/fish seller report when one party 
fails to either pay or collect the fee.
    These response estimates include the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
information collection.
    Send comments regarding this burden estimate, or any other aspect 
of this data collection, including suggestions for reducing the burden, 
to both NMFS and OMB (see ADDRESSES).
    Notwithstanding any other provision of law, no person is required 
to respond to, and no person is subject to a penalty for failure to 
comply with, an information collection subject to the requirements of 
the PRA unless that information collection displays a currently valid 
OMB control number.
    NMFS has determined that this proposed rule will not significantly 
affect the coastal zone of any state with an approved coastal zone 
management program. This determination was submitted for review by the 
States of Washington, Oregon, and California.

List of Subjects in 50 CFR Part 600

    Fisheries, Fishing capacity reduction, Fishing permits, Fishing 
vessels, Intergovernmental relations, Loan programs business, Reporting 
and recordkeeping requirements.

    Dated: April 5, 2005.
Rebecca Lent,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.
    For the reasons in the preamble, the National Marine Fisheries 
Service proposes to amend 50 CFR part 600 as follows:

PART 600--MAGNUSON-STEVENS ACT PROVISIONS

    1. An authority citation for part 600 subpart M is added to read as 
follows:

    Authority: 5 U.S.C. 561, 16 U.S.C. 1801 et seq., 16 U.S.C. 
1861a(b) through (e), 46 App. U.S.C. 1279f and 1279g, section 144(d) 
of Division B of Pub. L. 106-554, section 2201 of Pub. L. 107-20, 
section 205 of Pub. L. 107-117, Pub. L. 107-206, and Pub. L. 108-7.
    2. In Sec.  600.1102 the section heading is revised and text is 
added to read as follows:


Sec.  600.1102  Pacific Coast Groundfish Fee.

    (a) Purpose. This section implements the fee for repaying the 
reduction loan financing the Pacific Coast Groundfish

[[Page 17954]]

 Program authorized by section 212 of Division B, Title II, of Public 
Law 108-7 and implemented by a final notification in the Federal 
Register (July 18, 2003; 68 FR 42613).
    (b) Definitions. Unless otherwise defined in this section, the 
terms defined in Sec.  600.1000 expressly apply to this section. The 
following terms have the following meanings for the purpose of this 
section:
    Borrower means, individually and collectively, each post-reduction 
fishing permit holder and/or fishing vessel owner fishing in the 
reduction fishery, in any or all of the fee share fisheries, or in both 
the reduction fishery and any or all of the fee share fisheries.
    Deposit fee principal means all collected fee revenue that a fish 
buyer has deposited in the account required by paragraph (j)(1) of this 
section.
    Fee fish means all fish legally harvested from the reduction 
fishery during the period in which any portion of the reduction 
fishery's subamount is outstanding and all fish harvested from each of 
the fee share fisheries during the period in which any portion of each 
fee share fishery's subamount is outstanding.
    Fee-share fisheries means the California, Washington, and Oregon 
fisheries for coastal Dungeness crab and pink shrimp.
    Fee-share fishery subaccount means each of the six subaccounts of 
the groundfish program fund subaccount in which each of the six fee-
share fishery subamounts are accounted for.
    Reduction fishery subaccount means the subaccount of the groundfish 
program fund subaccount in which the reduction fishery subamount is 
accounted for.
    Subamount means each portion of the reduction loan's original 
principal amount which is allocated to the reduction fishery and to 
each of the fee share fisheries.
    (c) Reduction fishery. The reduction fishery for the groundfish 
program includes all species in, and that portion of, the limited entry 
trawl fishery under the Federal Pacific Coast Groundfish Fishery 
Management Plan that is conducted under permits, excluding those 
registered to whiting catcher-processors, which are endorsed for trawl 
gear operation.
    (d) Reduction loan amount. The reduction loan's original principal 
amount is $35,662,471.
    (e) Subamounts. The subamounts of the reduction loan amount are:
    (1) Reduction fishery, $28,428,719; and
    (2) Fee-share fisheries:
    (i) California coastal Dungeness crab fee-share fishery, 
$2,334,334,
    (ii) California pink shrimp fee-share fishery, $674,202,
    (iii) Oregon coastal Dungeness crab fee-share fishery, $1,367,545,
    (iv) Oregon pink shrimp fee-share fishery, $2,228,845,
    (v) Washington coastal Dungeness crab fee-share fishery, $369,426, 
and
    (vi) Washington pink shrimp fee-share fishery, $259,400.
    (f) Interest accrual inception. Interest began accruing on each 
portion of the reduction loan amount on and from the date each such 
portion was disbursed.
    (g) Interest rate. The reduction loan's interest rate is 6.97 
percent. This is a fixed rate of interest for the full term of the 
reduction loan's life.
    (h) Repayment term. For the purpose of determining fee rates, the 
reduction loan's repayment term shall be 30 years from March 1, 2004, 
but each fee shall continue for as long as necessary to fully repay 
each subamount.
    (i) Reduction loan repayment. The borrower shall repay the 
reduction loan in accordance with Sec.  600.1012.
    (j) Fee payment and collection. (1) Fish sellers in the reduction 
fishery and in each of the fee-share fisheries shall pay the fee 
applicable to each such fishery's subamount in accordance with Sec.  
600.1013.
    (2) Fish buyers in the reduction fishery and in each of the fee-
share fisheries shall collect the fee applicable to each such fishery 
in accordance with Sec.  600.1013.
    (k) Fee collection, deposits, disbursements, records, and reports. 
Fish buyers in the reduction fishery and in each of the fee share 
fisheries shall deposit and disburse, as well as keep records for and 
submit reports about, the fees applicable to each such fishery in 
accordance with Sec.  600.1014, except that:
    (1) Deposit accounts. Each fish buyer that this section requires to 
collect a fee shall maintain an account at a federally insured 
financial institution for the purpose of depositing collected fee 
revenue and disbursing the deposit fee principal directly to NMFS in 
accordance with paragraph (k)(3) of this section. The fish buyer may 
use this account for other operational purposes as well, but the fish 
buyer shall ensure that the account separately accounts for all deposit 
fee principal collected from the reduction fishery and from each of the 
six fee-share fisheries. The fish buyer shall separately account for 
all fee collections as follows:
    (i) All fee collections from the reduction fishery shall be 
accounted for in a reduction fishery subaccount,
    (ii) All fee collections from the California pink shrimp fee-share 
fishery shall be accounted for in a California shrimp fee-share fishery 
subaccount,
    (iii) All fee collections from the California coastal Dungeness 
crab fishery shall be accounted for in a California crab fee-share 
fishery subaccount,
    (iv) All fee collections from the Oregon pink shrimp fee-share 
fishery shall be accounted for in an Oregon shrimp fee-share fishery 
subaccount,
    (v) All fee collections from the Oregon coastal Dungeness crab fee-
share fishery shall be accounted for in an Oregon crab fee-share 
fishery subaccount,
    (vi) All fee collections from the Washington pink shrimp fee-share 
fishery shall be accounted for in a Washington shrimp fee-share fishery 
subaccount, and
    (vii) All fee collections from the Washington coastal Dungeness 
crab fishery shall be accounted for in a Washington crab fee-share 
fishery subaccount;
    (2) Fee collection deposits. Each fish buyer, no less frequently 
than at the end of each month, shall deposit, in the deposit account 
established under paragraph (k)(1) of this section, all collected fee 
revenue not previously deposited that the fish buyer collects through a 
date not more than two calendar days before the date of deposit. The 
deposit fee principal may not be pledged, assigned, or used for any 
purpose other than aggregating collected fee revenue for disbursement 
to the fund in accordance with paragraph (k)(3) of this section. The 
fish buyer is entitled, at any time, to withdraw interest (if any) on 
the deposit fee principal, but never the deposit fee principal itself, 
for the fish buyer's own use and purposes;
    (3) Deposit fee principal disbursement. Not later than the 14\th\ 
calendar day after the last calendar day of each month, or more 
frequently if the amount in the account exceeds the account limit for 
insurance purposes, the fish buyer shall disburse to NMFS the full 
deposit fee principal then in the deposit account, provided that the 
deposit fee principal then totals $100 or more. If the deposit fee 
principal then totals less than $100, the fish buyer need not disburse 
the deposit fee principal until either the next month during which the 
deposit fee principal then totals $100 or more, or not later than the 
14\th\ calendar day after the last calendar day of any year in which 
the deposit fee principal has not since the last required disbursement 
totaled $100 or more, whichever comes first. The fish buyer shall 
disburse deposit fee principal by check made payable to the

[[Page 17955]]

groundfish program fund subaccount. The fish buyer shall mail each such 
check to the groundfish program fund subaccount lockbox that NMFS 
establishes for the receipt of groundfish program disbursements. Each 
disbursement shall be accompanied by the fish buyer's settlement sheet 
completed in the manner and form which NMFS specifies. NMFS will, 
before fee payment and collection begins, specify the groundfish 
program fund subaccount lockbox and the manner and form of settlement 
sheet. NMFS will do this by means of the notification in Sec.  
600.1013(d). NMFS' settlement sheet instructions will include 
provisions for the fish buyer to specify the amount of each 
disbursement which was disbursed from the reduction fishery subaccount 
and/or from each of the six fee-share fishery subaccounts;
    (4) Records maintenance. Each fish buyer shall maintain, in a 
secure and orderly manner for a period of at least three years from the 
date of each transaction involved, at least the following information:
    (i) For all deliveries of fee fish that the fish buyer buys from 
each fish seller include:
    (A) The date of delivery,
    (B) The fish seller's identity,
    (C) The weight, number, or volume of each species of fee fish 
delivered,
    (D) Information sufficient to specifically identify the fishing 
vessel which delivered the fee fish,
    (E) The delivery value of each species of fee fish,
    (F) The net delivery value of each species of fee fish,
    (G) The identity of the payor to whom the net delivery value is 
paid, if different than the fish seller,
    (H) The date the net delivery value was paid,
    (I) The total fee amount collected as a result of all fee fish, and
    (J) The total fee amount collected as a result of all fee fish from 
the reduction fishery and/or all fee fish from each of the six fee-
share fisheries; and
    (ii) For all collected fee deposits to, and disbursements of 
deposit fee principle from, the deposit account include:
    (A) The date of each deposit,
    (B) The total amount deposited,
    (C) The total amount deposited in the reduction fishery subaccount 
and/or in each of the six fee-share fishery subaccounts,
    (D) The date of each disbursement to the Fund's lockbox,
    (E) The total amount disbursed,
    (F) The total amount disbursed from the reduction fishery 
subaccount and/or from each of the six fee-share fishery subaccounts, 
and
    (G) The dates and amounts of disbursements to the fish buyer, or 
other parties, of interest earned on deposits; and
    (5) Annual report. No fish buyer needs to submit an annual report 
about fee fish collection activities unless, during the course of an 
audit under Sec.  600.1014(g), NMFS requires a fish buyer to submit 
such a report or reports.
    (l) Other provisions. The reduction loan is, in all other respects, 
subject to the provisions of Sec.  600.1012 through applicable portions 
of Sec.  600.1017, except Sec.  600.1014(e).
[FR Doc. 05-7063 Filed 4-7-05; 8:45 am]
BILLING CODE 3510-22-S