Fisheries of the Exclusive Economic Zone Off Alaska; Revisions to IFQ Program Regulations, 65843-65851 [2012-26790]

Agencies

• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration

[Federal Register Volume 77, Number 211 (Wednesday, October 31, 2012)]
[Proposed Rules]
[Pages 65843-65851]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-26790]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 679

[Docket No. 120416009-2548-01 ]
RIN 0648-BB78


Fisheries of the Exclusive Economic Zone Off Alaska; Revisions to 
IFQ Program Regulations

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

ACTION: Proposed rule; request for comments.

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SUMMARY: NMFS proposes a regulatory amendment to the vessel ownership 
requirement of the Individual Fishing Quota (IFQ) Program for fixed-
gear Pacific halibut and sablefish fisheries in and off of Alaska. The 
IFQ Program requires that initial recipients of certain classes of 
quota shares own a minimum of 20-percent interest in any vessel on 
which they hire a master to fish their IFQ permits. This action 
proposes to require such quota share holders to have held a minimum of 
20-percent ownership interest in the vessel for at least 12 consecutive 
months prior to the submission of any application to hire a master. 
This proposed action also would temporarily exempt from the 12-month 
ownership requirement an initial recipient whose vessel has been 
totally lost, as by sinking or fire, or so damaged that the vessel 
would require at least 60 days to be repaired. This action is necessary 
to maintain a predominantly owner-operated fishery. This action is 
intended to promote the goals and objectives of the Magnuson-Stevens 
Fishery Conservation and Management Act, the Northern Pacific Halibut 
Act of 1982, the Fishery Management Plan for Groundfish of the Bering 
Sea and Aleutian Islands Management Area, the Fishery Management Plan 
for Groundfish of the Gulf of Alaska, and other applicable laws.

DATES: Comments on the proposed rule and supporting documents must be 
received by November 30, 2012.

ADDRESSES: You may submit comments on this document, identified by FDMS 
Docket Number NOAA-NMFS-2011-0300, by any one of the following methods:
     Electronic Submission: Submit all electronic public 
comments via the Federal e-Rulemaking Portal at www.regulations.gov. To 
submit comments via the e-Rulemaking Portal,

[[Page 65844]]

enter NOAA-NMFS-2012-0040 in the keyword search. Locate the document 
you wish to comment on from the resulting list and click on the 
``Comment Now'' icon on the right of that line.
     Mail: Address written comments to Glenn Merrill, Assistant 
Regional Administrator, Sustainable Fisheries Division, Alaska Region, 
NMFS, Attn: Ellen Sebastian. Mail comments to P.O. Box 21668, Juneau, 
AK 99802-1668.
     Fax: Address written comments to Glenn Merrill, Assistant 
Regional Administrator, Sustainable Fisheries Division, Alaska Region, 
NMFS, Attn: Ellen Sebastian. Fax comments to (907) 586-7557.
     Hand delivery to the Federal Building: Address written 
comments to Glenn Merrill, Assistant Regional Administrator, 
Sustainable Fisheries Division, Alaska Region, NMFS, Attn: Ellen 
Sebastian. Deliver comments to 709 West 9th Street, Room 420A, Juneau, 
AK.
    Comments must be submitted by one of the above methods to ensure 
that the comments are received, documented, and considered by NMFS. 
Comments sent by any other method, to any other address or individual, 
or received after the end of the comment period, may not be considered.
    All comments received are a part of the public record and will 
generally be posted for public viewing on www.regulations.gov without 
change. All personal identifying information (e.g., name, address) 
submitted voluntarily by the sender will be publicly accessible.
    Do not submit confidential business information, or otherwise 
sensitive or protected information.
    NMFS will accept anonymous comments (enter ``N/A'' in the required 
fields if you wish to remain anonymous). Attachments to electronic 
comments will be accepted in Microsoft Word or Excel, WordPerfect, or 
Adobe PDF file formats only.
    Electronic copies of the Regulatory Impact Review (RIR) for 
Amendment 94 and the RIRs for the regulatory amendments to add three 
communities to the list of CQE eligible communities and allow CQEs in 
Area 3A to purchase D category halibut QS prepared for this action are 
available from https://www.regulations.gov or from the NMFS Alaska 
Region Web site at https://alaskafisheries.noaa.gov.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
action may be submitted to NMFS at the above address and by email to 
OIRA_Submission@omb.eop.gov or fax to (202) 395-7285.

FOR FURTHER INFORMATION CONTACT: Gwen Herrewig, 907-586-7228.

SUPPLEMENTARY INFORMATION: 

Executive Summary

    This proposed rule would implement a regulatory amendment to the 
vessel ownership requirements of the Individual Fishing Quota (IFQ) 
Program for fixed-gear Pacific halibut and sablefish fisheries in and 
off of Alaska. The International Pacific Halibut Commission (IPHC) and 
National Marine Fisheries Service (NMFS) manage fishing for Pacific 
halibut through regulations established under the authority of the 
Northern Pacific Halibut Act of 1982 (Halibut Act). NMFS manages 
fishing for sablefish through regulations established under the 
authority of the Magnuson-Stevens Fishery Conservation and Management 
Act (Magnuson-Stevens Act). IFQ Program regulations may be found at 50 
CFR part 679.
    The North Pacific Fishery Management Council (Council) designed the 
IFQ Program to preserve, as much as possible, the historical character 
of the Pacific halibut and sablefish fisheries. The IFQ Program 
accomplishes this in part by ensuring that quota share (QS) are held 
mainly by those who actually do the fishing. Initial recipients of QS, 
however, are allowed to hire masters to fish their IFQ permits provided 
that the QS holder owns a minimum of 20-percent interest in the vessel 
on which the IFQ is fished by the hired master. The Council intended 
for initial recipients of QS to transfer their QS to other eligible 
fishermen upon retiring to eventually return to an owner-operated 
fishery. Current regulations have not prevented some QS holders from 
circumventing the intent of the vessel ownership requirement by 
acquiring temporary ownership interest in a vessel expressly for the 
purpose of hiring a master to fish the QS holder's IFQ permit.
    This proposed action would revise the vessel ownership regulations 
to require QS holders to own a minimum of 20-percent interest in their 
vessels for at least 12 consecutive months prior to the submission of 
an application to hire a master to NMFS. This regulatory amendment 
would prevent QS holders from acquiring temporary vessel ownership in 
order to circumvent Council intent of an owner-operated fishery.
    This proposed rule would also temporarily exempt from the 12-month 
ownership requirement a QS holder whose vessel has been lost as by 
sinking or fire, or damaged or is in need of repairs that will take at 
least 60 days to complete. This exemption would allow owners of such 
vessels to acquire a temporary 20-percent ownership interest in another 
vessel for the purpose of hiring a master to fish their IFQ permits 
from the date of the loss of or damage to the vessel until December 31 
of the following year. If approved by the Secretary, the 12-month 
ownership requirement would not be effective until one year following 
the effective date of this final rule to give sufficient time for 
compliance by QS holders.

Background

    The IPHC and NMFS manage fishing for Pacific halibut (Hippoglossus 
stenolepis) through regulations established under the authority of the 
Halibut Act. The IPHC promulgates regulations governing the halibut 
fishery under the Convention between the United States and Canada for 
the Preservation of the Halibut Fishery of the Northern Pacific Ocean 
and Bering Sea (Convention). The IPHC's regulations are subject to 
approval by the Secretary of State with concurrence of the Secretary of 
Commerce (Secretary). NMFS publishes the IPHC's regulations as annual 
management measures pursuant to 50 CFR 300.62. Additional management 
regulations not in conflict with regulations adopted by the IPHC (such 
as the IFQ Program) may be recommended by the Council and implemented 
by the Secretary. The Council has exercised this authority most notably 
in the development of the IFQ Program codified at 50 CFR part 679, 
subpart D.
    The U.S. groundfish fisheries of the Gulf of Alaska (GOA) and the 
Bering Sea and Aleutian Islands (BSAI) in the exclusive economic zone 
(EEZ) are managed by NMFS under fishery management plans (FMPs). The 
FMPs were prepared by the Council under the Magnuson-Stevens Act (16 
U.S.C. 1801 et seq.) and are implemented by regulations at 50 CFR part 
679. NMFS manages fishing for sablefish (Anoplopoma fimbria) through 
regulations established under the authority of the Magnuson-Stevens 
Act. NMFS manages sablefish as a groundfish species under the FMP for 
Groundfish of the Gulf of Alaska. The fixed-gear sablefish fishery is 
subject to the same IFQ Program that governs the halibut fishery.
    The IFQ Program is a limited access system for managing the fixed-
gear fisheries for Pacific halibut and sablefish in waters of the EEZ 
off of Alaska. The program was recommended

[[Page 65845]]

by the Council and, in 1995, implemented by NMFS under the authority of 
the Magnuson-Stevens Act and the Halibut Act. Intended primarily to 
reduce excessive fishing capacity, the IFQ Program is also designed to 
maintain the social and economic character of the fixed-gear fisheries 
and the coastal communities where many of these fisheries are based. 
Each year, an amount of QS yields a specific amount of individual 
harvesting privileges and is issued as an IFQ permit. An annual IFQ 
permit authorizes the permit holder to harvest a specified amount of an 
IFQ species in a regulatory area. All QS are categorized according to 
the size of the vessel (A, B, C, or D) from which IFQ species may be 
fished and whether IFQ species may be processed aboard the vessel. The 
vessel categories were designed to ensure that the IFQ Program not 
radically change the existing fleet structure. The program includes 
restrictions to prevent the fishery from being dominated by large boats 
or by any particular vessel class. A description of the specific vessel 
size classes is provided in regulation at 50 CFR part 679 and is not 
repeated here.
    Various other constraints limit the transfer of QS and the use of 
IFQ permits to ensure that the privilege of harvesting IFQ species is 
retained mainly by those commercial fishermen actively fishing. The IFQ 
Program includes several provisions, such as QS holding caps and vessel 
use caps, to protect participants from being adversely affected by 
excessive consolidation. Other provisions of the IFQ Program require 
IFQ holders to be onboard the vessel to maintain a predominantly 
``owner-operated'' fishery with a narrow exemption for initial 
recipients of QS. The requirement that individual owners of catcher 
vessel QS (vessel categories B, C, or D) be onboard the vessel during 
all IFQ fishing ensures that QS remain largely in the hands of active 
fishermen.
    In designing the IFQ Program, however, the Council exempted from 
this owner-onboard requirement fishermen who received initial 
allocations of catcher vessel QS at the inception of the program. Many 
of these fishermen had conducted their fishing businesses by hiring 
masters to skipper their fishing vessels before the IFQ Program was 
implemented. So that these fishermen may continue to do so as QS 
holders, the IFQ Program allows initial recipients of catcher vessel QS 
to employ hired masters to fish his or her IFQ, but only if the initial 
recipient owns the vessel on which the IFQ species are harvested. By 
limiting this exception to initial recipients, the Council anticipated 
that all initial recipients would eventually retire from fishing, at 
which time their QS would be transferred to other qualified fishermen 
and the IFQ fisheries would again become predominantly owner-operated.

Previous Actions

    The Council has revised the hired master provisions several times 
since the implementation of the IFQ Program to ensure the effectiveness 
of the vessel ownership requirement in maintaining an owner-operated 
fleet in the IFQ fisheries. In 1999, the Council became aware that some 
QS holders were circumventing the intent of the vessel ownership 
requirement by acquiring a nominal ownership interest in a vessel 
expressly for the purpose of hiring a master. On the Council's 
recommendation, NMFS revised the IFQ regulations to prevent this 
practice by defining vessel ownership (for purposes of the hired master 
provisions) as a minimum of 20-percent interest in any vessel on which 
a hired master fishes the QS holder's IFQ permit (May 10, 1999; 64 FR 
24960).
    Then, in 2006, the Council determined that the intent of the vessel 
ownership restrictions continued to be circumvented. In response, the 
Council recommended two additional regulatory changes to the IFQ vessel 
ownership restrictions: first, initial recipients of catcher vessel QS 
wishing to hire masters must provide NMFS with formal United States 
Coast Guard or State of Alaska documents verifying their ownership of 
the vessel; second, those documents must show that the QS holder has 
held 20-percent ownership interest in the vessel for at least 12 
consecutive months prior to applying to NMFS for a permit to employ a 
hired master to fish the IFQ permit. The Council's recommended action 
also would have created a temporary exemption from the 12-month 
ownership requirement for a QS holder whose vessel is lost or damaged 
irreparably. This exemption would have allowed an initial QS recipient 
to acquire temporary ownership interest in another vessel in order to 
continue having his or her IFQ fished by a hired master.
    To implement these recommendations from the Council, NMFS included 
these ownership recommendations in an omnibus package of proposed 
regulatory changes to the IFQ regulations published at 71 FR 64218 on 
November 1, 2006. Public comments on that proposed rule, however, 
identified instances where the proposed 12-month ownership regulations 
needed greater clarification and definition. The proposed regulations 
had used the phrase ``constructive total loss,'' which is a term used 
by insurance companies for property--in this case, fishing vessels--
that are damaged to such an extent that the cost of repairs would 
exceed the value of the property. Public comment on the proposed rule 
asked that in the final rule the regulations be revised to define the 
phrase ``constructive total loss'' to include vessels that are out of 
the fishery for 30 days or longer for repairs. Responding to this 
comment in the final rule, NMFS acknowledged that the phrase 
``constructive total loss'' was not defined in the rule, but noted that 
the standard definition of the phrase pertains only to vessels that are 
damaged irreparably (because the cost of repair would exceed the value 
of the vessel) and not to vessels simply in need of repair (72 FR 
44795, August 9, 2007). NMFS noted furthermore that it could not 
redefine the term to include vessels in need of repair because the 
Council did not recommend including repair as a condition for exemption 
from the 12-month ownership requirement. NMFS further noted that the 
proposed rule had not given notice that such a provision might be 
adopted, as required by the Administrative Procedure Act.
    Public comment on the proposed rule also called attention to a 
significant, unintended consequence of the 12-month ownership 
requirement as proposed. At present, in the absence of a 12-month 
ownership requirement, a QS holder whose vessel is being repaired may 
acquire a temporary ownership interest in another vessel to have his or 
her IFQ permit fished by a hired master. Were NMFS to implement the 12-
month ownership requirement as described in the proposed rule (71 FR 
64218, November 1, 2006), temporary ownership of a vessel would have 
been allowed for the purpose of hiring a master only in the event of 
the total loss of the vessel. A QS holder whose vessel is simply under 
repair would no longer be permitted to acquire temporary ownership of 
another vessel in order to continue having his or her IFQ permit fished 
by a hired master. Note that although individual QS holders may always 
go fishing themselves and are not required to own the vessel as long as 
they are on board for the fishing of their IFQ permit, corporate QS 
holders must necessarily hire a skipper (NMFS does not expect an entire 
corporation will board the vessel to fish the corporate-owned QS, but 
requires an authorized individual to be on board and responsible for 
each landing).

[[Page 65846]]

However, if a QS holder was not prepared to be on board a vessel for 
the fishing of his or her IFQ permit, the 12-month ownership 
requirement, as formerly defined, would have forced QS holders to 
forego revenue from their IFQ permit during the time that their fishing 
vessels were out of service for repairs. The proposed 12-month 
ownership requirement was not intended by the Council to prohibit 
temporary ownership arrangements to accommodate a QS holder whose 
vessel needs repair.
    The substantive issues that the public raised about the exemption 
from the ownership provisions could not be resolved under the Council's 
original recommendation. Accordingly, the final rule published in the 
Federal Register on August 9, 2007 (72 FR 44795) listed the United 
States Coast Guard or State of Alaska documents a QS holder must submit 
to NMFS to prove 20 percent ownership of a vessel, but did not include 
the 12-month ownership requirement and exemption. NMFS removed these 
two components of the action and returned to the Council for 
clarification on these issues.
    In a letter to the Council dated September 19, 2007, and in view of 
the public comment, NMFS identified five policy questions for the 12-
month ownership requirement that needed to be resolved before 
proceeding further with rule promulgation:
     If the QS holder suffers a total loss of a vessel, how 
long is he or she exempt from the ownership requirement?
     For a QS holder to be exempt from the ownership 
requirement, which vessel owned by the QS holder has to have suffered a 
total loss?
     What is the definition of the phrase ``constructive total 
loss''? Should it include a vessel that is repaired after having been 
declared a ``constructive total loss'' for insurance purposes?
     Should a QS holder be able to hire a master on a vessel 
that the QS holder does not own if the QS holder's vessel is 
temporarily out of service for repairs?
     What should be the effective date of the 20-percent/12-
month ownership requirement?
    At its December 2007 meeting, the Council addressed the five policy 
questions raised by NMFS and subsequently revised its recommendation to 
NMFS. The Council clarified that a vessel owner would be exempt from 
the 12-month ownership requirement only if his or her vessel were 
totally lost, for example by sinking or fire, or temporarily lost as a 
result of major repair work that requires at least 60 days to complete. 
In either case, exception from the 12-month ownership requirement would 
be limited to a time period from the date of the incident that resulted 
in the loss or need for repair of the vessel until December 31 of the 
following year. The vessel owner, or initial QS recipient who qualifies 
to hire a master, must have previously used the lost or damaged vessel 
to harvest halibut IFQ or sablefish IFQ in order to be eligible for the 
exemption. The Council recommended that NMFS delay the effective date 
of the 20-percent/12-month ownership requirement for 13 months after 
the publication of the final rule.
    NMFS determined that the Council's revised recommendations require 
publication of a revised proposed rule. The Council introduced a new 
concept of ``temporary loss'' for the exemption from the 12-month 
ownership requirement. ``Temporary loss'' is substantially different 
from ``constructive total loss'' used in the original proposed rule to 
describe the exemption. Although a 12-month ownership requirement was 
contemplated in the proposed rule, the proposed exemption from this 
requirement would have applied only to the actual total loss of a 
vessel and not to a vessel's temporary loss because of damage that 
requires major repairs. This proposed rule solicits public comment on 
this recommendation.

The Need for Action

    The Council recommendation that an initial QS holder hold a minimum 
of 20-percent ownership interest of a vessel for at least 12 
consecutive months is meant to maintain a predominantly owner-operated 
fishery and to prevent the leasing of IFQ permits to the owner or 
skipper of another vessel. The Council recommended this action in 
response to public testimony that initial recipients of QS were 
circumventing the intent of the Council with regard to vessel ownership 
restrictions and, as a result, impeding the intended transition to an 
owner-operator fishery. QS holders who are not initial recipients of QS 
in the IFQ Program are unable to hire a master and must be onboard the 
vessel while fishing their IFQ permits, except in the case of an 
emergency medical transfer. An emergency medical transfer may be 
approved if the applicant demonstrates that he or she is unable to 
participate in the IFQ fishery because of a severe medical condition. 
Individuals otherwise eligible to use a hired master may not do so in 
Areas 2C (for halibut) or SE for sablefish. The Council intended for 
initial recipients of QS to transfer their QS to other eligible 
fishermen upon retiring to eventually return to an owner-operated 
fishery. However, the Council became aware that some initial QS holders 
who used to be active in the fishery, but since retired, had not 
transferred their QS to other qualified fishermen. Instead, these 
initial recipients of QS were using hired masters to fish their IFQ 
permits.
    The Council also became aware that some QS holders were informally 
acquiring 20-percent ownership interest in a vessel for a de minimus 
payment (e.g., one dollar) and for a limited period (e.g., for the 
duration of a fishing trip) solely for the purpose of hiring a master 
to fish the QS holder's IFQ permit. The 12-month restriction would 
eliminate the opportunity for QS holders to form short-term agreements 
which transfer vessel ownership for the duration of a fishing trip or 
trips. Over the course of the IFQ Program, the number of initial QS 
holders who may hire a master has declined through attrition, while the 
reliance on hired masters by those QS holders has increased. While this 
may appear contradictory, it demonstrates that initial recipients who 
used to be active in the fishery are retired from active participation 
and instead are hiring skippers to fish their IFQ permits. The period 
when formerly active individual QS holders typically hire skippers is 
(1) during retirement of a formerly active QS holder and, (2) after 
transfer of QS upon the death of a QS holder to his or her spouse.

The Proposed Action

    This proposed action would require that initial recipients of 
catcher vessel QS (vessel categories B, C, and D) who wish to hire a 
master to fish their IFQ permit hold a minimum of 20-percent ownership 
interest in a vessel for at least 12 consecutive months prior to the 
submission of an Application for IFQ/CDQ Hired Master Permit to NMFS. 
The QS holder who presumably is an owner of a documented vessel would 
be required to submit a U.S. Abstract of Title issued by the U.S. Coast 
Guard upon the submission of an Application for IFQ/CDQ Hired Master 
Permit to show that the QS holder is at least 20-percent owner of the 
vessel, and has been for at least 12 consecutive months. A documented 
vessel is registered and issued a marine certificate by the U.S. Coast 
Guard. A QS holder who is the owner of an undocumented vessel would be 
required to submit a State of Alaska boat registration or a commercial 
vessel license upon the submission of an Application for IFQ/CDQ Hired 
Master Permit that shows the QS holder has had at least 20-percent 
ownership interest in the vessel for at least 12 consecutive months. An 
undocumented

[[Page 65847]]

vessel is registered by the Department of Motor Vehicles and does not 
have a marine certificate issued by the U.S. Coast Guard. If the U.S. 
Abstract of Title or State of Alaska documents do not prove the 
required percentage interest and duration, the QS holder would be 
required to submit additional written documentation to NMFS 
establishing the required percentage of ownership interest and 
duration. The additional written documentation that NMFS may request to 
establish ownership interest and the duration of ownership may include, 
but is not limited to, a copy of the purchase and sale agreement, or 
other corporate, partnership, or association documents. The additional 
documentation must show the required percentage interest of the vessel 
and duration of ownership. Unlike the situation above for documented 
vessels, a single record will not prove ownership interest. Therefore, 
a determination based on other evidence must be made. If NMFS 
determines that the documentation fails to demonstrate the applicant's 
required ownership interest in the vessel, NMFS would provide the 
applicant with an opportunity to provide supporting evidence. If the 
applicant's ownership interest is unsubstantiated at the end of the 
evidence period, NMFS would issue an initial administrative 
determination (IAD). The IAD would describe why NMFS is initially 
denying some or all of an applicant's claim and would provide 
instructions on how to appeal the IAD to the NMFS National Appeals 
Office (NAO).
    Current regulations already require an applicant to submit the U.S. 
Abstract of Title issued by the U.S. Coast Guard, State of Alaska 
vessel license registration, or additional documentation establishing 
20-percent ownership interest in a vessel on an Application for IFQ/CDQ 
Hired Master Permit. Therefore, the same types of documentation would 
be required by an applicant as a result of this proposed rule, although 
more recent documentation may need to be provided for NMFS to determine 
whether the QS holder has had at least 20-percent ownership interest in 
the vessel for at least 12 consecutive months.
    The proposed regulations, if approved, would not be effective until 
13 months after the publication date of the final rule for this action 
to give sufficient time for compliance by QS holders. The Council 
considered a range of timeframes from six months to two years for the 
requirement of continuous ownership in order for QS holders to be 
eligible to hire a skipper. The Council has selected the period of 13 
months following publication of the final rule because it typically 
incorporates an entire fishing season. Most fishing businesses make 
operating decisions, including a decision to hire a skipper, on an 
annual basis.
    A temporary exemption from the 12-month ownership requirement would 
be granted to QS holders whose vessels are totally lost, as by sinking 
or fire, or whose vessels are in need of repairs from major damage 
arising from an accident such as sinking, grounding, or fire and that 
will require the vessel to undergo repair for at least 60 days. The 
minimum 60-day repair time would only include the time required to 
repair the damage caused by the accident. In such cases, a QS holder 
would be exempted from the 12-month ownership requirement from the date 
of the loss of or damage to the vessel until December 31 of the 
following year. The Council intended for the temporary disablement of 
the vessel to result from repairs required from an accident that 
materially and adversely affect the vessel's seaworthiness or fitness 
for service, such as a loss of the vessel's primary steering systems or 
an accidental grounding such as from sinking, grounding, or fire, and 
not from routine maintenance of the vessel. NMFS would adapt similar 
vessel loss language from the American Fisheries Act (Public Law 105-
277, Title II of Division C) to address the vessel loss provision for 
the IFQ Program. The vessel that triggers the vessel repair exemption 
of this provision must be a commercial fishing vessel that has been 
previously used to harvest halibut IFQ or sablefish IFQ by the QS 
holder who is qualified to hire a master and not a second vessel used 
for some other purposes.
    The owner of a lost or damaged vessel (documented or undocumented) 
is required by USCG regulations to submit U.S. Coast Guard (USCG) Form 
2692, Report of Marine Accident, Injury, or Death, to the USCG as 
specified in 46 CFR 4.05. NMFS would require a QS holder seeking an 
exemption from the 12-month ownership requirement exemption to submit 
an Application for IFQ/CDQ Hired Master Permit to NMFS and attach a 
copy of USCG Form 2692. USCG Form 2692 would support the veracity of 
the need for the 60-day duration of the repair, or claim of total loss 
of a vessel. NMFS determined that USCG Form 2692 would best provide 
evidence of the need for repairs or evidence of total loss of a vessel. 
The form may not be submitted to the U.S. Coast Guard for the 
notification of routine maintenance of a vessel because vessel 
maintenance is not associated with a marine accident. The U.S. Coast 
Guard requires written reports of accidents whenever an accident 
involves a U.S vessel, or when the accident occurs upon the navigable 
waters of the U.S. If USCG Form 2692 is not required to be completed 
for a vessel at the time of an incident that caused the 60-day duration 
of repair, then the vessel owner would be required to provide 
additional documentation to NMFS demonstrating that the vessel meets 
the requirements of this exception. Documentation of vessel repairs or 
maintenance that do not result from a vessel accident is not sufficient 
for authorization of the exemption. If NMFS determines that the 
documentation fails to demonstrate that the vessel meets the 
requirements of this exception, NMFS would provide the applicant with 
an opportunity to provide supporting evidence. If the applicant's 
ownership interest is unsubstantiated at the end of the evidence 
period, NMFS would issue an IAD. The IAD would describe why NMFS is 
initially denying some or all of an applicant's claim and would provide 
instructions on how to appeal the IAD to the NAO.
    The exemption to the 12-month ownership requirement would allow the 
QS holder to acquire a 20-percent ownership interest in another vessel 
temporarily so that the QS holder would not lose the revenue that would 
be generated by his or her IFQ during the time needed to repair the 
damaged vessel or replace the lost one. The exemption for loss of or 
damage to a vessel applies to the 12-month ownership requirement only, 
and not the 20-percent ownership requirement. If a QS holder's vessel 
is damaged and undergoing repairs that will take at least 60 days, the 
QS holder may acquire temporary interest in another vessel in order to 
hire a master, but that temporary interest must constitute a minimum of 
20 percent ownership of the vessel.
    For example, if an individual QS holder loses use of his or her 
vessel (that was previously used to fish IFQ) at any time during 2014, 
that person would be exempted from the 12-month ownership requirement 
until December 31 of the following year, 2015. During this time, an 
individual QS holder may choose to be onboard a vessel to fish his or 
her own IFQ permit, and not be required to own any interest in the 
vessel. However, if that individual QS holder chooses to hire a master, 
he or she would be required to acquire a 20-percent ownership interest 
in another vessel during the time that his or her IFQ permit is fished 
by a hired master. The

[[Page 65848]]

length of time the QS holder would be able to use the exemption would 
depend on when during the year the vessel is lost; if the vessel is 
lost in January of 2014, the QS holder would have almost two years 
before he or she would have to once again satisfy the 12-month 
ownership requirement to be able to hire a master. If the QS holder 
loses the vessel in December of 2014, however, he or she would have 
less time--little more than a year--before having to satisfy the 12-
month ownership requirement.
    NMFS notes that in this latter example, if the QS holder loses a 
vessel in December 2014 and does not acquire a new vessel until June 1, 
2015, he or she will have owned the new vessel for only seven months--
from June 1 until December 31--before being required to again satisfy 
the 12-month ownership requirement. Hence, the QS holder would have to 
wait another five months before hiring a master to fish an IFQ permit 
on the new vessel. The IFQ season typically opens in March, but the QS 
holder will not have owned a vessel for the required 12 months until 
June, three months after the 2015 IFQ season is likely to open. This 
could delay the QS holder's hiring a master to fish an IFQ permit on 
the new vessel until some time after the IFQ season has begun.

Classification

    Pursuant to sections 304(b)(1)(A) and 305(d) of the Magnuson-
Stevens Act, the NMFS Assistant Administrator has determined that this 
proposed rule is consistent with the Halibut Act, the FMPs, the 
national standards and other provisions of the Magnuson-Stevens Act, 
and other applicable laws, subject to further consideration after 
public comment.
    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866.
    The Council recommended this action to the Secretary of Commerce 
for adoption pursuant to its authority under the Magnuson-Stevens Act 
and the Halibut Act. An RIR/IRFA for the proposed regulatory amendments 
describes the management background, the purpose and need for the 
action, the management alternatives, and the socioeconomic impacts of 
the alternatives (see ADDRESSES).
    The RIR assesses the costs and benefits of available regulatory 
alternatives. The Council considered all quantitative and qualitative 
measures and chose a preferred alternative based on those measures that 
maximize net benefits to affected individuals and communities under the 
halibut and sablefish IFQ Program.
    An initial regulatory flexibility analysis (IRFA) was prepared, as 
required by section 603 of the Regulatory Flexibility Act. The IRFA 
prepared for the action assesses potential impacts on small entities 
for purposes of the Regulatory Flexibility Act. The Council reviewed 
multiple alternatives for the action, including a ``no action'' 
alternative and a preferred alternative in an IRFA that describes the 
potential adverse impacts of the proposed alternatives on small 
entities.
    The objective of the proposed action is to amend halibut and 
sablefish IFQ regulations to implement Council intent for the hired 
skipper privilege. The legal basis for the proposed action is explained 
in the preamble of this proposed rule. In summary, NMFS manages the 
North Pacific halibut fisheries in Convention waters under the 
authority of the Halibut Act and the sablefish fisheries in the waters 
of the EEZ off Alaska under the authority of the Magnuson-Stevens Act. 
Regulations at 50 CFR 300.60 through 300.65 govern the Pacific halibut 
fisheries in the waters of the United States. The annual Pacific 
halibut management measures for 2011 were published in the Federal 
Register on March 16, 2011 at 76 FR 14300. Regulations at 50 CFR 679.1 
through 50 CFR 679.28 govern the sablefish fishery. Regulations at 50 
CFR 679.30 through 50 CFR 679.45 govern the halibut and sablefish IFQ 
and Community Development Quota (CDQ) programs.
    For reasons described below, NMFS defines all halibut and sablefish 
vessels as small businesses for the purpose of this analysis. This 
proposed action could directly regulate as many as 1,307 entities 
holding halibut and sablefish QS, which are eligible to hire skippers; 
however, the actual number of such entities that may be directly 
regulated is expected to be much smaller, because many of these 
participants are currently acting in compliance with Council intent and 
are onboard the vessel when their IFQ is harvested. Only 32 percent of 
halibut permit holders and 61 percent of sablefish permit holders hired 
masters in 2010. It is unknown to what extent this action may restrict 
some eligible QS holders from hiring a skipper in the future, but at 
most, 214 halibut IFQ hired masters and 118 sablefish IFQ hired masters 
who were hired in 2010 also would be affected by this action.
    The number of small entities operating as fishing vessels in the 
IFQ fisheries may be deduced from certain restrictions placed on those 
vessels. The IFQ Program restricts the amount of annual IFQ that may be 
landed from any individual vessel. A vessel may be used to land up to 1 
percent of all IFQ total allowable catch (TAC) issued for halibut in 
Area 2C (44,000 net lb in 2010); the same percentage cap is set for 
sablefish in Southeast Alaska (56,879 round lb in 2010). The vessel cap 
is 0.5 percent of the IFQ issued for halibut in all areas (201,490 net 
lb in 2010); the same percentage cap is set for sablefish in all Alaska 
areas (248,767 round lb in 2010). NMFS annually publishes standard 
prices for halibut and sablefish that are estimates of the ex-vessel 
prices received by fishermen for their harvests. NMFS uses these prices 
for calculating IFQ holder cost recovery fee liabilities. In 2010, the 
most recent year for which complete price data are available, the ex-
vessel price per pound for halibut in Area 2C and in all Alaska areas 
was $5.57 and $5.22, respectively; and for sablefish in Southeast and 
all Alaska areas it was $4.35 and $4.09, respectively (December 10, 
2010: 75 FR 76957). The harvest limits and prices, identified above, 
reflect the maximum ex-vessel gross revenues in 2010 accruing to a 
vessel operator who owned the maximum permissible amount of QS units 
for halibut ($245,000 in Area 2C and $1,090,000 in Area 3A) and 
sablefish ($247,000 in Southeast and $993,000), respectively. Although 
some halibut and sablefish IFQ operations participate in other revenue 
generating activities, the halibut and sablefish IFQ fisheries probably 
represent their largest single source of annual gross receipts.
    Based upon available data and more general economic activity 
information on vessels in these IFQ fisheries, no vessel subject to 
these restrictions could have landed more than $4 million in combined 
gross receipts in 2010. Therefore, all halibut and sablefish vessels 
are assumed to be small entities, for purposes of the IRFA. However, 
this simplifying assumption likely overestimates the true number of 
small entities, since it does not take account of vessel affiliations. 
No reliable data exists on vessel affiliation. NMFS does not have gross 
revenue data for halibut and sablefish IFQ operations. The best 
available data is from the 2011 Stock Assessment and Fishery Evaluation 
(SAFE) report, which contains data on revenues from all sources for 
operations harvesting groundfish in 2010. Based on data on the low 
revenues for average operations harvesting groundfish in 2010, and the 
low cap on maximum halibut and sablefish revenues, additional revenues 
from herring, salmon, crab, or shrimp likely would be relatively small 
for most of this class of

[[Page 65849]]

vessels. Therefore, the available data and analysis suggest that there 
are few, if any, large entities among the directly regulated entities 
subject to the proposed action.
    The requirement for catcher vessel QS holders to be onboard the 
vessel during harvest and offloading of IFQ species constitutes a key 
element of the halibut and sablefish IFQ Program. The Council remains 
concerned about alleged abuses of the regulatory provision allowing 
vessel owners who received QS at initial allocation to hire masters to 
harvest their IFQ permits without being onboard the vessel. The 
objective of this proposed action is to improve implementation of the 
owner-on-board provisions of the original program, while providing an 
opportunity to hire a master when appropriate.
    The RIR/IRFA notes that none of these small entities would be 
adversely impacted by this action.
    The RIR reviews Alternative 1, the status quo, and Alternative 2, 
the preferred alternative. Alternative 1 would maintain the current 20-
percent vessel ownership requirement for catcher vessel QS holders to 
hire a master to harvest IFQ permits. Current regulations do not 
require that QS holders establish that they owned their vessel for any 
specified period of time prior to their submitting an application to 
use a hired master. Alternative 2, the preferred alternative, would 
require that QS holders have owned 20-percent interest in their vessel 
for a minimum of 12 consecutive months before NMFS may approve an 
application to employ a hired master to fish the QS holder's IFQ 
permits. This alternative may result in a loss of fishing opportunity 
to harvest IFQ pounds for the hired masters; the proposed changes from 
this alternative would have distributional effects on both parties, 
which will not affect production from the fisheries noticeably. Net 
benefits to the nation may increase, to the extent that the Council's 
objectives for an ``owner-operator'' fishery are more fully realized 
through this action.
    The Council also considered other options, ranging from 6 to 24 
months, for the minimum amount of time that QS holders would be 
required to demonstrate a 20-percent ownership interest in a vessel. In 
recommending the preferred alternative, the Council determined that the 
12-month minimum ownership interest best met its objectives for the 
action because it would demonstrate a sufficient commitment by a QS 
holder to vessel ownership while also providing operational flexibility 
for a QS holder to adapt to changing vessel needs or business plans.

Collection of Information

OMB Control No. 0648-0272

    This proposed rule contains a collection-of-information requirement 
subject to review and approval by OMB under the Paperwork Reduction Act 
(PRA). This requirement has been submitted to OMB for approval under 
OMB Control No. 0648-0272. Public reporting burden for Application for 
IFQ/CDQ Hired Master Permit is estimated to average 30 minutes per 
response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    Public comment is sought regarding: Whether this proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information shall 
have practical utility; the accuracy of the burden estimate; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways to minimize the burden of the collection of 
information, including through the use of automated collection 
techniques or other forms of information technology. Send comments on 
these or any other aspects of the collection of information to (enter 
office name) at the ADDRESSES above, and email to OIRA_Submission@omb.eop.gov, or fax to 202-395-7285.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.
    No additional recordkeeping and reporting requirements are 
associated with this action. NMFS is not aware of any other federal 
rules that would duplicate, overlap, or conflict with this action.
    According to NOAA Administrative Order (NAO) 216-6, including the 
criteria used to determine significance; this rule would not have a 
significant effect, individually or cumulatively, on the human 
environment beyond those effects identified in the previous National 
Environmental Protection Act (NEPA) analysis. An environmental impact 
statement (EIS; dated December 1992) was prepared for the final rule 
implementing the original halibut and sablefish IFQ and CDQ programs 
(58 FR 59375; November 9, 1993). The scope of the EIS includes the 
potential environmental impacts of this proposed rule because the EIS 
analyzed the original IFQ Program, which included analysis of 
biological and socioeconomic impacts on the environment, affected 
fishermen, and affected communities. Based on the nature of the 
proposed rule and the previous environmental analysis, this proposed 
rule is categorically excluded from the requirement to prepare an 
environmental assessment or EIS, in accordance with Section 5.05b of 
NAO 216-6. Copies of the EIS for the original halibut and sablefish IFQ 
and CDQ programs and the categorical exclusion for this action are 
available from NMFS (see ADDRESSES).

List of Subjects in 50 CFR Part 679

    Alaska, Fisheries, Reporting and recordkeeping requirements.

    Dated: October 26, 2012.
Alan D. Risenhoover,
Director, Office of Sustainable Fisheries, performing the functions and 
duties of the Deputy Assistant Administrator for Regulatory Programs, 
National Marine Fisheries Service.

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

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

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

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

    2. In Sec.  679.42,
    a. Revise paragraphs (i)(1)(i), (i)(1)(ii), (j)(1)(i), and 
(j)(1)(ii); and
    b. Add paragraphs (i)(1)(iv), (i)(1)(v), (i)(6), (i)(7), 
(j)(i)(iv), (j)(1)(v), (j)(10) and (j)(11) to read as follows:


Sec.  679.42  Limitations on use of QS and IFQ.

* * * * *
    (i) * * *
    (1) * * *
    (i) For a documented vessel, continuously owned a minimum 20-
percent interest in the vessel for the previous 12 months as shown by 
the U.S. Abstract of Title issued by the U.S. Coast Guard, and any 
other documentation that shows the individual as an owner indicating 
percentage ownership; or
    (ii) For an undocumented vessel, continuously owned a minimum 20-
percent interest in the vessel for the previous 12 months as shown by a 
State of Alaska license or registration, and any other documentation 
that shows the

[[Page 65850]]

individual as an owner indicating percentage of ownership; and
* * * * *
    (iv) NMFS review of application for exemption--(A) Initial 
evaluation. The Regional Administrator will evaluate an application for 
a hired master submitted in accordance with paragraphs (i)(1), (i)(6), 
and (i)(7) of this section. An applicant who fails to submit the 
information specified in the application for a hired master will be 
provided a reasonable opportunity to submit the specified information 
or submit a revised application.
    (B) Initial administrative determinations (IAD). The Regional 
Administrator will prepare and send an IAD to an individual entity 
submitting an application for a hired master submitted in accordance 
with paragraphs (i)(1), (i)(6), and (i)(7) of this section if the 
Regional Administrator determines that the information required to be 
submitted to NMFS is deficient or if the applicant fails to submit the 
required information. The IAD will indicate the deficiencies with the 
information submitted. An applicant who receives an IAD may appeal 
under the appeals procedures set out at Sec.  679.43.
    (v) Upon request by the Regional Administrator or an authorized 
officer, a person must submit additional written documentation 
necessary to establish the required minimum 20-percent interest in the 
vessel for the previous 12 months .
* * * * *
    (6) In the event of the total loss of a vessel owned by an 
individual who qualifies for the exemption in paragraph (i)(1) of this 
section, the owner of such vessel may remain exempt under paragraph 
(i)(1) of this section until December 31 of the year following that 
which the vessel was lost or damaged, provided that such loss or 
irreparable damage was caused by an act of God, an act of war, a 
collision, an act or omission of a party other than the owner or agent 
of the vessel, or any other event not caused by the willful misconduct 
or negligence of the owner or agent.
    (i) The lost vessel must be a commercial fishing vessel that was 
previously used to harvest halibut IFQ or sablefish IFQ by the owner 
who qualifies for the exemption in paragraph (i)(1) of this section.
    (ii) As part of the application for exemption, the owner of the 
lost vessel must submit to NMFS a copy of the USCG Form 2692 submitted 
to the USCG as specified in 46 CFR 4.05.
    (7) In the event of repairs to a vessel owned by a person who 
qualifies for the exemption in paragraph (i)(1) of this section, the 
owner of such vessel may remain exempt under paragraph (i)(1) of this 
section until December 31 of the year following that which the vessel 
was damaged, provided that the necessary repairs require at least 60 
days to be completed.
    (i) The temporary disablement of the vessel must result from 
repairs required from an accident that materially and adversely 
affected the vessel's seaworthiness or fitness for service, such as 
from sinking, grounding, or fire.
    (ii) The damaged vessel must be a commercial fishing vessel that 
was previously used to harvest halibut IFQ or sablefish IFQ by the 
owner who qualifies for the exemption in paragraph (i)(1) of this 
section.
    (iii) The owner of the damaged vessel must submit to NMFS a copy of 
the USCG Form 2692 submitted to the USCG as specified in 46 CFR 4.05.
    (j) * * *
    (1) * * *
    (i) For a documented vessel, continuously owned a minimum 20-
percent interest in the vessel for the previous 12 months as shown by 
the U.S. Abstract of Title issued by the U.S. Coast Guard, and any 
other documentation indicating percentage ownership that shows the 
corporation, partnership, association, or other non-individual entity 
as an owner and, if necessary to prove the required ownership, other 
written documentation; or
    (ii) For an undocumented vessel, continuously owned a minimum 20-
percent interest in the vessel for the previous 12 months as shown by a 
State of Alaska vessel registration, and any other documentation 
indicating percentage of ownership that shows the corporation, 
partnership, association, or other non-individual entity as an owner 
and, if necessary to prove the required ownership, other written 
documentation; and
* * * * *
    (iv) NMFS review of application for exemption--(A) Initial 
evaluation. The Regional Administrator will evaluate an application for 
a hired master submitted in accordance with paragraphs (j)(1), (j)(10), 
and (j)(11) of this section. An applicant who fails to submit the 
information specified in the application for a hired master will be 
provided a reasonable opportunity to submit the specified information 
or submit a revised application.
    (B) Initial administrative determinations (IAD). The Regional 
Administrator will prepare and send an IAD to a non-individual entity 
submitting an application for a hired master and the additional 
documentation required in paragraphs (j)(1), (j)(10), and (j)(11) of 
this section if the Regional Administrator determines that the 
information required to be submitted to NMFS is deficient or if the 
applicant fails to submit the required information. The IAD will 
indicate the deficiencies with the information submitted. An applicant 
who receives an IAD may appeal under the appeals procedures set out at 
Sec.  679.43.
    (v) Upon request by the Regional Administrator or an authorized 
officer, a person must submit additional written documentation 
necessary to establish the required 20-percent interest for the 
previous 12 months in the vessel.
* * * * *
    (10) In the event of the total loss of a vessel owned by a non-
individual entity that qualifies for the exemption in paragraph (j)(1) 
of this section, the owner of such vessel may remain exempt under 
paragraph (j)(1) of this section until December 31 of the year 
following that in which the vessel was lost or damaged, provided that 
such loss or irreparable damage was caused by an act of God, an act of 
war, a collision, an act or omission of a party other than the owner or 
agent of the vessel, or any other event not caused by the willful 
misconduct or negligence of the owner or agent.
    (i) The lost vessel must be a commercial fishing vessel that was 
previously used to harvest halibut IFQ or sablefish IFQ by the owner 
who qualifies for the exemption in paragraph (j)(1) of this section.
    (ii) The owner of the lost vessel must submit to NMFS a copy of the 
USCG Form 2692 submitted to the USCG as specified in 46 CFR 4.05.
    (11) In the event of repairs to a vessel owned by a non-individual 
entity that qualifies for the exemption in paragraph (j)(1) of this 
section, the owner of such vessel may remain exempt under paragraph 
(j)(1) of this section until December 31 of the year following that in 
which the vessel was damaged, provided that the necessary repairs 
require at least 60 days to be completed.
    (i) The temporary disablement of the vessel must result from 
repairs required from an accident that materially and adversely 
affected the vessel's seaworthiness or fitness for service, such as 
from sinking, grounding, or fire.
    (ii) The damaged vessel must be a commercial fishing vessel that 
was previously used to harvest halibut IFQ or sablefish IFQ by the 
owner who qualifies for the exemption in paragraph (j)(1) of this 
section.

[[Page 65851]]

    (iii) The owner of the damaged vessel must submit to NMFS a copy of 
the USCG Form 2692 submitted to the USCG as specified in 46 CFR 4.05.
* * * * *
[FR Doc. 2012-26790 Filed 10-30-12; 8:45 am]
BILLING CODE 3510-22-P