Fisheries of the Exclusive Economic Zone Off Alaska; Bering Sea and Aleutian Islands Crab Rationalization Program; Amendment 27, 25449-25458 [E9-12430]

Download as PDF Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations SUMMARY: The General Services Administration (GSA) is amending the General Services Administration Acquisition Regulation (GSAR) by revising and updating the agency’s implementation of Federal Acquisition Regulation (FAR) Part 13, Simplified Acquisition Procedures. DATES: Effective Date: May 28, 2009. FOR FURTHER INFORMATION CONTACT: For clarification of content, contact Ms. Meredith Murphy, Procurement Analyst, at (202) 208–6925, or by email at meredith.murphy@gsa.gov. For information pertaining to status or publication schedules, contact the Regulatory Secretariat (VPR), Room 4041, 1800 F Street, NW, Washington, DC, 20405, (202) 501–4755. Please cite Amendment 2009–0007, GSAR case 2007–G502 (Change 35). SUPPLEMENTARY INFORMATION: A. Background This is part of the GSAM Rewrite Project, initiated in 2006 to revise, update, and simplify the GSA Acquisition Manual (GSAM). An Advance Notice of Proposed Rulemaking (ANPR), with a request for comments, was published in the Federal Register at 71 FR 7910 on February 15, 2006. No public comments were received in response to GSAM Part 513. Prior to publication of the ANPR, internal comments were incorporated. The current GSAM Part 513 implements three of the FAR Part 13 subparts and the policy at GSAM 513.003. There are no clauses associated with GSAM Part 513, and no supplementary subparts. The proposed rule deleted the policy statement at GSAM 513.003 and certain GSA-specific forms that are redundant to standard or optional forms in the FAR, as well as the GSAM text associated with them. The GSA review team noted that the GSAM Part 513 material currently coded as regulatory, i.e., GSAR, does not, in fact, contain regulatory material. The GSAR 513.302–70, 513.303–3(a) and (b), and 513.307 are considered policy, and this material has been converted to GSAM from GSAR. This change is shown by lining out the current GSAR text. The effect is to remove all of the GSAM Part 513 GSAR material. However, this former GSAR material has been retained, with some modifications, in the GSAM, which is also available to the public on the GSAM web site. A notice of proposed rulemaking was published in the Federal Register at 73 FR 44955 on August 1, 2008. The public comment period for the proposed rule closed September 30, 2008. No VerDate Nov<24>2008 16:39 May 27, 2009 Jkt 217001 comments were received. Therefore, the proposed rule is being converted to a final rule without change. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. B. Regulatory Flexibility Act The General Services Administration certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the changes are primarily editorial in nature. An Initial Regulatory Flexibility Analysis has, therefore, not been performed. No comments were received in response to the shift from GSAR to GSAM. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the GSAR do not impose recordkeeping or information collection requirements, or otherwise collect information from offerors, contractors, or members of the public that require approval of the Office of Management and Budget under 44 U.S.C. Chapter 35, et seq. List of Subjects in 48 CFR Part 513 Government procurement. Dated: May 14, 2009. David A. Drabkin, Acting Chief Acquisition Officer, Office of the Chief Acquisition Officer, General Services Administration. Therefore, GSA amends 48 CFR part 513 as set forth below: ■ 1. The authority citation for 48 CFR part 513 is revised to read as follows: ■ Authority: 40 U.S.C. 121(c). PART 513 [Removed and Reserved] 2. Remove and reserve Part 513 consisting of Subpart 513.3 and sections 513.302, 513.302–70, 513.303, 513.303– 3, and 513.307. ■ [FR Doc. E9–12375 Filed 5–27–09; 8:45 am] BILLING CODE 6820–61–S PO 00000 25449 DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 680 [Docket No. 080416577–9898–03] RIN 0648–AW73 Fisheries of the Exclusive Economic Zone Off Alaska; Bering Sea and Aleutian Islands Crab Rationalization Program; Amendment 27 AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. SUMMARY: NMFS issues regulations to implement Amendment 27 to the Fishery Management Plan for Bering Sea/Aleutian Islands King and Tanner Crabs (FMP). These regulations amend the Crab Rationalization Program to: implement the statutory requirements of section 122(e) of the Magnuson-Stevens Fishery Conservation and Management Reauthorization Act that specifically directs NMFS to modify how individual processing quota (IPQ) use caps apply to a person who is custom processing Chionoecetes opilio crab in the North Region; clarify that for other crab fisheries, IPQ crab that is processed at a facility through contractual arrangements with the facility owners will not be applied against the IPQ use cap of the facility owners provided specific conditions are met; and modify IPQ use caps that limit the amount of IPQ that may be used at a facility by persons processing Eastern Aleutian Islands golden king crab and Western Aleutian Islands red king crab. This action is intended to promote the goals and objectives of the Magnuson-Stevens Fishery Conservation and Management Act, the FMP, and other applicable law. DATES: Effective June 29, 2009. ADDRESSES: Copies of Amendment 27, the Regulatory Impact Review (RIR), the Final Regulatory Flexibility Analysis (FRFA), and the categorical exclusion prepared for this action, and the Environmental Impact Statement (EIS), RIR, FRFA, and Social Impact Assessment prepared for the Crab Rationalization Program are available from the NMFS Alaska Region at 709 West 9th Street, Room 420A, Juneau, AK, or from the Alaska Region website at http://www.fakr.noaa.gov/ sustainablefisheries.htm. FOR FURTHER INFORMATION CONTACT: Glenn Merrill, 907–586–7228. Frm 00063 Fmt 4700 Sfmt 4700 E:\FR\FM\28MYR1.SGM 28MYR1 25450 Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations The king and Tanner crab fisheries in the exclusive economic zone (EEZ) of the Bering Sea and Aleutian Islands (BSAI) are managed under the FMP. The FMP was prepared by the North Pacific Fishery Management Council (Council) under the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act or MSA) as amended by the Consolidated Appropriations Act of 2004 (Public Law 108–199, section 801). A final rule implementing the Crab Rationalization Program (Program) published on March 2, 2005 (70 FR 10174). Regulations implementing the FMP, and all amendments to the Program are at 50 CFR part 680 and general regulations related to fishery management at 50 CFR part 600. SUPPLEMENTARY INFORMATION: Program Overview Harvester, Processor, and Community Provisions The Program established a limited access privilege program (LAPP) for nine crab fisheries in the BSAI, and assigned quota share (QS) to persons based on their historic participation in one or more of those nine BSAI crab fisheries during a specific time period. Under the Program, NMFS issued four types of QS: catcher vessel owner (CVO) QS was assigned to holders of License Limitation Program (LLP) licenses who delivered their catch onshore or to stationary floating crab processors; catcher/processor vessel owner (CPO) QS was assigned to LLP holders that harvested and processed their catch at sea; captains and crew onboard catcher/ processor vessels were issued catcher/ processor crew (CPC) QS; and captains and crew onboard catcher vessels were issued catcher vessel crew (CVC) QS. Each year, a person who holds QS may receive an exclusive harvest privilege for a portion of the annual total allowable catch (TAC), called individual fishing quota (IFQ). NMFS also issued processor quota share (PQS) under the Program. Each year PQS yields an exclusive privilege to process a portion of the IFQ in each of the nine BSAI crab fisheries. This annual exclusive processing privilege is called individual processor quota (IPQ). Only a portion of the QS issued yields IFQ that is required to be delivered to a processor with IPQ. QS derived from deliveries made by catcher vessel owners (i.e., CVO QS) is subject to designation as either Class A IFQ or Class B IFQ. Ninety percent of the IFQ derived from CVO QS is designated as Class A IFQ, and the remaining 10 percent of the IFQ is designated as Class VerDate Nov<24>2008 16:39 May 27, 2009 Jkt 217001 B IFQ. Class A IFQ must be matched and delivered to a processor with IPQ. Class B IFQ is not required to be delivered to a specific processor with IPQ. Each year there is a one-to-one match of the total pounds of Class A IFQ with the total pounds of IPQ issued in each crab fishery. The Program seeks to ensure that communities that were historically active as processing ports continue to receive socioeconomic benefits from crab deliveries through regional delivery requirements, commonly known as regionalization. Even if processors transfer their PQS/IPQ, the Program specifies geographic regions where Class A IFQ must be delivered, and where IPQ must be used to receive that crab. The specific geographic regions applicable to Class A IFQ and IPQ are based on historic geographic delivery and processing patterns. Class B, CVC, CPO, and CPC IFQ are not subject to regionalization. For most crab fisheries, CVO QS and the resulting Class A IFQ, and PQS and the resulting IPQ, are regionally designated for the North Region (i.e., north of 54°20′ N. lat.), or the South Region (i.e., any location south of 54° 20′ N. lat.) based on the historic delivery and processing patterns of a specific CVO QS or PQS holder. For one fishery, the Western Aleutian Islands golden king crab fishery, half of the Class A IFQ and IPQ are designated for the West region, west of 174° W. long., and the other half of the Class A IFQ and IPQ are not subject to a regional designation. Two crab fisheries are not subject to regionalization requirements, the eastern Bering Sea and western Bering Sea C. bairdi fisheries. For communities that were historically active processing ports, the Program provides a right-of-first-refusal (ROFR) to purchase any PQS or IPQ that are derived from processing activities in those communities. The ROFR provision requires that any processor who wishes to transfer the PQS or IPQ in a specific crab fishery originally derived from processing activities in specific communities for use outside of those communities cannot complete that transfer unless they first provide those communities an opportunity to purchase the PQS or IPQ under the same terms and conditions offered to the processor to whom they wish to transfer those shares. The specific communities and fisheries eligible for the ROFR are described in regulation at 50 CFR 680.2. The intent behind the ROFR is to provide communities with an option to purchase PQS or IPQ that would otherwise be used outside of the community. The rationale for the PO 00000 Frm 00064 Fmt 4700 Sfmt 4700 specific fisheries and communities subject to ROFR requirements is described in detail in the EIS prepared for the Program (see ADDRESSES). Use Caps When the Council recommended the Program, it expressed concern about the potential for excessive consolidation of QS and PQS, and the resulting annual IFQ and IPQ. Excessive consolidation could have adverse effects on crab markets, price setting negotiations between harvesters and processors, employment opportunities for harvesting and processing crew, tax revenue to communities in which crab are landed, and other factors considered and described in the EIS prepared for the Program (see ADDRESSES). To address these concerns, the Program limits the amount of QS that a person can hold, the amount of IFQ that a person can use, and the amount of IFQ that can be used onboard a vessel. Similarly, the Program limits the amount of PQS that a person can hold, the amount of IPQ that a person can use, and the amount of IPQ that can be processed at a given facility. These limits are commonly referred to as use caps. Currently, processors are limited in how much IPQ they can receive at a processing facility. In each of the nine BSAI crab fisheries under the Program, a person is limited to holding no more than 30 percent of the PQS initially issued in the fishery and using no more than the amount of IPQ resulting from 30 percent of the initially issued PQS in a given fishery. In addition, no person is permitted to use more than 60 percent of the IPQ crab in the Bering Sea C. opilio fishery designated for exclusive use in the north region. Finally, no processing facility can be used to process more than 30 percent of the IPQ in a crab fishery. The Program is designed to minimize the potential that PQS and IPQ use caps could be evaded through the use of corporate affiliations or other legal relationships that would effectively allow a single person to use PQS or IPQ even if they are not the majority owner of that PQS or IPQ. Prior to Amendment 27, the Program calculated a person’s IPQ use cap by summing the total amount of IPQ that is (1) held by that person; (2) held by other persons who are affiliated with that person through common ownership or control; and (3) any IPQ crab that is custom processed at a facility an IPQ holder owns. A custom processing arrangement exists when one IPQ holder: (1) has a contract with the owners of a processing facility to have his crab processed at that E:\FR\FM\28MYR1.SGM 28MYR1 Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations facility; (2) that IPQ holder does not have an ownership interest in the processing facility; and (3) that IPQ holder is not otherwise affiliated with the owners of that crab processing facility. In custom processing arrangements, the IPQ holder contracts with a facility operator to have the IPQ crab processed according to his specifications. Custom processing arrangements typically occur when an IPQ holder does not own an onshore processing facility or cannot economically operate a stationary floating crab processor in a specific region. Relevant to this action, in each of the nine Program fisheries, a person is limited to holding no more than an amount equal to 30 percent of the PQS initially issued in a given BSAI crab fishery and limited to using no more than the amount of IPQ resulting from 30 percent of the initially issued PQS in a given BSAI crab fishery. In addition, no person is permitted to use more than 60 percent of the IPQ crab issued in the Bering Sea C. opilio fishery designated for exclusive use in the North Region. Finally, no processing facility can be used to process more than 30 percent of the IPQ issued for a crab fishery. Amendment 27 Amendment 27 accomplishes three broad goals. First, it establishes regulations necessary to implement section 122(e) of the Magnuson-Stevens Fishery Conservation and Management Reauthorization Act of 2006 (MSRA) which became law on January 12, 2007 (Public Law 109–479). Second, it modifies the methods used to calculate and apply use caps when custom processing arrangements occur. Third, it establishes a limit on the maximum amount of processing that may be undertaken at processing facilities in the Eastern Aleutian Islands golden king crab and Western Aleutian Islands red king crab fisheries. Section 122(e) of the MSRA specifically directs NMFS to modify how IPQ use caps apply to a person who is custom processing Bering Sea C. opilio crab in the North Region. Section 122(e) of the MSRA states: (e) USE CAPS.— (1) IN GENERAL.—Notwithstanding sections 680.42(b)(ii)(2) and 680.7(a)(ii)(7) of title 50, Code of Federal Regulations, custom processing arrangements shall not count against any use cap for the processing of opilio crab in the Northern Region so long as such crab is processed in the North region by a shore-based crab processor. (2) SHORE–BASED CRAB PROCESSOR DEFINED.—In this paragraph, the term ‘‘shorebased processor’’ means any person or vessel that receives, purchases, or arranges to VerDate Nov<24>2008 16:39 May 27, 2009 Jkt 217001 purchase unprocessed crab, that is located on shore or moored within the harbor. To fully implement section 122(e) of the MSRA, NMFS must adopt conforming regulations. However, several of the specific terms used in section 122(e), such as ‘‘custom processing arrangements’’ and ‘‘moored within the harbor,’’ are not defined in the statute or in regulation and Congress did not provide legislative history to guide NMFS on how to interpret those terms. In response, the Council received guidance from the public and adopted recommendations to revise the Program to implement section 122(e) of the MSRA. During this process, participants in other crab fisheries expressed concerns about the economic viability of their fishing operations and proposed IPQ use cap exemptions for custom processing arrangements similar to those congressionally mandated for the north region Bering Sea C. opilio fishery. Specifically, participants in crab fisheries with historically low TAC allocations or active in crab fisheries in more remote geographic regions argued that exempting IPQ crab processed under custom processing arrangements from the IPQ use caps of the owners of facilities could improve their operational efficiency. The Council recommended Amendment 27 to clarify that IPQ holders who hold at least a 10 percent or greater direct or indirect ownership interest in a processing facility would not be considered as using IPQ when that IPQ crab was (1) received by an IPQ holder at their facility under a custom processing arrangement; (2) limited to specific crab fisheries; (3) received and processed at specific types of processing facilities; or (4) was IPQ crab that was derived from PQS earned from processing in specific communities where crab has been historically delivered. In addition, the Council recommended limits on the amount of IPQ crab that could be processed at a facility for the Aleutian Islands golden and red king crab fisheries. In December 2007, the Council adopted these recommended changes in addition to the clarifications necessary to implement section 122(e) of the MSRA and forwarded Amendment 27 to the Secretary for review. Notice of Availability and Proposed Rule NMFS published the notice of availability for Amendment 27 on September 11, 2008 (73 FR 52806), with a public comment period that closed on November 10, 2008. NMFS published the proposed rule for this action on PO 00000 Frm 00065 Fmt 4700 Sfmt 4700 25451 September 19, 2008 (73 FR 54346), with a public comment period that closed on November 3, 2008. NMFS received 12 public comments from 3 unique persons on Amendment 27 and the proposed rule, which are summarized and responded to below. Changes to the Program This rule modifies or adds regulations at §§ 680.7(a)(7), 680.7(a)(8), 680.7(a)(9), 680.42(b)(2), and 680.42(b)(7). These changes are described in the following sections. Exempting Custom Processing Arrangements from IPQ Use Caps For certain crab fisheries, this rule removes the requirement that NMFS apply any IPQ used at a facility through a custom processing arrangement against the IPQ use cap of the owners of that facility if there is no affiliation between the person whose IPQ crab is processed at that facility and the IPQ holders who own that facility. The changes to § 680.7(a)(7) modify the calculation of a person’s IPQ use cap to be the sum of the IPQ held by that person, either directly or indirectly through subsidiary corporations, and all IPQ held by any IPQ holders affiliated with that person. Effectively, this change does not count IPQ crab that are custom processed at a facility owned by an IPQ holder against the IPQ use cap of the owner of the processing facility. A person who holds IPQ and who owns a processing facility is credited only with the amount of IPQ crab used by that person, or any affiliates of that person, when calculating IPQ use caps. In sum, the rule allows processing facility owners who also hold IPQ to be able to use their facility to establish custom processing arrangements with other IPQ holders to process more crab at their facilities, thereby improving throughput and providing a more economically viable processing platform. Conceivably, most or all of the IPQ crab to which the exemption applies could be processed at a single facility depending on the degree of affiliation that may exist between IPQ holders who have an ownership interest in the facility and the number of IPQ holders that establish custom processing arrangements with a given facility owner. The affiliation relationships among IPQ holders and processing facility ownership can change with time, so the degree of processing consolidation that may occur at a given processing facility in a specific crab fishery cannot be predicted. The analysis prepared for this action notes the possibility that IPQ crab designated for a specific region could be processed E:\FR\FM\28MYR1.SGM 28MYR1 25452 Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations at a single facility and notes the potential benefits that may accrue from increased efficiencies in processing (see ADDRESSES). A more extensive discussion of the rationale for relieving processing restrictions is provided in the preamble to the proposed rule (see ADDRESSES). Removing IPQ Crab Under Custom Processing Arrangement From The Facility Use Cap Consistent with the exemption for custom processing arrangements from IPQ use caps, this rule amends the regulations at § 680.7(a)(8) so that IPQ crab processed under a custom processing arrangement do not apply against the limit on the maximum amount of IPQ crab that can be processed at a facility in which no IPQ holder has a 10 percent or greater ownership interest. The rule effectively removes that limit so that more than 30 percent of the IPQ could be processed at a facility in which no IPQ holder has a 10 percent or greater direct or indirect ownership interest in the processing facility, provided those IPQ crab are custom processed at that facility. Removing IPQ Crab under Custom Processing Arrangement In The North Region C. opilio Fishery From IPQ Use Cap Calculations The rule modifies regulations at § 680.42(b)(2) so that IPQ crab processed under a custom processing arrangement do not apply against the IPQ use cap limitation that no person can use more than 60 percent of the Bering Sea C. opilio IPQ designated for the North Region. This exemption for IPQ crab custom processed in the Bering Sea C. opilio fishery in the North Region meets the intent of section 122(e) of the MSRA to exempt custom processing arrangements from this use cap. To conform to section 122(e) of the MSRA, this rule modifies § 680.42(b)(2) to allow persons holding Bering Sea C. opilio IPQ designated for delivery in the North Region to establish custom processing arrangements to have their IPQ crab processed at a facility. The IPQ crab processed under those custom processing arrangements do not apply against the Bering Sea C. opilio use cap of IPQ holders who own the facility where those crab are custom processed. Fisheries Subject To Custom Processing Arrangement Exemption The rule establishes regulations at § 680.42(b)(7)(ii)(A) that list the six crab fisheries for which the custom processing arrangement exemption applies. These are: Bering Sea C. opilio with a North Region designation, VerDate Nov<24>2008 16:39 May 27, 2009 Jkt 217001 Eastern Aleutian Islands golden king crab, Pribilof Island blue and red king crab, Saint Matthew blue king crab, Western Aleutian golden king crab processed west of 174° W. long., and Western Aleutian Islands red king crab. In these six crab fisheries, IPQ crab that are processed under a custom processing arrangement do not apply against the use cap of IPQ holders who own the facility where those crab are custom processed. Facilities Where Custom Processing Arrangements Are Exempt From Use Caps The rule establishes regulations at § 680.42(b)(7)(ii)(B) that exempt IPQ crab under custom processing arrangements in the six crab fisheries described above from applying to the IPQ use cap of the owner of that facility if that facility meets specific requirements. Consistent with section 122(e) of the MSRA, the Council recommended that any IPQ crab that were custom processed do not count against the IPQ use cap of persons holding a 10 percent or greater direct or indirect ownership interest in the facility where those IPQ crab were custom processed if the facility is: (1) in a home rule, first class, or second class city in the State of Alaska on the effective date of this rule; and (2) either a shorebased crab processor (i.e., shoreside), or a stationary floating crab processor that is moored within a harbor at a dock, docking facility, or other permanent mooring buoy, with specific provisions applicable to the City of Atka. In addition to the requirement that a facility be located in a home rule, first class, or second class city, the facility needs to be a shoreside processor, or be a stationary floating crab processor that is moored at a dock, docking facility, or other permanent mooring buoy located in a harbor within the municipal boundaries of the city. An exemption to the requirement that a stationary floating crab processor must be moored within a harbor at a dock, docking facility, or other permanent mooring buoy is provided for the City of Atka as described below. The requirement that a stationary floating crab processor be moored within a harbor within city boundaries is consistent with the statutory language of section 122(e) of MSRA. Although section 122(e) applies only to the C. opilio fishery in the North Region, the Council, with one exception for the City of Atka, did not wish to apply different standards to the use of stationary floating crab processors for purposes of applying an IPQ use cap exemption for PO 00000 Frm 00066 Fmt 4700 Sfmt 4700 custom processed crab in different crab fisheries. NMFS determined that a uniform standard will reduce confusion among fishery participants and ease enforcement of this provision. The Council recommended that a stationary floating crab processor would not be required to be moored within a harbor in the city of Atka. Currently, the city of Atka lacks an onshore processing facility capable of processing crab economically. These conditions do not appear to exist in other cities with substantial history of crab processing, and so an exemption to the mooring requirements does not appear necessary in other communities where custom processing is likely to occur. The preamble to the proposed rule contains a more detailed description of the rationale for the provisions specific to Atka (see ADDRESSES). NMFS defines home rule, first class, and second class cities and the boundaries of those cities as those that are in existence as of the effective date of this rule. Fixing the specific communities and their boundaries facilitates compliance with this provision and assists these municipalities or the State of Alaska in considering effects on processors who rely on the existing municipalities and the boundaries of those existing municipalities in any future action to redesignate these cities or modify their boundaries. Use Cap Exemptions For IPQ Crab Subject To ROFR Requirements This rule adds regulations at § 680.42(b)(7)(ii)(C) to exempt IPQ crab derived from PQS that is, or once was, subject to ROFR requirements and that is to be custom processed within the boundaries of an eligible crab community (ECC) with whom the ROFR contract applies, or did apply, from the IPQ use cap of the owner of the facility where those crab are custom processed. Any IPQ crab derived from this PQS and custom processed within that community would be exempt from the IPQ use cap of persons who own the crab processing facility. The fisheries subject to ROFR contract requirements are the Eastern Aleutian Islands golden king crab, Bristol Bay red king crab, Bering sea C. opilio crab, Pribilof Islands red and blue king crab, and St. Matthew blue king crab fisheries. The eight ECCs are Akutan, Dutch Harbor, False Pass, King Cove, Kodiak, Port Moller, Saint George, and Saint Paul. The net effect of this provision is to allow consolidation of processing through custom processing arrangements in these specific communities that are historically E:\FR\FM\28MYR1.SGM 28MYR1 Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations dependent on crab processing operations. This provision differs from the more general custom processing IPQ use cap exemptions in several ways. First, processing can occur only within the boundaries of the ECCs. Second, Bristol Bay red king crab as well as Bering Sea C. opilio crab designated for either the North Region or the South Region could be custom processed at facilities within the ECCs and does not apply to the IPQ use cap of the facility owners. Third, only IPQ derived from PQS that is, or was, subject to a ROFR with an ECC and transferred to another person can be custom processed at a facility within that community, and does not apply to the IPQ use cap of the owner of the facility. Fourth, this provision does not require that these IPQ crab be processed at specific types of facilities, only that the IPQ crab be processed within the boundaries of the ECC. Therefore, this provision does not require the IPQ crab to be processed only onshore or on stationary floating crab processors that are moored at a dock or a permanent mooring buoy in a harbor. IPQ Use Cap For Eastern Aleutian Islands Golden King Crab and Western Aleutian Islands Red King Crab The rule adds regulations at § 680.7(a)(9) that prohibit a person from processing more than 60 percent of the IPQ issued for the Western Aleutian Islands red king crab or Eastern Aleutian Islands golden king crab fisheries in a crab fishing year at a single processing facility east of 174° W. long. This provision applies to all IPQ processed at a shoreside crab processor or stationary floating crab processor, and does not exempt IPQ crab that are delivered under a custom processing arrangement from IPQ use cap calculations. The Council’s intent behind this provision is to limit the potential consolidation of IPQ that could occur under the custom processing exemptions contained in this rule. This processing limit prevents excessive consolidation of the number of markets available to harvesters, a scenario that is more likely in these fisheries compared to the other fisheries with custom processing exemptions given their historically relatively small TACs compared to other crab fisheries. In addition, this provision minimizes the potentially adverse effects on processing facilities west of 174° W. long. by preventing the complete consolidation of IPQ in processing facilities east of 174° W. long. Due to the limited TAC in the Eastern Aleutian Islands golden king crab fishery, and the currently limited number of PQS VerDate Nov<24>2008 16:39 May 27, 2009 Jkt 217001 holders, processing could consolidate in one or a few facilities east of 174° W. long., such as Dutch Harbor or other ports where PQS holders in this fishery currently own processing facilities. Processors owning facilities west of 174° W. long. expressed concern about their ability to effectively compete in these fisheries if all of the catch were processed in one facility east of 174° W. long. Response to Comments Comment 1: The Fisheries Impact Statement prepared to support the proposed rule did not adequately describe the foreseeable impacts of the proposed rule on certain processing operations in the Aleutian Islands Pacific cod fishery. The commenter notes that he has provided testimony to the Council recommending that limits be placed on the amount of Pacific cod that may be processed by vessels that have historically been used as stationary floating crab processors in the C. oplilo fishery. The commenter believes that Pacific cod processing limits should be established and notes that such processing limits are not included as part of this action. Response: Section 303(a)(9) of the MSA requires that a fishery management plan include a fishery impact statement: [W]hich shall assess, specify, and analyze the likely effects, if any, including the cumulative conservation, economic, and social impacts, of the conservation and management measures on, and possible mitigation measures for— (A) participants in the fisheries and fishing communities affected by the plan or amendment; (B) participants in the fisheries conducted in adjacent areas under the authority of another Council [emphasis added], after consultation with such Council and representatives of those participants; and (C) the safety of human life at sea, including whether and to what extent such measures may affect the safety of participants in the fishery.’’ Section 303(a)(9)(B) requires the Council and NMFS to examine the likely effects of Amendment 27 on participants in other fisheries under the jurisdiction of fishery management councils other than the North Pacific Fishery Management Council. It is not clear that section 303(a)(9)(B) applies to this action. The EEZ off Alaska under the authority of the Council is not adjacent to the EEZ of any other state under the authority of any other fishery management council. Second, this action would not be expected to have ‘‘likely effects’’ because this action is limited to amending the FMP for crab PO 00000 Frm 00067 Fmt 4700 Sfmt 4700 25453 fisheries in the BSAI and these stocks are not harvested in fisheries under the authority of other fishery management councils. NMFS and the Council did conduct a Fishery Impact Statement consistent with section 303(a)(9) of the MSA that assessed, specified, and analyzed the likely effects of Amendment 27. The Fishery Impact Statement is contained in section 4.2 of the RIR/IRFA prepared for this action and notes ‘‘[t]he impacts of the alternatives on participants in the harvesting sector and processing sector have been discussed in previous sections of this document. This action will have no effect on participants in other fisheries.’’ Specifically, the RIR/ IRFA contains a discussion of the impacts of the action on harvesters, processors, and fishing communities. Section 2.4.7 contains a discussion of the potential effects of this action on participants in other fisheries including groundfish fisheries such as Pacific cod. Specifically, section 2.4.7 notes that: Processor concerns have focused primarily on the activity of floating processors that have historically participated in the Bering Sea C. opilio fishery, now being freed up to process groundfish. In the first two years of the rationalization program, four and three processors participated in the North region, respectively, while four and six processors participated in the South region, respectively. This participation is a substantial decline from the 15 to 20 processors that participated in the years immediately preceding implementation of the program. Given this level of consolidation under [the Program], the potential for this action to contribute to further consolidation that has a perceptible effect on processors in other fisheries, is very limited. The analysis clearly indicates that although the Program resulted in some consolidation in the crab fishery, the potential that this action would encourage a redistribution of excess processing capacity to the Aleutian Islands Pacific cod fishery is not likely. The Fisheries Impact Statement adequately addresses the requirements of section 303(a)(9) of the MSA, specifically the ‘‘likely effects’’ of the action, including a discussion noting that the specific concerns raised by the commenter are not likely to occur. NMFS is adding some clarification to section 2.4.7 to note that in response to concerns raised by processing representatives (including the commenter) subsequent to implementation of the Program, the Council has initiated an examination of alternatives to impose limits on processing of groundfish harvested from the Aleutian Islands by floating E:\FR\FM\28MYR1.SGM 28MYR1 25454 Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations processors whose processing history led to an allocation under the Program. That action is intended to address possible inequities to historic groundfish processors that might arise from the potential that additional processing capacity could have been made available by the implementation of the Program and that additional capacity could increase processing effort in the groundfish fisheries. However, the conclusions contained in section 2.4.7 clearly note that the potential effects of Amendment 27 and the accompanying regulations are not likely to have an adverse effect on existing processing operations. Although it is possible that the implementation of the Program may have reduced the need for processing capacity for BSAI crab fisheries, and some of that processing capacity could be redirected for processing Pacific cod, there is no information to suggest that Amendment 27 and its accompanying regulations would measurably increase the amount of processing capacity that may be used to process Pacific cod in the Aleutian Islands beyond that which may have already occurred with the implementation of the Program. Section 2.4 of the analysis notes that currently there is likely to be excess processing capacity that may be used in a variety of fisheries, including the Aleutian Islands Pacific cod fishery. Modifying the method for calculating the IPQ use cap is not expected to substantially increase processing capacity available for use in the Aleutian Islands Pacific cod fishery. Comment 2: The Council acknowledged and then ignored the foreseeable impacts of this action on Aleutian Islands Pacific cod processing in Adak. The commenter provides an example of the operations of a specific floating processor involved in both Aleutian Islands Pacific cod and the snow crab fishery in 2008 and appears to suggest that this final rule would encourage this vessel to process Aleutian Islands Pacific cod instead of snow crab in a manner that would be disadvantageous to the specific processing operations in Adak. The commenter notes that additional mitigation measures, presumably to address the fishing operations of this floating processor, should be considered. The commenter notes that the Council is currently considering an action that would limit the amount of Aleutian Islands Pacific cod that could be received and processed by vessels that participate in LAPPs. The commenter provides a description of Council deliberations related to Aleutian Islands Pacific cod processing. VerDate Nov<24>2008 16:39 May 27, 2009 Jkt 217001 In particular, the commenter notes that in the transcript of Council deliberations, NOAA General Counsel had raised concerns about the nature of discussions and whether the Council had fully considered the impacts of its action. Response: NMFS reviewed the record developed by the Council for this action and determined that the Council did not ignore the foreseeable impact of this action on Aleutian Islands Pacific cod processing. The analysis prepared for this action analyzed the effects of this action and its likely effects on participants in various fisheries. Specifically, sections 2.3, 2.4, and 3.7 of the analysis contain an extensive description of the likely effects of this action on harvesters, processors, communities, and participants in other fisheries. The reference the commenter makes to a specific floating processor and how this action would affect that vessel’s operations appears speculative. The analysis generally examined changes in processing operations that might occur from this action but cannot reasonably predict or analyze the actions of specific vessel’s operations due to the wide variety of factors that will affect their operations. There is no reason to assume that a specific vessel operator will choose to process Aleutian Islands Pacific cod differently due to this action. However, the information the commenter presents in the comment indicates that the vessel of concern is already actively processing in the Aleutian Islands Pacific cod fishery, in which case, this action would not be expected to have any additional impact on processing by this vessel in the Aleutian Islands Pacific cod fishery. During deliberations, Council members explored the potential impact of this action on other fisheries. After a consideration of the potential impacts of this action, the Council chose to proceed with this action. In addition, the Council chose to initiate a review of the potential impacts of limited access privilege programs (LAPPs), including the Program, the AFA, and the Amendment 80 Program on processing capacity and the potential effects of those LAPPs on processing operations in various communities. The Council concluded that this action did not have a demonstrable likely impact on processing consolidation that would adversely affect other participants, but did choose to explore the impacts of LAPPs generally under a separate action. Based on the deliberations and a review of the analysis, NMFS agrees with the Council’s conclusions. It should be noted that the commenter’s PO 00000 Frm 00068 Fmt 4700 Sfmt 4700 description of comments made by NOAA General Counsel is not complete. NOAA General Counsel raised concerns in an effort to help focus the Council’s deliberations. Unfortunately, those deliberations are not available because the discussion among NOAA General Counsel and Council members was not recorded in its entirety. Comment 3: The IRFA improperly concludes that this action would be expected to benefit the directly regulated entities. Adak Fisheries would be harmed because under this action an IPQ holder will have less incentive to custom process in Adak, and this action would provide an incentive for a person to bring a floating processor into the Aleutians to process crab and Pacific cod which would reduce the potential product delivered to Adak. These issues have not been adequately addressed in the IRFA. Specific requirements that allow custom processing by floating processors in the Aleutian Islands undermine the goals of the Council to sustain communities in the Aleutian Islands. Allowing floating processors minimizes the potential benefits that may be received by shoreside processing operations. Response: NMFS disagrees. The commenter’s assertions about the effects of this final rule on directly regulated entities must be considered separately from the rule’s effects on other indirectly regulated entities, such as the communities of Adak or Atka, or processing facilities. The IRFA and FRFA conclude that directly regulated entities are the PQS and IPQ holders who would be allowed to undertake custom processing with less constraint than they could prior to this rule. The PQS and IPQ holders are expected to benefit because the action would relieve a restriction on their ability to consolidate processing operations and may provide additional benefits relative to the status quo such as improved operations efficiency. The commenter does not provide any information to suggest that this conclusion is not true. The action would allow any directly regulated PQS or IPQ holder to establish custom processing relationships with any other PQS or IPQ holder within the limits established by this action. Specific to this comment, Adak Fisheries, or any other IPQ holder, could choose to have crab processed at any facility that is able to process those crab, including Adak, provided that facility is not otherwise ineligible to be used. The potential for a processing facility at Adak to use this provision is addressed in the analysis prepared for this action (see ADDRESSES). E:\FR\FM\28MYR1.SGM 28MYR1 Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations The commenter asserts that the action would reduce the incentive for an IPQ holder to use the processing facility in Adak for custom processing, but provides no reason as to why this may be the case. Facilities in Adak, or any other community, could be used for custom processing. The only factors that would prevent operations from being consolidated in Adak would be those unrelated to this action (e.g., IPQ holders cannot reach agreement with the facility operators on terms to have their crab custom processed at that facility, the facility is unable to meet the processing requirements of the IPQ holders who wish to have their crab custom processed, or the facility is not economically viable for a given custom processing arrangement). As noted in the response to Comment 1, NMFS has concluded it is unlikely that this action will have an effect on processing activities in the Aleutian Islands Pacific cod fishery. The commenter notes that one of the goals in the Council’s purpose and need statement (i.e., problem statement) for this action is ‘‘sustaining communities,’’ but the commenter fails to consider the Council’s purpose and need statement in its entirety. The Council considered alternatives that would ‘‘protect the economic base of remote communities dependent on crab processing, and to allow for the efficient prosecution of quota held by fishermen.’’ Specifically, the Council considered alternatives that would allow Adak and Atka to benefit from more efficient prosecution of crab fisheries by the exemption of custom processing arrangements from IPQ use caps. The Council noted that given the limited shoreside processing facilities available in Aleutian Island communities other than Adak, allowing floating processors to operate in the Aleutian Islands under specific conditions would help to protect the economic base of Atka by allowing floating operators to operate there, while ensuring that processing operations in Adak may continue. Section 2.3.13 of the analysis notes that Adak has the only shoreside processing facilities in the Central and Western Aleutian Islands, and section 2.4.3 notes that the onshore processing facility ‘‘at Adak could be provided a substantial advantage relative to other processors, if only shore plants are qualified for the [custom processing] exemption.’’ Because the goal of this action is to protect the economic base of all communities, not only Adak, and is to allow efficient prosecution of quota, the Council considered, and ultimately selected options to allow floating VerDate Nov<24>2008 16:39 May 27, 2009 Jkt 217001 processors to operate in the Aleutian Islands as a way to accomplish these two goals. A review of the factors the Council considered is provided in the preamble to the proposed rule, section 2.4 of the analysis prepared for this action, and records of Council deliberation. Comment 4: The confidentiality standards applied to data used in the analysis compromised the Council’s decision making. Much of the WAG fishery harvested by catcher vessels has been processed by facilities in Adak since 1999. The commenter raises concerns about confidentiality standards applied both in the EIS prepared for the Program and the analysis conducted for this action. The commenter asserts that applying data confidentiality standards to catch data from LAPPs is a bad policy. Response: Due to the limited number of participants in the WAG fishery, the Council and NMFS are unable to release information in the analysis concerning processing in specific locations because doing so would reveal confidential information. Section 402(b)(3) of the MSA allows NMFS to ‘‘release or make public any such information in any aggregate or summary form which does not directly or indirectly disclose the identity of any person who submits such information.’’ Similarly, data from State of Alaska fish tickets are considered confidential and may not be released by the State, NMFS, or the Council under the requirements of State of Alaska statute except in an aggregate form that would not reveal data from an individual submitter (Alaska Statute, sec.16.05.815). However, the Council was generally aware of the overall patterns of harvesting and processing in the WAG fishery and the participants in that fishery through public testimony and the limited data available in the analysis. Constraints on the release of confidential information did not affect the ability of the Council or NMFS from adequately considering the effects of its actions. Public comment from the commenter to the Council and NMFS noted the historic and current processing activities of WAG crab at the facilities of Adak. Comment 5: The commenter asserts that this action would undermine existing investments in shoreside processing facilities in Adak. The commenter notes that the current dependence of Adak on crab is compromised by the ability of persons to use a stationary floating crab processor instead of a shoreside facility to custom process crab. The commenter states that section 303A(c)(5) of the MSA requires NMFS to consider PO 00000 Frm 00069 Fmt 4700 Sfmt 4700 25455 ‘‘current and historical’’ participation by fishing communities. Response: The Council and NMFS considered current and historic participation of Adak, and other fishing communities in the development and approval of this action. Additional detail on the fishing communities and their current and historic participation in the fishery is provided in section 2.4 of the analysis. While NMFS agrees with the commenter that section 303A(c)(5) requires NMFS to consider that current and historical participation of fishing communities during the development of a new LAPP, this action modifies an existing LAPP and under section 303A(i), the requirements of section 303A(c)(5) are inapplicable to this action. However, pursuant to other provisions of the MSA, NMFS has determined that this action would not undermine the ability for crab to be custom processed in Adak relative to other locations in the Aleutian Islands. The decision by an IPQ holder to process catch in Adak, or at any other location, will be based on a wide array of factors such as the potential costs of any custom processing fees, throughput of the facility, the ability of the facility mangers to meet the demands of the custom processors, and other economic factors. Allowing custom processing to occur at both stationary floating processors and shoreside facilities provides competition among processors and addresses concerns raised by the Council that limiting processing to shoreside facilities in the Aleutian Islands could limit competition. Sections 2.3.13 and 2.4.3 of the analysis and the response to Comment 2 provide additional rationale for allowing stationary floating processors and shoreside facilities to custom process crab in the Aleutian Islands. Comment 6: The analysis does not clarify that PQS holders would be the primary beneficiaries of this action. Facility operators who choose to custom process catch will not benefit from this action. Response: NMFS disagrees with the characterization of the analysis. The analysis, particularly sections 2.4 and 3.7, describe the potential effects of the action on harvesters, processing facility operators, PQS and IPQ holders, and communities. Section 2.4 of the analysis describes the potential benefits that PQS holders would receive from this action. However, the analysis also describes potential benefits from this action for facility operators, IPQ holders who may or may not be PQS holders, harvesters, and communities. The analysis contains a comprehensive discussion of the E:\FR\FM\28MYR1.SGM 28MYR1 25456 Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations effects of this action and the potential beneficiaries. Comment 7: The alternatives considered do not adequately address the Council’s purpose and need statement for the action. Specifically, the action does not contribute to community stability or provide for efficient prosecution of the fishery. The commenter asserts that 75 percent of the west region designated Western Aleutian Islands golden king crab (WAG) Class A IFQ was not harvested due to additional custom processing fees that made the operations uneconomic. The commenter asserts that PQS and IPQ for west designated WAG crab should be extinguished but that regional delivery requirements should be retained. Response: The Council considered a range of alternatives that would address the purpose and need statement and NMFS determined that the range of alternatives considered by the Council addressed the purpose and need statement for this action. The analysis examines the impacts of the exemption on community stability and effects on processors in section 2 of the document (see ADDRESSES). The commenter does not provide any specific examples that describe how the proposed action failed to address the Council’s purpose and need statement. Without additional detail, NMFS is unaware of any information omitted from the analysis. The commenter incorrectly states that 75 percent of the west designated WAG Class A IFQ has been unharvested. A review of NMFS landing data from the first three years of the Program indicates that in only one year (2006⁄2007) was a substantial portion of the west designated WAG Class A IFQ unharvested. NMFS cannot provide a more precise description of the use of west designated WAG Class A IFQ due to limitations on the release of potentially confidential fishery data. Furthermore, NMFS has no information to conclude that the WAG Class A IFQ that was left unharvested was due to additional custom processing fees. Finally, the commenter’s statements about eliminating PQS and IPQ for west designated WAG crab are noted, but are not relevant to the purpose of this action which is to modify IPQ use cap calculation procedures to provide greater opportunities for more efficient custom processing operations. Comment 8: The commenter supports the proposed action and notes that the ability for processors to consolidate processing in the north region C. opilio fishery will benefit the community of Saint Paul, Alaska. The commenter describes the relationships among VerDate Nov<24>2008 16:39 May 27, 2009 Jkt 217001 various processing companies and local government entities, and notes that economically efficient crab processing operations are necessary to benefit the community. Response: NMFS notes the support for the rule and the importance of crab processing to Saint Paul. Comment 9: The commenter provides some detailed information about the business arrangements that exist among various local government agencies and companies involved in crab processing in Saint Paul. The commenter notes that the text of section 2.4.2 of the analysis states that ‘‘a plant could be owned and operated by two distinct [IPQ] share holders, with each [IPQ] share holder credited with only its own [IPQ] share holdings for purposes of applying the cap.’’ While the preamble to the proposed rule states that ‘‘[a] person who holds IPQ and who owns a processing facility would be credited with only the amount of IPQ crab used by that person, or any affiliates of that person, when calculating IPQ use caps.’’ The commenter asks if these two statements are consistent, and whether the specific processing operations described by the commenter would be permitted. Response: NMFS cannot comment on whether the specific business arrangements described by the commenter would be subject to the custom processing use cap exemption due to incomplete knowledge about the specific conditions that may exist among the parties in question. However, the statements made in section 2.4.2 and the preamble to the proposed rule are not inconsistent. In cases where an IPQ holder is not affiliated with another IPQ holder then those two separate and distinct IPQ holders may process their IPQ crab at the same crab processing facility, provided they are otherwise eligible to receive the exemption. The preamble to the proposed rule notes that ‘‘affiliation’’ is defined in regulation at 50 CFR 680.2. Provided an IPQ holder is not defined as affiliated with another IPQ holder, then it is possible that two IPQ holders could own a portion of a crab processing facility, not be considered affiliated according to 50 CFR 680.2, and process their IPQ at that commonly owned facility. In that case, each IPQ holder would be considered to use only the amount of IPQ that it processed at the facility and only that IPQ would be credited against that person’s IPQ use cap. Comment 10: The commenter supports the definition of the specific processing facilities at which the custom processing exemption would PO 00000 Frm 00070 Fmt 4700 Sfmt 4700 apply, and notes that it is consistent with section 122(e) of the MSA. Response: NMFS notes the comment and agrees that the final rule is consistent with section 122(e) of the MSA. Comment 11: The commenter supports applying an exemption to the IPQ use cap calculations for PQS that is, or was, subject to a ROFR. Response: NMFS notes the comment. Comment 12: The commenter raises general concerns about fisheries management asserting that fishery policies have been overly liberal and have not been to the benefit of American citizens. The commenter asserts that NMFS is biased and should not be allowed to manage fisheries. Response: The comments are not specifically related to the proposed rule and recommend broad changes to fisheries management that are outside of the scope of this action. Changes from the Proposed Rule NMFS did not make any changes from the proposed rule. Classification The Assistant Administrator for Fisheries, NOAA, has determined that Amendment 27 is necessary for the conservation and management of the BSAI crab fisheries and that it is consistent with the MSA and other applicable laws. This final rule has been determined to be not significant for purposes of Executive Order 12866. Final Regulatory Flexibility Analysis (FRFA) A FRFA was prepared for this rule, as required by section 604 of the Regulatory Flexibility Act (RFA). Copies of the FRFA prepared for this final rule are available from NMFS (see ADDRESSES). The FRFA incorporates the IRFA, a summary of the significant issues raised by the public comments in response to the IRFA, NMFS’ responses to those comments, and a summary of the analyses completed to support the action. A summary of the FRFA follows. Why Action by the Agency is Being Considered and Objectives of, and Legal Basis for, the Rule The FRFA describes in detail the reasons why this action is being proposed, describes the objectives and legal basis for the rule, and discusses both small and non-small regulated entities to adequately characterize the fishery participants. The MSA provides the legal basis for the rule, as discussed in this preamble. The objectives of the rule are to (1) implement the statutory E:\FR\FM\28MYR1.SGM 28MYR1 Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations requirements of section 122(e) of the MSRA, modify IPQ use caps apply to a person who is processing IPQ crab through contractual arrangements with the facility owners to provide greater flexibility in processing operations, and (3) modify IPQ use caps that limit the amount of IPQ that may be used at a facility by persons processing Eastern Aleutian Islands golden king crab and Western Aleutian Islands red king crab. Number of Small Entities to Which the Final Rule Would Apply For purposes of a FRFA, the Small Business Administration (SBA) has established that a business involved in fish harvesting is a small business if it is independently owned and operated, not dominant in its field of operation (including its affiliates), and if it has combined annual gross receipts not in excess of $4.0 million for all its affiliated operations worldwide. A seafood processor is a small business if it is independently owned and operated, not dominant in its field of operation, and employs 500 or fewer persons on a full-time, part-time, temporary, or other basis, at all its affiliated operations worldwide. Because the SBA does not have a size criterion for businesses that are involved in both the harvesting and processing of seafood products, NMFS has in the past applied and continues to apply SBA’s fish harvesting criterion for these businesses because catcher/ processors are first and foremost fish harvesting businesses. Therefore, a business involved in both the harvesting and processing of seafood products is a small business if it meets the $4.0 million criterion for fish harvesting operations. NMFS currently is reviewing its small entity size classification for all catcher/processors in the United States. However, until new guidance is adopted, NMFS will continue to use the annual receipts standard for catcher/processors. NMFS plans to issue new guidance in the near future. The FRFA contains a description and estimate of the number of small entities to which the rule would apply. Currently, 29 processors hold processing shares. Estimates of large entities were made, based on available records of employment information on participation in processing activities in other fisheries, and analysts’ knowledge of foreign ownership of vertically integrated processing companies. Of the recipients of PQS, 11 are estimated to be large entities, leaving 18 small entities among the directly regulated universe under consideration. VerDate Nov<24>2008 16:39 May 27, 2009 Jkt 217001 Public Comments Received on the IRFA NMFS received one public comment on the IRFA or on the economic impacts of the rule. That comment is addressed in the Response to Comment section of this preamble (see response to Comment 3) and the FRFA prepared for this action (see ADDRESSES). 25457 Dated: May 21, 2009. John Oliver, Deputy Assistant Administrator for Operations, National Marine Fisheries Service. For the reasons set out in the preamble, 50 CFR part 680 is amended as follows: ■ Projected Reporting, Recordkeeping, and Other Compliance Requirements This rule would not change existing reporting, recordkeeping, or other compliance requirements. PART 680—SHELLFISH FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA ■ Comparison of Alternatives Authority: 16 U.S.C. 1862; Pub. L. 109– 241; Pub. L. 109–479. All the directly regulated individuals would be expected to benefit from the preferred alternative, Alternative 2 (described in this rule) relative to the status quo alternative because it relieves individuals from requirements that limit their ability to consolidate processing operations that may provide additional benefits relative to the status quo. Of the two alternatives considered, status quo and this action, this action minimizes adverse economic impacts on the individuals that are directly regulated. Although the alternatives under consideration in this action would have distributional and efficiency impacts for directly regulated small entities, in no case are these combined impacts expected to be substantial. The status quo alternative would not allow the additional processing efficiencies that were the motivation for the action. However, exempting processors from use caps under custom processing arrangements would provide additional processing opportunities for small entities that wish to reduce costs by consolidating operations with other processors. Although neither of the alternatives is expected to have any significant economic or socioeconomic impacts, the preferred Alternative 2 minimizes the potential negative impacts that could arise under Alternative 1, the status quo alternative. ■ Small Entity Compliance Guide NMFS has posted a small entity compliance guide on its website at http://www.fakr.noaa.gov/ sustainablefisheries/crab/crfaq.htm to satisfy the Small Business Regulatory Enforcement Fairness Act of 1996 requirement for a plain language guide to assist small entities in complying with this rule. Contact NMFS to request a hard copy of the guide (see ADDRESSES). List of Subjects in 50 CFR Part 680 Alaska, Fisheries. PO 00000 Frm 00071 Fmt 4700 Sfmt 4700 1. The authority citation for 50 CFR part 680 continues to read as follows: 2. In § 680.7, paragraphs (a)(7) and (a)(8) are revised, and paragraph (a)(9) is added to read as follows: § 680.7 Prohibitions. * * * * * (a) * * * (7) For an IPQ holder to use more IPQ crab than the maximum amount of IPQ that may be held by that person. Use of IPQ includes all IPQ held by that person, and all IPQ crab that are received by any RCR at any shoreside crab processor or stationary floating crab processor in which that IPQ holder has a 10 percent or greater direct or indirect ownership interest unless that IPQ crab meets the requirements described in § 680.42(b)(7). (8) For a shoreside crab processor or stationary floating crab processor that does not have at least one owner with a 10 percent or greater direct or indirect ownership interest who also holds IPQ in that crab QS fishery, to be used to receive in excess of 30 percent of the IPQ issued for that crab fishery unless that IPQ crab meets the requirements described in § 680.42(b)(7). (9) For any shoreside crab processor or stationary floating crab processor east of 174 degrees west longitude to process more than 60 percent of the IPQ issued in the EAG or WAI crab QS fisheries. * * * * * ■ 3. In § 680.42, paragraph (b)(2) is revised, and paragraph (b)(7) is added to read as follows: § 680.42 Limitations on use of QS, PQS, IFQ and IPQ. * * * * * (b) * * * (2) A person may not use more than 60 percent of the IPQ issued in the BSS crab QS fishery with a North region designation during a crab fishing year except that a person who: (i) Holds IPQ; and (ii) Has a 10 percent or greater direct or indirect ownership interest in the shoreside crab processor or stationary E:\FR\FM\28MYR1.SGM 28MYR1 25458 Federal Register / Vol. 74, No. 101 / Thursday, May 28, 2009 / Rules and Regulations floating crab processor where that IPQ crab is processed will not be considered to use any IPQ in the BSS crab QS fishery with a North region designation if that IPQ meets the requirements described in paragraph (b)(7) of this section. * * * * * (7) Any IPQ crab that is received by an RCR will not be considered use of IPQ by an IPQ holder who has a 10 percent or greater direct or indirect ownership interest in the shoreside crab processor or stationary floating crab processor where that IPQ crab is processed under § 680.7(a)(7) or paragraph (a)(8) of this section if: (i) That RCR is not affiliated with an IPQ holder who has a 10 percent or greater direct or indirect ownership interest in the shoreside crab processor or stationary floating crab processor where that IPQ crab is processed; and (ii) The following conditions apply: (A) The IPQ crab is: VerDate Nov<24>2008 16:39 May 27, 2009 Jkt 217001 (1) BSS IPQ crab with a North region designation; (2) EAG IPQ crab; (3) PIK IPQ crab; (4) SMB IPQ crab; (5) WAG IPQ crab provided that IPQ crab is processed west of 174 degrees west longitude; or (6) WAI IPQ crab; and (B) That IPQ crab is processed at: (1) Any shoreside crab processor located within the boundaries of a home rule, first class, or second class city in the State of Alaska in existence on the effective date of this rule; or (2) Any stationary floating crab processor that is: (i) Located within the boundaries of a home rule, first class, or second class city in the State of Alaska in existence on the effective date of this rule; (ii) Moored at a dock, docking facility, or at a permanent mooring buoy, unless that stationary floating crab processor is located within the boundaries of the city of Atka in which case that stationary floating crab processor is not required to PO 00000 Frm 00072 Fmt 4700 Sfmt 4700 be moored at a dock, docking facility, or at a permanent mooring buoy; and (iii) Located within a harbor, unless that stationary floating crab processor is located within the boundaries of the city of Atka on the effective date of this rule in which case that stationary floating crab processor is not required to be located within a harbor; or (C) The IPQ crab is: (1) Derived from PQS that is, or was, subject to a ROFR as that term is defined at § 680.2; (2) Derived from PQS that has been transferred from the initial recipient of those PQS to another person under the requirements described at § 680.41; (3) Received by an RCR who is not the initial recipient of those PQS; and (4) Received by an RCR within the boundaries of the ECC for which that PQS and IPQ derived from that PQS is, or was, designated in the ROFR. * * * * * [FR Doc. E9–12430 Filed 5–27–09; 8:45 am] BILLING CODE 3510–22–S E:\FR\FM\28MYR1.SGM 28MYR1

Agencies

[Federal Register Volume 74, Number 101 (Thursday, May 28, 2009)]
[Rules and Regulations]
[Pages 25449-25458]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-12430]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 680

[Docket No. 080416577-9898-03]
RIN 0648-AW73


Fisheries of the Exclusive Economic Zone Off Alaska; Bering Sea 
and Aleutian Islands Crab Rationalization Program; Amendment 27

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

ACTION: Final rule.

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SUMMARY: NMFS issues regulations to implement Amendment 27 to the 
Fishery Management Plan for Bering Sea/Aleutian Islands King and Tanner 
Crabs (FMP). These regulations amend the Crab Rationalization Program 
to: implement the statutory requirements of section 122(e) of the 
Magnuson-Stevens Fishery Conservation and Management Reauthorization 
Act that specifically directs NMFS to modify how individual processing 
quota (IPQ) use caps apply to a person who is custom processing 
Chionoecetes opilio crab in the North Region; clarify that for other 
crab fisheries, IPQ crab that is processed at a facility through 
contractual arrangements with the facility owners will not be applied 
against the IPQ use cap of the facility owners provided specific 
conditions are met; and modify IPQ use caps that limit the amount of 
IPQ that may be used at a facility by persons processing Eastern 
Aleutian Islands golden king crab and Western Aleutian Islands red king 
crab. This action is intended to promote the goals and objectives of 
the Magnuson-Stevens Fishery Conservation and Management Act, the FMP, 
and other applicable law.

DATES: Effective June 29, 2009.

ADDRESSES: Copies of Amendment 27, the Regulatory Impact Review (RIR), 
the Final Regulatory Flexibility Analysis (FRFA), and the categorical 
exclusion prepared for this action, and the Environmental Impact 
Statement (EIS), RIR, FRFA, and Social Impact Assessment prepared for 
the Crab Rationalization Program are available from the NMFS Alaska 
Region at 709 West 9\th\ Street, Room 420A, Juneau, AK, or from the 
Alaska Region website at http://www.fakr.noaa.gov/sustainablefisheries.htm.

FOR FURTHER INFORMATION CONTACT: Glenn Merrill, 907-586-7228.

[[Page 25450]]


SUPPLEMENTARY INFORMATION: The king and Tanner crab fisheries in the 
exclusive economic zone (EEZ) of the Bering Sea and Aleutian Islands 
(BSAI) are managed under the FMP. The FMP was prepared by the North 
Pacific Fishery Management Council (Council) under the Magnuson-Stevens 
Fishery Conservation and Management Act (Magnuson-Stevens Act or MSA) 
as amended by the Consolidated Appropriations Act of 2004 (Public Law 
108-199, section 801). A final rule implementing the Crab 
Rationalization Program (Program) published on March 2, 2005 (70 FR 
10174). Regulations implementing the FMP, and all amendments to the 
Program are at 50 CFR part 680 and general regulations related to 
fishery management at 50 CFR part 600.

Program Overview

Harvester, Processor, and Community Provisions

    The Program established a limited access privilege program (LAPP) 
for nine crab fisheries in the BSAI, and assigned quota share (QS) to 
persons based on their historic participation in one or more of those 
nine BSAI crab fisheries during a specific time period. Under the 
Program, NMFS issued four types of QS: catcher vessel owner (CVO) QS 
was assigned to holders of License Limitation Program (LLP) licenses 
who delivered their catch onshore or to stationary floating crab 
processors; catcher/processor vessel owner (CPO) QS was assigned to LLP 
holders that harvested and processed their catch at sea; captains and 
crew onboard catcher/processor vessels were issued catcher/processor 
crew (CPC) QS; and captains and crew onboard catcher vessels were 
issued catcher vessel crew (CVC) QS. Each year, a person who holds QS 
may receive an exclusive harvest privilege for a portion of the annual 
total allowable catch (TAC), called individual fishing quota (IFQ).
    NMFS also issued processor quota share (PQS) under the Program. 
Each year PQS yields an exclusive privilege to process a portion of the 
IFQ in each of the nine BSAI crab fisheries. This annual exclusive 
processing privilege is called individual processor quota (IPQ). Only a 
portion of the QS issued yields IFQ that is required to be delivered to 
a processor with IPQ. QS derived from deliveries made by catcher vessel 
owners (i.e., CVO QS) is subject to designation as either Class A IFQ 
or Class B IFQ. Ninety percent of the IFQ derived from CVO QS is 
designated as Class A IFQ, and the remaining 10 percent of the IFQ is 
designated as Class B IFQ. Class A IFQ must be matched and delivered to 
a processor with IPQ. Class B IFQ is not required to be delivered to a 
specific processor with IPQ. Each year there is a one-to-one match of 
the total pounds of Class A IFQ with the total pounds of IPQ issued in 
each crab fishery.
    The Program seeks to ensure that communities that were historically 
active as processing ports continue to receive socioeconomic benefits 
from crab deliveries through regional delivery requirements, commonly 
known as regionalization. Even if processors transfer their PQS/IPQ, 
the Program specifies geographic regions where Class A IFQ must be 
delivered, and where IPQ must be used to receive that crab. The 
specific geographic regions applicable to Class A IFQ and IPQ are based 
on historic geographic delivery and processing patterns. Class B, CVC, 
CPO, and CPC IFQ are not subject to regionalization. For most crab 
fisheries, CVO QS and the resulting Class A IFQ, and PQS and the 
resulting IPQ, are regionally designated for the North Region (i.e., 
north of 54[deg]20' N. lat.), or the South Region (i.e., any location 
south of 54[deg] 20' N. lat.) based on the historic delivery and 
processing patterns of a specific CVO QS or PQS holder. For one 
fishery, the Western Aleutian Islands golden king crab fishery, half of 
the Class A IFQ and IPQ are designated for the West region, west of 
174[deg] W. long., and the other half of the Class A IFQ and IPQ are 
not subject to a regional designation. Two crab fisheries are not 
subject to regionalization requirements, the eastern Bering Sea and 
western Bering Sea C. bairdi fisheries.
    For communities that were historically active processing ports, the 
Program provides a right-of-first-refusal (ROFR) to purchase any PQS or 
IPQ that are derived from processing activities in those communities. 
The ROFR provision requires that any processor who wishes to transfer 
the PQS or IPQ in a specific crab fishery originally derived from 
processing activities in specific communities for use outside of those 
communities cannot complete that transfer unless they first provide 
those communities an opportunity to purchase the PQS or IPQ under the 
same terms and conditions offered to the processor to whom they wish to 
transfer those shares. The specific communities and fisheries eligible 
for the ROFR are described in regulation at 50 CFR 680.2. The intent 
behind the ROFR is to provide communities with an option to purchase 
PQS or IPQ that would otherwise be used outside of the community. The 
rationale for the specific fisheries and communities subject to ROFR 
requirements is described in detail in the EIS prepared for the Program 
(see ADDRESSES).

Use Caps

    When the Council recommended the Program, it expressed concern 
about the potential for excessive consolidation of QS and PQS, and the 
resulting annual IFQ and IPQ. Excessive consolidation could have 
adverse effects on crab markets, price setting negotiations between 
harvesters and processors, employment opportunities for harvesting and 
processing crew, tax revenue to communities in which crab are landed, 
and other factors considered and described in the EIS prepared for the 
Program (see ADDRESSES). To address these concerns, the Program limits 
the amount of QS that a person can hold, the amount of IFQ that a 
person can use, and the amount of IFQ that can be used onboard a 
vessel. Similarly, the Program limits the amount of PQS that a person 
can hold, the amount of IPQ that a person can use, and the amount of 
IPQ that can be processed at a given facility. These limits are 
commonly referred to as use caps.
    Currently, processors are limited in how much IPQ they can receive 
at a processing facility. In each of the nine BSAI crab fisheries under 
the Program, a person is limited to holding no more than 30 percent of 
the PQS initially issued in the fishery and using no more than the 
amount of IPQ resulting from 30 percent of the initially issued PQS in 
a given fishery. In addition, no person is permitted to use more than 
60 percent of the IPQ crab in the Bering Sea C. opilio fishery 
designated for exclusive use in the north region. Finally, no 
processing facility can be used to process more than 30 percent of the 
IPQ in a crab fishery.
    The Program is designed to minimize the potential that PQS and IPQ 
use caps could be evaded through the use of corporate affiliations or 
other legal relationships that would effectively allow a single person 
to use PQS or IPQ even if they are not the majority owner of that PQS 
or IPQ. Prior to Amendment 27, the Program calculated a person's IPQ 
use cap by summing the total amount of IPQ that is (1) held by that 
person; (2) held by other persons who are affiliated with that person 
through common ownership or control; and (3) any IPQ crab that is 
custom processed at a facility an IPQ holder owns. A custom processing 
arrangement exists when one IPQ holder: (1) has a contract with the 
owners of a processing facility to have his crab processed at that

[[Page 25451]]

facility; (2) that IPQ holder does not have an ownership interest in 
the processing facility; and (3) that IPQ holder is not otherwise 
affiliated with the owners of that crab processing facility. In custom 
processing arrangements, the IPQ holder contracts with a facility 
operator to have the IPQ crab processed according to his 
specifications. Custom processing arrangements typically occur when an 
IPQ holder does not own an onshore processing facility or cannot 
economically operate a stationary floating crab processor in a specific 
region. Relevant to this action, in each of the nine Program fisheries, 
a person is limited to holding no more than an amount equal to 30 
percent of the PQS initially issued in a given BSAI crab fishery and 
limited to using no more than the amount of IPQ resulting from 30 
percent of the initially issued PQS in a given BSAI crab fishery. In 
addition, no person is permitted to use more than 60 percent of the IPQ 
crab issued in the Bering Sea C. opilio fishery designated for 
exclusive use in the North Region. Finally, no processing facility can 
be used to process more than 30 percent of the IPQ issued for a crab 
fishery.

Amendment 27

    Amendment 27 accomplishes three broad goals. First, it establishes 
regulations necessary to implement section 122(e) of the Magnuson-
Stevens Fishery Conservation and Management Reauthorization Act of 2006 
(MSRA) which became law on January 12, 2007 (Public Law 109-479). 
Second, it modifies the methods used to calculate and apply use caps 
when custom processing arrangements occur. Third, it establishes a 
limit on the maximum amount of processing that may be undertaken at 
processing facilities in the Eastern Aleutian Islands golden king crab 
and Western Aleutian Islands red king crab fisheries.
    Section 122(e) of the MSRA specifically directs NMFS to modify how 
IPQ use caps apply to a person who is custom processing Bering Sea C. 
opilio crab in the North Region. Section 122(e) of the MSRA states:

    (e) USE CAPS.--
    (1) IN GENERAL.--Notwithstanding sections 680.42(b)(ii)(2) and 
680.7(a)(ii)(7) of title 50, Code of Federal Regulations, custom 
processing arrangements shall not count against any use cap for the 
processing of opilio crab in the Northern Region so long as such 
crab is processed in the North region by a shore-based crab 
processor.
    (2) SHORE-BASED CRAB PROCESSOR DEFINED.--In this paragraph, the 
term ``shorebased processor'' means any person or vessel that 
receives, purchases, or arranges to purchase unprocessed crab, that 
is located on shore or moored within the harbor.

    To fully implement section 122(e) of the MSRA, NMFS must adopt 
conforming regulations. However, several of the specific terms used in 
section 122(e), such as ``custom processing arrangements'' and ``moored 
within the harbor,'' are not defined in the statute or in regulation 
and Congress did not provide legislative history to guide NMFS on how 
to interpret those terms.
    In response, the Council received guidance from the public and 
adopted recommendations to revise the Program to implement section 
122(e) of the MSRA. During this process, participants in other crab 
fisheries expressed concerns about the economic viability of their 
fishing operations and proposed IPQ use cap exemptions for custom 
processing arrangements similar to those congressionally mandated for 
the north region Bering Sea C. opilio fishery. Specifically, 
participants in crab fisheries with historically low TAC allocations or 
active in crab fisheries in more remote geographic regions argued that 
exempting IPQ crab processed under custom processing arrangements from 
the IPQ use caps of the owners of facilities could improve their 
operational efficiency. The Council recommended Amendment 27 to clarify 
that IPQ holders who hold at least a 10 percent or greater direct or 
indirect ownership interest in a processing facility would not be 
considered as using IPQ when that IPQ crab was (1) received by an IPQ 
holder at their facility under a custom processing arrangement; (2) 
limited to specific crab fisheries; (3) received and processed at 
specific types of processing facilities; or (4) was IPQ crab that was 
derived from PQS earned from processing in specific communities where 
crab has been historically delivered. In addition, the Council 
recommended limits on the amount of IPQ crab that could be processed at 
a facility for the Aleutian Islands golden and red king crab fisheries. 
In December 2007, the Council adopted these recommended changes in 
addition to the clarifications necessary to implement section 122(e) of 
the MSRA and forwarded Amendment 27 to the Secretary for review.

Notice of Availability and Proposed Rule

    NMFS published the notice of availability for Amendment 27 on 
September 11, 2008 (73 FR 52806), with a public comment period that 
closed on November 10, 2008. NMFS published the proposed rule for this 
action on September 19, 2008 (73 FR 54346), with a public comment 
period that closed on November 3, 2008. NMFS received 12 public 
comments from 3 unique persons on Amendment 27 and the proposed rule, 
which are summarized and responded to below.

Changes to the Program

    This rule modifies or adds regulations at Sec. Sec.  680.7(a)(7), 
680.7(a)(8), 680.7(a)(9), 680.42(b)(2), and 680.42(b)(7). These changes 
are described in the following sections.

Exempting Custom Processing Arrangements from IPQ Use Caps

    For certain crab fisheries, this rule removes the requirement that 
NMFS apply any IPQ used at a facility through a custom processing 
arrangement against the IPQ use cap of the owners of that facility if 
there is no affiliation between the person whose IPQ crab is processed 
at that facility and the IPQ holders who own that facility. The changes 
to Sec.  680.7(a)(7) modify the calculation of a person's IPQ use cap 
to be the sum of the IPQ held by that person, either directly or 
indirectly through subsidiary corporations, and all IPQ held by any IPQ 
holders affiliated with that person. Effectively, this change does not 
count IPQ crab that are custom processed at a facility owned by an IPQ 
holder against the IPQ use cap of the owner of the processing facility. 
A person who holds IPQ and who owns a processing facility is credited 
only with the amount of IPQ crab used by that person, or any affiliates 
of that person, when calculating IPQ use caps.
    In sum, the rule allows processing facility owners who also hold 
IPQ to be able to use their facility to establish custom processing 
arrangements with other IPQ holders to process more crab at their 
facilities, thereby improving throughput and providing a more 
economically viable processing platform. Conceivably, most or all of 
the IPQ crab to which the exemption applies could be processed at a 
single facility depending on the degree of affiliation that may exist 
between IPQ holders who have an ownership interest in the facility and 
the number of IPQ holders that establish custom processing arrangements 
with a given facility owner. The affiliation relationships among IPQ 
holders and processing facility ownership can change with time, so the 
degree of processing consolidation that may occur at a given processing 
facility in a specific crab fishery cannot be predicted. The analysis 
prepared for this action notes the possibility that IPQ crab designated 
for a specific region could be processed

[[Page 25452]]

at a single facility and notes the potential benefits that may accrue 
from increased efficiencies in processing (see ADDRESSES). A more 
extensive discussion of the rationale for relieving processing 
restrictions is provided in the preamble to the proposed rule (see 
ADDRESSES).

Removing IPQ Crab Under Custom Processing Arrangement From The Facility 
Use Cap

    Consistent with the exemption for custom processing arrangements 
from IPQ use caps, this rule amends the regulations at Sec.  
680.7(a)(8) so that IPQ crab processed under a custom processing 
arrangement do not apply against the limit on the maximum amount of IPQ 
crab that can be processed at a facility in which no IPQ holder has a 
10 percent or greater ownership interest. The rule effectively removes 
that limit so that more than 30 percent of the IPQ could be processed 
at a facility in which no IPQ holder has a 10 percent or greater direct 
or indirect ownership interest in the processing facility, provided 
those IPQ crab are custom processed at that facility.

Removing IPQ Crab under Custom Processing Arrangement In The North 
Region C. opilio Fishery From IPQ Use Cap Calculations

    The rule modifies regulations at Sec.  680.42(b)(2) so that IPQ 
crab processed under a custom processing arrangement do not apply 
against the IPQ use cap limitation that no person can use more than 60 
percent of the Bering Sea C. opilio IPQ designated for the North 
Region. This exemption for IPQ crab custom processed in the Bering Sea 
C. opilio fishery in the North Region meets the intent of section 
122(e) of the MSRA to exempt custom processing arrangements from this 
use cap.
    To conform to section 122(e) of the MSRA, this rule modifies Sec.  
680.42(b)(2) to allow persons holding Bering Sea C. opilio IPQ 
designated for delivery in the North Region to establish custom 
processing arrangements to have their IPQ crab processed at a facility. 
The IPQ crab processed under those custom processing arrangements do 
not apply against the Bering Sea C. opilio use cap of IPQ holders who 
own the facility where those crab are custom processed.

Fisheries Subject To Custom Processing Arrangement Exemption

    The rule establishes regulations at Sec.  680.42(b)(7)(ii)(A) that 
list the six crab fisheries for which the custom processing arrangement 
exemption applies. These are: Bering Sea C. opilio with a North Region 
designation, Eastern Aleutian Islands golden king crab, Pribilof Island 
blue and red king crab, Saint Matthew blue king crab, Western Aleutian 
golden king crab processed west of 174[deg] W. long., and Western 
Aleutian Islands red king crab. In these six crab fisheries, IPQ crab 
that are processed under a custom processing arrangement do not apply 
against the use cap of IPQ holders who own the facility where those 
crab are custom processed.

Facilities Where Custom Processing Arrangements Are Exempt From Use 
Caps

    The rule establishes regulations at Sec.  680.42(b)(7)(ii)(B) that 
exempt IPQ crab under custom processing arrangements in the six crab 
fisheries described above from applying to the IPQ use cap of the owner 
of that facility if that facility meets specific requirements. 
Consistent with section 122(e) of the MSRA, the Council recommended 
that any IPQ crab that were custom processed do not count against the 
IPQ use cap of persons holding a 10 percent or greater direct or 
indirect ownership interest in the facility where those IPQ crab were 
custom processed if the facility is: (1) in a home rule, first class, 
or second class city in the State of Alaska on the effective date of 
this rule; and (2) either a shorebased crab processor (i.e., 
shoreside), or a stationary floating crab processor that is moored 
within a harbor at a dock, docking facility, or other permanent mooring 
buoy, with specific provisions applicable to the City of Atka.
    In addition to the requirement that a facility be located in a home 
rule, first class, or second class city, the facility needs to be a 
shoreside processor, or be a stationary floating crab processor that is 
moored at a dock, docking facility, or other permanent mooring buoy 
located in a harbor within the municipal boundaries of the city. An 
exemption to the requirement that a stationary floating crab processor 
must be moored within a harbor at a dock, docking facility, or other 
permanent mooring buoy is provided for the City of Atka as described 
below.
    The requirement that a stationary floating crab processor be moored 
within a harbor within city boundaries is consistent with the statutory 
language of section 122(e) of MSRA. Although section 122(e) applies 
only to the C. opilio fishery in the North Region, the Council, with 
one exception for the City of Atka, did not wish to apply different 
standards to the use of stationary floating crab processors for 
purposes of applying an IPQ use cap exemption for custom processed crab 
in different crab fisheries. NMFS determined that a uniform standard 
will reduce confusion among fishery participants and ease enforcement 
of this provision.
    The Council recommended that a stationary floating crab processor 
would not be required to be moored within a harbor in the city of Atka. 
Currently, the city of Atka lacks an onshore processing facility 
capable of processing crab economically. These conditions do not appear 
to exist in other cities with substantial history of crab processing, 
and so an exemption to the mooring requirements does not appear 
necessary in other communities where custom processing is likely to 
occur. The preamble to the proposed rule contains a more detailed 
description of the rationale for the provisions specific to Atka (see 
ADDRESSES).
    NMFS defines home rule, first class, and second class cities and 
the boundaries of those cities as those that are in existence as of the 
effective date of this rule. Fixing the specific communities and their 
boundaries facilitates compliance with this provision and assists these 
municipalities or the State of Alaska in considering effects on 
processors who rely on the existing municipalities and the boundaries 
of those existing municipalities in any future action to redesignate 
these cities or modify their boundaries.

Use Cap Exemptions For IPQ Crab Subject To ROFR Requirements

    This rule adds regulations at Sec.  680.42(b)(7)(ii)(C) to exempt 
IPQ crab derived from PQS that is, or once was, subject to ROFR 
requirements and that is to be custom processed within the boundaries 
of an eligible crab community (ECC) with whom the ROFR contract 
applies, or did apply, from the IPQ use cap of the owner of the 
facility where those crab are custom processed. Any IPQ crab derived 
from this PQS and custom processed within that community would be 
exempt from the IPQ use cap of persons who own the crab processing 
facility.
    The fisheries subject to ROFR contract requirements are the Eastern 
Aleutian Islands golden king crab, Bristol Bay red king crab, Bering 
sea C. opilio crab, Pribilof Islands red and blue king crab, and St. 
Matthew blue king crab fisheries. The eight ECCs are Akutan, Dutch 
Harbor, False Pass, King Cove, Kodiak, Port Moller, Saint George, and 
Saint Paul. The net effect of this provision is to allow consolidation 
of processing through custom processing arrangements in these specific 
communities that are historically

[[Page 25453]]

dependent on crab processing operations.
    This provision differs from the more general custom processing IPQ 
use cap exemptions in several ways. First, processing can occur only 
within the boundaries of the ECCs. Second, Bristol Bay red king crab as 
well as Bering Sea C. opilio crab designated for either the North 
Region or the South Region could be custom processed at facilities 
within the ECCs and does not apply to the IPQ use cap of the facility 
owners. Third, only IPQ derived from PQS that is, or was, subject to a 
ROFR with an ECC and transferred to another person can be custom 
processed at a facility within that community, and does not apply to 
the IPQ use cap of the owner of the facility. Fourth, this provision 
does not require that these IPQ crab be processed at specific types of 
facilities, only that the IPQ crab be processed within the boundaries 
of the ECC. Therefore, this provision does not require the IPQ crab to 
be processed only onshore or on stationary floating crab processors 
that are moored at a dock or a permanent mooring buoy in a harbor.

IPQ Use Cap For Eastern Aleutian Islands Golden King Crab and Western 
Aleutian Islands Red King Crab

    The rule adds regulations at Sec.  680.7(a)(9) that prohibit a 
person from processing more than 60 percent of the IPQ issued for the 
Western Aleutian Islands red king crab or Eastern Aleutian Islands 
golden king crab fisheries in a crab fishing year at a single 
processing facility east of 174[deg] W. long. This provision applies to 
all IPQ processed at a shoreside crab processor or stationary floating 
crab processor, and does not exempt IPQ crab that are delivered under a 
custom processing arrangement from IPQ use cap calculations. The 
Council's intent behind this provision is to limit the potential 
consolidation of IPQ that could occur under the custom processing 
exemptions contained in this rule. This processing limit prevents 
excessive consolidation of the number of markets available to 
harvesters, a scenario that is more likely in these fisheries compared 
to the other fisheries with custom processing exemptions given their 
historically relatively small TACs compared to other crab fisheries.
    In addition, this provision minimizes the potentially adverse 
effects on processing facilities west of 174[deg] W. long. by 
preventing the complete consolidation of IPQ in processing facilities 
east of 174[deg] W. long. Due to the limited TAC in the Eastern 
Aleutian Islands golden king crab fishery, and the currently limited 
number of PQS holders, processing could consolidate in one or a few 
facilities east of 174[deg] W. long., such as Dutch Harbor or other 
ports where PQS holders in this fishery currently own processing 
facilities. Processors owning facilities west of 174[deg] W. long. 
expressed concern about their ability to effectively compete in these 
fisheries if all of the catch were processed in one facility east of 
174[deg] W. long.

Response to Comments

    Comment 1: The Fisheries Impact Statement prepared to support the 
proposed rule did not adequately describe the foreseeable impacts of 
the proposed rule on certain processing operations in the Aleutian 
Islands Pacific cod fishery. The commenter notes that he has provided 
testimony to the Council recommending that limits be placed on the 
amount of Pacific cod that may be processed by vessels that have 
historically been used as stationary floating crab processors in the C. 
oplilo fishery. The commenter believes that Pacific cod processing 
limits should be established and notes that such processing limits are 
not included as part of this action.
    Response: Section 303(a)(9) of the MSA requires that a fishery 
management plan include a fishery impact statement:

    [W]hich shall assess, specify, and analyze the likely effects, 
if any, including the cumulative conservation, economic, and social 
impacts, of the conservation and management measures on, and 
possible mitigation measures for--
    (A) participants in the fisheries and fishing communities 
affected by the plan or amendment;
    (B) participants in the fisheries conducted in adjacent areas 
under the authority of another Council [emphasis added], after 
consultation with such Council and representatives of those 
participants; and
    (C) the safety of human life at sea, including whether and to 
what extent such measures may affect the safety of participants in 
the fishery.''

    Section 303(a)(9)(B) requires the Council and NMFS to examine the 
likely effects of Amendment 27 on participants in other fisheries under 
the jurisdiction of fishery management councils other than the North 
Pacific Fishery Management Council. It is not clear that section 
303(a)(9)(B) applies to this action. The EEZ off Alaska under the 
authority of the Council is not adjacent to the EEZ of any other state 
under the authority of any other fishery management council. Second, 
this action would not be expected to have ``likely effects'' because 
this action is limited to amending the FMP for crab fisheries in the 
BSAI and these stocks are not harvested in fisheries under the 
authority of other fishery management councils.
    NMFS and the Council did conduct a Fishery Impact Statement 
consistent with section 303(a)(9) of the MSA that assessed, specified, 
and analyzed the likely effects of Amendment 27. The Fishery Impact 
Statement is contained in section 4.2 of the RIR/IRFA prepared for this 
action and notes ``[t]he impacts of the alternatives on participants in 
the harvesting sector and processing sector have been discussed in 
previous sections of this document. This action will have no effect on 
participants in other fisheries.'' Specifically, the RIR/IRFA contains 
a discussion of the impacts of the action on harvesters, processors, 
and fishing communities. Section 2.4.7 contains a discussion of the 
potential effects of this action on participants in other fisheries 
including groundfish fisheries such as Pacific cod. Specifically, 
section 2.4.7 notes that:

    Processor concerns have focused primarily on the activity of 
floating processors that have historically participated in the 
Bering Sea C. opilio fishery, now being freed up to process 
groundfish. In the first two years of the rationalization program, 
four and three processors participated in the North region, 
respectively, while four and six processors participated in the 
South region, respectively. This participation is a substantial 
decline from the 15 to 20 processors that participated in the years 
immediately preceding implementation of the program. Given this 
level of consolidation under [the Program], the potential for this 
action to contribute to further consolidation that has a perceptible 
effect on processors in other fisheries, is very limited.

    The analysis clearly indicates that although the Program resulted 
in some consolidation in the crab fishery, the potential that this 
action would encourage a redistribution of excess processing capacity 
to the Aleutian Islands Pacific cod fishery is not likely. The 
Fisheries Impact Statement adequately addresses the requirements of 
section 303(a)(9) of the MSA, specifically the ``likely effects'' of 
the action, including a discussion noting that the specific concerns 
raised by the commenter are not likely to occur.
    NMFS is adding some clarification to section 2.4.7 to note that in 
response to concerns raised by processing representatives (including 
the commenter) subsequent to implementation of the Program, the Council 
has initiated an examination of alternatives to impose limits on 
processing of groundfish harvested from the Aleutian Islands by 
floating

[[Page 25454]]

processors whose processing history led to an allocation under the 
Program. That action is intended to address possible inequities to 
historic groundfish processors that might arise from the potential that 
additional processing capacity could have been made available by the 
implementation of the Program and that additional capacity could 
increase processing effort in the groundfish fisheries. However, the 
conclusions contained in section 2.4.7 clearly note that the potential 
effects of Amendment 27 and the accompanying regulations are not likely 
to have an adverse effect on existing processing operations.
    Although it is possible that the implementation of the Program may 
have reduced the need for processing capacity for BSAI crab fisheries, 
and some of that processing capacity could be redirected for processing 
Pacific cod, there is no information to suggest that Amendment 27 and 
its accompanying regulations would measurably increase the amount of 
processing capacity that may be used to process Pacific cod in the 
Aleutian Islands beyond that which may have already occurred with the 
implementation of the Program. Section 2.4 of the analysis notes that 
currently there is likely to be excess processing capacity that may be 
used in a variety of fisheries, including the Aleutian Islands Pacific 
cod fishery. Modifying the method for calculating the IPQ use cap is 
not expected to substantially increase processing capacity available 
for use in the Aleutian Islands Pacific cod fishery.
    Comment 2: The Council acknowledged and then ignored the 
foreseeable impacts of this action on Aleutian Islands Pacific cod 
processing in Adak. The commenter provides an example of the operations 
of a specific floating processor involved in both Aleutian Islands 
Pacific cod and the snow crab fishery in 2008 and appears to suggest 
that this final rule would encourage this vessel to process Aleutian 
Islands Pacific cod instead of snow crab in a manner that would be 
disadvantageous to the specific processing operations in Adak. The 
commenter notes that additional mitigation measures, presumably to 
address the fishing operations of this floating processor, should be 
considered. The commenter notes that the Council is currently 
considering an action that would limit the amount of Aleutian Islands 
Pacific cod that could be received and processed by vessels that 
participate in LAPPs. The commenter provides a description of Council 
deliberations related to Aleutian Islands Pacific cod processing. In 
particular, the commenter notes that in the transcript of Council 
deliberations, NOAA General Counsel had raised concerns about the 
nature of discussions and whether the Council had fully considered the 
impacts of its action.
    Response: NMFS reviewed the record developed by the Council for 
this action and determined that the Council did not ignore the 
foreseeable impact of this action on Aleutian Islands Pacific cod 
processing. The analysis prepared for this action analyzed the effects 
of this action and its likely effects on participants in various 
fisheries. Specifically, sections 2.3, 2.4, and 3.7 of the analysis 
contain an extensive description of the likely effects of this action 
on harvesters, processors, communities, and participants in other 
fisheries.
    The reference the commenter makes to a specific floating processor 
and how this action would affect that vessel's operations appears 
speculative. The analysis generally examined changes in processing 
operations that might occur from this action but cannot reasonably 
predict or analyze the actions of specific vessel's operations due to 
the wide variety of factors that will affect their operations. There is 
no reason to assume that a specific vessel operator will choose to 
process Aleutian Islands Pacific cod differently due to this action. 
However, the information the commenter presents in the comment 
indicates that the vessel of concern is already actively processing in 
the Aleutian Islands Pacific cod fishery, in which case, this action 
would not be expected to have any additional impact on processing by 
this vessel in the Aleutian Islands Pacific cod fishery.
    During deliberations, Council members explored the potential impact 
of this action on other fisheries. After a consideration of the 
potential impacts of this action, the Council chose to proceed with 
this action. In addition, the Council chose to initiate a review of the 
potential impacts of limited access privilege programs (LAPPs), 
including the Program, the AFA, and the Amendment 80 Program on 
processing capacity and the potential effects of those LAPPs on 
processing operations in various communities. The Council concluded 
that this action did not have a demonstrable likely impact on 
processing consolidation that would adversely affect other 
participants, but did choose to explore the impacts of LAPPs generally 
under a separate action. Based on the deliberations and a review of the 
analysis, NMFS agrees with the Council's conclusions. It should be 
noted that the commenter's description of comments made by NOAA General 
Counsel is not complete. NOAA General Counsel raised concerns in an 
effort to help focus the Council's deliberations. Unfortunately, those 
deliberations are not available because the discussion among NOAA 
General Counsel and Council members was not recorded in its entirety.
    Comment 3: The IRFA improperly concludes that this action would be 
expected to benefit the directly regulated entities. Adak Fisheries 
would be harmed because under this action an IPQ holder will have less 
incentive to custom process in Adak, and this action would provide an 
incentive for a person to bring a floating processor into the Aleutians 
to process crab and Pacific cod which would reduce the potential 
product delivered to Adak. These issues have not been adequately 
addressed in the IRFA. Specific requirements that allow custom 
processing by floating processors in the Aleutian Islands undermine the 
goals of the Council to sustain communities in the Aleutian Islands. 
Allowing floating processors minimizes the potential benefits that may 
be received by shoreside processing operations.
    Response: NMFS disagrees. The commenter's assertions about the 
effects of this final rule on directly regulated entities must be 
considered separately from the rule's effects on other indirectly 
regulated entities, such as the communities of Adak or Atka, or 
processing facilities. The IRFA and FRFA conclude that directly 
regulated entities are the PQS and IPQ holders who would be allowed to 
undertake custom processing with less constraint than they could prior 
to this rule. The PQS and IPQ holders are expected to benefit because 
the action would relieve a restriction on their ability to consolidate 
processing operations and may provide additional benefits relative to 
the status quo such as improved operations efficiency. The commenter 
does not provide any information to suggest that this conclusion is not 
true. The action would allow any directly regulated PQS or IPQ holder 
to establish custom processing relationships with any other PQS or IPQ 
holder within the limits established by this action. Specific to this 
comment, Adak Fisheries, or any other IPQ holder, could choose to have 
crab processed at any facility that is able to process those crab, 
including Adak, provided that facility is not otherwise ineligible to 
be used. The potential for a processing facility at Adak to use this 
provision is addressed in the analysis prepared for this action (see 
ADDRESSES).

[[Page 25455]]

    The commenter asserts that the action would reduce the incentive 
for an IPQ holder to use the processing facility in Adak for custom 
processing, but provides no reason as to why this may be the case. 
Facilities in Adak, or any other community, could be used for custom 
processing. The only factors that would prevent operations from being 
consolidated in Adak would be those unrelated to this action (e.g., IPQ 
holders cannot reach agreement with the facility operators on terms to 
have their crab custom processed at that facility, the facility is 
unable to meet the processing requirements of the IPQ holders who wish 
to have their crab custom processed, or the facility is not 
economically viable for a given custom processing arrangement). As 
noted in the response to Comment 1, NMFS has concluded it is unlikely 
that this action will have an effect on processing activities in the 
Aleutian Islands Pacific cod fishery.
    The commenter notes that one of the goals in the Council's purpose 
and need statement (i.e., problem statement) for this action is 
``sustaining communities,'' but the commenter fails to consider the 
Council's purpose and need statement in its entirety. The Council 
considered alternatives that would ``protect the economic base of 
remote communities dependent on crab processing, and to allow for the 
efficient prosecution of quota held by fishermen.'' Specifically, the 
Council considered alternatives that would allow Adak and Atka to 
benefit from more efficient prosecution of crab fisheries by the 
exemption of custom processing arrangements from IPQ use caps. The 
Council noted that given the limited shoreside processing facilities 
available in Aleutian Island communities other than Adak, allowing 
floating processors to operate in the Aleutian Islands under specific 
conditions would help to protect the economic base of Atka by allowing 
floating operators to operate there, while ensuring that processing 
operations in Adak may continue. Section 2.3.13 of the analysis notes 
that Adak has the only shoreside processing facilities in the Central 
and Western Aleutian Islands, and section 2.4.3 notes that the onshore 
processing facility ``at Adak could be provided a substantial advantage 
relative to other processors, if only shore plants are qualified for 
the [custom processing] exemption.'' Because the goal of this action is 
to protect the economic base of all communities, not only Adak, and is 
to allow efficient prosecution of quota, the Council considered, and 
ultimately selected options to allow floating processors to operate in 
the Aleutian Islands as a way to accomplish these two goals. A review 
of the factors the Council considered is provided in the preamble to 
the proposed rule, section 2.4 of the analysis prepared for this 
action, and records of Council deliberation.
    Comment 4: The confidentiality standards applied to data used in 
the analysis compromised the Council's decision making. Much of the WAG 
fishery harvested by catcher vessels has been processed by facilities 
in Adak since 1999. The commenter raises concerns about confidentiality 
standards applied both in the EIS prepared for the Program and the 
analysis conducted for this action. The commenter asserts that applying 
data confidentiality standards to catch data from LAPPs is a bad 
policy.
    Response: Due to the limited number of participants in the WAG 
fishery, the Council and NMFS are unable to release information in the 
analysis concerning processing in specific locations because doing so 
would reveal confidential information. Section 402(b)(3) of the MSA 
allows NMFS to ``release or make public any such information in any 
aggregate or summary form which does not directly or indirectly 
disclose the identity of any person who submits such information.'' 
Similarly, data from State of Alaska fish tickets are considered 
confidential and may not be released by the State, NMFS, or the Council 
under the requirements of State of Alaska statute except in an 
aggregate form that would not reveal data from an individual submitter 
(Alaska Statute, sec.16.05.815). However, the Council was generally 
aware of the overall patterns of harvesting and processing in the WAG 
fishery and the participants in that fishery through public testimony 
and the limited data available in the analysis. Constraints on the 
release of confidential information did not affect the ability of the 
Council or NMFS from adequately considering the effects of its actions. 
Public comment from the commenter to the Council and NMFS noted the 
historic and current processing activities of WAG crab at the 
facilities of Adak.
    Comment 5: The commenter asserts that this action would undermine 
existing investments in shoreside processing facilities in Adak. The 
commenter notes that the current dependence of Adak on crab is 
compromised by the ability of persons to use a stationary floating crab 
processor instead of a shoreside facility to custom process crab. The 
commenter states that section 303A(c)(5) of the MSA requires NMFS to 
consider ``current and historical'' participation by fishing 
communities.
    Response: The Council and NMFS considered current and historic 
participation of Adak, and other fishing communities in the development 
and approval of this action. Additional detail on the fishing 
communities and their current and historic participation in the fishery 
is provided in section 2.4 of the analysis.
    While NMFS agrees with the commenter that section 303A(c)(5) 
requires NMFS to consider that current and historical participation of 
fishing communities during the development of a new LAPP, this action 
modifies an existing LAPP and under section 303A(i), the requirements 
of section 303A(c)(5) are inapplicable to this action. However, 
pursuant to other provisions of the MSA, NMFS has determined that this 
action would not undermine the ability for crab to be custom processed 
in Adak relative to other locations in the Aleutian Islands. The 
decision by an IPQ holder to process catch in Adak, or at any other 
location, will be based on a wide array of factors such as the 
potential costs of any custom processing fees, throughput of the 
facility, the ability of the facility mangers to meet the demands of 
the custom processors, and other economic factors. Allowing custom 
processing to occur at both stationary floating processors and 
shoreside facilities provides competition among processors and 
addresses concerns raised by the Council that limiting processing to 
shoreside facilities in the Aleutian Islands could limit competition. 
Sections 2.3.13 and 2.4.3 of the analysis and the response to Comment 2 
provide additional rationale for allowing stationary floating 
processors and shoreside facilities to custom process crab in the 
Aleutian Islands.
    Comment 6: The analysis does not clarify that PQS holders would be 
the primary beneficiaries of this action. Facility operators who choose 
to custom process catch will not benefit from this action.
    Response: NMFS disagrees with the characterization of the analysis. 
The analysis, particularly sections 2.4 and 3.7, describe the potential 
effects of the action on harvesters, processing facility operators, PQS 
and IPQ holders, and communities. Section 2.4 of the analysis describes 
the potential benefits that PQS holders would receive from this action. 
However, the analysis also describes potential benefits from this 
action for facility operators, IPQ holders who may or may not be PQS 
holders, harvesters, and communities. The analysis contains a 
comprehensive discussion of the

[[Page 25456]]

effects of this action and the potential beneficiaries.
    Comment 7: The alternatives considered do not adequately address 
the Council's purpose and need statement for the action. Specifically, 
the action does not contribute to community stability or provide for 
efficient prosecution of the fishery. The commenter asserts that 75 
percent of the west region designated Western Aleutian Islands golden 
king crab (WAG) Class A IFQ was not harvested due to additional custom 
processing fees that made the operations uneconomic. The commenter 
asserts that PQS and IPQ for west designated WAG crab should be 
extinguished but that regional delivery requirements should be 
retained.
    Response: The Council considered a range of alternatives that would 
address the purpose and need statement and NMFS determined that the 
range of alternatives considered by the Council addressed the purpose 
and need statement for this action. The analysis examines the impacts 
of the exemption on community stability and effects on processors in 
section 2 of the document (see ADDRESSES). The commenter does not 
provide any specific examples that describe how the proposed action 
failed to address the Council's purpose and need statement. Without 
additional detail, NMFS is unaware of any information omitted from the 
analysis. The commenter incorrectly states that 75 percent of the west 
designated WAG Class A IFQ has been unharvested. A review of NMFS 
landing data from the first three years of the Program indicates that 
in only one year (\2006/2007\) was a substantial portion of the west 
designated WAG Class A IFQ unharvested. NMFS cannot provide a more 
precise description of the use of west designated WAG Class A IFQ due 
to limitations on the release of potentially confidential fishery data. 
Furthermore, NMFS has no information to conclude that the WAG Class A 
IFQ that was left unharvested was due to additional custom processing 
fees. Finally, the commenter's statements about eliminating PQS and IPQ 
for west designated WAG crab are noted, but are not relevant to the 
purpose of this action which is to modify IPQ use cap calculation 
procedures to provide greater opportunities for more efficient custom 
processing operations.
    Comment 8: The commenter supports the proposed action and notes 
that the ability for processors to consolidate processing in the north 
region C. opilio fishery will benefit the community of Saint Paul, 
Alaska. The commenter describes the relationships among various 
processing companies and local government entities, and notes that 
economically efficient crab processing operations are necessary to 
benefit the community.
    Response: NMFS notes the support for the rule and the importance of 
crab processing to Saint Paul.
    Comment 9: The commenter provides some detailed information about 
the business arrangements that exist among various local government 
agencies and companies involved in crab processing in Saint Paul. The 
commenter notes that the text of section 2.4.2 of the analysis states 
that ``a plant could be owned and operated by two distinct [IPQ] share 
holders, with each [IPQ] share holder credited with only its own [IPQ] 
share holdings for purposes of applying the cap.'' While the preamble 
to the proposed rule states that ``[a] person who holds IPQ and who 
owns a processing facility would be credited with only the amount of 
IPQ crab used by that person, or any affiliates of that person, when 
calculating IPQ use caps.'' The commenter asks if these two statements 
are consistent, and whether the specific processing operations 
described by the commenter would be permitted.
    Response: NMFS cannot comment on whether the specific business 
arrangements described by the commenter would be subject to the custom 
processing use cap exemption due to incomplete knowledge about the 
specific conditions that may exist among the parties in question. 
However, the statements made in section 2.4.2 and the preamble to the 
proposed rule are not inconsistent. In cases where an IPQ holder is not 
affiliated with another IPQ holder then those two separate and distinct 
IPQ holders may process their IPQ crab at the same crab processing 
facility, provided they are otherwise eligible to receive the 
exemption. The preamble to the proposed rule notes that ``affiliation'' 
is defined in regulation at 50 CFR 680.2. Provided an IPQ holder is not 
defined as affiliated with another IPQ holder, then it is possible that 
two IPQ holders could own a portion of a crab processing facility, not 
be considered affiliated according to 50 CFR 680.2, and process their 
IPQ at that commonly owned facility. In that case, each IPQ holder 
would be considered to use only the amount of IPQ that it processed at 
the facility and only that IPQ would be credited against that person's 
IPQ use cap.
    Comment 10: The commenter supports the definition of the specific 
processing facilities at which the custom processing exemption would 
apply, and notes that it is consistent with section 122(e) of the MSA.
    Response: NMFS notes the comment and agrees that the final rule is 
consistent with section 122(e) of the MSA.
    Comment 11: The commenter supports applying an exemption to the IPQ 
use cap calculations for PQS that is, or was, subject to a ROFR.
    Response: NMFS notes the comment.
    Comment 12: The commenter raises general concerns about fisheries 
management asserting that fishery policies have been overly liberal and 
have not been to the benefit of American citizens. The commenter 
asserts that NMFS is biased and should not be allowed to manage 
fisheries.
    Response: The comments are not specifically related to the proposed 
rule and recommend broad changes to fisheries management that are 
outside of the scope of this action.

Changes from the Proposed Rule

    NMFS did not make any changes from the proposed rule.

Classification

    The Assistant Administrator for Fisheries, NOAA, has determined 
that Amendment 27 is necessary for the conservation and management of 
the BSAI crab fisheries and that it is consistent with the MSA and 
other applicable laws.
    This final rule has been determined to be not significant for 
purposes of Executive Order 12866.

Final Regulatory Flexibility Analysis (FRFA)

    A FRFA was prepared for this rule, as required by section 604 of 
the Regulatory Flexibility Act (RFA). Copies of the FRFA prepared for 
this final rule are available from NMFS (see ADDRESSES). The FRFA 
incorporates the IRFA, a summary of the significant issues raised by 
the public comments in response to the IRFA, NMFS' responses to those 
comments, and a summary of the analyses completed to support the 
action. A summary of the FRFA follows.
Why Action by the Agency is Being Considered and Objectives of, and 
Legal Basis for, the Rule
    The FRFA describes in detail the reasons why this action is being 
proposed, describes the objectives and legal basis for the rule, and 
discusses both small and non-small regulated entities to adequately 
characterize the fishery participants. The MSA provides the legal basis 
for the rule, as discussed in this preamble. The objectives of the rule 
are to (1) implement the statutory

[[Page 25457]]

requirements of section 122(e) of the MSRA, modify IPQ use caps apply 
to a person who is processing IPQ crab through contractual arrangements 
with the facility owners to provide greater flexibility in processing 
operations, and (3) modify IPQ use caps that limit the amount of IPQ 
that may be used at a facility by persons processing Eastern Aleutian 
Islands golden king crab and Western Aleutian Islands red king crab.
Number of Small Entities to Which the Final Rule Would Apply
    For purposes of a FRFA, the Small Business Administration (SBA) has 
established that a business involved in fish harvesting is a small 
business if it is independently owned and operated, not dominant in its 
field of operation (including its affiliates), and if it has combined 
annual gross receipts not in excess of $4.0 million for all its 
affiliated operations worldwide. A seafood processor is a small 
business if it is independently owned and operated, not dominant in its 
field of operation, and employs 500 or fewer persons on a full-time, 
part-time, temporary, or other basis, at all its affiliated operations 
worldwide.
    Because the SBA does not have a size criterion for businesses that 
are involved in both the harvesting and processing of seafood products, 
NMFS has in the past applied and continues to apply SBA's fish 
harvesting criterion for these businesses because catcher/processors 
are first and foremost fish harvesting businesses. Therefore, a 
business involved in both the harvesting and processing of seafood 
products is a small business if it meets the $4.0 million criterion for 
fish harvesting operations. NMFS currently is reviewing its small 
entity size classification for all catcher/processors in the United 
States. However, until new guidance is adopted, NMFS will continue to 
use the annual receipts standard for catcher/processors. NMFS plans to 
issue new guidance in the near future.
    The FRFA contains a description and estimate of the number of small 
entities to which the rule would apply. Currently, 29 processors hold 
processing shares. Estimates of large entities were made, based on 
available records of employment information on participation in 
processing activities in other fisheries, and analysts' knowledge of 
foreign ownership of vertically integrated processing companies. Of the 
recipients of PQS, 11 are estimated to be large entities, leaving 18 
small entities among the directly regulated universe under 
consideration.
Public Comments Received on the IRFA
    NMFS received one public comment on the IRFA or on the economic 
impacts of the rule. That comment is addressed in the Response to 
Comment section of this preamble (see response to Comment 3) and the 
FRFA prepared for this action (see ADDRESSES).
Projected Reporting, Recordkeeping, and Other Compliance Requirements
    This rule would not change existing reporting, recordkeeping, or 
other compliance requirements.
Comparison of Alternatives
    All the directly regulated individuals would be expected to benefit 
from the preferred alternative, Alternative 2 (described in this rule) 
relative to the status quo alternative because it relieves individuals 
from requirements that limit their ability to consolidate processing 
operations that may provide additional benefits relative to the status 
quo. Of the two alternatives considered, status quo and this action, 
this action minimizes adverse economic impacts on the individuals that 
are directly regulated.
    Although the alternatives under consideration in this action would 
have distributional and efficiency impacts for directly regulated small 
entities, in no case are these combined impacts expected to be 
substantial. The status quo alternative would not allow the additional 
processing efficiencies that were the motivation for the action. 
However, exempting processors from use caps under custom processing 
arrangements would provide additional processing opportunities for 
small entities that wish to reduce costs by consolidating operations 
with other processors. Although neither of the alternatives is expected 
to have any significant economic or socioeconomic impacts, the 
preferred Alternative 2 minimizes the potential negative impacts that 
could arise under Alternative 1, the status quo alternative.

Small Entity Compliance Guide

    NMFS has posted a small entity compliance guide on its website at 
http://www.fakr.noaa.gov/sustainablefisheries/crab/crfaq.htm to satisfy 
the Small Business Regulatory Enforcement Fairness Act of 1996 
requirement for a plain language guide to assist small entities in 
complying with this rule. Contact NMFS to request a hard copy of the 
guide (see ADDRESSES).

List of Subjects in 50 CFR Part 680

    Alaska, Fisheries.

    Dated: May 21, 2009.
John Oliver,
Deputy Assistant Administrator for Operations, National Marine 
Fisheries Service.

0
For the reasons set out in the preamble, 50 CFR part 680 is amended as 
follows:

PART 680--SHELLFISH FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF 
ALASKA

0
1. The authority citation for 50 CFR part 680 continues to read as 
follows:

    Authority: 16 U.S.C. 1862; Pub. L. 109-241; Pub. L. 109-479.

0
2. In Sec.  680.7, paragraphs (a)(7) and (a)(8) are revised, and 
paragraph (a)(9) is added to read as follows:


Sec.  680.7  Prohibitions.

* * * * *
    (a) * * *
    (7) For an IPQ holder to use more IPQ crab than the maximum amount 
of IPQ that may be held by that person. Use of IPQ includes all IPQ 
held by that person, and all IPQ crab that are received by any RCR at 
any shoreside crab processor or stationary floating crab processor in 
which that IPQ holder has a 10 percent or greater direct or indirect 
ownership interest unless that IPQ crab meets the requirements 
described in Sec.  680.42(b)(7).
    (8) For a shoreside crab processor or stationary floating crab 
processor that does not have at least one owner with a 10 percent or 
greater direct or indirect ownership interest who also holds IPQ in 
that crab QS fishery, to be used to receive in excess of 30 percent of 
the IPQ issued for that crab fishery unless that IPQ crab meets the 
requirements described in Sec.  680.42(b)(7).
    (9) For any shoreside crab processor or stationary floating crab 
processor east of 174 degrees west longitude to process more than 60 
percent of the IPQ issued in the EAG or WAI crab QS fisheries.
* * * * *

0
3. In Sec.  680.42, paragraph (b)(2) is revised, and paragraph (b)(7) 
is added to read as follows:


Sec.  680.42  Limitations on use of QS, PQS, IFQ and IPQ.

* * * * *
    (b) * * *
    (2) A person may not use more than 60 percent of the IPQ issued in 
the BSS crab QS fishery with a North region designation during a crab 
fishing year except that a person who:
    (i) Holds IPQ; and
    (ii) Has a 10 percent or greater direct or indirect ownership 
interest in the shoreside crab processor or stationary

[[Page 25458]]

floating crab processor where that IPQ crab is processed will not be 
considered to use any IPQ in the BSS crab QS fishery with a North 
region designation if that IPQ meets the requirements described in 
paragraph (b)(7) of this section.
* * * * *
    (7) Any IPQ crab that is received by an RCR will not be considered 
use of IPQ by an IPQ holder who has a 10 percent or greater direct or 
indirect ownership interest in the shoreside crab processor or 
stationary floating crab processor where that IPQ crab is processed 
under Sec.  680.7(a)(7) or paragraph (a)(8) of this section if:
    (i) That RCR is not affiliated with an IPQ holder who has a 10 
percent or greater direct or indirect ownership interest in the 
shoreside crab processor or stationary floating crab processor where 
that IPQ crab is processed; and
    (ii) The following conditions apply:
    (A) The IPQ crab is:
    (1) BSS IPQ crab with a North region designation;
    (2) EAG IPQ crab;
    (3) PIK IPQ crab;
    (4) SMB IPQ crab;
    (5) WAG IPQ crab provided that IPQ crab is processed west of 174 
degrees west longitude; or
    (6) WAI IPQ crab; and
    (B) That IPQ crab is processed at:
    (1) Any shoreside crab processor located within the boundaries of a 
home rule, first class, or second class city in the State of Alaska in 
existence on the effective date of this rule; or
    (2) Any stationary floating crab processor that is:
    (i) Located within the boundaries of a home rule, first class, or 
second class city in the State of Alaska in existence on the effective 
date of this rule;
    (ii) Moored at a dock, docking facility, or at a permanent mooring 
buoy, unless that stationary floating crab processor is located within 
the boundaries of the city of Atka in which case that stationary 
floating crab processor is not required to be moored at a dock, docking 
facility, or at a permanent mooring buoy; and
    (iii) Located within a harbor, unless that stationary floating crab 
processor is located within the boundaries of the city of Atka on the 
effective date of this rule in which case that stationary floating crab 
processor is not required to be located within a harbor; or
    (C) The IPQ crab is:
    (1) Derived from PQS that is, or was, subject to a ROFR as that 
term is defined at Sec.  680.2;
    (2) Derived from PQS that has been transferred from the initial 
recipient of those PQS to another person under the requirements 
described at Sec.  680.41;
    (3) Received by an RCR who is not the initial recipient of those 
PQS; and
    (4) Received by an RCR within the boundaries of the ECC for which 
that PQS and IPQ derived fro