Fisheries Off West Coast States and in the Western Pacific; Pacific Coast Groundfish Fishery; Limited Entry Fixed Gear Sablefish Fishery Permit Stacking Program, 59296-59311 [05-20344]

Agencies

• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration

[Federal Register Volume 70, Number 196 (Wednesday, October 12, 2005)]
[Proposed Rules]
[Pages 59296-59311]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-20344]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 660

[Docket No. 050921244-5244-01; I.D. 091305A]
RIN 0648-AP38


Fisheries Off West Coast States and in the Western Pacific; 
Pacific Coast Groundfish Fishery; Limited Entry Fixed Gear Sablefish 
Fishery Permit Stacking Program

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

ACTION: Proposed rule; request for comments.

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SUMMARY: NMFS issues this proposed rule to implement portions of 
Amendment 14 to the Pacific Coast Groundfish Fishery Management Plan 
(FMP) for 2007 and beyond. Amendment 14, approved by NOAA in August 
2001, created a permit stacking program for limited entry permits with 
sablefish endorsements. This proposed rule would implement regulatory 
measures from Amendment 14 that the agency could not set in place in 
time for the 2001 through 2006 primary sablefish seasons. Amendment 14 
was intended to improve safety in the primary sablefish fishery and to 
provide greater season flexibility for sablefish fishery participants.

DATES: Comments must be submitted in writing by December 12, 2005.

ADDRESSES: You may submit comments on the proposed rule to implement 
further limited entry sablefish permit stacking program regulations, 
identified by 091305A, by any of the following methods:
     E-mail: Amendment14b.nwr@noaa.gov. Include I.D 091305A in 
the subject line of the message.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Fax: 206-526-6736, Attn: Jamie Goen
     Mail: D. Robert Lohn, Administrator, Northwest Region, 
NMFS, 7600 Sand Point Way NE., Seattle, WA 98115-0070
    Copies of Amendment 14 and its Environmental Assessment/Regulatory 
Impact Review (EA/RIR) are available from Donald McIsaac, Executive 
Director, Pacific Fishery Management Council (Council), 7700 NE 
Ambassador Place, Portland, OR 97220. Copies of the Supplemental 
Initial Regulatory Flexibility Analysis (IRFA) are available from D. 
Robert Lohn, Administrator, Northwest Region, NMFS, 7600 Sand Point Way 
NE., Seattle, WA 98115-0070.
    Send comments on the reporting burden estimate or any other aspect 
of the collection-of-information requirements in this proposed rule to 
Jamie Goen or Kevin Ford, Northwest Region, NMFS, and to David Rostker, 
Office of Management and Budget (OMB), by e-mail at David--
Rostker@omb.gov,or fax to 202-395-7285.

FOR FURTHER INFORMATION CONTACT: Jamie Goen or Kevin Ford (Northwest 
Region, NMFS), phone: 206-526-4646 or 206-526-6115; fax: 206-526-6736 
and; e-mail: jamie.goen@noaa.gov or kevin.ford@noaa.gov.

SUPPLEMENTARY INFORMATION:

Electronic Access

    This Federal Register document is also accessible via the internet 
at the website of the Office of the Federal Register: https://
www.gpoaccess.gov/fr/.
    NMFS is proposing this rule to implement those portions of 
Amendment 14 to the FMP that NMFS was unable to implement in time for 
the 2001 through 2006 primary sablefish seasons. Amendment 14 
implemented a permit stacking program for limited entry permits with 
sablefish endorsements. This proposed rule is based on recommendations 
of the Council, under the authority of the Pacific Coast Groundfish FMP 
and the Magnuson-Stevens Fishery Conservation and Management Act 
(Magnuson-Stevens Act). The portions of Amendment 14 that were 
implemented for the 2001 primary sablefish season significantly 
increased safety in the fishery, allowed individual fishery 
participants to more fully use their existing vessel capacity, and 
reduced overall capacity in the primary fixed gear sablefish fishery. 
This proposed rule would not change any of those benefits, but would 
further complete the implementation of Amendment 14 by preventing 
excessive fleet consolidation, ensuring processor access to sablefish 
caught in the primary season, and maintaining the character of the 
fleet through owner-on-board requirements. The background and rationale 
for the Council's recommendations are summarized below. The discussion 
below also explains why NMFS will not be implementing the Council's 
recommendation for a hail-in requirement for vessels delivering primary 
season sablefish. Furthermore, it summarizes some modifications to the 
permit stacking program that the Council is considering for future 
implementation.
    Further detail appears in the EA/RIR prepared by the Council for 
Amendment 14 and in the proposed and final rule to implement Amendment 
14 for the 2001 primary sablefish season. The proposed rule for the 
2001 season was published on June 8, 2001 (66 FR 30869), the final rule 
was published on August 7, 2001 (66 FR 41152), and a correction to the 
final rule was published on August 30, 2001 (66 FR 45786).

Background

    For many years, sablefish harvested by the limited entry, fixed 
gear fleet north of 36[deg] N. lat. has been separated into a small, 
year-round daily trip limit fishery and a primary season fishery (from 
April 1 through October 31). Annually, about 85 percent of the limited 
entry fixed gear sablefish allocation has been taken in the primary 
season fishery. Before 1997, the Council managed harvest in the primary 
season fishery without vessel cumulative limits by setting the season 
length short enough to ensure that the fishery would not exceed its 
quota. Capitalization in the fixed gear sablefish fleet increased

[[Page 59297]]

over time and the Council needed to set ever shorter primary seasons to 
control catch levels. By 1996, the fleet was able to take the bulk of 
the primary season sablefish catch in a 5 day fishery.
    This evolution to a derby-style fishery induced the Council to make 
a series of management changes intended to rationalize fishing effort 
and improve safety for primary season fishery participants. Amendment 9 
to the FMP introduced a sablefish endorsement program that limited the 
number of vessels allowed to participate in the primary season fishery. 
Limited entry permit holders with at least 16,000 lb (7,257 mt) of 
sablefish landed in any one year from 1984 through 1994 received 
sablefish endorsements. This program was intended to restrict primary 
season fishery participation to those permit holders with historical 
participation in and dependence upon the sablefish fishery.
    Following Amendment 9, the Council further separated participation 
in the primary season sablefish fishery by introducing the three-tier 
program in 1998. This program divided sablefish-endorsed permits into 3 
tiers based on historical landings associated with those permits. Under 
the three-tier program, a participant in the primary season may land an 
amount of sablefish up to the cumulative limit associated with his/her 
permit. Qualifications for each of the 3 tiers were based on the 
cumulative sablefish landings associated with a permit over the same 
1984 through 1994 period: at least 898,000 lb (407.33 mt) to qualify 
for Tier 1, less than 898,000 lb (407.33 mt) but more than 380,000 lb 
(172.36 mt) to qualify for Tier 2, and less than 380,000 lb (172.36 mt) 
but at least the minimum 16,000 lb (7,257 mt) to qualify for Tier 3. 
The three-tier system also set a between-tier ratio to describe the 
relationship between the cumulative limits that would be available to 
each tier during the primary season fishery. That ratio is 1 (Tier 3): 
1.75 (Tier 2):3.85 (Tier 1). For example, if Tier 3 had a cumulative 
limit of 10,000 lb (4,536 mt), Tier 2 would have a corresponding 
cumulative limit of 17,500 lb (7,938 mt), and Tier 1 would have a 
corresponding cumulative limit of 38,500 lb (17,463 mt).
    While the three-tier program somewhat slowed the pace of the 
primary season fishery, the season was still less than 10 days long in 
each of the primary seasons from 1998 to 2000. Even under the three-
tier program, the Council had to set the seasons short enough to ensure 
that not all participants would be able to catch the full cumulative 
limits of sablefish associated with their permits. A fishery where all 
participants have the opportunity to catch a cumulative limit and all 
are able to catch that limit is an Individual Fishing Quota (IFQ) 
fishery as defined by the Magnuson-Stevens Act. At the time, the 
Magnuson-Stevens Act, as amended by Public Law 106-554, included a 
moratorium on the implementation of new IFQ programs through October 1, 
2002. (The moratorium has since been lifted). However, via Public Law 
106-554, Congress exempted from the moratorium a Pacific Council IFQ 
program for the fixed gear sablefish fishery that: (1) allows the use 
of more than one limited entry groundfish permit per vessel; and/or (2) 
sets cumulative trip limit periods, up to 12 months in any calendar 
year, that allow fishing vessels a reasonable opportunity to harvest 
the full amount of the associated trip limits. Amendment 14 to the FMP 
implements a permit stacking program that meets these moratorium 
exemption requirements.

Amendment 14

    The Council approved Amendment 14 at its November 2000 meeting and 
clarified its intent on implementing Amendment 14 at its November 2001 
and April 2002 meetings. Amendment 14 introduced a permit stacking 
program to the limited entry, fixed gear primary sablefish fishery. 
Under this permit stacking program, a vessel owner may register up to 3 
sablefish-endorsed permits for use with their vessel to harvest each of 
the primary season sablefish cumulative limits associated with the 
stacked permits. By exempting the Pacific Coast fixed gear permit 
stacking program from the IFQ moratorium, Congress removed the need to 
set short seasons designed to prevent participants from catching their 
full cumulative limits. Amendment 14 allows a season up to 7 months 
long, from April 1 through October 31, which allows an ample period for 
vessels to pursue their primary season sablefish cumulative limits. 
Beginning in 2002, NMFS implemented the full April 1 through October 31 
season via the Pacific Coast groundfish final specifications and 
management measures published on March 7, 2002 (67 FR 10490).
    Provisions subject to the regulatory review process required under 
the Paperwork Reduction Act (PRA) and a longer NMFS application and 
permitting process were reserved for a second set of proposed 
regulations for 2002 and beyond. In its June 8, 2001, proposed rule, 
NMFS announced its intention to divide Amendment 14 implementation into 
two separate regulatory processes. Implementation of this latter 
portion of Amendment 14 was further postponed in 2002 to allow time for 
NMFS to return to the Council for further clarification. On February 
14, 2002, NMFS notified fixed gear permit holders by letter to let them 
know the agency would be requesting further clarification from the 
Council. NMFS received further clarification at the Council's April 
2002 meeting.
    The regulatory changes proposed with this Federal Register document 
would implement permit stacking regulations that include the following 
provisions: permit owners and permit holders would be required to 
document their ownership interests in their permits to ensure that no 
person holds or has ownership interest in more than 3 permits; an 
owner-on-board requirement for permit owners who did not own sablefish-
endorsed permits as of November 1, 2000; an opportunity for permit 
owners to add a spouse as co-owner; vessels that do not meet minimum 
frozen sablefish historic landing requirements would not be allowed to 
process sablefish at sea; permit transferors would be required to 
certify sablefish landings during mid-season transfers; and, a 
definition of the term ``base permit.''

Documenting Permit Ownership Interest and Adding a Spouse as Co-owner

    Amendment 14 includes several ownership-related provisions. (1) No 
partnership or corporation may own a sablefish-endorsed limited entry 
permit unless that partnership or corporation owned a sablefish-
endorsed permit as of November 1, 2000 (also referred to as 
grandfathered or first generation permit owner). NMFS announced this 
November 1, 2000, control date in an Advance Notice of Proposed 
Rulemaking on April 3, 2001 (66 FR 17681). Partnerships or corporations 
that owned permits as of November 1, 2000, may continue to have 
ownership interest in those same permits and may purchase or hold 
additional permits up to the 3-permit limit; however, partnerships or 
corporations that owned a permit before November 1, 2000, and 
subsequently sell all of their sablefish-endorsed permits, will lose 
the privilege of continuing to own sablefish-endorsed permits if they 
do not buy another permit within one year. Any permits sold after 
November 1, 2000, may only be sold to an individual person or to 
partnerships or corporations that had ownership interest in a 
sablefish-endorsed permit before November 1, 2000.

[[Page 59298]]

    (2) No person, partnership, or corporation in combination may have 
ownership interest in or hold more than 3 sablefish-endorsed permits 
either simultaneously or cumulatively over the primary season, except 
for an individual person, or partnerships or corporations that had 
ownership interest in more than 3 sablefish-endorsed permits as of 
November 1, 2000. An individual person, or partnerships or corporations 
that had ownership interest in 3 or more sablefish-endorsed permits as 
of November 1, 2000, may not acquire additional permits either by 
purchase or holding beyond those sablefish-endorsed permits owned on 
November 1, 2000, until they own fewer than 3 permits; at that time 
they may acquire additional permits but may not exceed the ownership 
cap of 3 permits.
    (3) A partnership or corporation will lose the exemptions provided 
in paragraphs (1) and (2) of this section on the effective date of any 
change in the ownership of a corporation or partnership from that which 
existed on November 1, 2000. [Note: In cases where multiple 
corporations or partnership are listed on a permit, NMFS will treat 
them as one new entity for purposes of the permit count and 
grandfathered status. For example, if Smith, Inc. and Jones, Inc. are 
listed as owning a permit together since before November 1, 2000, they 
will be grandfathered as ``Smith, Inc. and Jones, Inc.'' and this 
entity will be counted as owning that 1 permit. If Jones, Inc. did not 
also own a permit on its own before November 1, 2000, it would not be a 
grandfathered corporation and could not own a permit after November 1, 
2000. Any change in Smith, Inc. and/or Jones, Inc. would affect 
``Smith, Inc. and Jones, Inc.'' as listed on the permit.] A ``change'' 
in the partnership or corporation means the addition of a partner or 
shareholder to the corporate or partnership membership. This definition 
of ``change'' will apply to any person added to the corporation or 
partnership since November 1, 2000, including any family member of an 
existing shareholder or partner. A change in membership is not 
considered to have occurred if a member dies or becomes legally 
incapacitated and a trustee is appointed to act on his behalf, nor if 
the ownership of shares among existing members changes, nor if a member 
leaves the corporation or partnership and is not replaced. Changes in 
the ownership of publicly held stock will not be deemed changes in 
ownership of the corporation. Changes in the partnership or corporation 
must be reported to NMFS' Sustainable Fisheries Division (SFD) within 
15 days of the addition of a new partner or shareholder.
    (4) An individual person who did not own a sablefish-endorsed 
permit as of November 1, 2000, and who purchases a sablefish-endorsed 
permit after November 1, 2000, will be required to be on board the 
vessel registered for use with the permit when that vessel is fishing 
for sablefish against the primary sablefish tier limits associated with 
the permit(s) registered for use with that vessel. (Also known as the 
``owner-on-board'' requirement.)
    To implement these four major permit ownership provisions, NMFS 
will need to determine which individuals have an ownership interest in 
the partnerships and corporations that own and/or hold sablefish-
endorsed permits. As of November 2000, about 40 partnerships or 
corporations were owners of sablefish-endorsed permits (this number 
only includes business entities denoted as corporation, general 
partnership, limited partnership, etc.). Similarly, about 40 
partnerships or corporations were holders of sablefish-endorsed permits 
with seven of those being different from the partnerships or 
corporations that were given as permit owners. Once NMFS obtains the 
names of all of the individuals who had ownership interest in a 
sablefish-endorsed permit as of November 1, 2000, as well as all of the 
individuals that had ownership interest in or held a sablefish endorsed 
permit after November 1, 2000, the agency will be better able to 
implement the Amendment 14 provision that restricts the number of 
permits each person has ownership interest in or holds to three 
permits. If a person who has not owned all their permits since November 
1, 2000, is found to have ownership interest in or hold more than 3 
permits, NMFS will void all current permits, including any 
grandfathered permits owned or held by partnerships or corporations, 
and reissue all permits in an ``unidentified'' status meaning that the 
permits cannot be fished, until such time as that individual can prove 
they have ownership interest in or hold no more than 3 permits. [Note: 
A permit cannot be fished if it is in ``unidentified'' status. The 
permit must be registered for use with the vessel being used to land 
the groundfish as specified in 50 CFR 660.333(a).] For example, if a 
person is found to have ownership interest in five permits, three of 
which were owned as of November 1, 2000, NMFS will issue all five 
permits, including any permits shared with other individuals, 
partnerships or corporations, into ``unidentified'' status until that 
person sells at least two of their permits so that they own or hold no 
more than three permits. If a person had ownership interest in five 
permits as of November 1, 2000, and still has ownership interest in 
those five permits and does not own or hold additional permits, none of 
the permits would be moved into the ``unidentified'' status.
    While the Council recommended that permit owners would be required 
to document their ownership interests in their permits to ensure that 
no person holds or has ownership interest in more than 3 permits, NMFS 
has determined that permit holders that are corporations or 
partnerships would also be required to document their ownership 
interests for purposes of the permit count which was implemented with 
the first round of permit stacking regulations in August 2001. 
Therefore, NMFS has interpreted the Council's recommendation to not 
just require permit owners, but also permit holders to document their 
ownership interests in their permits to ensure that no person holds or 
has ownership interest in more than 3 permits. For purposes of 
establishing the permit count for each permit owner and permit holder, 
each individual who is listed as owner on the permit or is listed as 
having an ownership interest as part of a corporation or partnership 
will be counted as owning or holding one permit. In cases where a 
husband and wife are listed as co-owners of the same permit, both 
individuals will be counted as owning one permit each. However, if the 
husband is listed on the permit as the sole owner of that permit, only 
the husband will be counted as owning that permit for purposes of 
restrictions and exemptions on the number of permits a person may own 
or hold.
    If a permit owner who owned the permit as of November 1, 2000, 
conveys a permit to their spouse upon their death, the conveyed permit 
will count toward the permit ownership limits for that spouse. 
``Spouse'' means a person who is legally married to another person as 
recognized by state law (i.e., one's wife or husband). If the spouse 
already owns or holds 3 permits, he/she will not be permitted to retain 
this additional permit, unless he/she conveys ownership of or no longer 
holds one of his/her existing permits.
    If a couple were married as of November 1, 2000, but only one 
spouse was listed on the permit as the permit owner at that time, the 
spouse of the listed permit owner would not be exempt from the owner-
on-board requirement. However, NMFS realizes permit owners could not 
have foreseen the implications of not listing their spouse under the 
detailed provisions of

[[Page 59299]]

the permit stacking program adopted by the Council. Therefore, permit 
owners who were married as of the control date (November 1, 2000) and 
who wish to add their spouse as co-owner on their permit(s) may correct 
NMFS' permit ownership records as of that control date. Permit owners 
may add a not-listed spouse as a co-owner without losing their 
grandfathered status. As previously mentioned, in cases where a couple, 
married as of November 1, 2000, are listed as co-owners of the same 
permit, both individuals will be counted as owning one permit each and 
will have grandfathered status as a partnership as defined at Sec.  
660.302. An individual within the married couple will not, however, be 
able to retain their exemption from owner-on-board requirements if they 
choose to buy another permit as an individual and did not own a permit 
as an individual as of the control date in NMFS ``corrected'' records 
(i.e., NMFS records after allowing a not-listed spouse to be added as 
co-owner). Members of partnerships and corporations will not be allowed 
to add their spouses to the corporate ownership listing as of November 
1, 2000, for purposes of exempting them from the owner-on-board 
requirements. (Note: NMFS defines a ``partnership'' as two or more 
individuals, partnerships, or corporations, or combinations thereof, 
who have ownership interest in a permit, including married couples and 
legally recognized trusts and partnerships, such as limited 
partnerships (LP), general partnerships (GP), and limited liability 
partnerships (LLP).)
    Upon publication of these regulations in the Federal Register, NMFS 
will send a form to permit owners with one individual listed as of 
November 1, 2000, to allow married individuals who wish to declare 
their spouses as having permit ownership interest as of November 1, 
2000. If the permit owner fails to return the form by July 1, 2006, the 
permit name on record with SFD as of November 1, 2000, will remain on 
the permit. If the permit owner has been married since the control 
date, chooses not to add their spouse as a co-owner and the permit 
owner listed on the permit thereafter dies, the spouse will not be 
exempt from the owner-on-board requirement should the spouse inherit 
the permit. SFD will not accept any declarations to add a spouse as co-
owner for couples married as of the control date after the July 1, 
2006, deadline.
    For corporations and partnerships, NMFS will send a form to legally 
recognized corporations and partnerships (i.e., permit owners other 
than individuals) that currently own or hold sablefish-endorsed permits 
that requests a listing of the names of all shareholders or partners as 
of November 1, 2000, and a second listing of that same information as 
of the current date in 2006. NMFS may require a copy of the United 
States Coast Guard Abstract of Title as proof of vessel ownership for 
permit holders and/or owners and may require articles of incorporation 
or other documentation deemed necessary for proof of corporate or 
partnership ownership. If a corporation or partnership fails to return 
the completed form by the deadline date of July 1, 2006, NMFS will send 
a second written notice to delinquent entities requesting the completed 
form be returned by a revised deadline date of August 1, 2006. If the 
permit owning entity fails to return the completed form by that second 
deadline date, August 1, 2006, NMFS will void their existing permit(s) 
and reissue the permit(s) with a vessel registration given as 
``unidentified'' until such time that the completed form is provided to 
NMFS. For purposes of determining changes in partnerships/corporations 
in succeeding years, NMFS will send the form to corporations and 
partnerships as part of the annual permit renewal process.
    Failure to report or false reporting of ownership interest in 
federal limited entry groundfish permits to NMFS may be subject to 
federal civil or criminal penalties.

Owner-on-board Requirement

    As mentioned above, an individual person who owns sablefish-
endorsed permits, but who did not have an ownership interest in a 
sablefish-endorsed permit as of November 1, 2000, would be required to 
be on board the vessel registered for use with that permit during any 
groundfish fishing operations within the primary season fishery while 
that permit's primary sablefish season limits are being taken. (Note: 
An individual person, or partnerships or corporations that hold(s) a 
sablefish-endorsed permit, but does not own a sablefish-endorsed 
permit, are not subject to the owner-on-board requirements.) The 
Council included this provision in Amendment 14 as a way of ensuring 
that the fixed gear sablefish fleet would maintain its character, by 
requiring that only fishermen control sablefish-endorsed permits and 
moving toward a fishery where permit owners are working onboard the 
vessel during fishing operations.
    The sablefish permit stacking program is essentially an IFQ 
program. A concern about IFQ programs is that if fishing privileges are 
for sale, individuals or business entities who do not fish could buy 
those privileges. Allowing individuals or business entities who do not 
fish to own fishing privileges and then rent those privileges out to 
fishers is often referred to as ``share-cropping'' the fishing 
privileges. Members of the West Coast sablefish fleet were concerned 
that without an owner-on-board provision, permit ownership could flow 
out of fishing communities and into the hands of speculative non-
fishing buyers. To ensure that only fishers could buy into the 
sablefish fleet, the Council included an owner-on-board provision in 
Amendment 14.
    Under this proposed rule, an individual who purchased a sablefish-
endorsed permit after November 1, 2000, would be required to be on 
board the vessel registered for use with that permit when the vessel is 
participating in any groundfish fishery during the primary season and 
fishing on that permit's sablefish limits until that vessel has taken 
that permit's primary sablefish season limits. Once the primary 
sablefish season starts, any sablefish landings made by a vessel 
registered for use with a sablefish-endorsed permit count against that 
vessel's primary season limit(s). This aspect of the owner-on-board 
requirement prevents unnecessary sablefish discard by ensuring that if 
sablefish is taken incidentally in fisheries targeting other 
groundfish, that sablefish will not be discarded and will count against 
the primary season fishery limits. All permit owners who are subject to 
the owner-on-board requirements would be notified in a letter from NMFS 
in 2006 and prior to the start of the primary sablefish season on April 
1, 2007.
    Permit owners who are subject to the owner-on-board requirement may 
request an emergency exemption from the requirement in cases of death, 
illness, or injury of the permit owner that prevents the permit owner 
from participating in the fishery. This exemption would ensure that a 
permit owner's family could receive the sablefish income associated 
with a permit if the permit owner himself is unable to participate in 
the groundfish fishery through death, illness, or injury. In the case 
of death of a permit owner, the estate of the deceased permit owner is 
afforded a grace period from the owner-on-board requirement for up to 3 
years after the death of the individual or until such time as there is 
settlement of the permit owner's estate and the permit is transferred 
to the beneficiary, whichever is earlier. In the interim

[[Page 59300]]

before the estate is settled, if the deceased permit owner was subject 
to the owner-on-board requirements, the estate of the deceased permit 
owner can send a letter to NMFS with a copy of the death certificate, 
requesting an exemption from the owner-on-board requirements until 
either the estate is settled or for up to 3 years after the time of 
death, whichever is earlier. An exemption from the owner-on-board 
requirements would be conveyed in a letter from NMFS to the estate of 
the permit owner and this letter would be required to be on the vessel 
during fishing operations. This grace period allows the estate a period 
of time in which to transfer the permit to an individual and also 
allows the estate to hire a skipper to fish the permit while the estate 
is being settled. Once the permit is transferred, the new owner would 
be subject to the owner-on-board requirements. If, after the estate is 
settled, the spouse inherits and therefore owns the permit and the 
deceased permit owner was grandfathered, but the spouse was not listed 
on the permit as grandfathered, the spouse would be a second generation 
owner and would be required to be on board the vessel while the permit 
is being fished.
    An exemption due to injury or illness would be effective only 
through the end of the calendar year in which it was granted. In order 
to receive an exemption due to injury or illness, the permit owner must 
submit a letter to NMFS requesting an exemption from the owner-on-board 
requirement, explaining the need for the exemption, and providing 
documentation from a certified medical practitioner detailing why the 
permit owner is unable to continue to be onboard a fishing vessel. In 
order to extend an emergency medical exemption for a succeeding year, 
the permit owner must submit a new request to NMFS and provide 
documentation from a certified medical practitioner detailing why the 
permit owner is still unable to be onboard a fishing vessel. An 
emergency exemption would be conveyed in a letter from NMFS to the 
permit owner and this letter would be required to be on the vessel 
during fishing operations. All emergency exemptions will be evaluated 
by NMFS and a decision will be made by SFD in writing to the permit 
owner within 60 days of receipt of the original exemption request. 
Emergency medical exemptions will be granted by NMFS for no more than 
three consecutive or total years. NMFS will consider any exemption 
granted for less than 12 months in a year to count as one year against 
the 3-year cap.
    An individual person, or partnerships or corporations who continue 
to own at least one sablefish-endorsed permit that was owned as of 
November 1, 2000, would be exempt from the owner-on-board requirement. 
If a person, partnership, or corporation that is exempt from the owner-
on-board requirement no longer owns at least one sablefish-endorsed 
permit for a period greater than one year, that permit owner would no 
longer be exempt from the owner-on-board requirement. However, a 
person, partnership, or corporation that is exempt from the owner-on-
board requirement could sell all of its permits, buy another sablefish-
endorsed permit within 1 year of the date the last permit was approved 
for transfer, and retain its exemption from the owner-on-board 
requirements. A person that is part of a grandfathered partnership or 
corporation could buy additional permits as an individual, up to the 
limit of three per individual, but the individual would not be exempt 
from the owner-on-board requirements with the new permit. However, if 
the individual was part of grandfathered partnership or corporation in 
which they were the only remaining individual (i.e., all other 
individuals with ownership interest had left the partnership or 
corporation), this individual would still be considered as a 
grandfathered partnership or corporation in NMFS records. Thus, permits 
owned by this individual under the partnership or corporation would be 
exempt from the owner-on-board requirements. This individual could also 
buy additional permits under the partnership or corporation, up to the 
limit of 3 per individual, and would remain exempt from the owner-on-
board requirements with the additional permits.
    Additionally, a person, partnership, or corporation that qualified 
for the owner-on-board exemption, but later divested their interest in 
a permit or permits, may retain rights to an owner-on-board exemption 
as long as that person, partnership, or corporation purchases another 
permit within one year of the date that the final rule for these owner-
on-board requirements is implemented. A partnership or corporation 
could only purchase a permit if it has not added or changed individuals 
since November 1, 2000, excluding individuals that have left the 
partnership or corporation or that have died. NMFS would send out a 
letter to all individuals, partnerships or corporations who owned a 
permit as of November 1, 2000, and who no longer own a permit to notify 
them that they would qualify as a grandfathered permit owner if they 
choose to buy a permit within one year from the date the final rule for 
these owner-on-board requirements is effective.
    If the individuals who have an ownership interest in the 
corporation or partnership change from those owning the partnership or 
corporation as of November 1, 2000, by adding another individual(s), 
that partnership or corporation will lose its exemption from both the 
owner-on-board requirements and from the provision that allows only an 
individual person to own a sablefish-endorsed permit. Thus, a husband 
and wife who own a permit could not add a sibling or child to the 
permit without losing their first generation status and losing their 
exemption from the provision that only allows an individual person to 
own permits. Similarly, a fisherman who wants to take on a new partner 
because an existing partner is retiring could not add that new partner 
without losing his first generation status and his exemption from the 
provision that only allows an individual to own permits. In the case of 
a grandfathered corporation such as ``Smith, Inc. and Jones, Inc.,'' 
viewed as one corporation in NMFS records, Jones, Inc. could not add a 
new member without causing ``Smith, Inc. and Jones, Inc.'' to lose it's 
grandfathered status. However, an individual person, or partnerships 
and corporations may continue to hold sablefish-endorsed permits (e.g., 
through a lease arrangement) from any permit owner (exempt from owner-
on-board or not) and remain exempt from the owner-on-board 
requirements, even if their membership has changed or they did not hold 
a sablefish-endorsed permit as of November 1, 2000.
    As mentioned above, if a couple was married as of November 1, 2000, 
but only one spouse was listed as the permit owner at that time, the 
spouse of the listed permit owner would not be exempt from the owner-
on-board requirement. NMFS will allow an opportunity for those 
grandfathered permit owners who wish to add their spouses as co-owners 
on their permits to correct NMFS' permit ownership records as of that 
control date (November 1, 2000). Permit owners may then add not-listed 
spouses as co-owners without losing their grandfathered statuses. Their 
new grandfathered status will be as a partnership, as defined at Sec.  
660.302, which includes married couples. Individual permit owners will 
lose their individual grandfathered status when they add their not-
listed spouse unless they also owned at least one permit as

[[Page 59301]]

an individual and did not retroactively add a spouse as co-owner on 
that permit. The process that NMFS will follow for adding a spouse as 
co-owner is described in the ownership interest section of this 
proposed rule. As previously mentioned, in cases where married couples 
are listed as co-owners of the same permit, both individuals will be 
counted as owning one permit each and will have grandfathered status as 
a partnership, as defined at Sec.  660.302. An individual within the 
married couple will not, however, be able to retain their exemption 
from owner-on-board requirements if they choose to buy another permit 
as an individual and did not own a permit as an individual as of the 
control date in NMFS ``corrected'' records (i.e., NMFS records after 
allowing a not-listed spouse to be added as co-owner). Members of 
partnerships and corporations will not be allowed to add their spouses 
as of November 1, 2000, for purposes of exempting those spouses from 
the owner-on-board requirements or the provision that only allows 
individuals to own or hold permits.
    Because only the owners of non-exempt permits that are being fished 
during the trip are required to be on board, enforcement agents must be 
able to determine which permits are being fished and which owner should 
be on board. In order to enforce the owner-on-board provision, NMFS is 
requesting that the states require that the groundfish Federal limited 
entry permit number be written on state fish landing receipts (i.e., 
fish tickets). At the April 2002 Council meeting in Portland, OR, the 
Council and NMFS requested that the States of Washington, Oregon, and 
California modify their fish tickets to require a space for recording 
the permit number under which a landing is made. The states agreed to 
consider modifying their fish tickets, but requested time to consider 
the implications of such a modification and could not guarantee that 
action would be taken in time for implementation of the second set of 
the permit stacking regulations. Currently, only the State of 
California has added a line for permit information on their state fish 
tickets and enters that information into the fish ticket database, 
PacFIN. Until a new fish ticket design is available, states should 
require that permit numbers be written somewhere on the fish ticket, as 
appropriate. Ultimately, it would be beneficial to have these Federal 
limited entry permit numbers entered into the PacFIN database so that 
enforcement could query a given permit number and their associated fish 
ticket landings. However, until such time, having the permit number on 
the paper fish ticket would allow hand searching of paper fish tickets 
for investigations. This request is also being made to aid in 
enforcement of mid-season transfers, discussed later in this proposed 
rule. Adding a permit number to the fish ticket is expected to aid 
enforcement by creating a record of which sablefish permit was being 
fished on a given fishing trip. Thus, if enforcement boarded a vessel 
at sea or as they were coming into port, enforcement could record which 
owners were on board. At a later time, they could then verify which 
permit the sablefish landings were credited to on the fish ticket and 
double check that the owner of that permit was on board if they were 
not exempt from the owner-on-board provisions.
    At a minimum, the permit number associated with a landing should be 
recorded on the fish ticket and entered into the PacFIN database for 
tracking and enforcement reasons. If Washington and Oregon do not 
require that permit numbers be written on the fish tickets and entered 
into the PacFIN database, NMFS may require all permit owners who are 
subject to the owner-on-board requirement to be onboard the vessel when 
that vessel is fishing for groundfish until all sablefish tiers 
associated with that vessel during the primary season have been fished 
(e.g., even if landings are only being attributed to one permit at a 
time but all three permits are subject to the owner-on-board 
requirement, all three permit owners would be required to be onboard 
the vessel until that vessel has finished the primary season and 
completed their landings against all three permits). Conversely, if 
Washington and Oregon require the permit number on the fish ticket, 
only those permit owners who are subject to the owner-on-board 
requirement need to be onboard the vessel when that vessel is fishing 
for sablefish against a specific sablefish permit (e.g., if landings 
are only being attributed to one permit at a time and that permit is 
subject to the owner-on-board requirement, only that permit owner would 
be required to be onboard the vessel when that vessel is fishing 
against that permit).

Exemptions for Vessels Processing Sablefish at Sea

    Sablefish caught off the West Coast are often processed and frozen 
for the Japanese market, but the manner of processing varies along the 
West Coast. Because of the varied ocean bottom topography, some 
sablefish fishing grounds are closer to shoreside processing plants 
than others. Larger-sized sablefish tend to bring higher prices, but 
those large fish are usually found in deep water farther offshore. In 
areas where the sablefish grounds are within a single day's round trip 
from port, fishers might bring their sablefish to the processor whole. 
Processors remove the landed fish's head and guts, then glaze and 
freeze the sablefish body as quickly as possible to ensure that the 
processed product meets the high standards of the Japanese fish market. 
Fishers who operate farther than a day's trip from port might remove 
the head and guts from their sablefish before landing them at the 
processor to preserve the quality of the fish's flesh throughout 
fishing and processing operations. Depending on the care that a fisher 
takes in heading and gutting his/her sablefish, the processor may have 
to re-clean the fish before freezing and glazing it for sale.
    Because of the primary sablefish fishery's history as a short 
season, fishers have traditionally pulled sablefish out of the ocean as 
quickly as possible and have left most or all of the processing to the 
processors. With a longer primary sablefish season, fishers could 
operate at a more leisurely pace and do more of their own processing. 
If a significant portion of the sablefish-endorsed fishers were to 
begin operating as their own processors, however, the shoreside 
processing plants would be deprived of their traditional sablefish-
generated income. The value of sablefish taken with fixed gear and sold 
as processed product by West Coast processors was $9-10 million in 1999 
and $10-11 million in 2000. Those amounts include sablefish taken in 
the daily trip limit fisheries and are based on round weight of 
sablefish landed in 1999 and 2000 with a product recovery rate range of 
56-60 percent of round weight. With implementation of a prohibition on 
processing sablefish at sea, revenues in sold sablefish product for 
shoreside processors would be expected to remain similar to those 
amounts reported before the control date of November 1, 2000.
    To ensure that shoreside processing plants would continue to have 
access to sablefish landed from the primary sablefish fishery, the 
Council included a provision in Amendment 14 that prohibits vessels 
from processing their sablefish at sea. ``Processing'' is defined at 50 
CFR 660.302 as, ``the preparation or packaging of groundfish to render 
it suitable for human consumption, retail sale, industrial uses or 
long-term storage, including, but not limited to, cooking, canning, 
smoking, salting, drying, filleting, freezing, or rendering

[[Page 59302]]

into meal or oil, but does not mean heading and gutting unless 
additional preparation is done.''
    Although most West Coast sablefish vessels have not traditionally 
processed their sablefish catch, there are a few vessels that may have 
a history of processing sablefish. To acknowledge investments these 
vessel owners have made in on board freezing and processing equipment, 
Amendment 14 includes an exception to the at-sea processing prohibition 
for vessels that froze at least 2,000 lb (907.2 mt) round weight of 
sablefish landings in any one year of 1998, 1999, or 2000. Because the 
control date for this exemption is also November 1, 2000, frozen 
sablefish landings from 2000 would have to have occurred before that 
date. The best evidence of a vessel having made frozen sablefish 
landings would be state fish tickets for landed sablefish accompanied 
by receipts for frozen sablefish from fish buyers or exporters. The 
qualifying landings of frozen sablefish must have occurred during the 
primary sablefish fishery season, must have been taken in waters from 
0-200 nautical miles offshore of the states of Washington, Oregon or 
California, and the vessel owner must have had a valid sablefish-
endorsed limited entry permit at the time the qualifying fish were 
landed.
    NMFS expects that fewer than five vessels owners will apply for an 
at-sea processing exemption. NMFS SFD will send a letter to sablefish-
endorsed permit owners and/or fixed gear vessel owners announcing the 
qualification requirements for the at-sea processing exemption. Permit 
and/or vessel owners who believe that they qualify for an at-sea 
processing exemption would have at least 60 days to provide NMFS SFD 
with evidence of their frozen sablefish landings via an application to 
be provided by NMFS. The permit and/or vessel owner must submit an 
application and supporting evidence to SFD no later than July 1, 2006. 
The application will be available from NMFS in hard copy and online at 
https://www.nwr.noaa.gov/1sustfsh/permits/prmits01.htm. NMFS SFD would 
then have 30 days to review the submitted evidence and make 
determinations on whether an applicant vessel qualifies for the at-sea 
processing exemption. Persons whose vessels qualify for the at-sea 
processing exemption will be issued a letter from NMFS to carry aboard 
their vessels.
    Permit and/or vessel owners who are initially denied the at-sea 
processing exemption but who believe that they have further evidence to 
demonstrate their qualifications for the exemption will have 30 days 
from the NMFS SFD denial decision to appeal the decision to the 
Regional Administrator. No appeals will be accepted after September 1, 
2006. An at-sea processing exemption would be issued if the permit and/
or vessel owner demonstrates that his vessel has met the exemption 
qualification requirements. Unlike the initial limited entry permitting 
process, there are no hardship allowances for appealing denials and 
there will be no industry appeal board to review appeals of exemption 
denials. A complete list of the vessels exempted from the at-sea 
processing prohibition would be published in the Federal Register in 
the fall of 2006. This exemption would apply only to the vessel while 
it is registered for use with a sablefish-endorsed limited entry 
permit. The exemption would not be associated with any of the permits 
registered for use with the vessel and would not be transferable to any 
other vessel, including other vessels belonging to that same permit 
and/or vessel owner. Further, the exemption would expire if the vessel 
itself is sold or otherwise transferred to a new owner.

Mid-season Transfers

    With the longer season, there are more opportunities for permit 
owners to transfer their permits mid-season. Permit transfers will 
still be constrained by limited entry program regulations at 50 CFR 
660.335(e) and (f), which allow a permit to be transferred between 
vessels only once per calendar year and which make all permit transfers 
effective on the first day of a major cumulative limit period. Major 
cumulative limit periods begin on January 1, March 1, May 1, July 1, 
September 1 and November 1. While permits may only be transferred 
between vessels once per calendar year, changes in the permit owner or 
holder may occur at any time during the calendar year and as often as 
necessary. However, regardless of whether there is a change in the 
vessel registered to the permit and the permit owner/holder or just a 
change in the permit owner/holder, any of these actions would require a 
certification from the permit owner of the amount of sablefish landings 
to date. If a permit owner wishes to transfer a sablefish-endorsed 
permit mid-season, he/she will have to certify the cumulative amount of 
sablefish taken to date with that permit on a NMFS permit transfer 
form. In addition, the individual either leasing or buying the permit 
(the transferee) must acknowledge the cumulative amount of sablefish 
landed to date by signing the transfer form and maintaining the permit 
onboard the vessel. Under already existing regulations at 660.303(c), 
the transferee would also be required to retain onboard any fish 
tickets associated with landings made against that transferred permit, 
including any landings made previously on the permit during the 
cumulative limit period (i.e., the primary sablefish season). This mid-
season certification is required for enforcement purposes as it is a 
means to associate specific amounts of landings to date with an 
aggregate amount reported on fish tickets for a particular permit 
owner.
    In addition to the certification of sablefish landings to date, a 
space will be provided on the landings certification portion of the 
permit transfer form that requests the sale or lease price of the 
permit. Providing this sale or lease price to NMFS is optional. This 
information is being requested so that NMFS may build a database on 
permit sale prices. This database would be useful in analyzing economic 
trends and the value of the sablefish fishery.
    If during a post-season audit of landings associated with a permit, 
the landings exceed the amount available to be landed on the permit, 
enforcement measures may be taken against any party that had ownership 
interest in the permit during the calendar year. The vessel owner or 
operator may also be held liable. It is a violation of both state and 
Federal law to give false or incomplete information on fish tickets.
    At the April 2002 Council meeting in Portland, OR, the Council and 
NMFS requested that the States of Washington, Oregon, and California 
modify their fish tickets to require a space for recording the permit 
number under which a landing is made. The states agreed to consider 
modifying their fish tickets, but requested time to consider the 
implications of such a modification and could not guarantee that action 
would be taken in time for implementation of the second set of the 
permit stacking regulations. Currently, only the State of California 
has added a line for permit information on their state fish tickets. 
Until a new fish ticket design is available, states should require that 
permit numbers be written somewhere on the fish ticket, as appropriate, 
and that the permit number be added into the PacFIN database. If 
Washington and Oregon do not require that permit numbers be written on 
the fish tickets and entered into the PacFIN database, NMFS may not 
allow mid-season transfers due to this provision being unenforceable.

[[Page 59303]]

Defining the Term ``Base Permit''

    Under Amendment 14, each vessel participating in the primary 
sablefish fishery must be registered for use with at least one permit 
with a length endorsement appropriate to that vessel. Any additional 
permits need not match the vessel's length (50 CFR 660.334(c)). At 
Section 14.2.4, the FMP describes a base permit in a permit stacking 
program as the initial permit needed to participate in the limited 
entry fishery, and subject to all of the requirements for limited entry 
permit ownership qualifications, and permit gear and length 
endorsements. The FMP further allows that any requirements and 
additional privileges for permits stacked on to base permits may be 
authorized in a Federal rulemaking. Amendment 14 and its implementing 
regulations describe the requirements and privileges associated with 
stacking sablefish-endorsed limited entry permits.
    This proposed rule would clarify that the permit registered for use 
with a vessel that is appropriate to that vessel's length is considered 
the ``base'' permit. If more than one permit registered for use with 
the vessel has an appropriate length endorsement for that vessel, NMFS 
SFD will designate a base permit by selecting the permit that has been 
registered to the vessel for the longest time. If the permit owner 
objects to NMFS selection of the base permit, the permit owner may send 
a letter to NMFS SFD requesting the change and the reasons why. If the 
permit requested to be changed to the base permit matches the length of 
the vessel, NMFS SFD will reissue the permit with the new base permit.
    At least one sablefish-endorsed permit must match the length of the 
vessel that will be fishing against the permit's landing limits, as 
required by current regulations at 50 CFR 660.334(c). Outside of the 
primary season, the vessel would operate under the per vessel 
cumulative limit restrictions appropriate to the gear of the base 
permit. Defining this term would not change the effect of limited entry 
permit regulations, but would provide further clarity in the 
regulations for both NMFS and for the public.

Hail-in Requirement - Initial Council Recommendation not Proposed by 
NMFS

    In adopting Amendment 14, the Council also recommended several 
regulatory measures to implement the permit stacking program. One of 
those recommendations was to require fishers to provide 6 hours advance 
notice to NMFS Enforcement when making a sablefish landing in the 
primary sablefish season. Fishers were to provide landings times, hail 
weights, and landings locations as part of the hail-in procedure. This 
hail-in requirement was based on a similar requirement in place for the 
sablefish/halibut fisheries off Alaska. For the Alaska fisheries, the 
hail-in requirement was intended to prevent quota landings violations 
by giving enforcement officers an opportunity to meet the incoming 
vessel to inspect its catch.
    NMFS has subsequently determined that this hail-in requirement 
would be unnecessarily burdensome for fishers and less useful in 
enforcing West Coast fisheries regulations than it may be in Alaska 
waters. Over 1,000 vessels participate in the sablefish/halibut IFQ 
fisheries off Alaska, each landing a vessel-specific amount of fish 
based on that vessel's particular quota share amount with many landings 
occurring in remote locations. In the West Coast primary sablefish 
fishery, there are only 164 sablefish-endorsed permits, which means 
that no more than 164 vessels could participate in the fishery. 
Additionally, each permit is assigned to one of 3 tiers, which means 
that there is a limited number of possible landings amounts available 
to the vessels participating in the primary fishery. This relatively 
simple cumulative limit system and the small number of vessels involved 
make a hail-in requirement unnecessary. NMFS does not now have hail-in 
requirements for any other West Coast groundfish species or fishery and 
does not believe that primary sablefish season cumulative limit 
management differs significantly enough from the rest of the groundfish 
fishery's cumulative limit management to warrant this additional 
enforcement and reporting burden.
    NMFS consulted with the Council on this issue at the Council's 
October 29 through November 2, 2001, meeting in Millbrae, CA. The 
Council, its Enforcement Consultants and its Groundfish Advisory 
Subpanel concurred with the NMFS decision to not propose the hail-in 
requirement for implementation in the West Coast sablefish fishery.

Owner-in-Board Requirement - Future Implementation

    The Council is considering another qualifier to the owner-on-board 
exemptions for grandfathered individuals in partnerships or 
corporations based on the Groundfish Advisory Panel's recommendation. 
As previously mentioned, at the Council's April 2002 meeting, NMFS 
returned to the Council to seek clarification on the Council's intent 
with the owner-on-board requirement, including duration of owner-on-
board exemptions, time allotted to settle the estate of deceased 
owners, loss of exemption, and joint ownership of permits. While 
clarifying these issues, the Council stated that it also wished to 
consider allowing a person who had 30 percent or greater ownership 
interest in a partnership or corporation that was a first generation 
owner to be exempt from the owner-on-board provision if he/she wishes 
to own a permit under his/her own name, even if he/she did not own a 
permit under his/her own name as of November 1, 2000. The EA for the 
permit stacking program, dated October 2000, did not analyze the 
effects of allowing exemptions from the owner-on-board requirement for 
those individuals who had only 30 percent or greater ownership interest 
in a permit. Thus, further analysis and Council discussion is required 
before NMFS could consider this provision for implementation.
    NMFS is also considering implementing a phone-in declaration system 
to aid in enforcement of the owner-on-board requirement, if having the 
permit numbers on the fish tickets is not sufficient. The declaration 
system would require all sablefish endorsed permit owners, including 
those exempt from the owner-on-board requirement, to call into a phone-
in system and declare which permit(s) they will be fishing. Fishers 
would not need to call back into the system until they change the 
sablefish permit(s) they are currently fishing. For any permits 
reported on the phone-in declaration system, if not exempt from the 
owner-on-board requirement, the permit owner(s) would be expected to be 
onboard the vessel while fishing for sablefish. In addition to having 
permit numbers on state fish tickets, this would aid enforcement to 
determine, in a more timely manner, if the appropriate person was 
onboard.

Cap on Number of Permits Held - Future Implementation

    Under the Council's initial regulatory recommendations for 
implementing Amendment 14, no more than three sablefish-endorsed 
permits may be owned by an individual person, partnership or 
corporation, unless that individual person, partnership or corporation 
held more than 3 permits as of November 1, 2000. In June 2001, the 
Council clarified this recommendation, saying that it had intended to 
restrict each individual person, partnership or corporation to holding 
(owning or leasing) no more than 3 permits. The Council further 
clarified that the grandfathered exception to the three

[[Page 59304]]

permits restriction allowed only those individuals, partnerships or 
corporations that had owned more than 3 permits as of November 1, 2000, 
to continue to own those particular permits without acquiring (through 
owning or leasing) additional permits. This restriction was implemented 
through a final rule at 66 FR 41152, August 7, 2001.
    In 2002, the Council and NMFS received a request from a limited 
entry permit owner to revisit the limit on the number of permits an 
entity may own or hold. This permit owner wished to hold (lease) 
additional permits beyond those he already owned. During the Council's 
April 2002 meeting, the Council's Groundfish Advisory Subpanel (GAP) 
discussed the issue and voted to retain the current regulations, which 
limits the number of permits that can be owned or held to no more than 
three permits, unless a person, partnership or corporation owned more 
than three permits as of November 1, 2000. An individual person, or 
partnerships or corporations that owned more than three permits as of 
November 1, 2000, are limited to the number of permits owned as of that 
date. Of the GAP members present, eight favored the current regulations 
(status quo), four favored recommending a regulatory change and four 
abstained. After the GAP meeting, this issue was brought before the 
Council. The Council requested that the GAP look into alternatives that 
would revise the accumulation cap on the total permits an individual 
person, partnership or corporation could hold through leasing and 
report back to the Council at a later meeting. Due to the busy agenda 
of the GAP and the Council, this issue has not yet been revisited and 
would require further analysis before it could be implemented.

Permit Stacking Program Fee - Future Implementation

    NMFS is required under Section 304(d)(2) of the Magnuson-Stevens 
Act to collect fees from participants in an IFQ program to recover the 
actual costs directly related to the management and enforcement of the 
program. These fees shall not exceed 3 percent of the ex-vessel value 
of sablefish harvested under this IFQ program, to be collected as 
landings fees.
    NMFS implemented a fee system for its sablefish/halibut IFQ fishery 
in Alaska on March 20, 2000 (65 FR 14919) after a lengthy consultation 
with the fishing industry and in a rulemaking specific just to fee 
implementation. NMFS would like an opportunity to assess the Alaska fee 
program and the analyses associated with its implementation before 
proposing a fee system for West Coast sablefish-endorsed limited entry 
permit holders.
    NMFS has not yet analyzed the cost of managing and enforcing the 
sablefish endorsement program and will be better able to predict this 
cost once all of the other provisions of Amendment 14 are implemented. 
NMFS will issue a separate proposed rule to implement a fee system 
after assessing the applicability of the Alaska fee system to West 
Coast fisheries, estimating the NMFS cost of managing and enforcing the 
sablefish endorsement program, and consulting on the fee system with 
the Council and West Coast industry.

Classification

    NMFS has determined that the proposed rule is consistent with the 
Pacific Coast Groundfish FMP and preliminarily determined that the rule 
is consistent with the Magnuson-Stevens Act and other applicable laws.
    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866.
    As required by section 603 of the Regulatory Flexibility Act (RFA), 
NMFS prepared a supplement to the IRFA originally prepared by the 
Council as part of the EA. The IRFA describes the economic impact this 
proposed rule, if adopted, would have on small entities. A description 
of the action, why it is being considered, and the legal basis for this 
action are contained at the beginning of this section in the preamble 
and in the SUMMARY section of the preamble. A copy of this analysis is 
available from the NMFS (see ADDRESSES). A summary of the analysis 
follows.
    This proposed rule would affect only the owners of the 164 limited 
entry permits with sablefish endorsements. These permit holders use 
longline or pot gear to participate in the limited entry, primary 
sablefish fishery. All of the permit owners and vessels in the Pacific 
Coast, limited entry, fixed gear fleet are considered small entities 
under Small Business Administration (SBA) standards.
    NMFS and the SBA have already considered whether Amendment 14 would 
significantly affect the small entities involved in the limited entry, 
fixed gear sablefish fishery. The agencies concluded that while 
Amendment 14 would have significant effects on the limited entry, fixed 
gear sablefish fleet, those effects would be positive improvements in 
the safety of the fishing season, and in business planning flexibility. 
These conclusions were described in the final rule to implement 
Amendment 14 for the 2001 fishing season (August 7, 2001, 66 FR 41152) 
and in the Final Regulatory Flexibility Analysis prepared for that 
rule.
    The regulatory changes proposed with this rule follow out of the 
regulations implementing Amendment 14 (August 7, 2001, final rule) for 
2007 and beyond. The regulatory changes in the August 7, 2001, final 
rule brought greater operational safety and more business planning 
flexibility to the participants in both the primary sablefish fishery 
and the daily trip limit fishery for sablefish. It allowed participants 
with greater harvest capacity to better match their sablefish 
cumula