Fisheries Off West Coast States and in the Western Pacific; Pacific Coast Groundfish Fishery; Limited Entry Fixed Gear Sablefish Fishery Permit Stacking Program, 10614-10624 [06-1961]

Agencies

• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration

[Federal Register Volume 71, Number 41 (Thursday, March 2, 2006)]
[Rules and Regulations]
[Pages 10614-10624]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-1961]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 660

[Docket No. 050921244-6049-02; 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: Final rule.

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SUMMARY: NMFS is implementing 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. 
Amendment 14 was intended to provide greater season flexibility for 
sablefish fishery participants and to improve safety in the primary 
sablefish fishery.

DATES: Effective April 3, 2006.

ADDRESSES: 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, phone: 866-806-7204. Copies of 
the Finding of No Significant Impact (FONSI), Supplemental Initial 
Regulatory Flexibility Analysis (IRFA), Supplemental Final Regulatory 
Flexibility Analysis (FRFA), and the Small Entity Compliance Guide 
(SECG) are available from D. Robert Lohn, Administrator, Northwest 
Region, NMFS, 7600 Sand Point Way NE, Seattle, WA 98115-0070, phone: 
206-526-6150.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
final rule may be submitted to D. Robert Lohn, Administrator, Northwest 
Region, NMFS, 7600 Sand Point Way NE, Seattle, WA 98115-0070, and by e-
mail to DavidRostker@omb.eop.gov, or by 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: 
www.gpoaccess.gov/fr/.

Background

    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 three sablefish-endorsed 
permits for use with their vessel to harvest each of the primary season 
sablefish cumulative limits associated with the stacked permits. 
Amendment 14 also 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.
    This final 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 allowed individual fishery participants to more fully 
use their existing vessel capacity, reduced overall capacity in the 
primary fixed gear sablefish fishery, and significantly increased 
safety in the fishery. This rule does not change any of those benefits, 
but further completes the implementation of Amendment 14 by preventing 
excessive fleet consolidation, ensuring processor access to sablefish 
landings from the primary season, and maintaining the character of the 
fleet through owner-on-board requirements. The background and rationale 
for the Council's recommendations, as well as an explanation of why 
NMFS will not be implementing the Council's recommendation for a hail-
in requirement and some modifications to the permit stacking program 
that the Council is considering for future implementation are 
summarized in the

[[Page 10615]]

proposed rule (70 FR 59296, October 12, 2005).
    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). In addition, 
an advanced notice of proposed rulemaking announcing the control date 
was published on April 3, 2001 (66 FR 17681), and the notice of 
availability for Amendment 14 was published on May 9, 2001 (66 FR 
23660). NMFS approved Amendment 14 to the Groundfish FMP on July 30, 
2001. The proposed rule to implement the additional Amendment 14 
provisions in this final rule was published on October 12, 2005 (70 FR 
59296). NMFS requested public comment on the proposed rule through 
December 12, 2005. See the preamble to the proposed rule for additional 
background information on the fishery and on this rule.
    In the final rule implementing the initial permit stacking 
provisions (66 FR 41152, August 7, 2001), the following provisions were 
implemented: (1) up to three sablefish endorsed permits may be 
registered for use with a single vessel; (2) the limited entry, fixed 
gear primary sablefish season opens on August 15 and ends on October 
31, 2001; (3) a vessel may fish for sablefish during the primary season 
with any of the gears specified on at least one of the limited entry 
sablefish endorsed permits registered for use with that vessel; (4) no 
person may hold (own or lease) more than three sablefish endorsed 
limited entry permits unless that person owned more than three permits 
as of November 1, 2000; (5) no partnership or corporation may own a 
sablefish endorsed limited entry permit unless that partnership or 
corporation owned a permit as of November 1, 2000; (6) cumulative 
limits for species other than sablefish and for the sablefish daily 
trip limit fishery remain per vessel limits and are not affected by 
permit stacking; and (7) the limited entry daily trip limit fishery for 
sablefish will be open during the primary season for vessels not 
participating in the primary season.
    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).
    In its June 8, 2001, proposed rule, NMFS announced its intention to 
divide Amendment 14 implementation into two separate regulatory 
processes. Implementation of this second portion of Amendment 14 
required 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.
    This final rule implements further permit stacking regulations that 
include the following provisions: (1) 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 three permits; (2) an owner-on-board requirement for permit 
owners who did not own sablefish-endorsed permits as of November 1, 
2000; (3) an opportunity for permit owners to add a spouse as co-owner; 
(4) vessels that do not meet minimum frozen sablefish historic landing 
requirements would not be allowed to process sablefish at sea; (5) 
permit transferors would be required to certify sablefish landings 
during mid-season transfers; and, (6) a definition of the term ``base 
permit.''
    In the future, NMFS expects to propose another rule to implement 
additional provisions of Amendment 14 as explained in the preamble to 
the proposed rule dated October 12, 2005 (70 FR 59296). Such provisions 
may include the following: (1) adding a declaration system for 
enforcement purposes that 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; and (2) implementing a permit stacking program fee system in 
accordance with Magnuson-Stevens Act requirements at 304(d)(2). The 
Council has also discussed, but has not prioritized analysis or 
development of provisions to: (1) allow a person who had 30% 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; and (2) 
revise the accumulation cap on the total permits a person, partnership 
or corporation could hold through leasing.
    Finally, as described in more detail in the proposed rule, NMFS 
decided not to propose a hail-in requirement as initially recommended 
by the Council. The hail-in requirement would have required 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. The Council, its Enforcement Consultants and its 
Groundfish Advisory Subpanel, concurred with NMFS determination that 
this hail-in requirement would be unnecessarily burdensome for fishers.

Comments and Responses

    NMFS received seven letters of comment on the proposed rule to 
implement portions of Amendment 14 for 2007 and beyond: two letters 
were received from state governments, one letter was received from an 
industry organization, and four letters were received from members of 
the public. These comments are addressed here:
    Comment 1: The Washington Department of Fish and Wildlife (WDFW) is 
in the process of a comprehensive, agency-wide review of potential 
changes to their state fish ticket system. In the interim, to respond 
to new regulations for the primary sablefish fishery, beginning in 
2007, WDFW will require the Federal permit number to be entered into 
the state fish ticket field currently reserved for dealer's use. This 
information, along with appropriate identifiers, would be captured 
separately from WDFW's routine state fish ticket data entry, and 
subsequently, entered into Pacific Fisheries Information Network 
(PacFIN). WDFW will also require a separate state fish ticket to be 
filled out for sablefish catch attributed to each permit.
    The Oregon Department of Fish and Wildlife (ODFW) will record 
Federal permit numbers on state fish tickets, but is not able to modify 
their data system to enter and transfer that data into PacFIN at this 
time.
    Response: As stated in the proposed rule (70 FR 59296, October 12, 
2005), WDFW, ODFW and California Department of Fish and Game (CDFG) 
should require that Federal sablefish-endorsed permit numbers be 
written somewhere on the state fish ticket, as appropriate. It is 
beneficial to have these Federal limited entry sablefish-endorsed 
permit numbers entered into the PacFIN database so that enforcement 
agents could query a given Federal permit number and their associated 
state fish ticket landings. However, until such time, having the 
Federal sablefish-endorsed permit number on the paper state fish ticket 
would allow hand searching by enforcement agents of

[[Page 10616]]

paper state fish tickets for investigations.
    NMFS is requesting this change to aid in enforcement of the owner-
on-board provision and mid-season transfers. Adding a Federal 
sablefish-endorsed permit number to the state fish ticket is expected 
to aid enforcement agents by creating a record of which sablefish 
permit was being fished on a given fishing trip. Thus, if enforcement 
agents boarded a vessel at sea, they could record which owners were on 
board the vessel. At a later time, they could then verify which permit 
the sablefish landings were credited to on the state fish ticket and 
double-check that the owner of that permit was on board if the owner 
was not exempt from the owner-on-board provisions. For mid-season 
transfers, a mid-season certification is required on the permit office 
form for enforcement purposes, because it is a means to associate 
specific amounts of landings to date with an aggregate amount reported 
on state fish tickets for a particular permit owner. If during a post-
season audit of landings associated with a permit, the landings exceed 
the amount available to be landed on the permit, NMFS may begin 
enforcement proceedings against any party that had an ownership 
interest in the permit during the calendar year, including the vessel 
owner or operator. Adding a Federal sablefish-endorsed permit number to 
the state fish ticket is expected to aid enforcement agents by creating 
a record of which sablefish permit is attributed to which state fish 
ticket. This system will allow enforcement agents to attribute overages 
of sablefish landings to the appropriate party.
    Currently, only the CDFG has added a line for Federal permit 
information on their state fish tickets and enters that information 
into the PacFIN database. In the proposed rule, NMFS provided 
alternative ways to implement the owner-on-board and mid-season 
transfer provisions depending on whether or not WDFW and ODFW would 
require the Federal sablefish-endorsed permit number to be written on 
the state fish ticket and whether that information would be entered 
into PacFIN.
    NMFS understands that system and funding constraints make it 
difficult to change the state fish ticket system to provide information 
to PacFIN and to reprint the state fish tickets with a line for the 
Federal permit number. While the ability to pull state fish ticket data 
and permit information directly from PacFIN is ideal, it is not 
necessary to implement the owner-on-board requirement or mid-season 
transfers. As long as the Federal sablefish-endorsed permit number is 
required to be written somewhere on the state fish ticket, NMFS 
enforcement can audit state fish tickets, as needed, to determine 
whether the appropriate permit owner was on board the vessel or to 
determine a particular permit's catch. NMFS appreciates that WDFW and 
CDFG will provide Federal permit information into the PacFIN database.
    Because CDFG already requires the Federal permit number on the 
state fish ticket and because WDFW and ODFW will require it beginning 
in 2007, NMFS will implement the provisions of the sablefish permit 
stacking program that allows for mid-season transfers and requires only 
the owner of the sablefish endorsed permit being fished to be onboard 
the vessel while that permit is being fished. NMFS acknowledges that 
WDFW and ODFW will continue to work towards an improved state fish 
ticket system to meet the growing needs of fisheries management and 
enforcement.
    Comment 2: ODFW needs to be able to validate Federal permit numbers 
listed on state fish tickets with real-time access to the NOAA Federal 
permit database. ODFW stated that ODFW, WDFW, and CDFG cannot verify 
Federal permit numbers on state fish tickets with existing systems.
    Response: Federal permit information is available on our website at 
www.nwr.noaa.gov and is updated weekly. Click on ``Groundfish & 
Halibut,'' then click on ``Federal Permits,'' then click on 
``Groundfish Limited Entry Permits,'' and click on ``List of Current 
Permits.'' In addition, while the state's ability to validate Federal 
permit numbers listed on state fish tickets may be ideal, it is not 
necessary to implement the owner-on-board requirement or mid-season 
transfers. NMFS enforcement agents can check state fish tickets and 
compare the Federal permit numbers listed on the tickets with those 
listed in the NMFS Permit Office database, as needed. NMFS will not 
hold the states responsible for validating Federal permit information. 
If the states are concerned with validating Federal permit number, they 
can request that the Federal permit onboard the vessel be shown at the 
time the state fish ticket is filled out. Also, it is in the 
fisherman's best interest to ensure that the correct permit number is 
recorded on the state fish ticket in order to maintain their permit 
catch history.
    Comment 3: One commenter wrote to support the owner-on-board 
requirement, citing its implementation in other fisheries as being 
effective at: preventing harvesters from becoming sharecroppers for 
permit owners, and keeping the price of the cost of entry into the 
fishery within reach of fishermen. Another commenter wrote in 
opposition to the owner-on-board requirement, stating that it would be: 
confusing to fishery participants, and should not be required of 
individuals who had fished their permits for a certain period of time 
(maybe 7-10 years.)
    Response: NMFS continues to support the owner-on-board requirement. 
As NMFS stated in its final rule implementing the initial provisions of 
Amendment 14, ``Allowing persons 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.'' (66 FR 41152, August 7, 
2001). The Council carefully crafted Amendment 14's provisions to 
maintain a sablefish fleet populated by vessel owner-operators. 
Eliminating the owner-on-board requirement would be contrary to the 
Council's intent to maintain the small business character of this 
fishery.
    NMFS notes that while the owner-on-board requirement may make 
regulations more complex than the existing reguylatory regime, they are 
necessary to ensure the owner-operator character of the fleet is 
maintained. This provision was initially included in Amendment 14 
because it had been developed and supported by permit owners.
    NMFS disagrees with the commenter's suggestion that permit owners 
should be able to earn the right to be exempt from the owner-on-board 
requirement after fishing for a period of time. As stated above, the 
intent of the owner-on-board requirement is to maintain the owner-
operator character of the fleet. Creating additional exemptions to the 
requirement would be contrary to Amendment 14.
    Comment 4: Two commenters suggested that anyone who had owned at 
least 30 percent of a permit prior to November 1, 2000, should not be 
subject to the owner-on-board requirement (known colloquially as being 
``grandfathered'' from the requirement.) One of these commenters has 
part ownership in a permit that was purchased prior to November 1, 
2000, and sole ownership of a permit

[[Page 10617]]

purchased after that date. Amendment 14 had exempted entities that had 
purchased permits prior to November 1, 2000, from being subject to the 
owner-on-board requirement. However, Amendment 14 had specifically not 
exempted particular persons who were part owners of permits but not 
sole owners of permits from the owner-on-board provision. This 
commenter believes that he is being unfairly excluded from the 
exemption to the owner-on-board requirement. In his letter, he cites 
the particular challenge of owning two permits, wishing to fish those 
permits from two different vessels, and not being able to be on two 
vessels simultaneously.
    Response: As stated above in the response to Comment 3, the intent 
of the owner-on-board requirement is to maintain the owner-operator 
character of the fleet. Amendment 14 provided an exemption to this 
requirement to permit owning entities that had owned a permit prior to 
November 1, 2000. Amendment 14 also specifically did not exempt a 
person who had some percentage of interest in an exempted partnership 
or corporation, but who did not individually own a permit prior to the 
cutoff date, from the owner-on-board requirement. This and other 
restrictions on the exemption to the owner-on-board requirement were 
intended to transition the fleet to an owner-on-board fleet.
    Subsequent to its adoption of Amendment 14, the Council considered 
whether to exempt permit owners who had partial ownership in a permit 
prior to November 1, 2000, from the owner-on-board requirement. While 
the Council expressed some support for this notion, it has declined to 
further discuss or analyze a revision to the original owner-on-board 
requirements and exemptions from Amendment 14.
    Comment 5: One commenter wrote in support of the limit on the 
number of permits that may be owned or leased by an individual, and in 
support of requirements for documentation of permit ownership 
interests. Another commenter wrote in opposition to the limit on the 
number of permits that may leased. This second commenter suggested that 
permit holders who had participated in the fishery prior to November 1, 
2000, should be allowed to own up to three permits, and lease up to an 
additional three permits per vessel owned prior to November 1, 2000.
    Response: Federal regulations at Sec.  660.334(d)(4)(ii) state, 
``No person, partnership, or corporation may have ownership interest in 
or hold more than three permits with sablefish endorsements, except for 
persons, partnerships, or corporations that had ownership interest in 
more than three permits with sablefish endorsements as of November 1, 
2000.'' This regulation has been in place since August 2001 and the 
proposed rule for the action implemented via this final rule did not 
propose to revise this provision. NMFS appreciates the first 
commenter's support of the action the agency did propose, which was to 
require documentation of ownership interest in order to facilitate more 
thorough agency enforcement of this requirement.
    The proposed rule (October 12, 2005; 70 FR 59296) stated that the 
issue of whether to increase the number of permits that can be held was 
discussed by the Council and the Groundfish Advisory Panel (GAP) in 
2002. At that time, 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. This 
issue has not yet been revisited and would require further analysis and 
a rulemaking before it could be implemented by NMFS. Therefore, a 
change in the number of permits that can be held is not being 
considered in this final rule.
    Comment 6: The commenter understands the need for designating a 
base permit associated with the vessel length in order to maintain the 
characteristics of the fleet. However, the commenter suggests relaxing 
the restriction that the permit be within 5 ft (1.52 m) of the vessel 
length to within 10 ft (3 m). The commenter feels this would allow 
fishermen to make slight modifications to their vessel while still 
maintaining the character of the fleet, not changing the amount of 
blackcod they could catch, and allowing vessels to make modifications 
to participate in other fisheries. In addition, relaxing the length 
would make it somewhat easier to buy and sell permits to match a 
vessel.
    Response: The requirement that the vessel length be within 5 ft 
(1.52 m) of the length marked on the permit is currently in regulation 
at 50 CFR 660.334(c)(2)(i) and is not part of this rulemaking. 50 CFR 
660.334(c)(2)(i) states that, ``A limited entry permit endorsed only 
for gear other than trawl gear may be registered for use with a vessel 
up to 5 ft (1.52 m) longer than, the same length as, or any length 
shorter than, the size endorsed on the existing permit without 
requiring a combination of permits under Sec.  660.335 (b) or a change 
in the size endorsement.'' NMFS agrees that relaxing the limitations on 
the length (size) endorsement on the permit would increase flexibility. 
NMFS suggests that the commenter request that the Council analyze and 
revisit vessel size endorsements for the fixed gear fleet and consider 
making a recommendation to NMFS. If NMFS considers changes to the size 
endorsement requirement, it would do so through a separate rulemaking.
    Comment 7: One commenter wrote in support of the restriction of 
opportunities to process sablefish at-sea as a mechanism for ensuring 
that shore-based processing plants have access to sablefish landings 
from the primary sablefish season. A second commenter wrote to express 
his concern that the prohibition on processing sablefish at-sea could 
constrain his practice of processing on-shore the sablefish that he 
catches. A third commenter wrote to ask for an exemption to the 
prohibition on processing sablefish at-sea for fishery participants who 
have purchased at-sea processing equipment since the November 1, 2000, 
cutoff date. This third commenter also complained that the fleet had 
not received adequate notice of this potential restriction prior to the 
publication of the proposed rule for this action.
    Response: This final rule includes a prohibition on processing 
sablefish taken in the primary sablefish season at-sea unless the 
vessel has a sablefish at-sea processing exemption. In accordance with 
Amendment 14, exemptions to this prohibition will be provided to vessel 
owners who meet the qualification requirement of evidence of having 
processed: at least 2,000 lb (907.2 mt) round weight of frozen 
sablefish landed by the applicant vessel in any one calendar year in 
either 1998 or 1999, or between January 1, 2000 and November 1, 2000. 
As stated by the first commenter, the Council included this provision 
in Amendment 14 in order to maintain the character of the fishery, 
which included having the bulk of primary season sablefish being 
processed on shore.
    NMFS agrees that this prohibition encourages shoreside processing. 
As stated in the Environmental Assessment for the sablefish permit 
stacking program (Pacific Council, March 2001), 'If the fishing season 
is extended and permits can be stacked, the extended and more flexible 
fishing opportunities may increase the probability that at-sea 
processing activity will occur (or expand). Processor vessels may be 
typical harvesting vessels using the harvesting crew as processor labor 
or they may be larger processors (catcher-processors and motherships) 
drawing their workers from noncoastal and coastal communities. This may 
result in

[[Page 10618]]

the relocation of processing jobs and income from coastal communities 
and shore-based processors to the processor vessels and the offloading 
ports. Such relocation of activities could have an adverse effect on 
coastal communities dependent on fisheries. Prohibition of at-sea 
processing would reduce the potential for relocation of processing jobs 
and income away from fishery dependent coastal communities and limit 
on-shore/off-shore allocation disputes. However, if at-sea freezing is 
the most efficient way to harvest and process sablefish, the provision 
would also result in the loss of some economic benefit to the nation. 
The Pacific Council viewed the benefits of preventing negative impacts 
on coastal communities and the equity and simplification that would 
result from establishing a clear line between processors and catcher 
vessels as outweighing potential efficiency concerns that may result.' 
NMFS agrees with the Pacific Council's cost/benefit analysis and is 
implementing the Pacific Council's recommendation to facilitate 
shoreside processing, thus assisting coastal fishing communities.
    The second commenter wishes to continue processing his sablefish on 
shore. This regulation does not address shore-based processing of 
sablefish; therefore, his shore-based processing activities would not 
be affected by this regulation. Amendment 14 did not address limiting 
which shore-based processors would be permitted to process sablefish.
    NMFS disagrees with the third commenter's statement that adequate 
notice of this restriction was not provided to the public. The 
prohibition on at-sea processing was discussed in 2001 as slated for 
future implementation in the advanced notice of proposed rulemaking (66 
FR 17681, April 3, 2001) and in the proposed and final rules (66 FR 
30869, June 8, 2001, and 66 FR 41152, August 7, 2001, respectively) 
implementing the initial portions of Amendment 14. In addition, 
implementation of the prohibition on at-sea processing of sablefish and 
the corresponding qualifying criteria was discussed in the Pacific 
Fishery Management Council's Spring 2001 (Volume 25, Number 1) and 
Summer 2001 (Volume 25, Number 2) newsletters.

Changes From the Proposed Rule

    A definition for the term ``Grandfathered'' was added to the 
regulations in Sec.  660.302, Definitions. Grandfathered or first 
generation, when referring to a limited entry sablefish-endorsed permit 
owner, means those permit owners who owned a sablefish-endorsed limited 
entry permit prior to November 1, 2000, and are, therefore, exempt from 
certain requirements of the sablefish permit stacking program within 
the parameters of the regulations at Sec. Sec.  660.334 through 660.341 
and Sec.  660.372.
    In Sec.  660.334, Limited Entry Permits-endorsements, paragraph 
(d)(4)(vii) has been added to complement the same requirements listed 
at Sec.  660.372, Fixed gear sablefish fishery management, paragraph 
(b)(4)(i). This requirement allows a person, partnership, or 
corporation that is exempt from the owner-on-board requirement to sell 
all of their permits, buy another sablefish-endorsed permit within up 
to a year from the date the last permit was approved for transfer, and 
retain their exemption from the owner-on-board requirements.

Classification

    NMFS has determined that the final rule is consistent with the 
Pacific Coast Groundfish FMP and with the Magnuson-Stevens Act and 
other applicable laws.
    This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    NMFS prepared a final regulatory flexibility analysis (FRFA). The 
FRFA incorporates the IRFA, the supplemental IRFA (prepared by NMFS as 
a supplement to the IRFA prepared by the Council as part of the EA), a 
summary of the significant issues raised by the public comments in 
response to the supplemental IRFA, and NMFS responses to those 
comments, and a summary of the analyses completed to support the 
action. A copy of this analysis is available from the NMFS (see 
ADDRESSES). A summary of the analysis follows.
    This rule affects 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 
(July 19, 2001).
    The regulatory changes implemented in this final 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 cumulative limits with individual vessel capacity, it reduced 
overall primary fishery capacity, and it allowed the fishermen to use 
the longer season to fish more selectively and to increase their 
incomes by improving the quality of their ex-vessel product.
    The regulatory changes implemented in this rule require permit 
owners and permit holders to document their ownership interests in 
sablefish-endorsed limited entry permits and are expected to have no 
effect on permit owners and permit holders beyond the time required to 
complete that documentation. The owner-on-board requirement will not 
affect the fishing behavior of persons who owned sablefish-endorsed 
permits before November 1, 2000, and will only affect those who 
consider purchasing permits after that time in that persons who do not 
wish to participate in fishing activities aboard a vessel may not wish 
to purchase sablefish-endorsed permits. Prohibiting vessels from 
processing sablefish at sea, if they do not meet minimum frozen 
sablefish historic landing requirements, is expected to simply maintain 
current sablefish landing and processing practices for both fishers and 
processors. This prohibition should, therefore, ensure that shore-based 
processors will continue to receive business from sablefish harvesters. 
Certification of current sablefish landings on a permit when conducting 
a mid-season permit transfer to another person is not expected to have 
any effect on permit owners or holders beyond the time required to 
complete the documentation. Defining the term ``base permit'' 
consistent with the FMP is not expected to have any effect on any 
participant in the groundfish fishery because it is only an 
administrative change. This final rule is also not

[[Page 10619]]

expected to have any effect on the 66 limited entry, fixed gear permit 
holders without sablefish endorsements because this program only 
applies to sablefish fishery participants with sablefish endorsements 
(i.e., primary sablefish fishery participants).
    The criteria used to evaluate whether this final rule imposes 
``significant economic impacts'' are disproportionality and 
profitability. Disproportionality means that the regulations place a 
substantial number of small entities at a significant competitive 
disadvantage to large entities. Profitability means that the regulation 
significantly reduces profit for a substantial number of small 
entities. These criteria relate to the basic purpose of the RFA, i.e., 
to consider the effect of regulations on small businesses and other 
small entities. This final rule will not impose disproportionate 
effects between small and large business entities because all limited 
entry fixed gear vessels, including the sablefish endorsed vessels 
affected by this rule, are small business entities. As described in the 
above paragraph, Amendment 14 to the FMP and implementing regulations, 
including the August 7, 2001, final rule, increased business planning 
flexibility and profitability overall for the affected small 
businesses. This final rule further implements provisions of Amendment 
14, making the regulations more enforceable and maintaining the small 
business character of the fleet. Therefore, this final rule is not 
expected to change the overall increased profitability of the fleet 
gained through the August 7, 2001, final rule. However, the owner-on-
board requirement may decrease the overall profitability gained from 
implementation of the initial permit stacking provisions from Amendment 
14. An economic analysis of the owner-on-board provision from the 
supplemental IRFA (see ADDRESSES) shows that the owner-on-board 
requirement may cost second generation permit owners approximately 
$40,400 per person per year or approximately $15 million in lost income 
for all second generation permit owners, collectively discounted over a 
20-year period. In addition, the permit value may decrease over time 
due to the reduced flexibility associated with use of the permit. 
Overall, when considering all of the provisions associated with 
Amendment 14, those implemented with the August 7, 2001, final rule and 
those implemented through this rulemaking, profitability is still 
expected to increase over the previous sablefish 3-tier management 
system.
    The actions being implemented in this document are not expected to 
have significant impacts on small entities. Seven public comments were 
received on the proposed rule. None of these comments specifically 
addressed the IRFA. Comments 3, 4, and 7 in the preamble pertain to the 
economic impacts which were analyzed in the IRFA and FRFA. Responses to 
these comments were provided earlier in the preamble to this final 
rule.
    Section 212 of the Small Business Regulatory Enforcement Fairness 
Act of 1996 states that, for each rule or group of related rules for 
which an agency is required to prepare a FRFA, the agency shall publish 
one or more guides to assist small entities in complying with the rule, 
and shall designate such publications as ``small entity compliance 
guides.'' The agency shall explain the actions a small entity is 
required to take to comply with a rule or group of rules. As part of 
this rulemaking process, a public notice that also serves as small 
entity compliance guide (the guide) was prepared. The guide and final 
rule will be sent to all holders of permits for the limited entry fixed 
gear sablefish fishery. Copies of this final rule and the guide are 
available from the NMFS Northwest Regional Office (see ADDRESSES) and 
are available on our website at www.nwr.noaa.gov (Click on ``Groundfish 
& Halibut,'' then on ``Public Notices'').
    The Council prepared an EA for Amendment 14 and the Assistant 
Administrator (AA) concluded that there will be no significant impact 
on the human environment as a result of this final rule. A copy of the 
EA is available from the Council (see ADDRESSES). In the EA/RIR 
prepared by the Council for this action, two main alternatives were 
considered, a no action alternative and a permit stacking regime 
alternative. The topics considered under each of these alternatives 
were permit stacking, accumulation, season length, at-sea processing, 
permit ownership/owner-on-board, and foreign control. Under the no 
action alternative, the primary limited entry, fixed gear sablefish 
fishery would continue under the 3-tier management program, with one 
permit associated with each participating vessel. In addition, permit 
stacking would not be allowed, the number of permits owned would not be 
limited, the season length would be 9-10 days and would likely shorten 
over time, vessels without sablefish endorsements would not be allowed 
to fish during the primary season, at-sea processing would be 
permitted, permit owners would not be required to be onboard their 
vessel during fishing operations, and any legal entity allowed to own a 
U.S. fishing vessel may own a permit.
    Under the permit stacking regime alternative, 12 provisions, many 
of which include suboptions, were considered for the topics (permit 
stacking, accumulation, season length, etc.). Thus, the permit stacking 
regime alternative consists of many sub-alternatives, depending on the 
combination of provisions and suboptions adopted by the Council. 
Provisions 1 (allow a basic permit stacking program), 2 (gear usage), 4 
(unstacking permits), and 8 (stacking non-sablefish limits and 
sablefish daily trip limits) address permit stacking. Provision 3 
(accumulation limits) addresses accumulation. Provisions 5 (season 
duration), 9 (opportunities for unendorsed vessels), 11 (advanced 
notice of landings), and 12 (stacking deadline) address season length. 
Provision 6 (processing prohibition and freezer vessel length) 
addresses at-sea processing. Provision 7 (individual ownership only and 
owner-on-board requirement) addresses permit ownership/owner-on-board. 
Provision 10 (U.S. citizenship requirement) addresses foreign control. 
As mentioned previously, the final rule for Amendment 14 implemented 
most of these provisions. This final rule would implement parts of the 
following provisions: 2, 6, and 7. The preferred alternative 
recommended by the Council and implemented by NMFS was the permit 
stacking regime alternative with only certain options within each 
provisions being adopted as preferred.
    The preferred alternative was selected because it best met the 
objectives of the action, which for the provisions implemented through 
this action (i.e., provisions 2, 6, and 7) included directing benefits 
towards fishing communities and preventing excessive concentration of 
harvest privileges. The EA/RIR for this action reviewed alternatives 
for their economic impacts. Of the provisions that would be implemented 
by this action, only provisions 6 and 7 may have economic effects. 
Provision 6 may prevent economic efficiencies from developing by 
restricting at-sea processing to vessels that had processed at-sea 
prior to November 1, 2000, and may limit a rise in permit prices from 
what they would have been if at-sea processing were allowed. Provision 
7 may reduce flexibility, which may in turn reduce efficiency and limit 
the rise in permit prices compared to a regime where owner-on-board 
were not required and

[[Page 10620]]

permits were not limited to ownership by individuals.
    This final rule contains a collection-of-information requirement 
subject to the Paperwork Reduction Act (PRA,) which has been approved 
by the Office of Management and Budget (OMB) under control number 0648-
0203. Public reporting burden to determine ownership interests is 
estimated to average 0.5 hour per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information, or approximately $8.51 per respondent for 
the respondent's time. Public reporting burden for the provision to add 
a not-listed spouse as permit co-owner is estimated to average 0.33 
hour per response, including the time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the collection of information, or 
approximately $5.62 per respondent for the respondent's time. Public 
reporting burden for mid-season transfers of sablefish-endorsed permits 
is estimated to average 0.5 hour per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information, or approximately $8.51 per respondent for 
the respondent's time. Public reporting burden for the sablefish at-sea 
processing exemption is estimated to average 0.5 hour per response, 
including the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information, or approximately $8.51 per 
respondent for the respondent's time. Send comments regarding these 
burden estimates or any other aspect of this data collection, including 
suggestions for reducing the burden, to NMFS (see ADDRESSES) and by e-
mail to David--Rostker@omb.eop.gov, or fax to 202-395-7285.
    Notwithstanding any other provision of the law, no person is 
required to respond to, and no person shall be subject to penalty for 
failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB control number.

List of Subjects in 50 CFR Part 660

    Fishing, Fisheries, and Indian fisheries.

    Dated: February 24, 2006.
John Oliver,
Deputy Assistant Administrator for Operations, National Marine 
Fisheries Service.

0
For the reasons set out in the preamble, 50 CFR part 660 is amended as 
follows:

PART 660--FISHERIES OFF WEST COAST STATES AND IN THE WESTERN 
PACIFIC

0
1. The authority citation for part 660 continues to read as follows:

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


0
2. In Sec.  660.302, the definition for ``Permit holder'' is revised, 
and new definitions for ``Base permit,'' ``Change in partnership or 
corporation,'' ``Corporation,'' ``Grandfathered,'' ``Partnership,'' 
``Spouse,'' and ``Stacking'' are added in alphabetical order to read as 
follows:


Sec.  660.302  Definitions.

* * * * *
    Base permit, with respect to a limited entry permit stacking 
program, means a limited entry permit described at Sec.  660.333(a) 
registered for use with a vessel that meets the permit length 
endorsement requirements appropriate to that vessel, as described at 
Sec.  660.334(c).
* * * * *
    Change in partnership or corporation means the addition of a new 
shareholder or partner to the corporate or partnership membership. This 
definition of a ``change'' will apply to any person added to the 
corporate or partnership membership 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.
* * * * *
    Corporation is a legal, business entity, including incorporated 
(INC) and limited liability corporations (LLC).
* * * * *
    Grandfathered or first generation, when referring to a limited 
entry sablefish-endorsed permit owner, means those permit owners who 
owned a sablefish-endorsed limited entry permit prior to November 1, 
2000, and are, therefore, exempt from certain requirements of the 
sablefish permit stacking program within the parameters of the 
regulations at Sec. Sec.  660.334 through 660.341 and Sec.  660.372.
* * * * *
    Partnership is 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).
* * * * *
    Permit holder means a vessel owner as identified on the United 
States Coast Guard form 1270 or state motor vehicle licensing document.
* * * * *
    Spouse means a person who is legally married to another person as 
recognized by state law (i.e., one's wife or husband).
* * * * *
    Stacking is the practice of registering more than one limited entry 
permit for use with a single vessel (See Sec.  660.335(c)).
* * * * *

0
3. In Sec.  660.303, paragraph (c) is revised to read as follows:


Sec.  660.303  Reporting and recordkeeping.

* * * * *
    (c) Any person landing groundfish must retain on board the vessel 
from which groundfish is landed, and provide to an authorized officer 
upon request, copies of any and all reports of groundfish landings 
containing all data, and in the exact manner, required by the 
applicable state law throughout the cumulative limit period during 
which a landing occurred and for 15 days thereafter. For participants 
in the primary sablefish season (detailed at Sec.  660.372(b)), the 
cumulative limit period to which this requirement applies is April 1 
through October 31.
* * * * *

0
4. In Sec.  660.306, paragraph (b)(3) is added and paragraphs (e) and 
(g)(2) are revised to read as follows:


Sec.  660.306  Prohibitions.

* * * * *
    (b) * * *
    (3) Fail to retain on board a vessel from which sablefish caught in 
the primary sablefish season is landed, and provide to an authorized 
officer upon request, copies of any and all reports of sablefish 
landings against the sablefish endorsed permit's tier limit, or 
receipts

[[Page 10621]]

containing all data, and made in the exact manner required by the 
applicable state law throughout the primary sablefish season during 
which such landings occurred and for 15 days thereafter.
* * * * *
    (e) Fixed gear sablefish fisheries. (1) Take, retain, possess or 
land sablefish under the cumulative limits provided for the primary 
limited entry, fixed gear sablefish season, described in Sec.  
660.372(b), from a vessel that is not registered to a limited entry 
permit with a sablefish endorsement.
    (2) Beginning January 1, 2007, take, retain, possess or land 
sablefish in the primary sablefish season described at Sec.  660.372(b) 
unless the owner of the limited entry permit registered for use with 
that vessel and authorizing the vessel to participate in the primary 
sablefish season is on board that vessel. Exceptions to this 
prohibition are provided at Sec.  660.372(b)(4)(i) and (ii).
    (3) Beginning January 1, 2007, process sablefish taken at-sea in 
the limited entry primary sablefish fishery defined at Sec.  
660.372(b), from a vessel that does not have a sablefish at-sea 
processing exemption, defined at Sec.  660.334(e).
* * * * *
    (g) * * *
    (2) Make a false statement on an application for issuance, renewal, 
transfer, vessel registration, replacement of a limited entry permit, 
or a declaration of ownership interest in a limited entry permit.
* * * * *

0
5. In Sec.  660.334, paragraph (e) is redesignated as paragraph (f), 
and is revised; paragraphs (c)(3), (d)(4)(ii) and (iii) are revised; 
and paragraphs (d)(4)(iv) through (vii) and new paragraph (e) are added 
to read as follows:


Sec.  660.334  Limited entry permits endorsements.

* * * * *
    (c) * * *
    (3) Size endorsement requirements for sablefish-endorsed permits. 
Notwithstanding paragraphs (c)(1) and (2) of this section, when 
multiple permits are ``stacked'' on a vessel, as described in Sec.  
660.335(c), at least one of the permits must meet the size requirements 
of those sections. The permit that meets the size requirements of those 
sections is considered the vessel's ``base'' permit, as defined in 
Sec.  660.302. Beginning in the Fall of 2006 with the limited entry 
permit renewal process (Sec.  660.335(a)), 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's selection of the 
base permit, the permit owner may send a letter to NMFS SFD requesting 
the change and the reasons for the request. If the permit requested to 
be changed to the base permit is appropriate for the length of the 
vessel as provided for in paragraph (c)(2)(i) of this section, NMFS SFD 
will reissue the permit with the new base permit. Any additional 
permits that are stacked for use with a vessel participating in the 
limited entry primary fixed gear sablefish fishery may be registered 
for use with a vessel even if the vessel is more than 5 ft (1.5 m) 
longer or shorter than the size endorsed on the permit.
* * * * *
    (d) * * *
    (4) * * *
    (ii) No individual person, partnership, or corporation in 
combination may have ownership interest in or hold more than 3 permits 
with sablefish endorsements 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 permits with 
sablefish endorsements as of November 1, 2000. The exemption from the 
maximum ownership level of 3 permits only applies to ownership of the 
particular permits that were owned on November 1, 2000. An individual 
person, or partnerships or corporations that had ownership interest in 
3 or more permits with sablefish endorsements as of November 1, 2000, 
may not acquire additional permits beyond those particular permits 
owned on November 1, 2000. If, at some future time, an individual 
person, partnership, or corporation that owned more than 3 permits as 
of November 1, 2000, sells or otherwise permanently transfers (not 
holding through a lease arrangement) some of its originally owned 
permits, such that they then own fewer than 3 permits, they may then 
acquire additional permits, but may not have ownership interest in or 
hold more than 3 permits.
    (iii) A partnership or corporation will lose the exemptions 
provided in paragraphs (d)(4)(i) and (ii) of this section on the 
effective date of any change in the corporation or partnership from 
that which existed on November 1, 2000. A ``change'' in the partnership 
or corporation is defined at Sec.  660.302. A change in the partnership 
or corporation must be reported to SFD within 15 calendar days of the 
addition of a new shareholder or partner.
    (iv) During 2006 when a permit's ownership interest is requested 
for the first time, NMFS anticipates sending a form to legally 
recognized corporations and partnerships (i.e., permit owners or 
holders that do not include only individual's names) 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 listing 
of that same information as of the current date in 2006. Applicants 
will be provided at least 60 calendar days to submit completed 
applications. 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 by a revised deadline date of August 1, 2006. If the permit owning 
or holding entity fails to return the completed form by that second 
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 the 2007 fishing year and beyond, any partnership or 
corporation with any ownership interest in or that holds a limited 
entry permit with a sablefish endorsement shall document the extent of 
that ownership interest or the individuals that hold the permit with 
the SFD via the Identification of Ownership Interest Form sent to the 
permit owner through the annual permit renewal process defined at Sec.  
660.335(a) and whenever a change in permit owner, permit holder, and/or 
vessel registration occurs as defined at Sec.  660.335(d) and (e). SFD 
will not renew a sablefish-endorsed limited entry permit through the 
annual renewal process described at Sec.  660.335(a) or approve a 
change in permit owner, permit holder, and/or vessel registration 
unless the Identification of Ownership Interest Form has been 
completed. Further, if SFD discovers through review of the 
Identification of Ownership Interest Form that an individual person, 
partnership, or corporation owns or holds more than 3 permits and is 
not authorized to do so under paragraph (d)(4)(ii) of this section, the 
individual person, partnership or corporation will be notified and the 
permits owned or held by that individual person, partnership, or 
corporation will be void and reissued with the vessel status as 
``unidentified'' until the permit owner owns and/or holds a quantity of 
permits appropriate

[[Page 10622]]

to the restrictions and requirements described in paragraph (d)(4)(ii) 
of this section. If SFD discovers through review of the Identification 
of Ownership Interest Form that a partnership or corporation has had a 
change in membership since November 1, 2000, as described in paragraph 
(d)(4)(iii) of this section, the partnership or corporation will be 
notified, SFD will void any existing permits, and reissue any permits 
owned and/or held by that partnership or corporation in 
``unidentified'' status with respect to vessel registration until the 
partnership or corporation is able to transfer those permits to persons 
authorized under this section to own sablefish-endorsed limited entry 
permits.
    (v) For permit owners with one individual listed and who were 
married as of November 1, 2000, and who wish to add their spouse as co-
owner on their permit(s), NMFS will accept corrections to NMFS' permit 
ownership records. Permit owners may add a not-listed spouse as a co-
owner without losing their exemption from the owner-on-board 
requirements (i.e., grandfathered status). 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 an individual and did not 
retroactively add a spouse as co-owner on that permit. 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. 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. NMFS will send a form to 
permit owners with one individual listed on the permit 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. Applicants 
will be required to submit a copy of their marriage certificate as 
evidence of marriage. Applicants will be provided at least 60 calendar 
days to submit an application to add a spouse as co-owner. Failure to 
return the completed form to NMFS SFD by July 1, 2006, will result in 
the individual listed on the permit in SFD records as of November 1, 
2000, remaining on the permit. SFD will not accept any declarations to 
add a spouse as co-owner for couples married as of November 1, 2000, 
postmarked after the July 1, 2006, deadline.
    (vi) For an individual person, partnership, or corporation that 
qualified for the owner-on-board exemption, but later divested their 
interest in a permit or permits, they may retain rights to an owner-on-
board exemption as long as that individual person, partnership, or 
corporation obtains another permit by March 2, 2007. An individual 
person, partnership or corporation could only obtain 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 will 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 by March 2, 
2007.
    (vii) A person, partnership, or corporation that is exempt from the 
owner-on-board requirement may sell all of their permits, buy another 
sablefish-endorsed permit within up to a year from the date the last 
permit was approved for transfer, and retain their exemption from the 
owner-on-board requirements. An individual person, partnership or 
corporation could only obtain 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.
    (e) Sablefish at-sea processing prohibition and exemption--(1) 
General. Beginning January 1, 2007, vessels are prohibited from 
processing sablefish at sea that were caught in the primary sablefish 
fishery without sablefish at-sea processing exemptions at Sec.  
660.306(e)(3). A permit and/or vessel owner may get an exemption to 
this prohibition if his/her vessel meets the exemption qualifying 
criteria provided in paragraph (e)(2) of this section. The sablefish 
at-sea processing exemption is issued to a particular vessel and the 
permit and/or vessel owner who requested the exemption. The exemption 
is not part of the limited entry permit. The exemption is not 
transferable to any other vessel, vessel owner, or permit owner for any 
reason. The sablefish at-sea processing exemption will expire upon 
transfer of the vessel to a new owner or if the vessel is totally lost, 
as defined at Sec.  660.302.
    (2) Qualifying criteria. A sablefish at-sea processing exemption 
will be issued to any vessel registered for use with a sablefish-
endorsed limited entry permit that meets the sablefish at-sea 
processing exemption qualifying criteria and for which the owner 
submits a timely application. The qualifying criteria for a sablefish 
at-sea processing exemption are: at least 2,000 lb (907.2 mt), round 
weight, of frozen sablefish landed by the applicant vessel during any 
one calendar year in either 1998 or 1999, or between January 1 and 
November 1, 2000. The best evidence of a vessel having met these 
qualifying criteria will be receipts from frozen product buyers or 
exporters, accompanied by the state fish tickets or landings receipts 
appropriate to the frozen product. Documentation showing investment in 
freezer equipment without also showing evidence of how poundage 
qualifications have been met is not sufficient evidence to qualify a 
vessel for a sablefish at-sea processing exemption. All landings of 
sablefish must have occurred during the regular and/or mop-up seasons 
and must have been harvested in waters managed under this part. 
Sablefish taken in tribal set aside fisheries or taken outside of the 
fishery management area, as defined at Sec.  660.302, does not meet the 
qualifying criteria.
    (3) Issuance process for sablefish at-sea processing exemptions.
    (i) The SFD will mail sablefish at-sea processing exemption 
applications to all limited entry permit owners with sablefish 
endorsements and/or fixed gear vessel owners and will make those 
applications available online at www.nwr.noaa.gov/Groundfish-Halibut/
Fisheries-Permits/index.cfm. Permit and/or vessel owners will have at 
least 60 calendar days to submit applications. A permit and/or vessel 
owner who believes that their vessel may qualify for the sablefish at-
sea processing exemption will have until July 1, 2006, to submit 
evidence showing how their vessel has met the qualifying criteria 
described in this section at paragraph (e)(2) of this section. 
Paragraph (e)(4) of this section sets out the relevant evidentiary 
standards and burden of proof. SFD will not accept applications for the 
sablefish at-sea processing exemption postmarked after July 1, 2006.

[[Page 10623]]

    (ii) Within 30 calendar days of the deadline or after receipt of a 
complete application, the SFD will notify applicants by letter of 
determination whether their vessel qualifies for the sablefish at-sea 
processing exemption. A person who has been notified by the SFD that 
their vessel qualifies for a sablefish at-sea processing exemption will 
be issued an exemption letter by SFD that must be onboard the vessel at 
all times. After the deadline for the receipt of applications has 
expired and all applications processed, SFD will publish a list of 
vessels that qualified for the sablefish at-sea processing exemption in 
the Federal Register.
    (iii) If a permit and/or vessel owner chooses to file an appeal of 
the determination under paragraph (e)(3)(ii) of this section, the 
appeal must be filed with the Regional Administrator within 30 calendar 
days of the issuance of the letter of determination. The appeal must be 
in writing and must allege facts or circumstances, and include cr